The Hospital of the Future: Why Funding alone is not enough

A conversation with Dr. Manuel Iserloh about the pressure to reform, financial constraints and how hospitals can transform without disrupting day-to-day care

Up to €50 billion is set to be invested in restructuring Germany’s hospital landscape through the Hospital Transformation Fund. This opens up significant opportunities for hospitals and their operators. Yet the funding comes at a time when many hospitals are already operating at their limits: financial pressure is high, ongoing projects under the German Hospital Future Act (KHZG) still need to be completed, and patient care cannot simply be put on hold.

Responding to the pressure to reform therefore involves far more than securing funding and defining a strategic direction. Hospitals must determine which services they will be able to provide reliably in the future, how their operating processes should be aligned with those services and which digital solutions will actually ease the burden on staff. These initiatives must reflect the resources available and remain feasible while normal hospital operations continue.

In this interview, Dr. Manuel Iserloh, Senior Partner and Head of Healthcare at 4C GROUP, explains why building the hospital of the future requires more than a collection of individual reform or digitalisation projects. He outlines what matters when hospitals need to align their service portfolio, operating processes, resources and technology without disrupting ongoing care.

01When Reform Pressure Meets Day-to-Day Hospital Reality

Looking at the German hospital landscape in 2026, what issues are currently at the top of the agenda for hospital boards and management teams?

The main challenge is that several major developments are converging. Projects under the German Hospital Future Act are still in progress, hospital reform is raising new questions about clinical service portfolios and care structures, and more services are shifting from inpatient to outpatient settings. At the same time, many hospitals are under severe financial pressure. None of these issues is new on its own. What makes the current situation so difficult is their combination. A hospital cannot withdraw from patient care and say, “We are going to stop and restructure everything first.” Normal operations must continue, even though many hospitals have little capacity left to absorb further change.

The key questions are therefore: What should we do next, and what resources are available to do it? Each hospital must identify what the new regulatory and structural conditions require, which changes will improve care and financial performance, and what the organisation is realistically capable of delivering. A workable target operating model can only emerge when these questions are considered together—one that is convincing on paper and works in day-to-day hospital operations.

02Why Individual Projects Are Not Enough

Where do transformation programmes most often run into difficulty in practice?

The problem is that transformation initiatives are often considered in isolation. A hospital may focus on the operating theatre, admissions, a particular medical centre or an IT system and optimise that area on its own. In a hospital, however, these areas are closely interconnected. Improving one area can create a new bottleneck somewhere else.

In day-to-day operations, there is also rarely enough time to analyse these dependencies in depth. A change seldom affects only the department in which it begins. It can have consequences for staffing, processes, IT systems, documentation and, in some cases, other clinical services. These interactions must be understood before deciding what should be implemented and in which sequence.

This is where different capabilities need to come together. The people working in the hospital understand its processes and know exactly where problems occur in practice. At the same time, the organisation needs experience in managing complex transformation, as well as specialist expertise relevant to the issue at hand. The real challenge is to bring these different perspectives together in one coherent implementation plan.

03What Makes a Hospital Future-Ready

When we consider the hospital of the future, what characterises an organisation that is well positioned for the long term?

For me, it starts with clarity about the hospital’s role within the healthcare system. It knows which services it intends to provide reliably in the future. For hospital groups, this also means defining the role each individual site will play. The clinical service portfolio must reflect the available workforce, existing infrastructure and the hospital’s financial position.

The hospital’s operating processes are equally important. Admissions, documentation, treatment planning and discharge must work together so that patient care can be prepared and managed reliably. Today, hospitals frequently have to make last-minute adjustments—for example, because documents are missing, a patient does not arrive or a doctor is unavailable. The earlier this information becomes available, and the better the individual stages of treatment are prepared, the more reliably the remainder of the patient pathway can be planned.

Digitalisation is an important enabler because it can make relevant information available at the right time and in the places where decisions are made. Ultimately, the hospital of the future is an organisation that can continue to fulfil its responsibility for patient care under changing conditions, deploy its resources effectively and remain financially sustainable.

04Delivering Care Along the Patient Pathway

What role does the interaction between care delivery, financial performance, organisation and technology play in achieving this vision?

In a hospital, these areas cannot be managed in isolation. This becomes particularly clear when looking at the patient pathway. An operating-theatre scheduling process may work well on its own. But that says little about whether all the necessary information is available on time, whether treatment has been properly prepared, how nursing care, medical treatment and documentation fit together, or what happens after the procedure.

When these steps are not aligned, the result is disruption, additional coordination and avoidable work. Clinically, patients need to receive the right treatment at the right time. Financially, scarce resources need to be deployed where they are most needed.

It is therefore not enough simply to introduce an IT system or reorganise one department. Medical teams, nursing staff, IT and billing functions must work together as part of one end-to-end process, supported by clearly defined responsibilities and handovers. The patient pathway provides the common point of reference. Only when these perspectives come together do individual measures add up to a transformation of the hospital as a whole.

05Transformation During Ongoing Operations

What is essential for transformation to succeed while normal hospital operations continue?

A hospital cannot stop operating while it reorganises itself. Unlike a short-term restructuring programme that may be managed in temporary crisis mode, hospital transformation is a multi-year process. It therefore needs to be firmly embedded within the organisation. This means establishing clear responsibilities, defining a realistic sequence for the different priorities and assigning people who will manage implementation over the long term.

Employees are a crucial part of this process because they are the ones who put change into practice every day. In my experience, the willingness to support transformation is considerably greater today than it was several years ago. Many employees have now seen that change can work and that it can make their daily work easier. When the benefits become tangible—because processes become more reliable or repetitive administrative work is eliminated—employees are much more likely to support the transformation.

The organisation must also draw on its internal expertise. Someone who has worked in admissions for many years knows exactly where the process breaks down. This practical experience must inform the design of new processes and systems. The objective should be to relieve employees of repetitive work, not to disregard their knowledge.

The challenge is to combine a shared target operating model for the hospital with a sequence of manageable implementation steps. Visible progress in individual areas can demonstrate that change is possible. However, each improvement must contribute to the shared target model. Otherwise, the result is simply another collection of isolated measures.

06Internal Capabilities and External Support

Which tasks can hospitals manage using their own resources, and where does external support become valuable?

In the long term, hospitals need to build internal capabilities in the areas that require continuous improvement. That means establishing clear internal ownership for areas such as operating-theatre management or admissions, which need to be developed over several years.

At the same time, these initiatives are so complex that they often cannot be delivered solely through the existing organisation while normal operations continue. These programmes go far beyond isolated technical questions. They require hospitals to coordinate strategy, processes, IT, regulation, resources and implementation. This calls for experience with comparable transformation programmes, methodological expertise and, in some cases, highly specialised knowledge in areas such as IT security or data protection.

External support can bring structure to this complexity and turn a target operating model into an actionable plan. However, it is important that knowledge and capabilities do not remain permanently outside the organisation. Effective external support provides the initial momentum, contributes relevant experience and enables the organisation to manage similar challenges independently in the future. Responsibility for the transformation remains with the hospital, but it does not have to structure and manage every aspect alone.

07How 4C Supports Transformation

How do you support transformation programmes of this kind in practice?

I start by building a clear picture of where the hospital stands today. Many hospitals face similar challenges, but the organisations themselves differ considerably—in their organisational structures and history, clinical service portfolios, operating models and the initiatives already under way. I therefore work closely with the hospital’s executive management and with the employees who shape its processes every day. This helps us identify the hospital’s most pressing priorities and decide where to start.

The next step is to develop a concrete roadmap. Strategy often sounds broad and abstract. For me, it primarily means creating clarity about where the hospital wants to go, which decisions need to be made and what the next steps should be. I contribute experience from comparable situations and combine it with an approach tailored to the specific hospital.

Implementation is what ultimately matters. It is not enough to document measures and assign tasks. Together with the hospital management team, I prepare the necessary decisions, establish the conditions for change and stay involved through implementation so that the agreed priorities translate into tangible progress. Ultimately, success means turning the plan into visible change within the hospital.

08Where Hospitals Should Begin

Finally, what advice would you give hospital leaders who are now preparing to take the next steps?

My advice would be to begin with the most difficult questions—the decisions that will shape the hospital’s future. These include the future clinical service portfolio, the role of the hospital or its individual sites, the organisation of its core processes and the question of which changes will improve both patient care and financial performance.

These are often precisely the subjects that organisations prefer to postpone because they require extensive coordination, specialist expertise and, in some cases, external support. In my view, however, this is where the greatest potential lies. Once these fundamental questions have been answered, the organisation can build on them step by step.

Quick wins can be valuable when they reduce the burden on employees and demonstrate that transformation can work in daily operations. However, they should support the hospital’s strategic direction, not replace the fundamental decisions that still need to be made.

I would also advise hospitals not to pursue every new buzzword. Whether the topic is artificial intelligence, a new system or another initiative, the first question should always be whether it improves patient care, strengthens operations or supports financial sustainability. Every initiative must contribute to the direction the hospital has chosen, rather than simply adding another item to the agenda.

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