Berlin Administrative Court Rejects Lawsuit Against Millions in Vivantes Subsidies

The lawsuit had been filed in 2023 by the DRK Klinik Köpenick on behalf of nearly 30 Berlin hospitals, including private, confessional, and independent non-profit institutions. They accused the Senate of lavishing disproportionately high sums in the millions on the municipal Vivantes group in order to offset its deficits. According to the plaintiffs, Vivantes received around 1.2 billion euros from the State of Berlin over the past seven years to close financing gaps.

The plaintiff hospitals argued that the Senate was violating the principle of equal treatment, EU state aid law, and the Hospital Financing Act. They see themselves as disadvantaged compared to the state-owned group. They also claimed that the indirect financing of Vivantes' above-average wage rates impaired occupational freedom and made it harder for other hospitals to recruit staff.

Reactions from Plaintiffs and Union

Christian Friese, Managing Director of DRK Kliniken Berlin, sharply criticized the decision. "Die Entscheidung ist für uns eine Enttäuschung, denn mit dem Urteil wird die Ungleichbehandlung zunächst verstetigt. Wir werden die schriftliche Begründung abwarten und Rechtsmittel einlegen", said Friese. The judges' written reasoning is expected soon.

The Verdi union welcomed the ruling. Verdi stated that the court decision strengthened the state's ability to stabilize its public hospitals. At the same time, the union called for the public sector collective agreement (TVöD) to also be applied at Vivantes' subsidiaries for cleaning, catering, and transport services. Verdi has been staging strikes at the subsidiaries for weeks.

Background: Dual Hospital Financing System

The conflict is set against the backdrop of Germany's dual hospital financing system: health insurance funds pay for staff and medication, while the federal states are required to invest in the buildings and technology of all hospitals deemed necessary for care. In Berlin's system, there has additionally been a commissioning act since 2020 that gives the state the ability to grant Vivantes compensatory payments, such as investment subsidies or the offsetting of annual shortfalls.

The fact that Vivantes has repeatedly received additional state funds in the past is also linked, according to reports, to the above-average wage rates of certain professional groups there, which were established after labor disputes. Various coalition governments apparently injected money into the state-owned hospitals on multiple occasions for this reason.

Economic Situation of Berlin's Hospitals

The conflict over hospital financing is part of a nationwide debate. In Frankfurt am Main, the Christian hospital group Agaplesion filed an injunction in 2023 against the city to obtain a judicial ruling on whether a 47 million euro deficit payment to a municipal hospital was lawful. Two years later, the Federal Administrative Court ruled that a corresponding procedure was admissible because it could not be ruled out that the financial support of the state-run hospital constituted unequal treatment of all planned hospitals.

The economic situation of many Berlin hospitals is strained even beyond Vivantes. In Charlottenburg, the private Schlosspark-Klinik recently went bankrupt; the Jewish Hospital in Gesundbrunnen is also insolvent. Against this backdrop, the question of how the state will finance its hospitals in the future is likely to remain on the political agenda. The RBB and other media had already reported extensively in advance.