In addition to the economic situation of German hospitals, the fifth edition of the "Krankenhaus Rating Report" (Hospital Rating Report) investigated the effects of the financial crisis and the second stimulus package (Konjunkturpaket II) on clinics. On the average, the risk of insolvency had decreased slightly for these institutions in recent years up to 2007. Yet the risk probably rose sharply in 2008, only to drop back to the previously low level in the current year as a result of significantly higher revenues. That indicator is expected to worsen again in 2010 due to the impact of the financial crisis. The investment gap, caused among other things by discontinuation of public funding, has grown to 16 billion euros since 1991. In the meantime hospitals have partly closed the gap by contributing about 7 billion euros from their own capital. Medical care centers and investment grants could boast the efficiency of the health system in the future.

The economic situation of hospitals

In economic terms, the last year was probably one of the worst for hospitals and the current year will probably be one of the best. A funding gap amounting to billions of euros appeared in 2008 due to rising costs combined with only moderate increases in revenues. Yet clinics will be able to profit in 2009 from additional revenue facilitated by the Krankenhausfinanzierungsreformgesetz (KHRG; Hospital Financing Reform Act) and from allocations for investments originating in the second stimulus package, Konjunkturpaket II. The situation is nevertheless expected to worsen again significantly next year, as the impact of the financial crisis comes to bear on the health sector. These are the conclusions drawn in the fifth edition of the "Krankenhaus Rating Report" (Hospital Rating Report) prepared jointly by RWI, the Institute for Healthcare Business GmbH and ADMED GmbH.

According to the study, the cuts in public funding stipulated by the Krankenhausfinanzierungsgesetz (KHG; Hospital Financing Act) have caused the cumulative investment gap of German hospitals to grow to 16 billion euros since 1991. Yet hospitals are filling that gap to an increasing extent by investing their own capital. The cumulative share of this capital amounts to about 7 billion euros, so that the actual investment deficit is probably about 9 billion euros.

Percentage of clinics in the red has fallen slightly

The rating is based on a sample of 546 annual reports, for the most part from the years 2006 and 2007, encompassing a total of 832 hospitals. This represents a further expansion of the data underlying the report. With respect to risk of insolvency, institutions were classified in three categories according to a traffic light system, i.e. green, yellow or red: 16% of hospitals were found in the red range, 15% in yellow and a substantial 69% in the green range. These figures are somewhat better than those published in the previous study from 2008, which was, however, based on a smaller and thus different sample. The share of hospitals in the red range (high risk of insolvency) increased to 27% in 2008, due in our estimate to the unfavorable overall situation. In 2009 this share should drop again to 15%, however. With net annual revenues increasing considerably in 2009, three quarters of all hospitals should be in the black. The share of clinics in the red range is, however, expected to rise again from 2010 on. Without measures to enhance productivity, the situation will probably deteriorate in the future, and the share of institutions operating in the red range could increase to almost 30% by 2020.

Small hospitals achieved significantly poorer ratings than large or mid-sized institutions, while western German hospitals rated worse than eastern German ones, and publicly funded institutions rated worse than private or non-profit institutions. Among publicly funded institutions, 24% were in the red range in 2006-2007, with this figure 10% for non-profit and 14% for private institutions. An especially large number of clinics in eastern Germany and North Rhine-Westphalia are in the green range with only a few in the red. In the states of Baden-Württemberg, Schleswig-Holstein and Hamburg the red share is also relatively small, while here the share in the yellow range is very high. It appears that the risk of insolvency is reduced, besides other measures, by focusing their range of services. On the other hand, whether a clinic is a member of a clinic chain or whether it is privately owned or maintained by a non-profit organization is not, for example, statistically significant.

Relatively few foreign patients seek treatment in Germany

No major changes were seen in patient flows compared to the previous Hospital Rating Report. Munich continues to be the treatment region within all of Germany with the greatest net patient flow to the region, with Frankfurt am Main, Heidelberg, Hamburg and the core cities of the Ruhr area following. Relative to the total number of patients in the area, Heidelberg had by far the largest net influx of patients. A total of about 64,000 foreign patients also sought treatment in German hospitals in 2006, amounting to only about 0.4% of all patients. Most of them are originally from Europe, in particular from neighboring European countries bordering on Germany. The number of patients from foreign countries outside Europe is relatively small. Yet it is worth mentioning that about 1,000 patients were from Kuwait and 900 from the United Arab Emirates.

Medical care centers and investment grants enhance efficiency

The number of Medizinische Versorgungszentren (MVZ; medical care centers) is expected to continue to grow in the future. Doctors, hospitals, therapists and others can join together to form such centers in order to achieve enhanced efficiency. By mid-2008 there were already 1,500 such centers with more than 5000 doctors, three quarters of whom were regularly employed. With respect to funding provided for by the Hospital Financing Act (KHG), the federal states should take advantage of the option, stipulated in the KHRG, of introducing investment grants. As the study shows, hospitals in states with a large share of grant funding run a significantly smaller risk of insolvency than those in states with a small share - even when other factors affecting the rating are accounted for. Consequently, from 2011 on, the federal states should gradually transform their systems of investment funding in order to make more effective use of shrinking public funding.

This press release is based on the study "Krankenhaus Rating Report 2009: Im Auge des Orkans" (Hospital Rating Report 2009: in the Eye of the Storm). The report includes graphic charts on maps of Germany and hospital benchmarks. The complete study can be ordered at a price of 260 euros incl. VAT from RWI Essen, HCB GmbH or ADMED GmbH (available only in German).

For further information, please contact::
Dr. Boris Augurzky, Phone:+49 201 8149-203, e-mail
Sabine Weiler (Press Office), Phone:+49 201 8149-213, e-mail