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KHZG penalty: Yet in the end they do…

The fact that the government intends to stick to the KHZG penalty as planned surprised the industry in May – as did Lauterbach with his new proposals for the hospital reform. It could be an uncomfortable few months and years ahead.

Honesty, diligence, a sense of duty and punctuality are just some of the virtues that Germans are said to have. But obviously, they are not far behind when you look at what the healthcare sector was primarily concerned with in terms of digitization in May. If you want to phrase it maliciously: with its own unpunctuality.

I still remember the consultant panel at our Smart Health Evolution Vol.1 in Cologne last November. There, it was heatedly discussed that the hospitals would have quite different problems due to inflation, rising energy costs and the overall difficult economic situation than the penalty stipulated in the KHZG, which will become due from 2025 if projects are not implemented on time by 2024. The general consensus at the time was that they wouldn’t do it. That’s not possible at all. The penalty will be suspended, anything else would be irresponsible.

But as it looks now, “they” are doing it after all – those responsible at the federal level – even if the hospital lobby is still trying to prevent this with intensive talks. The German Hospital Association, for example, is proposing to extend the deadlines “at least for the year 2025, possibly even for 2026.”

The fact that the penalty could now come as planned seems to have the digital healthcare industry in a roar at the moment. Ultimately, it is a transfer of pressure exerted on hospitals at the federal and state level – including through funding decisions, some of which were approved very late – and which they in turn are trying to pass on to the IT service providers they have commissioned. 

However, it is also clearly a question of perspective. After all, the KHZG is “only” intended as an accelerator, a financial accelerator of digitization in the healthcare sector. The subsidies are not a complete funding commitment. Accordingly, the digitization of the hospital world should not depend on when the stamps were put on the various notices, funding commitments and award procedures. In theory – or let’s say in an ideal world – it would still have to go ahead. And with a solid, long-term strategy, one could thus look calmly at impending penalties. After all, they won’t affect you.

However, we all know that the reality is somewhat different at the moment, especially because resources are scarce and the KHZG has also created a certain gold-rush atmosphere in the digital healthcare industry, so that not only are many clinics afraid of the penalties, but some of the service providers will probably not be able to meet the ambitious targets.

A disaster rarely comes alone

And then it is the case that – once things are going well – things usually get really “thick”. This is exactly what could happen, of course, if the German Minister of Health, Lauterbach, implements his hospital reform in the way it is currently being discussed. That he is consistent in his approach and cares rather little about his own popularity, he should have proven to all skeptics so far.

And the current status as of the end of May makes concerns seem well-founded indeed. According to this, the hospital network is to be divided into three levels of care in the future: basic care close to home, a second, extended level and then maximum care, predominantly represented by university hospitals. Conversely, this would mean that almost two-thirds of the approximately 1,700 hospital sites in Germany would “only” be classified as level 1 primary care, and just under 700 of these would only be a type of health center without emergency care and stationary services, i.e. de facto no longer a hospital. Some experts are already talking about the “withdrawal of the financial basis of life” for the hospitals at the lowest level of care.

There will be a painful rebuilding period

Something that the topics that have dominated the month of May make clear: The restructuring of the German healthcare system could turn into a painful therapy. There will be cuts and losses. What is not yet foreseeable today is whether the pain will be worth it, because in the end there will be a goal-oriented and sustainable result.

In principle, we all agree that “business as usual” is not a viable path. However, one thing is becoming increasingly clear: The individual players – clinics, private practices, IT operators, digital health companies – need to focus more on their own power and strength and should rely less on the outside, i.e., funding, laws, reforms and regulations. What is missing in many places – and this is due to the previous structure: a certain entrepreneurial spirit. This includes the courage to change, foresight, vision and also the willingness to fail in order to be successful in the end.

Because what is now turning out to be a mistake is, first of all, the assumption that “they won’t do it” when things get really tight or difficult. Because in the end, they probably do anyway. And all those who relied on procrastination, more time or even more money now have to rethink in the shortest possible time – which is almost impossible.

With a view to the KHZG penalty, at this point I do not want to evaluate at all whether sticking to the original schedule is fair or unfair. Rather, I would like to offer the thought-provoking suggestion that, regardless of the KHZG or legal requirements, we have actually already run out of time. Other companies – especially Apple, Google and Co, and countries are already so much further ahead. We really only have the option of going full throttle. And if things get difficult and/or circumstances become adverse, then all the more so. Because history has shown that we can actually do it!