The last few years saw substantial structural changes in the hospital market. No least because of the DRG flat-rate payment system, hospitals have developed into real businesses offering patient treatment as ‚goods‘ for sale. A consolidation process, which gives hospitals more market power, is mainly effected by the operator acquiring additional clinics. Patients often don’t notice this, as confirmed by a current study authored by graduate health economist Andreas Schmid and Prof. Dr. Volker Ulrich, who holds the Chair of Finance at the University of Bayreuth.
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Commentary: Events surrounding companies in the market can be considered cyclical. The development is well-known from other industries: Market participants merge to gain a powerful position. Following this, company groups are split up in turn in order to specialize. It is a sequence of accumulation and subsequent disintegration. In the hospital market the trend to merge can go further. This is often formally executed at the operator level – investment, M&A, cooperation, are the keywords here. The position of power held by large vendors is widely known. When purchasing conditions etc. are negotiated, the opportunities to minimize the purchasing prices are greater. Only ‚large‘ vendors, in turn, can withstand this pressure. The effect can also be seen in the area of service provision, for instance in outpatient follow-up care after a patient has been discharged. More and more companies in the industry and also large providers (homecare companies) are successfully being appointed to facilitate patient discharge management. Their structure and orientation is better suited to large hospitals than small medical supplies retailers. As long as the trend to consolidate continues, small provider companies will also have to ask themselves how they will be able to survive in competition with large, federal vendors.