The Bundestag gave the green light to a new law in mid-October, which weathered its final storm on Friday morning when it obtained a slim majority approval from the Bundesrat.

The Bundesrat, representing the federal states, has a significant role in hospital planning in Germany. The states had expressed strong reservations about the project and it remained uncertain until the eleventh hour how the voting would play out.

Dietmar Woidke, the Premier of Brandenburg- a social democrat like Scholz and Lauterbach- took the drastic step of relieving his health minister of his duties during the discussion, to ensure his vote against the project in its current form.

A key feature of this reform is the introduction of a novel system of reimbursement for hospitals. At present, a hospital’s income is purely determined by the number of surgeries they conduct. This is set to change with the new structure, where 60% of the expenses will be covered by a fixed sum allocated for staff and equipment for specific surgeries. This system aims to discourage unnecessary procedures by eliminating the need for hospitals to conduct more surgeries just to boost their income.

In order to qualify for funding for surgeries, hospitals will need to comply with stringent quality standards. The objective of the reform is to ensure that only large, well-equipped hospitals undertake complex surgeries such as cancer treatments. A transformation fund will back this restructuring and bear the expenses. This includes the merging and shutting down of some of the approximately 1,700 hospitals in Germany.

Though the law is set to come into effect on Jan. 1, 2025, the new framework will be gradually implemented over a period extending up to 2029. This article holds invaluable insights for potential investors or those with an interest in the healthcare sector, though its primary focus is on informing the reader about these significant changes in German healthcare.