growing pains

Fresenius Hospitals in Need of Treatment

Fresenius Pressefoto
Fresenius is growing but at what cost? 
  • Why it matters

    Why it matters

    Some doctors and nurses working for Fresenius have complained that patient care suffers if costs and staff are cut too much.

  • Facts

    Facts

    • Fresenius has delivered rising profits for shareholders and sales which recently rose to €23.3 billion, or $26.5 billion.
    • Fresenius has four divisions: Fresenius Helios, the hospital segment; Fresenius Medical Care, dialysis clinics; Fresenius Kabi, transfusion medicines and technology; and Fresenius Vamed, worldwide hospitals and health-care centers.
    • Helios operates more than 100 hospitals and employs about 70,000 people. It is based in Berlin.
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    Audio

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Twice a year, Ulf Schneider exchanges his suit for a white nurse’s coat at a hospital in Bad Homburg, in the central German state of Hesse.

The chief executive of the Fresenius health-care group brings meals to patients and pushes beds from one ward to another to gain an idea of the problems the doctors and nurses working in the large company face every day.

Mr. Schneider, a trained economist, describes hospital work as “very exhausting on a soul level.”

But many of his medical employees believe the boss is making their jobs even more exhausting by piling on more work in search of higher profits.

Throughout Fresenius Helios, the hospital division of the DAX-listed global company, discontent is growing over cost and staff-reduction pressures from the top.

Ulf M Sommer
Fresenius’ CEO Ulf M. Sommer. Source: Action Press

 

Niko Stumpfögger, a worker representative and deputy chief on the company’s supervisory board, is blunt. “With some doctors, Helios has an image problem due to the high workload and strict business orientation,” he said. “That can lead to difficulties in filling available positions.”

When he’s not pushing beds, Mr. Schneider has been successful in leading business at Fresenius. For years, he delivered rising profits for shareholders and sales grew continuously reaching €23.3 billion in 2014, or $26.5 billion.

The company’s Berlin-based Helios division is the largest hospital operator in Germany, with 111 clinics, 68,900 employees and more than €5 billion in sales. Two years ago it acquired 40 hospitals from the private group, Rhön Hospitals, and more growth is expected.

“We are interested in taking over more hospitals,” said Mr. Schneider. “Our market share in the German market is only about 6 percent. There are many more growth possibilities.”

The hospital division contributes about a quarter of the group’s sales. For 2015, Mr. Schneider wants still higher sales growth, and has asked hospital managers for 6 to 9 percent more than other divisions.

Above all, Mr. Schneider wants to raise profits to double digits at hospitals, more than in operations and nursing.

To lower costs, Mr. Schneider has centralized purchasing to get better deals from suppliers, on everything from bandages to surgical tools. Pharmaceutical representatives no longer have access to Helios hospitals and their doctors.

But more drastic measures are also required, including restructuring and staff reductions. Especially in the recently acquired Rhön hospitals, opposition is rising. Doctors and nurses complain about extreme work loads and understaffed stations.

In Dachau, near Munich, hospital CEO Bernward Schröter resigned, probably because he did not like the hard line taken by the new owners.

Conflict has also arisen at other Helios hospitals, including in Bad Berleburg, Hildesheim, Pforzheim, Wuppertal and Wiesbaden. In Wuppertal, Helios nurses organized a flash mob protest. Shortly before that, medical director Aruna Raghavachar quit, citing  “different views on hospital restructuring.”

Earlier this year, the medical director of the Helios clinic in Schleswig also quit – unofficially, over staff reductions.

In the Horst Schmidt hospital in Wiesbaden, doctors raised their concerns this spring. In a poll of the doctors’ organization Marburger Bund, 84 percent indicated their health had been impaired by the workload –  and 94 percent said pressure had risen since being taken over by Helios in 2014.

Hospital management, however, said the poll was not representative, because only members of Marburger Bund were surveyed. Management also maintained that the number of patients had not risen and number of doctors had not significantly been reduced.

Meantime, however, the hospital, which has run at a deficit for years, is cutting about 400 of the 2,400 fulltime positions.

“I cannot detect efficiency gains since Helios got on board,” complained Michael Drott, the works council leader. “We are competing with other clinics in the Rhine-Main area and have difficulties finding qualified staff. We are even losing very well-educated staff to other hospitals in the area.”

For the Verdi trade union, these are good opportunities to denounce Helios and the way it runs the former Rhön hospitals. In a nationwide campaign in spring, people working for the labor union examined the night shift at over 200 hospitals – and were especially critical of Helios clinics.

“At Helios hospitals, the staff was tighter than anywhere else. Nurses had to take care of larger stations and more patients,” said Mr. Stumpfögger, the union representative and supervisory vice chair. “At a large station, it can come to dicey situations, so patients cannot be cared for in a timely manner.”

According to Fresenius, there are “no abnormalities” at Helios due to staff cuts and the company also said it had no problems hiring qualified staff.

 

This article originally appeared in the business magazine Wirtschaftswoche. To contact the author: juergen.salz@wiwo.de

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