German hospital reform: which leaders hospitals need now and who chooses them

In short: The German hospital reform (Krankenhausreform) fundamentally changes five leadership roles: the managing director of a hospital group, site management, the medical director, medical controlling and the head of IT. Whether these roles succeed is often decided by the hospital owner (Träger). In public hospitals, which provide almost half of all hospital beds in Germany, supervisory boards, municipal councils and municipal investment management shape strategic decisions and often the appointment of the managing director, depending on the legal form. A good appointment therefore starts with the owner’s vision for the hospital.

What does the German hospital reform decide by 2030?

The German Bundestag passed the Hospital Reform Adjustment Act (Krankenhausreformanpassungsgesetz, KHAG) on 6 March 2026 (German Bundestag, in German). It has been in force since 15 April 2026 (Federal Law Gazette I 2026 No. 98; Federal Ministry of Health, both in German). It amends the 2024 reform and gives every hospital management a calendar to plan by.

Date	What applies
By 31 December 2026	If the federal states (Länder) assign service groups by this date with effect from 1 January 2027, they can grant exceptions for hospitals that do not yet meet the quality criteria after consulting the statutory health insurers, provided the assignment is essential, for example to secure comprehensive care across the region. After that, the insurers’ agreement is required. The exception is limited to three years and can be extended by no more than three further years with the insurers’ agreement.
Ongoing	61 service groups (Leistungsgruppen) define which hospital may provide which treatments.
2026 to 2030	Capacity-based funding (Vorhaltevergütung) is budget-neutral in 2026 and 2027, 2028 and 2029 are transition years, and it takes full effect from 2030.
2026 to 2035	The Transformation Fund provides up to EUR 50 billion for restructuring. The federal government contributes EUR 29 billion from the special fund for infrastructure and climate neutrality, and the federal states finance the rest, partly together with hospital owners (Federal Ministry of Health, in German).

This calendar forces decisions about sites. Hospitals are specialised, merged or converted, and anyone who has run a single hospital will often lead a hospital group in future. In public hospitals, each of these decisions needs the approval of a board or council.

Why is the hospital owner the overlooked leadership level?

Around 29 per cent of hospitals in Germany were publicly owned in 2025, yet they provided almost half of all beds (Destatis, reporting year 2025, as of 10 September 2026, in German). Depending on the legal form and the rules of responsibility, supervisory boards, municipal councils and municipal investment management shape strategic decisions and often the appointment of the managing director. Many of these bodies include people from local politics and administration who know their region well but rarely know healthcare from the inside.

In the reform, these bodies carry a double responsibility. They are often involved in selecting the managing director, and they defend that person’s decisions locally, such as giving up a service group, converting a site or merging with the neighbouring district.

“The best candidate to lead a hospital group achieves little if the district council does not support the course. That is why we talk to the board first and only then to the market.”

Jorma Schüch, Principal Healthcare and Public Sector at HAGER Executive Consulting GmbH

Which questions should a hospital owner answer before the search?

Before appointing a hospital managing director, the owner should be able to answer three questions.

1. What should this hospital provide in 2030, and what should it stop providing?
2. Which of these decisions will the board also support in public?
3. Who on the supervisory board understands the figures behind the service groups?

If the third question remains open, appointing a managing director often goes hand in hand with strengthening the supervisory board. HAGER offers Board Services for these mandates.

Which five leadership roles does the German hospital reform change?

The reform mainly changes the managing director of a hospital group, site management, the medical director, medical controlling and the head of IT.

Role	What changes	How to recognise the right person
Managing director of a hospital group	Running one hospital becomes steering several sites with different service groups.	Has already merged or converted a site and defended the decision to staff and politicians.
Site and hospital management	Where the group steers centrally, operational responsibility is needed on site. Many groups are creating this role for the first time.	Connects medicine, nursing and administration in daily operations and works well in a matrix organisation.
Medical director and chief medical officer (different roles with comparable strategic responsibility, depending on the organisational model)	Which service groups a hospital applies for or gives up is a medical and an economic decision at the same time.	Has pushed through a decision on services against resistance from their own specialty.
Medical controlling and service planning	Quality criteria, minimum volumes and capacity-based budgets turn a staff function into a steering function.	Models scenarios for the board and delivers more than billing reports.
Head of IT and digital	Telemedicine partnerships gain importance when hospital groups spread services across several sites. What is possible across sites depends on the service group, quality requirements and how each federal state implements the reform. Networking is therefore increasingly part of patient care.	Has organised care digitally across sites and knows hospital operations from the inside.

“In the reform, it matters less where someone has led than what they changed there.”

Jorma Schüch

How does HAGER fill leadership roles in hospitals?

At HAGER, Jorma Schüch is responsible for both Healthcare and Public Sector and therefore knows the perspective of the hospital as well as that of the owner. For public-sector clients we bring this experience together in HAGER Public Advisors.

We search through direct approach, including beyond healthcare. For digital and transformation roles we work closely with our Digital & Technology practice group. In our Management Assessment we examine three things: proven experience of change, working with municipal boards and councils, and fit with a hospital in transition. After the appointment we support the first 100 days.

Find out more on our Healthcare and Public Sector pages.

Frequently asked questions about leadership in the German hospital reform

Which leaders do hospitals need after the German hospital reform?

After the German hospital reform, hospitals mainly need managing directors for hospital groups, site managers, medical directors with a strategic view of service groups, medical controlling with a steering mandate and heads of IT who connect care across sites. What these roles have in common is that they are responsible for change rather than for running an established operation. Anyone who specialises a hospital, converts a site or gives up a service group must be able to defend that decision to staff, the hospital owner and the public. In selection, proven experience of change therefore often counts for more than the size of the hospital a candidate has led so far.

What role does the supervisory board play in appointing a hospital managing director?

Depending on the legal form and the rules of responsibility, the supervisory board either decides on the managing director itself or is involved in the selection. In public hospitals, which provide almost half of all hospital beds in Germany, municipal councils and municipal investment management are also involved. The reform asks the supervisory board to decide on service groups, sites and mergers that have rarely been on its agenda before. A search should therefore start with the owner’s vision for the hospital. This includes what the hospital should provide in 2030, which cuts the board will support and who on the supervisory board can challenge the new managing director on the substance. If this expertise is missing, strengthening the board is often the first appointment.

What does the KHAG change for hospital management?

The Hospital Reform Adjustment Act (KHAG) has been in force since 15 April 2026 and amends the German hospital reform of 2024. It defines 61 service groups, postpones capacity-based funding by one year so that it takes full effect from 2030, and gives the federal states more room for exceptions to the quality criteria. The Transformation Fund provides up to EUR 50 billion for restructuring until 2035, of which EUR 29 billion comes from the federal government. For hospital management, this means more decisions about sites, more steering within hospital groups and more coordination with the federal state and the hospital owner.

What applies to the deadline of 31 December 2026?

Until 31 December 2026, the federal states have an easier route to exceptions. If, by this date, they assign a service group to a hospital with effect from 1 January 2027 although it does not yet meet the quality criteria, consulting the statutory health insurers is sufficient. One condition is that the assignment is essential to secure comprehensive care across the region. After that date, the federal states need the insurers’ agreement. The exception is limited to a maximum of three years and can only be extended by no more than three further years with the insurers’ agreement. Hospital owners who need such an exception should therefore prepare their decision on sites this year.

When is it worth using an executive search firm for a hospital managing director?

An executive search firm is worth using for a hospital managing director when the position is to be filled confidentially, when suitable people are not actively looking or when experience from other industries is needed. For key roles in the German hospital reform, all of this often applies at once. The profiles in demand have already led change and are therefore usually firmly in post. In addition, a job advertisement sends signals to staff and the region that a hospital owner may not want to send yet. A direct approach also reaches candidates who would never apply to an advertisement.

Content reviewed and updated: 22 October 2026