Which hospital systems are profitable

Dr. Economicus - Greed for profit rules at German clinics

What do you think of when you think of a hospital? Doctors who approach bed like angels? Blood soaked gauze bandages? Nausea when waking up after the operation, pain in the groin?

You are certainly not wrong with that. But do you also think of administrative clerks who work out how much money you're bringing in? To managing directors who instruct their chief physicians to have fewer multiple sclerosis and more strokes instead? Do you remember that management consultancies such as Roland Berger or McKinsey are behind the organization of your hospital stay?

It's been ten years since the SPD and the Greens introduced a new financing system for hospitals. At that time, a senior ministerial official had grandly announced the reform as “the most revolutionary change in the hospital sector of all time”.

The red-green government has kept its word. It has transformed patients into business indicators and hospitals into market-based companies. People became risks and side effects for the company's balance sheet. Medicine and ethics were subjected to the economic imperative.

In 2003, hospital funding was converted to performance-based remuneration. Since then, the health insurers have only paid the clinics lump sums that correspond to the usual cost of treatment. The average market price applies. If a hospital cannot restore a person's health within this budget, it will have to pay the additional costs itself. If, on the other hand, it works cheaper than calculated, it makes a profit.

Where are the ethics?

Because fewer and fewer municipalities can pay for the losses in their clinics and more and more houses are being privatized, the annual surplus has become the key indicator for hospital management. And not the quality indicators. These serve at best - and wherever useful - to optimize the operating result. For example, by minimizing costly complications through quality improvements.

The financing system is therefore viewed more and more critically, especially by the medical community and patient representatives. “A system free of ethics?” Asks the physician Kai Wehkamp from the University Clinic in Kiel in an article by Deutsches Ärzteblatt. He is not the only medical professional to criticize the flat rate system. Because it creates incentives to perform certain services and to refrain from others.

The institute tries to calculate the flat rate per case for the hospital remuneration system based on the actual costs of the previous year. In reality, however, there are lucrative and less lucrative treatments.

Conservative treatment - such as physiotherapy instead of back surgery - almost always brings in less money for the hospital than an operation. Technical interventions offer potential for efficiency, while this is not possible with treatments that primarily require human attention. Where costs can be reduced, profit increases. This is how the remuneration system influences a hospital's catalog of services. It dictates what treatment patients get.

Even the salaries of many medical professionals depend on the clinic's success. "Of course, the target agreements with our chief physicians also include macroeconomic goals," admits Karl Max Einhäupl, CEO of the Berlin Charité, in the Berliner Zeitung. The economy also rules at a hospital that stands for exceptional medical quality around the world. "If a chief physician wants to place more doctors, he must also demonstrate that this is economical, for example through optimized treatment processes or comprehensible and sensible additional services."

Page 2: "Patients come to my practice in a hair-raising condition"

Head physicians and senior physicians are obliged through bonus payments to treat patients in the most lucrative way for the hospital. They are encouraged to refrain from treatments that jeopardize the clinic's success. On the other hand, they should increasingly carry out profitable interventions.

This system is taken to extremes with bonuses that are paid for the achievement of specified quantities. Excesses of this could be observed in Göttingen, for example. The university clinic there transferred an additional 1,500 euros to a senior physician for each liver transplant as soon as he had a minimum number of operations. He drove up the number of lucrative transplants in a very short time - even if he apparently had to manipulate the organ allocation system with falsified patient data. Two thirds of senior doctors consider bonus payments linked to economic success to be unethical.

It is true that the case in Göttingen was clearly criminal. However, it is often not possible to distinguish whether medical action is already economically motivated or whether it is still a common decision within the medical discretion. Does a patient have to go to the intensive care unit in every case? But there he brings more money. Whether a spine has to be operated on, or whether it is tried again with a cheaper and gentler physiotherapy for the patient - all of this is at the discretion of the doctors. There is also scope for questions as to whether a patient needs an endoprosthesis, knee prosthesis or hip prosthesis. Expensive diagnoses are supposed to make patients feel safe. In truth, in many cases they are superfluous.

The clinicians do not like to think about questions of revenue optimization every day. On the contrary, they feel increasingly restricted in their therapy decisions due to the economic pressure. Maneuvered by the business economists in the house. They do not fail to calculate the economic consequences of their work for their doctors. Budget discussions, case numbers and profit targets are part of the ritual of the monthly meetings with the commercial department.

Standardized treatment for non-standardized patients

In everyday life, too, the management is always on their backs: in the person of the DRG or case manager. These are mostly retrained nurses. You can now calculate how long and extensively patients can be treated without endangering the hospital's economic goals. As a rule, at the start of treatment, the medical professionals are informed of the target discharge date - as it is called in the most beautiful counselor speech - for the patient. At the latest when a sick person threatens to become a losing business, the case managers put pressure on the medical professionals so that the patient is discharged.

Management consultancies have long been going in and out of the clinics. They implement treatment processes "on the basis of which costs are optimized and length of stay reduced", as it is called in a description by Roland Berger. Daily key figure reports for each patient should provide information regarding the length of stay goals and revenue expectations. Performance figures are specified for the laboratory as well as for the nursing staff. A supply that corresponds to the individual patient needs is no longer provided for in these economic models. They practice standardized treatment for non-standardized patients.

Resident doctors and rehab clinics then have to pay for it. A study on behalf of the German Pension Insurance comes to the conclusion that the state of health of the patients upon admission to the rehabilitation clinics has deteriorated since the introduction of the flat rate system.

“You all know the term 'bloody dismissal', which is contested over and over again. But as a resident surgeon, I can tell you that this has now become part of my normal everyday work, ”reported the Frankfurt doctor Bernd Hontschik recently at the surgeon day in Nuremberg. "More and more patients come to my practice post-operatively in a hair-raising condition who are extremely difficult to care for on an outpatient basis."

Five years ago, Hontschik was appointed to the works commission - the local supervisory board - of the Höchst Hospital by the Frankfurt magistrate. He was horrified what he experienced there. “The commercial director had the chair and had the big say. The influence of the medical director hardly got beyond objections, ”says Hontschik. "Diagnosis-related case groups (DRG) were negotiated, personnel decisions and the weal and woe of entire departments were discussed and decided based on the case severity index. There was only one goal: black numbers on the balance sheet. "

An important factor for this: increase the number of cases. Treating more and more has now become a dogma in hospitals. If costs rise, this is the only way to guarantee stable or increasing income. The clinics therefore use all legal and illegal means to advertise patient admissions. That can be classic marketing. Or one pays premiums to general practitioners for referring a patient.

The flat rate system is a market system. And market systems are designed for growth. The debate about qualitative growth has long since arrived in the real economy. It has not yet started in the clinic sector. The debate is urgently needed. At the moment it's about quantity, turnover and profit.

In this system, the patient is basically only a means to an end.