European Union of Private Hospitals

The German Association of Private Clinics is suing the District of Calw for subsidising a local hospital

JUNE 2016.

The BDPK (German Association of Private Clinics) is suing the District of Calw for subsidising local clinics with taxpayers’ money. In some German cities, losses made by public hospitals are made good with taxpayers’ money. Subsidising only municipal clinics with taxpayers’ money is unfair. It discriminates against all other hospitals in the vicinity that are operated by private companies, non-profit organisations or churches. This has led to the Federal Association of German Private Clinics suing the District of Calw, which has paid out more than 10 million Euros in subsidies to the municipal hospitals run by Calw GmbH, over many years, to refrain from balancing out these deficits.

On 24th March 2016, the proceedings took place before the highest German court, the Federal Supreme Court and the BDPK achieved a partial success of great significance. According to the judgment issued by the Federal Supreme Court, the granting of such aid by local authorities to their hospitals is subject to very strict requirements. Particularly lacking, in this case, was a clear allocation, showing which subsidies were made to cover which specific costs at the hospitals in the District (transparency criterion). The District would therefore have had to obtain permission from the European Commission. But had not done so.

The Federal Supreme Court has referred parts of the proceedings back to the Court of Appeals, such that the Stuttgart County Court must now make the final decision on whether the subsidies made by the District of Calw constitute unlawful aid under EU legislation.

Any further consequences, which may result from the judgement of the Federal Court of Justice can only be assessed once a full written statement has been published.