In the dynamic landscape of the German hospital sector, several challenges and developments are currently taking centre stage that affect both the quality of care and the economic stability of the facilities.

Quality competition between hospitals is a key challenge. There is deliberate competition between hospitals, focussing on the quality of medical care. This competition is important to ensure the profitability of hospitals and to give patients the opportunity to choose between different providers. A loss of this competition could lead to a decline in the quality of treatment.

Another key aspect is adequate staffing, particularly in the area of nursing staff. Procedures are being developed to determine the number of nursing staff required on wards with beds in order to adequately cover nursing requirements.

Demographic change poses a further challenge. An ageing population is leading to an increasing need for medical and nursing care. At the same time, the shortage of skilled labour is worsening, making care even more difficult. These developments require the healthcare system to adapt in order to ensure needs-based care.

Financial aspects also play an important role. The growing need for care and medical progress are leading to an increased need for funding. There is a need to reform the financing structures in order to ensure the efficiency and effectiveness of the utilisation of funds. Cost pressure in the healthcare sector is increasing, which has an impact on medical care and liability risks. The tension between the economic efficiency requirement and the demands on medical care is becoming increasingly apparent.

In addition, organisational duties and quality assurance are becoming increasingly important. The organisation of medical care must be designed in such a way that safe and effective patient care is guaranteed. This also includes ensuring the functionality of medical equipment and compliance with hygiene standards.

To summarize, the German hospital system faces the challenge of finding a balance between high quality of care and economic efficiency. This task requires comprehensive reforms and adjustments.

The Hospital Care Improvement Act (KHVVG), which came into force on 12 December 2024, represents a significant reform to improve the quality and efficiency of hospital care in Germany.

The KHVVG marks a significant step towards improving the quality of care in German hospitals and reforming remuneration structures. Before the KHVVG came into force, remuneration in the hospital sector was heavily dependent on flat rates per case, which led to false incentives and insufficient consideration of actual care requirements.

The KHVVG introduced several significant changes. One of the key innovations is the entitlement to transitional care for insured persons following hospital treatment. This transitional care can be utilized for up to ten days in a cross-sector care facility or at another hospital location if certain services cannot be provided or can only be provided at considerable expense. Transitional care comprises comprehensive care, including medicines, remedies and aids, activation of the insured person, basic and treatment care, discharge management as well as accommodation and meals.

A further aim of the KHVVG is the introduction of a retention fee, which is to replace around 60% of the previous flat rate per case revenue. This reform is intended to increase the financial stability of hospitals and reduce their dependence on the number of treatment cases. In the area of paediatrics in particular, additional surcharges are planned in addition to the retention fee in order to secure care in this sensitive area.

The reasons for enacting the KHVVG were the need to improve the quality of care in hospitals and to adapt remuneration systems to actual care requirements. The introduction of transitional care and the reform of remuneration structures are intended to ensure patient-orientated, high-quality care that meets both the needs of patients and the economic requirements of hospitals.

Despite the positive changes, there are also critical voices: In the specialist area of paediatrics, a significant proportion of revenue remains dependent on the number of treatment cases, which could lead to false incentives. In addition, the implementation of the economic efficiency principle in the healthcare system is seen as a challenge, as it could lead to a limitation of the medical treatment mandate.

Overall, it remains to be seen how the objectives of the KHVVG can be realised in reality and whether the targeted improvements will have the expected positive effects on the quality of care.