The proposals of the government commission in detail:
1. Remuneration of Provision Services
At present, hospital services are largely financed via case flat rates (see background below). Fixed costs – such as the provision of staff, an emergency room or the necessary medical technology – must also be generated via the flat rate per case. In order to underline the importance of hospitals for services of general interest and to reduce the economic pressure on as many treatment cases as possible, the government commission recommends defining a fixed amount as upfront costs in future, which hospitals – depending on their assignment (see points 2 and 3) – receive. This takes the economic pressure off the hospitals.
2. Definition of hospital care levels (levels)
The hospital structures in Germany have grown historically. Every hospital has different departments and offers different services. In the future, hospitals are to be classified into three specific levels and funded accordingly:
- primary care – Basic medical and nursing care, such as basic surgical procedures and emergencies.
- Regular and priority care – Hospitals that offer additional services compared to basic care.
- maximum supply – for example university hospitals.
Uniform minimum requirements should apply for each level. For the first time, uniform standards for the equipment, space and staffing would apply – and thus the quality of treatment for the patients would be significantly increased.
The hospitals of Levels I is given special importance. They must guarantee nationwide coverage close to home. They are therefore divided into hospitals that provide emergency care (Level I n) and those that offer integrated outpatient/inpatient care (Level I i). hospitals of Levels I i should play a key role on the way to overcoming the too often separate inpatient and outpatient health care. The Government Commission therefore recommends planning them regionally across sectors, removing them completely from the DRG system and remunerating them via daily flat rates. In addition, appropriate legal changes should make it possible for them to be under nursing management.
3. Introduction of defined performance groups
The only rough assignment of specialist departments (such as “internal medicine”) to hospitals is to be replaced by more precisely defined service groups (e.g. “cardiology”). Hospitals are currently treating certain cases all too often without the appropriate personnel and technical equipment, such as heart attacks without a left heart catheter, strokes without a stroke unit or oncological diseases without a certified cancer center.
In the future, treatments should only be billed if the hospital has been assigned the appropriate service group. The prerequisite for the allocation is the fulfillment of precisely defined structural requirements for the respective performance group, for example with regard to personnel and equipment. Depending on the complexity, it is determined for each service group whether it may be provided at hospitals of all three levels or only at higher level hospitals (II and III or only III). The quality of treatment for patients is thus significantly improved. A reserve share is defined for each performance group.
The Government Commission recommends not allowing the regulations to apply immediately, but gradually introducing them in a generous transitional phase (convergence phase of 5 years). This gives hospitals, doctors, health insurance companies and the federal states sufficient time to adapt to the changed financing system.
Order of the Government Commission for modern and needs-based hospital care
According to the coalition agreement, the government commission should present recommendations for the further development of hospital financing, which supplements the previous system with a differentiated system of revenue-independent upfront flat rates according to care levels (primary, basic, standard, maximum care, university hospitals). The government commission was set up in May 2022 and has since submitted statements on various topics (including adequate funding for paediatrics and obstetrics, hospital day care), which have been implemented in the Hospital Care Relief Act.
Background: Current hospital financing
Hospitals cover their ongoing operating costs (costs for medical treatment, e.g. staff, surgical requirements, …) via the so-called Case flat rates (DRGs). This means: You receive a fixed amount, even if the treatment actually cost more or less. Investment costs – for example costs for buildings or structural maintenance – are to be borne by the federal states in sufficient amounts. This is not happening across the board to a sufficient extent.
The case-based system provides an incentive to perform a large number of surgeries or other treatments (in case of doubt, also unnecessary ones) (so-called performance or quantity incentive), in addition to billing the case-based rates, which are particularly lucrative, and specialist areas that are less lucrative, such as the Child and Adolescent Medicine to close. In addition, there is an economic incentive to discharge patients as early as possible in order to earn more from the flat rate per case than the treatment cost (“bloody discharge”). The economic pressure in the system is correspondingly high.
In a global comparison, Germany finances its hospitals the most through performance and quantity incentives. Hospital financing thus differs not only from other healthcare systems that use flat rates per case, but also from comparable critical infrastructure and public services in Germany (e.g. fire brigade).
Various legislative steps have been taken in the past to mitigate the negative effects of flat rates per case. For example, by defining requirements (e.g. a certain minimum quantity) that hospitals must meet in order to bill for a service or surcharges for certain hospitals (e.g. security surcharges for hospitals that are economically threatened but are important for the supply) or the Removal of care from the flat rate per case. These solutions “in the system” have not been able to completely eliminate the deficits in case-based flat-rate financing.