Which environmental factors affect hospitals?

Health policy

Thomas Gerlinger

Prof. Dr. Dr. Thomas Gerlinger is professor at AG 1: Health Systems, Health Policy and Health Sociology at the Faculty of Health Sciences at Bielefeld University

Who is responsible for hospital planning? What are the criteria for hospital planning? How are hospitals financed? The historically grown isolation of the sectors is not only expressed in the separation of institutional responsibilities for health care. It has also contributed to the development of an independent system of capacity planning, performance remuneration and contractual management of care in the hospital sector.
A patient in a new room in the intensive care unit at the Charité Berlin: Hospitals in Germany are financed on a dual basis: the state is responsible for the costs that arise in order to maintain hospital capacities. The health insurance companies bear the running costs. (& copy picture-alliance / dpa)

The federal government issues the framework provisions for managing inpatient capacities and for remuneration for hospital services. However, the relevant provisions are subject to the approval of the Federal Council. In addition to Book V of the Social Code (SGB V), the most important legal bases for inpatient care are the Hospital Financing Act (KHG), the framework of which the states specify in their own state hospital laws, the Federal Care Rate Ordinance (BPflV) and the Hospital Remuneration Act (KHEntgG), which came into force in April 2002.

Hospital planning

The federal states are tasked with ensuring that the population is supplied with hospital services in line with their needs. To do this, they create a hospital plan and use it to decide the number of hospitals and beds required. Hospital planning is carried out differently from state to state: While some states limit themselves to framework specifications such as the locations of the hospitals, others work out specific specifications that sometimes even include the structure of individual departments (Deutsche Krankenhausgesellschaft 2004).

The state authorities are fundamentally obliged to work closely with the associations and institutions involved in the state; the hospital concerned has the right to be heard (Section 7 (1) KHG). How these actors are involved differs from country to country.

The regional hospital associations (LKGs) and the regional health insurance associations are usually involved in hospital planning. However, their participation rights do not go beyond hearing and advice. The decision-making authority about the hospital plan lies with the respective federal state, i.e. it is the responsibility of the state. The health insurances and hospitals can agree on a lower number of beds compared to the specifications of the hospital plan, but are not allowed to change the service structure of the hospital (§ 109 SGB V). Otherwise they only have the right to take legal action against the decisions of the hospital planning.

Under certain circumstances, the health insurance companies are permitted to conclude a supply contract with hospitals that are not included in a state hospital plan (Section 108 No. 3 SGB V). However, unlike the plan hospitals, the institutions concerned have no legal claim to this.

If a hospital is included in a state hospital plan, the legal entitlement to conclude a care contract with the responsible associations of the health insurance companies is connected with it. This also applies analogously to the university clinics, which are not subject to hospital planning, but for which the inclusion of the university in the state's university directory gives the right to bill the health insurance companies for the services provided to patients with statutory health insurance. Fundamentally, the health insurances can terminate the supply contract with a plan hospital, but this is only possible if the facility "does not guarantee an efficient and economical hospital treatment" (§ 109 Abs. 3 Nr. 1 SGB V in connection with § 110 Abs . 1 SGB V). Beyond these reasons, the health insurers have no discretion with regard to the conclusion of a supply contract.

The determination of the bed requirement results from the criteria "number of inhabitants", "hospital frequency", "average length of stay" and "desired level of bed utilization". (& copy picture-alliance, ZB)
In addition, the state associations of the health insurance funds and the associations of the substitute funds can only terminate a contract together, and the reasons for termination must not only exist temporarily. In addition, the termination is subject to the approval of the competent state authority (§ 110 SGB V). This, in turn, may only refuse approval on the condition that the hospital in question is indispensable for needs-based care (Section 110 (2) SGB V). However, it is very likely that this argument will be used, because otherwise the state authority would question the appropriateness of its hospital planning. The health insurance companies are therefore de facto obliged to contract with the planned hospitals.

The number of planned hospitals and beds has declined since the mid-1970s, largely in sync with the total number of hospitals and beds. In 2010, of the 1,758 general hospitals in Germany, 1,455 were planned hospitals (82.8 percent), 34 university clinics (1.9 percent), 82 hospitals with a supply contract with the state associations of health insurance companies or the associations of replacement insurance companies (4.7 percent) as well as 187 other hospitals without a supply contract (10.6 percent) (Federal Statistical Office 2012).

The determination of the bed requirement results from the criteria "number of inhabitants", "hospital frequency" (ie the number of hospital admissions per 1,000 inhabitants), "average length of stay" and "desired level of bed utilization". The bed requirement formula is therefore:

For a region with 1,000,000 inhabitants, a hospital frequency of 20 percent (i.e. 200 hospital admissions per 1,000 inhabitants) and an average length of stay of eleven days, a bed utilization rate of 82 percent would result in a requirement of 7,350 beds. A value of 85 percent is used as a benchmark for the degree of bed occupancy. This takes into account the fact that the frequency of hospitals is subject to strong seasonal fluctuations and that the hospitals must have sufficient capacities to be prepared for times of high demand.

In the discussion about the future of hospital planning, more and more attention is being drawn to the need to take into account other parameters in addition to the traditional bed requirement formula when planning the hospital bed requirement (Stapf-Finé / Polei 2002). Structural factors on the supply side as well as on the demand side should flow into the planning.
  • On the supply side, it is above all the availability of facilities outside the inpatient sector that influences the utilization of the hospital. These include, for example, the density of general practitioners and specialists or the range of nursing homes and rehabilitation facilities. In addition, the number and type of services provided are also important.

  • On the demand side, there is primarily the development of morbidity, taking into account the types of illness. In Hamburg, the requirement of a morbidity-oriented bed requirement planning has been realized for the first time.

Dual financing

The "needs-based supply of the population with efficient, self-sufficient hospitals" (Section 1, Paragraph 1 of the KHG) requires economic security for the facilities concerned. The hospitals included in the hospital plan ("plan hospitals") have a legal claim to this security. Demand planning is therefore linked to the obligation or right to finance the institutions concerned. The economic security of the plan hospitals is carried out by means of dual financing, i.e. by two independent decision-makers (Section 4 KHG):
  • The state is responsible for financing hospital investments, i.e. for those costs that arise in order to maintain hospital capacities. This applies to the construction of hospitals, the initial equipment of the hospitals as well as the procurement of certain fixed assets. Until 1984 the investments were financed jointly by the federal government and the federal states, since then only the federal states have been responsible. Funding by the state is an expression of the widespread view that ensuring sufficient supply capacities is a public task.
  • The health insurance companies bear the ongoing operating costs of a hospital, i.e. those costs that arise directly in connection with the medical treatment. Up until the mid-1990s, the running costs were financed by means of fully flat-rate nursing care rates on the same day. With the Health Structure Act 1993, this model was replaced by a mixed system of flat rates per case, special remuneration and nursing care rates. Since January 1, 2004, this mixed system has been gradually converted into a system financed exclusively by diagnosis-related flat-rate fees (Diagnosis Related Groups - DRGs).
Beyond this dual financing, hospital operators (municipalities, charities, etc.) make a contribution to the economic security of hospitals by compensating for their deficits with grants.