Building financial health

There’s some good news for Germany’s hospitals: for the vast majority, 2015 brought rising revenues and projections for further growth in 2016. Unfortunately, this is only half of the story. Despite the increase in revenue, 30% are still unable to generate an annual net profit and many expect their financial situation to substantially deteriorate over the the coming year with 70% predicting financial malaise. Compiled from the responses of board members and managing directors at 400 of Germany’s largest hospitals, these are just some of the insights that we share in our exclusive German-language report on the current state of financial health in Germany’s hospitals.

For these reasons, the coming years will see an intensive focus on improvement, including restructuring projects. By their own reporting, 60% of respondent hospitals are currently involved in restructuring. Many are looking at classic levers such as inpatient revenues and optimizing supplies, with personnel costs and outpatient revenues as points of growing interest. However, many remain unsatisfied with the results of these measures. Implementation and involving the relevant stakeholders are seen as major obstacles, as is funding. 40% report that they are still not making the necessary investments, with insufficient funds being the primary reason.

Financial recovery

There is no quick fix. “Despite recent hospital reform, the financial pressure on clinics will continue over the coming years,” says Peter Magunia, director of the Roland Berger Healthcare Practice. “Even with restructuring measures already underway in many places, the path to financial recovery is often still very long.” To conclude this study, we take a look at success factors as well as the effect of digitization. Hospitals have so far taken a classical view of digitization—we point out the hurdles and the potential of taking a more disruptive perspective and pushing forward with digitization as a management priority.