Study: Swiss hospitals will have made a billion in losses by 2023

• According to a KPMG study, Swiss hospitals are likely to have accumulated losses totalling one billion Swiss francs by 2023.
• According to the study, the majority of hospitals will fall far short of the margin required to finance investments.
• The majority are relying on an implicit state guarantee.

68 per cent of the CFOs of 48 hospitals, psychiatric and rehabilitation clinics surveyed stated in a new KPMG study that they assume a state guarantee. Most public hospitals are owned by the cantons or municipalities. The study was first reported in the "The New Zurich Times".

Situation worsens – even after the pandemic

Only 14 of the institutions surveyed reported any profit at all. Extrapolated to the entire hospital landscape, KPMG arrived at a loss of one billion Swiss francs. This means that 70 per cent of hospitals were operating at a loss. They never recovered from the coronavirus crisis.

On the contrary: their financial situation shows a continuing negative trend, which is putting the sector under increasing pressure. It is becoming more difficult for institutions to raise money, as the market is assessing the risks higher.

53 per cent of outstanding bonds must be refinanced by 2030. In total, the clinics have bonds totalling over CHF 4.4 billion outstanding.

Financing requirement of 4.5 billion

In the longer term, 96 per cent of hospital CFOs see no possibility of achieving the EBITDA margin required for investments. 86 per cent report additional extraordinary financing requirements. According to the KPMG study, this will reach CHF 4.5 billion over the next five years.

To increase profitability, the hospitals are implementing restructuring measures as well as political measures. Bern’s Inselspital, for example, plans to cut jobs in 2023 following a loss of CHF 113 million.

Although sales increased in 2023, the growth was lower than immediately after the pandemic. Outpatient treatments reached the one-third mark of total revenue for the first time. At the same time, hospitals and clinics ran out of costs for staff and medical supplies, as KPMG also reported. Personnel expenses alone rose by 8 per cent in 2023, the strongest annual increase since 2019

This is mainly due to the announced wage increases and the shortage of skilled labour. In addition to personnel costs, this development was also driven by tariffs that did not cover costs. Overall, costs have risen by 17 per cent in the last five years.

Study: https://kpmg.com/ch/de/branchen/gesundheitswesen/spital-klinik-markt-ausblick.html