Application for KHZG Funding Has Been Submitted — What Next?

Approximately 1,900 clinics, 500,000 beds, €4.3 billion in subsidies compared to €115.1 billion in annual hospital costs, and as much as €86 million in impending payment reductions starting in 2025 (source: Federal Statistical Office, issued: 2019, own calculations). The Future of Hospitals Act (KHZG) will drastically change the hospital landscape in Germany over the next several years. The submission of applications for the requirement reports will have been completed by the time this article is published. One question remains: What happens next?

Identification of projects subject to public procurement law

If this has not already been done, the first step should be to clarify whether and how tender procedures for the projects must be announced. The Federal Ministry of Health has clearly described in its FAQ that compliance with national and European procurement law is essential throughout the entire process. Since public funding is involved, even religious operators (as one example) must follow tender regulations for the projects. Unfortunately, the specific contract award procedure that must be followed has not been regulated across the board. As a general rule, European public procurement law applies to supply and service contracts above a threshold value of €214,000.

Amounts below this total are subject to the regulations of the specific federal state, in most cases the UVgO (Sub-threshold Contract Award Regulations) or the older VOL/A [Award and Contract Regulations for Services, Part 1]. There are exceptions here as well, however. For example, the State of North Rhine-Westphalia has extended the Value Limit Regulations, which increased the value limits because of COVID-19, meaning that different rules apply in this state. Legal professionals should always be consulted before any contracts are awarded to avoid any potential demands for reimbursement of funds because procedural errors were made. Moreover, there is typically a need for consultation during preparation and operational realization as well as in the follow-up and evaluation of the responses to the tender that are received.

Catalog requirements correctly

When a contract is awarded, the criteria defined as mandatory in the KHZG should be expanded to include a catalog of the services to meet specific requirements. This prevents procurement of digital solutions that do little or nothing to aid the hospital in its daily processes. All project stakeholders and key persons who will later work with the new solution should be given the opportunity to contribute their proposed requirements. Requirements should be cataloged with requirements engineering in accordance with appropriate standards such as ISO 29148. The guide on which the standards are based not only helps to catalog the requirements correctly, but also to describe them with the aid of sentence templates and other tools.

Precise and unambiguous requirements with a high level of quality can be collected, avoiding possible discovery during the stage of project realization that a provider that cannot fulfill actual needs adequately (or even not at all) or is too expensive has been engaged. One important aspect is the involvement of employees in the process as their participation increases their subsequent readiness to adopt the new processes and digital solutions, and the needs of both employees and patients can be identified at an early stage. Even though this method seems to be time-consuming, it will spare hospitals a lot of time, adaptations, and the related annoyances during the later conduct of the projects.

Sustainable digitalization projects

Besides consideration of the pertinent issues during the funding period, requirements for the usability and expansion of the solutions should also be defined. The state of technology changes rapidly, and solutions that are at the cutting edge today may no longer meet standards four years from now. Interoperability, for instance, may suffer because it might no longer be possible to use existing interfaces, above all with physicians in private practice and other stakeholders. Purchased solutions should also be upgradeable so that they do not have to be replaced in a few years, leading to subsequent costs. In this sense, providers should offer in-depth information regarding the adaptations of interfaces or further development costs. Expensive surprises in the future can be minimized by taking such actions now.


In summary: we recommend careful planning and preparation of your projects and supporting them with professional methods as a means of improving quality and cost efficiency. The required investments will clearly be overcompensated over time and more than pay for themselves during both project realization and subsequent operation.

This article originally appeared in Lünendonk Magazine in early 2022.