Focus on Hospital Reform: Political Decisions and Their Impact on Surgical Care

The editorial team of the Leading Medicine Guide took the opportunity to interview Dr. Björn Schmitz in his capacity as chairman of the Westphalia-Lippe of the Professional Association of German Surgeons (BDC) and spokesperson for all BDC regional chapter chairs, to learn more about the specific challenges of hospital reform, its consequences, and the necessary adjustments.

Hospital reform ranks among the largest healthcare policy restructuring projects of recent years—with far-reaching consequences for structures, financing, continuing education, and the future of surgical care. While policymakers promise efficiency, quality, and transparency, many hospitals, private practices, and young physicians are facing profound changes that present opportunities but also bring considerable uncertainty. In this tension between political aspirations and clinical reality, key questions arise regarding the surgical professional association and its assessment of the reform.

To implement reform guidelines effectively in both rural and urban regions, flexible adaptation to local conditions is necessary. This includes a detailed analysis of regional needs to account for the density of care provision, patient numbers, and specific requirements. Local hospital administrations and regional associations should be given sufficient leeway to adapt guidelines to their own structures. 

“When you look at the hospital reform, you can certainly see a positive underlying intent: the goal is to improve the quality of care and create more streamlined, efficient structures. Centralization plays a major role in this. At the same time, however, things become difficult as soon as you consider the regional perspective. I need to elaborate a bit here: I am speaking here not only as the chair of the state association, but above all as an additional voice for the regional representatives. And regional representatives—those are the private practitioners. Surprisingly, few have so far considered that the hospital reform also significantly affects our colleagues in private practice. First, however, let’s look at the basic assumptions: Fundamentally, I personally—but also we as the BDC—indeed, all doctors—are in favor of reform, provided it improves the quality of medical care and healthcare for the population as a whole. After all, the status quo shows that we spend an enormous amount of money, but by European or global standards, this does not result in us living longer. Nor is the quality of life in our final years necessarily better than in other countries—though it is certainly much more expensive. And that raises the question of why this is the case. Let’s now look at the specific example of hospital reform in North Rhine-Westphalia, where we’ve already gained some experience. The idea of centralization makes sense at first glance. However, politically, it has been framed in such a way that services—especially surgical procedures—are centralized, leading to a kind of black-and-white logic: what is done at the central facility is considered good; what takes place elsewhere is no longer considered good or should not take place at all. Here’s a simple example: A hospital that performs a large number of pancreatic surgeries and excels at them is supposed to serve as a center. But that doesn’t automatically mean this hospital is also perfectly capable of performing hernia surgeries. Nevertheless, these smaller procedures are politically drawn into the centralization process. This creates a pull toward large tertiary care hospitals, while smaller hospitals providing primary and standard care are left behind. Their services will be reimbursed at lower rates in the future, making it nearly impossible for hospital management to operate these facilities profitably. “On the one hand, services that are generally better reimbursed are being withdrawn, and on the other hand, the remaining services—keywords: hybrid DRGs and the shift toward outpatient care—are to be provided on an outpatient basis as much as possible, in some cases even outside the hospital,” explains Dr. Schmitz, adding:

“This inevitably leads to a decline in quality—at the expense of patients. The maximum-care providers, which are now expected to take on many new service groups, simply cannot manage this in the short term: In addition to infrastructure, there is a shortage of staff, operating room capacity, parking spaces (for family members), and beds. The result is longer wait times and the diversion of patients. At the same time, patients at small hospitals—which have previously offered high-quality primary and routine care—may soon no longer be able to receive treatment there because management says, ‘We can no longer cover the costs—please go to the outpatient surgical center.’ The problem is, these centers don’t even exist in many places yet. And this is where private practitioners come into play once again. They, too, cannot simply absorb the additional outpatient procedures that are now set to be outsourced en masse. This results in a reduction in the services provided, coupled with a reduction in reimbursement—and ultimately, that is precisely the stated goal of the reform.”

To prevent structural reforms from eroding local surgical care rather than stabilizing it, a nuanced approach is needed that takes into account both the political goals of the reform and the actual care needs.

Every reform must be based on realistic planning, but the hospital reform in North Rhine-Westphalia reveals structural problems. The dual financing system—operating funds from health insurance companies, capital funds from the state—has been neglected for years. States invested too little, forcing hospitals to finance operations out of their operating funds. This system is now collapsing, while demand analyses are continually being revised downward because services are no longer adequately reimbursed. 

Dr. Schmitz explains this in more detail: “In practice, the reform means that large hospitals are taking on new services, while smaller facilities providing basic and standard care are coming under financial pressure. Policymakers have made decisions independently of the hospital operators, leading each to try to secure the maximum benefit for itself. Several expedited legal proceedings are still underway, but the reform is largely in effect: payment is tied to service groups, which severely restricts budget planning and management. To sustain smaller hospitals financially, policy direction and financial support are necessary. Otherwise, everything will concentrate on large hospitals, while investor-driven outpatient surgical centers take over the rest. Private practitioners are often integrated into medical care centers (MVZs) or group practices and cannot fill the resulting gaps. Care at large hospitals can only be ensured through cooperation with other hospitals. The hospitals in Münster and Essen demonstrate that networking works: specialized hospitals handle complex procedures, while routine surgeries are performed at partner hospitals. This is based on regional, cross-insurer budgets provided by health insurance companies to facilitate collaborations and distribute resources fairly. The widespread mantra that “quantity equals quality” falls short, because quality declines when only certain services are performed excessively often. Calculating case volumes for entire hospitals further exacerbates this problem. When looking at hospitals, a paradox emerges: A hospital with eight surgeons and another with three can be formally rated the same if they have similar case volumes, even though their expertise is distributed differently. At the same time, everyone is demanding more and more specializations—right or left of the liver, upper or lower abdomen—yet a 24-hour on-call system for highly specialized surgeons is practically impossible. Specialists work during the day; at night, the generalist has to step in. I like to compare this to track and field: a sprinter, high jumper, or 400-meter runner excels in their discipline but not beyond it. The decathlete, on the other hand, is good at many things—and the situation is similar in surgery. The general surgeon, defined as a separate service group, reliably covers 80% of cases. Specialists such as visceral or trauma surgeons complement this, but are not necessary everywhere to ensure comprehensive care.”

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Certain specialized fields—such as esophageal or pancreatic surgery—have been heavily emphasized in the media, yet they play only a minor role in day-to-day patient care. The focus on specialization has far-reaching consequences, both for hospitals and for patients’ decisions.

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Single, elderly, and immobile individuals want to have a hospital right around the corner. If they see that a hospital is no longer allowed to provide certain services, this can lead them to avoid going there altogether or to postpone surgeries. 

“This was observed, for example, during the COVID-19 pandemic: Many people stopped going for preventive care because they didn’t feel able to travel long distances. These decisions aren’t always made consciously, but they have massive repercussions. The result is a downward spiral that particularly threatens smaller hospitals: they are no longer assigned service groups, patients no longer choose the hospital, and this can lead to financial problems and, in the long term, even closure. Another issue is the shift toward outpatient care, which can generally be a sensible way to relieve the burden on hospitals. In practice, however, it poses considerable difficulties, especially for people living alone or with limited mobility. The concept of hybrid DRGs means that cases are now billed as “non-inpatient = hybrid”—even though they are not truly outpatient cases from a medical standpoint. The problem also lies in the organization: A hospital network could create surgical centers where private practitioners and hospital physicians treat patients together. This would require pre- and post-operative care for patients, including emergency care and overnight accommodations. But providing these resources is expensive: beds, nursing staff, meals—all of this costs money that isn’t covered for outpatient services. Bureaucratic hurdles further complicate the situation. If a doctor decides, from a medical standpoint, that a patient should remain hospitalized, the health insurance provider may reject this because the case is considered “suitable for outpatient care.” In such cases, every decision to admit a patient must be justified in detail, which is time-consuming and often only partially reimbursed. Central operating rooms with anesthesia and surgical staff incur high costs that cannot be covered by outpatient services alone. The burden on nursing staff is also increasing: patients who used to be hospitalized are now left to fend for themselves at home. The greater the need for care, the more labor-intensive the care becomes—and family members are often unable to take on this responsibility. Pre- and post-operative care isn’t covered for hospitals anyway, so these patients are left on their own when in doubt,” Dr. Schmitz notes thoughtfully.

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Hybrid DRGs are flat-rate payments that provide the same reimbursement for certain procedures—regardless of whether they are performed on an outpatient basis or require an overnight hospital stay. This is intended to save costs, but it often leads to problems because medically necessary inpatient cases are not adequately funded.

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Under the hybrid DRG system, another problem arises in practice: A patient sent home after groin surgery receives an emergency plan, but its implementation is limited. 

Dr. Schmitz explains: “In an emergency, the patient must call an ambulance themselves to be taken back to the hospital. Private practitioners provide only limited care at night, such as for acute problems like a severely swollen knee or bleeding. Many emergencies aren’t noticed until hours later, which can put patients at risk. Comparisons with countries like Denmark, Sweden, or the U.S. are misleading in this context. Those countries have different systems: Patients often stay in a hotel next to the hospital, where medical staff provide follow-up care. In Germany, on the other hand, patients go straight home without anyone ensuring their follow-up care. Private practitioners cannot make up for these gaps—their practices aren’t twice as large, and the number of doctors hasn’t doubled just because more surgeries are being performed on an outpatient basis. This chain of problems goes largely unnoticed. In the reform process to date, the concerns of the surgical community have found little traction, as professional associations were often dismissed out of hand as lobbyists by the former federal minister and his advisory group. Initial discussions have already taken place with the new health minister, and members of parliament are also showing understanding. Nevertheless, the reform is not yet complete, and political majorities are needed to push through adjustments. If this does not happen, patients face the risk of a decline in quality of care: fewer available slots, longer waiting lists, reduced personalized care, limited continuing education, more digital documentation, and a strict focus on budgets. “In the end, so much of it is just about money, while patient care takes a back seat.” 

Hospital administrators are under enormous pressure: they are wondering whether they can even continue to operate a facility under the current conditions. Although the state classifies these hospitals as essential and requires their continued operation, the financial situation is often unsustainable. At the same time, paradoxically, the state provides subsidies when a hospital is closed, which makes the situation even more absurd.

“Many hospital administrations are therefore faced with the difficult decision of how to continue operating their facilities under these conditions. The idea of networking hospitals is also complex, especially when it comes to its financial implementation. The DRG system does offer theoretical approaches here: regional DRGs or dynamic hybrid DRGs could be a solution (DRG stands for “Diagnosis-Related Groups,” which is the case-based payment system). Under this system, a hospital could, for example, receive additional payments for overnight stays, nursing care, or facility availability without having to bill the entire case as an inpatient stay. The problem with hybrid DRGs, however, is that responsibility for patient overnight stays lies entirely with the physicians, while reimbursement remains the same—regardless of whether the patient is discharged as an outpatient or must stay overnight as an inpatient. Hospitals are thus unable to cover the actual costs of care. This is where policymakers must step in. Clear financial frameworks are needed to stabilize hospitals providing primary and standard care. As a professional advocacy group, the BDC is therefore taking a very clear stance to highlight these shortcomings and demand solutions,” Dr. Schmitz emphasizes. 

High-quality and predictable continuing education can only be guaranteed if reforms and funding models specifically take into account the framework conditions for training and hospital operations. Under the rigid DRG conditions, which reimburse services based on case-based flat rates, there is a risk that time-intensive continuing education measures will be deemed economically “unprofitable” and therefore neglected. 

“Many hospitals feel as though they are heading into a black hole: No one knows exactly how the financial situation will develop, whether they will be able to hire the necessary surgeons, or how to provide doctors with proper continuing education. The situation is extremely dire. On the one hand, hospitals must ensure coverage for certain service groups and maintain the necessary specialist physicians. On the other hand, the question arises as to who will train future physicians, particularly for procedures that are increasingly performed on an outpatient basis or for which training is only available at specialized centers within specific service groups. Standard procedures such as hernia repairs are performed in private practices by specialists in private practice, who, however, often do not have authorization to provide continuing medical education. Residents cannot simply observe in private practices and learn the procedures—and the practices themselves are focused on their own specialist duties. Rotation models involving tertiary care providers, general practitioners, and primary care providers are theoretically conceivable but practically almost impossible to implement. Highly specialized fields such as specialized visceral surgery can no longer be taught without years of rotation. This leads to a tragedy: Germany used to have an extremely strong global reputation in medicine and hospitals, but current trends are jeopardizing this standing. 75% of all hospitals are currently operating at a loss. Even flagship hospitals like the Charité in Berlin—which offers networked, cutting-edge medical care across all service categories and has sufficient doctors and nurses—are incurring enormous losses in the hundreds of millions. These institutions meet all the goals of the hospital reform, provide cutting-edge medical care, and enjoy the highest international recognition—and yet they are not financially viable. Other hospitals in the region also operate at the highest level and are nevertheless running at a loss. “The current reform does nothing to improve this situation,” Dr. Schmitz sharply criticizes. 

A professional association can ensure that political processes take surgical expertise into account by systematically acting as a link between politics, administration, and medical practice. The BDC is organized by federal states and state associations, with the state associations having their own chairs and private practitioners also being represented.

“As the joint spokesperson for the state association chairs and regional representatives of the BDC, I work together with my colleague, Prof. Dr. Carolin Tonus from Hamburg, to consolidate the interests of the surgical specialty societies and present them at meetings, to the Presidium, and to the Executive Board. We meet three times a year, hold regular Zoom conferences and meetings, and compile the results, which are then communicated to policymakers. This involves direct dialogue with the Ministry of Health, the German Medical Association, elected officials, and healthcare providers. Demands are rarely pushed through publicly via the media; the political process involves intensive discussions and consensus-building. A current example is the debate over hospital funding. Health insurance companies want cost savings, as they view hospitals as the largest expense item. This is where the BDC (together with the DGAV) steps in to explain its positions and find solutions. For example, the hybrid DRG regulations were successfully adjusted for certain cases, such as appendicitis, while more complex cases must remain inpatient. This requires intensive one-on-one discussions to secure medically justified exceptions. The current reform is heavily oriented toward measurable metrics, such as the number of surgeries, and neglects “patient-centered care,” which cannot be quantified. The political perspective often follows management logic that is only partially applicable in medicine: “A hospital or a private practice physician is not a standardized product—regional differences and specific patient situations make a huge difference,” explains Dr. Schmitz, emphasizing:

“My hope for improving the system would be sufficient funding for hospitals so that they can operate at a ‘break-even point’ without having to restrict medical services for financial reasons. Investments in construction, modernization, and staff must be secured. My greatest wish remains patient-centered care: When hospitals are closed or procedures are restricted, wait times increase significantly, and basic and routine care suffers massively. Patients cannot simply seek care abroad, and even those who could are often constrained by financial or legal barriers. The reform, as currently implemented, thus jeopardizes care for the population and leads to an increasing burden on patients, doctors, and hospitals.”

To ensure that surgical care is once again guided more by medical priorities than by economic constraints, several structural adjustments would need to be implemented. It remains to be seen how the situation will develop starting in 2026. 

Dr. Schmitz comments: “There are currently no reliable figures available. However, the Ministry of Labor, Social Affairs, and Health has already published which hospitals will still be allowed to offer certain service groups—and the numbers are down across the board. The categorization of these service groups will reveal just how dramatic the situation will actually become. Initial reports already indicate that demand is rising sharply: with the same surgical capacity, the same staff, and the same number of beds, some hospitals are seeing a 30% increase in requests for upper abdominal surgery and are already experiencing initial wait times. The dramatic consequences for patients who are not treated in a timely manner are therefore foreseeable. The legislature defines basic care as being available within a 20-minute drive for 90% of the population—that is, for around 16.2 million people. What will become of the 1.8 million people outside urban service areas remains unclear. In practice, however, this becomes even more unrealistic: In urban areas, the drive takes significantly longer even on a Friday evening during rush hour, and the new federal reform, for example, also requires that cooperating hospitals be no more than two kilometers apart—a requirement that is difficult to comprehend and whose data basis is unclear. The situation is even more precarious, particularly in rural regions east of North Rhine-Westphalia: Doctors must travel long distances to transport patients to maternity or primary care centers. Under these conditions, it will be nearly impossible to maintain basic and standard medical care. Many doctors feel compelled by the high demands, liability risks, and limited resources to stop offering certain services. The reform thus threatens to massively restrict medical care for large segments of the population.”

Dr. Schmitz, however, ends our conversation on a positive and optimistic note: “Of course, the level of frustration caused by political and organizational circumstances is high, but every day I try to do what’s best for the patients and my team. The goal is always to provide good patient care, regardless of economic interests. Even if I simply manage to avoid putting pressure on anyone on my team, so that everyone can focus entirely on caring for patients, that’s a great success in these difficult times. I’m also involved in activities outside the hospital, such as the ‘Careers Night’ at high schools, to introduce interested high school seniors to the medical profession. Likewise, there are many worthwhile projects underway within Rotary clubs. In this context, I passionately advocate for making the medical field as a whole more inclusive of women, especially in leadership positions. Greater participation by women would greatly benefit our industry and hospital organizations alike. Currently, despite the high number of (female) medical licenses issued, few women end up in primary care. The medical profession remains the most wonderful profession in the world, and I am happy to experience that anew every day. I always conclude my lectures with the same motto: “Stay optimistic,” by Ingo Zamperoni. This is my conviction, which I have held for many years—despite all challenges, optimism remains a central driving force.”

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• Chief of the Department of General and Visceral Surgery and Proctology, Knappschaft Kliniken Kamen
• Focus on state-of-the-art diagnostics and treatment in abdominal surgery and proctology
• Medical Areas of Expertise: Visceral surgery, hernia surgery, reflux surgery, endocrine surgery (particularly thyroid surgery); specialization in minimally invasive (keyhole) surgery, including complex procedures
• Specializes in wound care, particularly in the treatment of diabetic foot syndrome
• Outpatient clinic authorized by the Association of Statutory Health Insurance Physicians (KV) for second opinions: diabetic foot syndrome & cholecystectomy
• Board-certified specialist in surgery and visceral surgery, specialized visceral surgery, emergency medicine, sports medicine, manual therapy, and medical assessment
• MHBA degree combining medical excellence with business management expertise