Dr. Volker Fackeldey, M.D., is a specialist in hernia surgery and heads the renowned Hernia Center at the Maindreieck campus of Klinik Kitzinger Land. His expertise and tireless dedication have made the center a leading institution in the treatment of abdominal wall hernias. Under his leadership, the Hernia Center was recognized in 2013 as one of the first centers of excellence for hernia surgery in Germany and has continued to build on its outstanding reputation ever since.
Dr. Fackeldey uses state-of-the-art endoscopic techniques during surgery and offers a wide range of specialized treatment options, including minimally invasive hernia surgery and traditional procedures such as the Shouldice and Lichtenstein methods. As Chief of the Department of General, Vascular, and Visceral Surgery, Dr. Fackeldey has extensive additional training and specializations, including sports medicine, proctology, and chiropractic therapy.His EBSQ certification in coloproctology and membership in several expert committees ensure that he remains at the cutting edge of medical research and practice.
Dr. Fackeldey is a critical observer of the proposed changes to the German healthcare system. For example, the new hybrid DRG (Diagnosis-Related Group) is a healthcare concept that represents a hybrid form combining flat-rate case groups and service-oriented elements for billing hospital services. While traditional DRGs set hospital reimbursement at a flat rate based on the diagnosis and the extent of treatment, the Hybrid-DRG aims to take specific service aspects into account to a greater extent, thereby making financing more transparent and equitable.
The editorial team of the Leading Medicine Guide was able to hold a critical discussion with Dr. Fackeldey on this topic.
The introduction of the hybrid DRG and the new provisions in the Transparency Act in 2024 have sparked considerable debate in the healthcare industry. Originally designed to enable fairer and more transparent billing of medical services, these changes have faced widespread criticism. Experts particularly criticize the complexity and potential injustices of the new billing mechanisms. Furthermore, the implementation of the service groups in the Transparency Act is viewed as insufficiently thought through and, in some cases, flawed.
Originally intended as tools to improve financial transparency and ensure fairer reimbursement for medical services, these changes have elicited mixed reactions and presented various challenges.
The hybrid DRG, a further development of traditional DRG systems, was intended to overcome the limitations of these established models. By identifying and reimbursing specific services and cost components separately, it is designed to enable more precise billing of hospital services. This is intended, in particular, to ensure that complex and cost-intensive treatments are adequately compensated, which could lead to fairer reimbursement. Despite these potential advantages, however, there are significant criticisms of the hybrid DRG.
“The entire rollout of the hybrid DRG this year has been a minor disaster. It was supposed to start on January 1, 2024. And what I’m hearing from our billing departments is that the billing process still isn’t working properly even today. The background to this whole story is that there was supposed to be sector-equivalent reimbursement for outpatient providers and for hospital-based providers. And even that isn’t right in this form. That’s because outpatient providers can bill for more—such as the entire preparation for a patient’s treatment as well as the entire follow-up care. The way the entire hybrid DRG system came about is also rather strange. They simply added the average rate for outpatient surgeries to that for inpatient surgeries and then divided the result by two. “This means we’re facing a massive reduction in reimbursement and don’t know if it’s still possible to offer these services in a way that covers costs,” Dr. Fackeldey explains critically, outlining the potential consequences of this dilemma:
“Among colleagues, there’s talk that there will be a revival of mesh-free procedures, for example, in inguinal hernia surgery. This definitely marks a departure from a success story that has spanned more than a decade. However, there are now also surgeries performed in hospitals that can be billed under the hybrid DRG system instead of as outpatient procedures. But when you consider the high-volume centers that have performed a great many inguinal hernia surgeries on an inpatient basis, they naturally face a major problem now because they’re facing massive rebates. It’s also still unclear how patients will be billed if, despite originally being scheduled for outpatient care, they are admitted as inpatients—for example, because a complication has arisen. After all, there are always cases where patients, for whatever reason, cannot be discharged home on the day of surgery but must remain in the hospital. The hospital is free to make that decision, but it cannot bill for inpatient care in such cases. Ultimately, the entire Hybrid-DRG billing system benefits the health insurance companies. The well-being of patients is not the primary concern here. Under the Hybrid-DRG system, a hospital ends up with reductions of approximately 1,000.00 euros per case. So instead of the 2,600.00–2,700.00 euros we used to receive for an inguinal hernia operation and one night in the hospital, we now only get about 1,600.00 euros. That amounts to a few hundred thousand euros less in revenue per year. So, in the end, it’s all about cost savings and not about how much better surgical procedures are for the patient. But that doesn’t work anyway, because expenses are still rising steadily.”
Overall, the hybrid DRG system creates a major injustice in the billing options available to hospitals and private practitioners.
“Whether I, as a salaried physician at a hospital, perform 100 or 200 inguinal hernia surgeries a year makes no difference to me, since I’m on a fixed salary. A private-practice physician, however, could theoretically double their revenue if they wanted to. Hospitals are left out in the cold here—yet they are often vilified as cost drivers, while other groups are not. Some hospitals are currently struggling to survive, and something must be done to help them overcome their deficits. A good basic idea here would be an adequate flat-rate payment for preventive care—one that is actually treated as a flat rate and is not once again dependent on DRGs. After all, we’ve had a nursing care budget for some time now—why isn’t there a budget for physicians? That would take some pressure off the system. There are certainly some positive approaches being pursued by the Federal Ministry of Health as well. Of course, not every hospital is supposed to perform every type of surgery. This is about specialization and experience gained through a correspondingly high volume of cases. And these hospitals must then be well-equipped for their respective specializations,” states Dr. Fackeldey.
The increased complexity of billing systems leads to a significant rise in administrative workload. Hospitals must collect and process additional data, which ties up resources and incurs administrative costs. These changes also have an impact on day-to-day hospital operations. Hospital staff face an increased documentation burden to meet the requirements of Hybrid-DRG. Adjusting IT systems and investing in training are necessary to implement the new billing mechanisms. In addition, detailed billing requires strict quality control and compliance monitoring to avoid financial penalties.
“We’ve been dealing with a massive increase in workload for years, and it’s getting even worse right now. Here at the hospital, we’ve introduced a short-stay ward where all outpatients and day-care patients are treated, which means: The patient arrives in the morning and leaves again in the evening. If a patient does end up needing to stay overnight, they have to be transferred again. We’ve essentially separated these patients so that they don’t become part of the hospital’s normal daily routine. When I started as a resident, a patient with an inguinal hernia would stay in the hospital for a week. And now, everything that used to take a week is reduced to a single day. Of course, this is due to much improved surgical techniques, as patients generally recover much faster and are pain-free, which is very positive. It was only because of these advancements that the idea of hybrid DRGs came about in the first place. The problem, however, lies in the reimbursement for us as a hospital. The Ministry of Health’s ultimate goal is to close approximately 20–30% of hospitals. So far, this has offered no advantage to health insurance companies. After all, when a private practice physician performs an inguinal hernia repair, it costs about 700 euros. When the hospital performs the same procedure, it costs about 2,600.00 euros. Now both sides receive 1,600.00 euros each, which is good for the private practice physician, as this allows them to increase their revenue; however, they must now also work with flat rates and, to be fair, cover material costs—which was not the case before. “I don’t believe this approach will correct the high number of surgeries. And keeping the number of surgeries lower was, after all, one of the goals of the entire reform. And because savings on materials may be made here and there, this could lead to more recurrences in the future,” Dr. Fackeldey notes critically.
The implementation of the Service Group and Transparency Act poses a significant challenge, particularly with regard to the accuracy and integrity of the data published in the Hospital Atlas.
The first Hospital Atlas was published by the German Hospital Association (DKG) in 2009 and was intended to be a comprehensive collection of data and information on German hospitals. The goal was to provide a detailed overview of various aspects of hospital operations, including the care structure, performance data, quality indicators, and economic conditions. The goal was to create transparency in the healthcare system, improve the quality of hospital care, and better inform policymakers and the public about the hospital landscape in Germany, with the ultimate aim of pursuing targeted improvements in the hospital sector.
“When the first Hospital Atlas was published, there was a major outcry because they simply took the data from the quality reports. This makes no sense, since the quality reports document all of a hospital’s procedures, which has nothing to do with the external presentation of competence and quality. There was a lot of backlash because the data also contained inaccuracies. For example, a specialized clinic for prostate surgery was listed as performing 40–50 procedures per year, even though it actually performed hundreds each year. A lot went wrong back then, but that has now been corrected, and the atlas is more user-friendly. That said, it’s still worth criticizing that the Atlas focuses primarily on quantity rather than quality. Of course, the number of surgeries performed is important—someone who performs 500 knee surgeries a year understands the procedure better than someone who performs 50. But patient outcomes should also be taken into account. And what still needs to be added to the Clinic Atlas are the various certifications earned—for example, whether a clinic has been recognized for cancer treatments or joint replacement surgery. In my view, the requirements also lack mention of the certifications granted by the various professional societies, which clinics would also like to list. “I don’t yet know whether we’ll be allowed to submit this retroactively as a potential quality indicator—that will be reviewed by our quality management officer,” explains Dr. Fackeldey.
To establish the Hospital Atlas as a meaningful tool for patients, physicians, and other stakeholders, the published data must be comparable. This requires clear definitions, standards, and methodologies for data collection and reporting to ensure that the data is consistent and comparable and allows for an objective comparison between hospitals. In addition, strict data protection and security guidelines must be followed to protect the confidentiality and privacy of patient data.
The Clinic Atlas is an online platform that provides comprehensive information about clinics and hospital services in Germany. It is designed to promote transparency in the healthcare system and assist patients in choosing a clinic. The platform contains quality data, evaluations of medical services, patient experiences, and location information, and allows users to compare different hospitals based on selected criteria. This enables patients and their families to make informed decisions and find the right hospital for their individual needs.
The new regulations regarding hybrid DRGs and the Service Group and Transparency Act could influence the quality of patient care in various ways.
Dr. Fackeldey reiterates his statement on Hybrid DRGs: “In principle, I am not opposed to Hybrid DRGs. It’s just that the reimbursement calculation is truly flawed because it places a heavy burden on hospitals. Cost-saving measures are fine, and the Hybrid-DRGs are an interesting development. The parity between hospitals and private practitioners could certainly have been structured differently. There are always too few clinicians involved in decision-making at the Ministry of Health, and they are then outvoted when in doubt.”
By publishing performance data, hospitals could learn from one another and identify best practices, which could improve the overall quality of care. On the other hand, the new regulations could also have negative effects. The increased administrative burden on hospitals could distract from direct patient care and increase the workload for medical staff. There is also a potential risk that hospitals might attempt to manipulate their performance data to maximize financial incentives or minimize negative consequences, which could compromise the integrity of the data and the quality of care. Furthermore, the focus on specific quality indicators and performance targets could lead hospitals to prioritize their resources at the expense of other aspects of patient care. This could result in distorted priorities and the neglect of certain aspects of care, which could have a negative impact on overall quality.
There are various proposals for improvement regarding reimbursement and transparency in the healthcare system.
When comparing the quality of the German healthcare system to that of other countries, Germany is often regarded as one of the countries with a high standard of healthcare. The German healthcare system is characterized by comprehensive insurance coverage, broad access to medical services, and high patient satisfaction. Nevertheless, there is definitely room for improvement. Dr. Fackeldey comments on this:
“It would make the most sense if hospitals received standby fees—that is, compensation that hospitals receive for making certain services and resources available at all times for patient care, regardless of whether these services are actually used. This flat-rate payment is intended to cover the costs of maintaining constant readiness and availability of staff, infrastructure, and medical equipment. The plan is apparently for 60% of hospital costs to be covered by the flat-rate payment for maintaining readiness, with the remainder covered by DRGs. To this day, however, I do not know how this is supposed to work. I cannot say at this time whether the standby flat rates will once again be based on the DRGs. The DRG for nursing care has been reduced by 20% and is set to be cut by another 20%—for a total reduction of 40%—with the remainder covered by the flat rate. But it’s hard to say whether that will actually relieve the pressure on hospitals. After all, the missing 40% will still have to be recouped. And then the number of surgeries performed by a hospital will become important again. I can’t think of a solution for how to avoid this financial pressure. “The fact is that Germany ranks very high internationally in terms of the total number of surgeries,” Dr. Fackeldey points out.
Dr. Fackeldey criticizes the lack of preventive care in Germany’s healthcare landscape. This is also evident in the latest draft bill from the Federal Ministry of Health, which proposes a law to strengthen heart health in order to reduce the high burden of disease caused by cardiovascular diseases in Germany. These diseases are the leading cause of death and impose significant costs on the healthcare system. The law aims to improve the early detection and treatment of cardiovascular diseases. Prevention, however, is only marginally addressed in the draft bill. “Compared to other countries, Germany invests too little in medical prevention. To strengthen this, the government should take targeted action, such as introducing a sugar tax to combat unhealthy eating habits and seeking a significant increase in nicotine and tobacco taxes. Such fiscal measures would not only reduce health risks but also lower the financial burden on the healthcare system in the long term. Prevention is an investment in the future of society and should be promoted much more consistently. This is currently being blocked by the FDP, the coalition partner of the SPD and Alliance 90/The Greens, which currently holds only 92 of 736 seats (12.5%!) in the German Bundestag. The FDP favors awareness campaigns and voluntary commitments by the industry to change unhealthy behaviors and emphasizes the importance of citizens’ personal responsibility. “Unfortunately, that doesn’t work,” Dr. Fackeldey criticizes and recommends.
Hospitals have long since ceased to be merely places of healing and care; they are also major players in a complex economic environment.
As business entities, they face the challenge of striking a balance between fulfilling their medical mission and ensuring their economic sustainability. Rising healthcare costs, competition for patients and skilled personnel, and the pressure to provide high-quality services have forced hospitals to develop business strategies. This development influences not only the way medical care is organized but also how patients and their families perceive the healthcare system.
“Of course, it is the hospital that decides whether a patient can be discharged home or not after outpatient surgery. And here, we simply do not yet know how this patient can be billed if, out of medical responsibility, an inpatient stay must be provided after all. Outpatient treatment clearly has the advantage of freeing up more beds for sicker patients. For the nursing staff—who were actually supposed to have their workload reduced—this situation, however, means an increased burden, since they now have to deal with more patients who require more intensive care. And this is happening amid the current nursing shortage. We have currently closed 30 beds due to the nursing shortage. How things will proceed from here probably depends in part on whether our “traffic light” coalition survives the budget deliberations; the existing system of state autonomy isn’t always helpful in this regard, and there is no overarching plan. Nothing is happening in health policy right now. Yet we urgently need to streamline the German healthcare market. We have excellent medical care in Germany, but we’re far too often inefficient. In that respect, the idea of healthcare reform is the right one. And we need people at the bedside—with the patients—not at a desk, dealing with the excessive bureaucracy,” Dr. Fackeldey states vehemently, and with that, we conclude our discussion.
Thank you very much, Dr. Fackeldey, for this candid insight into the existing healthcare policy structures!
