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Global Economy

Clinics in the cost trap

"Heating oil has become almost a third more expensive for us in July," complains Hendrik Weinz. 20,000 liters fit in the emergency tank of his hospital. Weinz is administrative director at the Klinikum in Idar-Oberstein in Rhineland-Palatinate. 1300 people work here. With more than 500 beds, the hospital is a key provider. In regular operation, however, they heat with gas.

Most clinics need gas

The clinic on the edge of the Hunsrück is not alone in this: According to a survey by the German Hospital Society (DKG), nine out of ten hospitals in Germany are dependent on gas. "A gas levy would also hit us hard," says Weinz.

Running a hospital is also very energy-intensive: according to the non-profit viamedica foundation, one hospital bed uses as much energy as four single-family houses each year. The university medical center in Mainz, for example, expects energy costs to be 2.7 times higher in 2022 than in the previous year.

Hospital financing already at the limit

96 percent of the clinics surveyed can no longer pay higher costs from their own revenues. This is shown by a survey by the German hospital institute. The problem is the financing system of the hospitals: Put simply, the clinics get money from the state for investments and from the health insurance companies for the operating costs via so-called case cost flat rates.

These flat rates were last renegotiated in December 2021. According to the DKG, revenue increases of 2.32 percent are planned for 2022. According to the Federal Statistical Office, the forecast inflation rate for August is just under eight percent.

Not only energy is more expensive

"According to current calculations, a medium-sized hospital will pay over six million euros more for gas and electricity in 2023 than in 2021," says DKG CEO Gerald Gass. "Overall, we are assuming a shortfall of ten billion for 2023."

"Not only is energy becoming more expensive, but also many other medical services," explains hospital director Weinz in Idar-Oberstein. "For example, cytostatics, i.e. cancer therapy drugs, and due to higher transport costs, actually everything that reaches us here." The clinic, which is currently planning a construction project, is also hit by higher costs for building materials. "It's completely impossible to calculate that."

Personnel burdens due to Corona

The situation is similar in the Palatinate at the Asklepios Südpfalzkliniken in Germersheim and Kandel. And the corona pandemic, in which many beds remained empty, is still a burden on the clinic. There were government payments that improved the economic situation of the clinics in Germany. However, this aid has expired.

"Our staff has done a great job over the past two years," says Managing Director Frank Lambert. "We are still caring for corona patients today, and we expect that number will increase again in the autumn. Our employees are absent due to illness themselves, and there is a general lack of specialist staff to be able to compensate at all. We are caught in a hamster wheel ." According to the RWI Leibniz Institute for Economic Research, three quarters of all clinics could be in the red by 2023.

Demand for inflation compensation

"Without inflation compensation to stabilize the hospitals, there is a risk of massive staff cuts with negative consequences for patient care," says DKG boss Gass. "We now need short-term financial help and long-term sensible structural and financing reforms."

The health insurance companies show understanding for short-term demands. However: “The problems in hospitals are caused by structures that are not tailored to needs,” says Florian Lanz from the National Association of Statutory Health Insurance Funds. "Meanwhile, around 40 percent of hospital beds are regularly not needed. Many small clinics, especially in urban areas, tie up money and staff, although they are no longer needed in this form to provide good care for the population."

The DKG, health insurance companies and politicians have been arguing for years about the type of reform. Basically, DKG boss Gass says: "We will have to check in the regions which locations will be retained and which mergers will occur."

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