Financial Losses at Berlin's State Hospitals: Charité and Vivantes Report Significant Deficits

Berlins state-owned hospitals, including the Charité and Vivantes, are facing substantial financial challenges as they close the books on another year marked by significant deficits. Preliminary reports indicate that Vivantes incurred a loss of approximately EUR146 million against a backdrop of around EUR1.7 billion in revenue for the year 2024. Meanwhile, the Charité anticipates a deficit of EUR85 million on expected revenues of EUR2.5 billion.

These figures are not yet finalized, as both institutions await official confirmation from their supervisory boards, with meetings scheduled for May. In light of these financial strains, both Vivantes and the Charité have implemented austerity measures.

The mounting losses for both entities are a continuation of a troubling trend; in 2023, each reported deficits exceeding EUR130 million. Managers at Vivantes had anticipated an even worse financial outcome last year but were able to sell off some outdated properties, providing a temporary boost. However, no such extraordinary gains were realized in 2024, leading to larger losses despite ongoing cost-cutting initiatives.

As labor negotiations for public service contracts continue, healthcare workers at both hospitals are planning strike actions due to disputes over pay. Currently, around 43,000 employees work across both Vivantes and Charité, contributing to the overall financial landscape.

Vivantes, which is the largest municipal healthcare provider in Germany, employs about 19,000 staff and operates 6,000 beds. The organization has a broad portfolio, including hospitals, nursing homes, rehabilitation facilities, and home care services. In response to the ongoing healthcare reform led by Federal Health Minister Karl Lauterbach, Vivantes is shifting its focus toward outpatient care.

The financial structure of hospitals is complex; while health insurance funds are responsible for covering personnel and medication costs, they do so through fixed rates per diagnosis. This payment model can lead to discrepancies where certain cases are underfunded, causing hospitals to compete for more lucrative patient cases.

Minister Lauterbach's recent reforms categorize medical services into 65 performance groups, establishing stringent criteria that hospitals must meet to provide services at insurance cost. These changes disproportionately impact smaller hospitals, potentially favoring larger institutions like Vivantes and Charité.

As these developments unfold, the financial future of Berlin's state hospitals remains uncertain. The need for significant investment in infrastructure, medications, and staffing continues to rise amidst a precarious financial backdrop.