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DRK Braunschweig: declared bankruptcy – is there hope for rescue?
The German Red Cross in Braunschweig files for bankruptcy. The reasons are economic burdens and increased energy costs.
DRK Braunschweig: declared bankruptcy – is there hope for rescue?
The news of the insolvency of the German Red Cross (DRK) is causing a stir in the Braunschweig/Salzgitter region. On Wednesday it was announced that the DRK district association had filed for bankruptcy. However, business operations will initially continue under the supervision of an administrator. The district court has ordered self-administration insolvency, which means that the DRK has developed a restructuring concept, and board member Nico Seefeldt Kazazi believes there are good chances for a sustainable restructuring. Despite this situation, the salaries of around 450 employees are secured by insolvency money from the employment agency, so that the workforce is financially secure for the time being.
The reasons for this step are obvious. The economic burden caused by the Covid-19 pandemic as well as the sharp increase in energy costs as a result of the Russian attack on Ukraine are placing a heavy burden on the DRK. However, an additional planned sale of a former nursing home, which was intended to contribute to financial relief, was delayed.
Background of the hospital crisis
The DRK's problems are not an isolated case. Almost every sixth hospital in the DRK is in a similar situation and has filed for bankruptcy. DRK President Gerda Hasselfeldt reports that independent non-profit organizations such as the DRK in particular are suffering greatly from the financial burden because they can only build up limited reserves. The situation in many German hospitals is worrying: a survey by the German Hospital Association shows that over 80 percent of hospitals are in the red. The deficit of many clinics has increased to over 14 billion euros. There is no quick way out in sight and the challenges posed by hospital reform, which aims to increase the specialization of facilities, could further aggravate the situation.
The pressure on these institutions is immense. Clinics have to invest several hours a day in bureaucracy, which requires additional staff. Many hospital managers are skeptical about the Ministry of Health's planned reforms, which envisage a de-economization of the remuneration system. Rural facilities could be particularly left behind by these changes.
The future of the DRK
What does this mean for the DRK and its institutions? Despite the bankruptcy, the district association still has the goal of maintaining all services. These include advice and youth centers, care facilities, daycare centers and rescue stations. The need for financial support and structural reforms to stabilize the industry is obvious. Otherwise, the vicious circle could worsen, with more and more clinics following the same path as the DRK.
The developments surrounding the insolvency of the DRK and the tense situation in the hospital landscape make it clear that a rethink is required here. Health policy needs to be addressed urgently to prevent further loss of facilities and ensure health care. The cycle of financial bottlenecks and administrative burdens is no longer sustainable.
For the people of Braunschweig and the surrounding area, we can only hope that the DRK's upcoming renovation measures will bear fruit and that a viable solution will be found. The commitment of the employees and the extensive offerings of the DRK must not be allowed to fall behind.