Based on the third statement and proposals from the 
Government Commission for a Modern and Need-Based Hospital Sector [1], 
the Federal Minister of Health and the Ministers of Health in the 16 
Federal States started discussions on a fundamental reform of hospital 
remuneration in January 2023.
In its coalition agreement from 
2021, the Federal Government agreed on reforms in the hospital sector, 
especially to expand the Diagnosis Related Groups (DRG)-based 
remuneration through the introduction of flat fees and to develop a new 
instrument for hospital planning based on defined service groups and 
hospital levels. For this, the Federal Minister of Health appointed an 
independent Government Commission to develop recommendations. The 
Commission published its proposal in December 2022, which combines the 
remuneration via flat fees with the new instruments of defined service 
groups and hospital levels (see Policy Analysis from December 2022).
Since
 2004, hospital remuneration in Germany has been – apart from capital 
costs – based entirely on caseloads via DRGs. The Government Commission 
argues in its report that the current system leads to an increase in 
inpatient cases. Further, an international comparison shows that 
inpatient numbers are generally higher in Germany, especially for 
planned procedures like hip and knee replacements and avoidable hospital
 admissions like asthma or congestive heart failure [1]. A large number 
of hospitals, including many small ones without basic emergency 
facilities like stroke units, further characterize Germany’s health 
system.
Hospital remuneration is subject to federal law, but 
the states are in charge of hospital planning. Therefore, the Federal 
Minister of Health needs a common ground with colleagues from the states
 to realize the main aspects of the planned reform. So far, many 
stakeholders in politics and the health sector have shown agreement with
 the principle recommendations [2–5]. One potential challenge will be to
 define homogeneous service groups and hospital levels between the 
states.
