How do hospitals work

Focus: hospital financing

The full and partial inpatient services of the approx. 2,000 hospitals are remunerated via the DRG system (Diagnosis Related Groups) in accordance with Section 17b of the Hospital Financing Act (KHG). Details of the remuneration of the DRG hospitals are regulated in the Hospital Financing Act (KHG), in the Hospital Remuneration Act (KHEntgG) and in the flat rate agreement of the self-administration partners. The basis for the remuneration of full and part-time inpatient services by psychiatric and psychosomatic hospitals and specialist departments (psych institutions) is set out in the KHG, in the Federal Care Rate Ordinance (BPflV) and in the agreement to be made by the self-administration partners at the federal level on the flat-rate fees for psychiatry and Psychosomatic Medicine (PEPPV).

Flat rate per case and quantity

To cover the operating costs incurred per patient or hospital case, hospitals receive a lump sum in euros from the patient's health insurance, the so-called case flat rate. Depending on the case, this flat rate is adjusted using a weighting ratio. The higher the valuation ratio, the more money is paid to the hospital. Severe cases, such as a heart transplant, have a high score, while mild cases, such as an appendectomy, have a lower score. Cases in which the patient has comorbidities (e.g. diabetes) or there are complications often have higher values.

The exact amount of the flat rate per case is determined by the treatment case, i. H. according to the underlying valuation ratio and according to the state-specific price, the so-called state base case value. If you multiply the valuation ratio by the price, you get the amount that the hospital receives from the health insurance company for a specific patient.

The more patients a hospital treats, the more income it generates. There is no maximum revenue limit in the hospital sector. The number and severity of cases in hospitals increase by around 3 percent every year.

Country base rate

The state base case value (price) is negotiated annually at state level between health insurance companies and representatives of the hospitals. Together with the number of patients treated (case volume), they determine the income situation of the hospitals. In the past few years, the price negotiations have always led to an average increase in the price (national base rate), in spite of the sometimes high increases in performance.

The agreement of the price was limited up to 2013 by the basic wage rate. The prices in the hospital could only increase in line with the overall social development and the health insurance companies' premium income, which is dependent on this. This means that the prices in the hospital sector were sensibly limited upwards in relation to the contribution rate situation of the health insurance companies, but the number of cases treated was open at the top.

Orientation and change value: New legal regulation since 2013

Since 2013, the upper limit for the state base rates has no longer been the basic wage rate, but a so-called change value (Psych-Entgeltgesetz). It is agreed in negotiations at the federal level by the National Association of Statutory Health Insurance Funds, the German Hospital Association and the Association of Private Health Insurance. An important factor here is the reference value calculated by the Federal Statistical Office by September 30th, which reflects the development of personnel and material costs in the hospital sector. The basic wage rate, which the Federal Ministry of Health (BMG) determines by September 15 of each year, is decisive for the implementation of the principle of stable contribution rates in hospital negotiations (Section 71 of the Book V of the Social Code). The basic wage rate is the rate of change in the contributory income of all members of the statutory health insurance funds.

If the orientation value falls below the rate of change according to Section 71 (3) SGB V, the change value corresponds to the rate of change. If the orientation value exceeds the rate of change according to Section 71 (3) SGB V, the contracting parties at federal level determine the difference between the two values ​​and agree on the change value in accordance with Section 9 (1b) sentence 1 and Section 9 (1) number 5 of the Federal Care Rate Ordinance. If an agreement is not reached, the federal arbitration board decides on the change value. The change value forms the basis for the state base rate negotiations and represents the maximum possible increase for the state base rate value.

As in previous years, the current orientation value is below the basic wage rate / rate of change. According to the law, the basic wage rate then automatically applies as a change in value (most-favored-nation clause).