Projected Increase in Medical Revenues for 2023
In 2023, medical practices in Germany faced a complex landscape of increasing revenues and costs, driven by factors such as healthcare utilisation, insurance revenues, and expenditure growth.
The year saw significant increases in costs for medical practices, with expenses rising by 5.8% to an average of 493,000 euros per practice. This growth was largely attributed to higher resource utilisation, staff expenses, and operational costs. However, the picture was not entirely bleak, as revenues also saw a slight increase, rising by 1.0% to an average of 804,000 euros per practice.
The increase in revenues was primarily influenced by a rise in statutory health insurance revenues, which generated around €304–305 billion in 2023. This increase in funding, coupled with the growing demand for healthcare services, particularly in the inpatient and behavioural health sectors, helped boost revenues.
However, the rise in costs, particularly in the areas of hospital and outpatient services, put pressure on net income. Providers had to balance the higher reimbursements against escalating costs, with some achieving strong operating margins through strategic revenue optimization, while others may have seen their profitability reduced.
Interestingly, the revenues for psychological practices were lower than the average for all medical practices in Germany, while dental practices saw higher revenues. The number of employees in medical practices decreased slightly, from an average of 9.9 to 9.7.
It is worth noting that the revenues and expenses for dental and psychological practices do not necessarily follow the overall trends for medical practices in Germany. For instance, dental practices experienced a 13.2% increase in revenues, while psychological practices saw a decrease. Similarly, expenses for dental practices rose significantly by 11.7%, compared to a lower increase for psychological practices.
Inflation in Germany was 5.9% in 2023, roughly the same as the increase in expenses for medical practices. Despite the increase in revenues, the average net income per practice fell by 6.3% in 2023, to 310,000 euros. This decrease in net income is not solely attributable to the increase in expenses, as it does not account for expenses related to practice takeovers and certain insurance policies of the owners.
In conclusion, the medical practices in Germany experienced a mixed bag in 2023, with rising revenues and costs creating a challenging environment. The outcomes for individual practices depend on their ability to manage cost growth and optimise revenue, with some achieving strong operating margins and others facing reduced profitability.
Scientists are encouraged to study the factors influencing the financial health of medical practices, given the complex landscape of increasing revenues and costs in 2023. To improve the overall health-and-wellness of these practices, it's crucial to focus on strategies for managing resources and expenses, such as staff, operational, and medical-conditions-related costs, while ensuring sustainable income growth. The balance between these will be key in maintaining positive net income for medical practices in the future.
