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Updated: Jun 8, 2026
Using Visual and Narrative Methods to Achieve Fair Process in Clinical Care
Published on: February 16, 2011
[Dealing with bottlenecks in health care: the hospital management perspective]
1Institut für Krankenhausmanagement, Charité, Universitätsmedizin Berlin, Campus Benjamin Franklin, Berlin. wkox@charite.de
Insights
Diagnosis Related Groups (DRGs) in Germany shifted hospital payments, increasing financial pressure. Hospitals must balance economic demands with patient needs by improving efficiency and quality to avoid deficits and ensure better outcomes.
Area of Science:
- Health Economics
- Hospital Management
- Healthcare Policy
Context:
- The implementation of Diagnosis Related Groups (DRGs) in Germany has fundamentally altered hospital remuneration from daily rates to fixed payments per diagnosis.
- This shift necessitates a critical review of hospital operational processes and treatment protocols to accommodate shorter patient stays and increased throughput.
Purpose:
- To analyze the economic challenges faced by German hospitals post-DRG implementation.
- To explore the impact of DRGs on hospital financial stability, resource allocation, and quality of care.
- To identify strategies for effective hospital management in navigating the new economic landscape.
Summary:
- Hospitals are experiencing significant financial strain, with 25% operating at a deficit due to the fixed-sum payment system under DRGs.
- This financial pressure results in shortages of medical staff, outdated equipment, and inadequate facilities, compromising both economic viability and patient care.
- Effective hospital management requires developing strategic visions and implementing robust financial and medical controlling systems to reconcile economic imperatives with patient welfare.
Impact:
- The current economic pressures threaten the quality of care and patient outcomes, potentially increasing costs due to complications.
- There is an urgent need for strategic financial and medical management to ensure the sustainability of healthcare services and meet patient needs.
- Successful adaptation to DRGs requires a proactive approach to operational efficiency, quality improvement, and resource management within German hospitals.
Abstract:
After the introduction of diagnosis related groups (DRGs) in Germany for the remuneration of hospitals economic aspects have become increasingly daunting. While hospitals were used to being paid on a daily basis they are now provided with a fixed sum for a given diagnosis. This means that hospitals are under pressure to review their processes and to treat more patients during shorter hospital stays. In order to contain costs the quality of treatment and care has to be improved since poor quality, i.e. the development of complications, would cause higher costs. This has led to 25% of the 2,200 hospitals in Germany running deficits, which is reflected in a shortage of doctors and nurses as well as in a lack of adequately advanced medical equipment and suitable hospital buildings. These facts pose an enormous challenge to the hospital management: they have to bridge the gap between economic requirements and the patients' needs. This is why hospital management needs to develop visions and strategies as well as a tight financial and medical controlling and steering system to improve their financial and medical outcomes.
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