The agreement which the then new CEO Stephan Holzinger made last year with the federal state government of Hesse and the universities in Giessen and Marburg had a positive one-off effect on earnings in the amount of Euro 20 million. On the other hand regulatory legislation in the form of the law to reform the structures of hospital care (Krankenhausstrukturgesetz – KHSG regarding lower remuneration for special orthopaedic and cardiological services and the discount for lower overheads applicable since 1st January 2017 in the region of a middle single-digit million figure again slowed organic growth in earnings. The imminent move of the hitherto five clinics to the new campus site in Bad Neustadt also placed a burden on the company’s figures.

Stephan Holzinger, CEO of RHÖN-KLINIKUM AG, stated: “RHÖN-KLINIKUM has the correct strategy in a difficult market environment with continuously increasing regulatory burdens: we have picked up the growing trend for out-patient services with a concept of flexible, cross-sector medical care. Our prototype here is the new campus site in Bad Neustadt where we are boldly going in a completely new direction. Yet we also continue to remain focused on the in-patient cases in mainly very complex medical disciplines – as the sole provider of such medical care we can use the medical excellence at the two university hospitals in Giessen and Marburg to benefit all our patients. With various measures to introduce gradual digital change in our company we are also raising our organizational efficiency as well as increasing speed and safety in the provision of medical care to our patients.”

RHÖN-KLINIKUM Campus Concept – Healthcare of the Future

On 6th December the first phase of the new RHÖN-KLINIKUM Campus in Bad Neustadt will be officially opened after a good three years of construction. The project is our concept for strong future-proof healthcare in a rural area. With its centre for out-patient medical care (ZaM – Zentrum für ambulante Medizin) and its centre for clinical medical care (ZkM ‑ Zentrum für klinische Medizin) it enables one-stop medical care with its main focus on the patient: preventative healthcare, treatment, nursing and rehab, all in one place and using modern IT and innovative digital instruments.

Against the background of the demographic, regulatory and budgetary constraints on the healthcare market RHÖN-KLINIKUM AG is convinced that more regions will in future wish to benefit from our expertise in putting the campus concept into practice. As a driver of innovation in the German hospital market RHÖN-KLINIKUM intends to introduce the campus concept to other rural areas.

Essential Basis for the Campus Strategy: Using Digital Tools

We also pressed on with the implementation of our digitalization strategy. RHÖN-KLINIKUM AG does not consider digitalization to be an end in itself. Instead its aim is to ease the workload of our physicians and nurses and make the medical care of our patients even safer and better than it is already. Maintaining a modern IT system with the guarantee that patient data is secure is the basis for a system to pass information across all our sites and for the use of our digital applications.

One of our most important projects is the Medical Cockpit, a search engine which helps to process relevant information in medical reports, OP reports and x-ray diagnoses in a structured manner to give a faster comprehensive overview on a platform to the medical staff providing the treatment. The Cockpit is integrated in a clinical information system and has access to a universal archive. A gradual introduction of the Medical Cockpit as a standard feature is intended to coincide with the start of the campus in Bad Neustadt, including active dialogue with the users.

Another application is our new medical portal concept which enables continuous efficient and safe patient care. It facilitates communication between local and hospital physicians with the possibility to retrieve the latest information electronically. We therefore offer a considerable possibility to ease the workload of local physicians with the use of the Medical Cockpit and electronic patient records.

There was significant progress in the use of our digital applications across all five of our sites in the last nine months. This also includes more efficient organization in documenting services with the Tiplu Momo tool.

Investments Strengthen our Sites

Apart from the funds used for building the Campus in Bad Neustadt RHÖN-KLINIKUM AG has already planned or commenced more investments at its various other sites. A huge investment programme is foreseen for the two university hospitals in Giessen and Marburg (UKGM). At least Euro 100 million will go in the next five years to extend the paediatric cardiological centre in Giessen and rebuild the paediatric and youth psychiatric clinic in Marburg. “With our Schuldschein loan in the amount of Euro 100 million which we successfully placed on the market a few days ago we have secured attractive conditions in the current environment for earning interest in order to be able to react flexibly to opportunities and to finance our investments in our sites and our campus strategy in the long-term. We consider the multiple oversubscription of the issued loan to be clear proof of investors’ confidence in our strategy,” stated Stephan Holzinger, CEO of RHÖN‑KLINIKUM AG.

Legislative Challenges

We believe the minimum levels of nursing staff in areas of intensive hospital care which legislation has introduced to be critical since we do not see a proven link between the quality of treatment and results and a particular nurse to patient ratio. We believe that the discounts which are threatened if the stipulations are not fulfilled as well as the acute lack of specialist nursing staff bear the risk of shortages in capacity.

RHÖN-KLINIKUM AG recommends constructive discussion and systems which prevent that too few staff work in hospitals. This can be staff ratios or minimum levels of nurses for the entire hospital. Apart from the requirement for good quality and patient care time‑consuming duties to provide evidence should be eliminated at the level of wards and shifts since the time spent here is lost and cannot then be used for patient care.

Outlook

RHÖN-KLINIKUM AG confirms its forecast for the current financial year of 2018 and expects revenues in the amount of Euro 1.24 billion plus/minus 5 percent.

The burden of regulatory legislation such as lower remuneration for services with high material costs (especially cardiological services) or the fixed cost degression discount for additional services, must still be taken into consideration. For 2018 we expect a much higher amount for earnings before interest, taxes, depreciation and amortization (EBITDA) of between Euro 117.5 million and Euro 127.5 million in comparison with 2017 – positively influenced by the agreement with UKGM regarding separate accounting as well as other effects.


RHÖN‐KLINIKUM AG is one of the largest healthcare providers in Germany. The hospital group offers excellent medical care with a direct link to universities and research institutes. More than 830,000 patients are treated every year at the five group hospitals located in Bad Berka, Bad Neustadt, Frankfurt (Oder), Giessen and Marburg where approx. 16,700 employees work. With the RHÖN campus concept the Company is currently implementing a new and forward-looking project which raises fully comprehensive healthcare in rural areas to a new level of excellence and is geared to the growing needs of patients. www.rhoen-klinikum-ag.com

Contact:

RHÖN-KLINIKUM AG | Head of Corporate Communication and Marketing
Elke Pfeifer
Telephone: +49 9771 65-1327 | E-Mail: elke.pfeifer(at)rhoen-klinikum-ag.com

RHÖN-KLINIKUM AG | Head of Investor Relations and Treasury
Julian Schmitt
Telephone: +49 9771 65-1536 | E-Mail: julian.schmitt(at)rhoen-klinikum-ag.com