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Rationalising the hospital sector in Europe – what works? 

Germany, France and the UK all have different strategies for public-sector hospital rationalisation. What works?

After 20 years of drift, Germany finally has a hyperactive health minister in Jens Spahn. The hospital sector doesn’t like it. Meanwhile in France the Ministry of Health says jump and public hospitals do just that. The UK which probably has the tightest provision is a little schizophrenic. All three should look to Denmark.

The German hospital sector is massively over-bedded and hasn’t moved to ambulatory care at anything like the pace of the UK, Nordics or the USA. The federal nature of provision and the strong role of the medical profession in determining payments has led to a Byzantine system. Spahn has effectively cut the Gordian knot. He has removed nursing as a profit centre and upped nurse to patient ratios, cut DRGs for inpatient care and enabled telehealth. The move leaves the public sector facing massive profit pressures. Indeed consultancy WMC expects 50 hospital groups to go to the wall in 2020. Most will be public or not-for-profit. Spahn’s approach says “OK you’ve failed to reform yourselves for decades so now the weakest will go to the wall”.

In France, in 2018 the Ministry of Health demanded that all public hospitals joined larger groups by a fixed date. Who you were supposed to jump into bed with wasn’t specified. But jump you had to. Our sources say this has worked insofar as larger chains have formed. The next steps are to make them more efficient and ensure that the right people are in bed with the right people.

English plans to rationalise child heart surgery in a few large hospitals led to a predictable outcry in 2018. Nevertheless, the plan which had the inescapable logic of the more operations you do the better you are, was eventually forced through. But in general, the 300+ trusts in England enjoy huge autonomy.

So what approach works best? Decentralising power sounds sensible. It also can let politicians off the hook.  In practice, we do not think it works. Brave politicians centralise. The notion that German or British hospitals are free to choose their own electronic health record system leads to vast inefficiency and massive replication of effort. The same is clearly the case when it comes to procurement. Decentralisation here leads to hospitals striking poor deals which are then subject to non-disclosure agreements and so complete opacity. But it is a brave politician who takes on the medical profession and risks enraging local communities by shutting hospitals.

We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.