Business management specialist Ulrich Bosch is Managing Director of Sana Management GmbH, Munich, part of Sana Kliniken GmbH & Co. KGaA - one of Germany’s leading private hospital management operating companies. Earlier, in Styria, Austria, he was Chairman of the Board, responsible for transforming 21 state-owned hospitals into a private limited company. He was also Managing Director of Paracelsus Clinics, responsible for operational activities and acquisitions in Austria, Switzerland, England and France.
Procuring large equipment
Around €18 billion annually is spent on medical technology in Germany. After the US and Japan, the German medical technology market is the third largest in the world.
The financing of large medical technology equipment for German hospitals (and therefore also for radiology departments) has been regulated by law since 1972: The investment costs are contributed by the Federal States, operating costs must be met by the medical insurers.
There are different types of governmental investment assistance. Individual assistance can be applied for building projects or the acquisition of equipment. Then there are flat-rate subsidies based on the size of a hospital. Although this gives individual hospitals a certain amount of flexibility, one has to take into account that governmental funding has decreased by 25% over the last 15 years, so that the backlog of investments required across the whole of the hospital sector (building and technology) is currently between around €12-50 billion.
In the past, due to its interdisciplinary use across the hospital, investment decisions on radiology equipment in hospitals have had priority. The purchase of large-scale radiology equipment via governmental funding is by far the most common form of financing in German hospitals (68%). Only 3.6% of investments are financed via credit, 20% are financed through the hospitals’ own resources, and around 6% of investments are financed through the hospital operators.
Apart from these conventional means of financing, more flexible types of financing such as ‘try and lease’, ‘pay per use’ and public/private partnerships are on the increase. Even if these types of financing are only reluctantly accepted by public hospital operating companies, they have become much more common among private hospital operating companies. Considering that more and more public hospitals are now being privately financed, these new types of financing are set to become much more widespread in the German hospital market.
This article was published on 03/01/2006