Hospital Reform: Need for Improvement

The Federal Cabinet has approved the planned hospital reform. The draft will now be discussed in the German Bundestag. Simon Reif, head of the “Health Care Markets and Health Policy” Research Group at ZEW Mannheim and Professor for Economics with a Focus on Health Care Markets at Friedrich-Alexander University Erlangen-Nuremberg (FAU), has commented on the draft:

“In general, it is a very good development that the government is pushing for hospital reform. The current hospital structure is one of the reasons why there are many complaints about a shortage of nurses in Germany, even though we have a very high number of nurses compared to international standards. There is, however, still need for improvement in the current plans.

The approach described in the Cabinet decision to reimburse care capacity instead of care volume does, in fact, not provide hospitals with money for care capacity. Instead, this capacity component in the proposed reimbursement scheme is also related to the number of patients treated. A genuine capacity-based reimbursement would financially compensate the mere provision of standby capacity, regardless of the volume of services provided. Under the proposal, current misallocations will get perpetuated and hospitals will still have an incentive to perform as many surgeries as possible.

To achieve a transformation of the hospital landscape towards a greater concentration of services despite this design flaw, the capacity reimbursement is to be linked to minimum quantities that serve as quality standards. However, it is still completely unclear how such a minimum quantity regulation can be designed. Since each federal state can also decide on exceptions to the minimum quantities, no significant effect on care can be expected. It would be important that exceptions are only possible if there is a plan for how the nationally required quality characteristics will be achieved in the future. Otherwise, there is a real danger that exceptions will become the rule and that quality standards will differ between the federal states in the long term. There is, however, no justification why quality standards for hospital care should differ between the federal states.”