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This paper analyzes the privatization of German public and charitable hospitals. The subject is examined from financial and social perspective. In the first step, an introduction about health sector is given. In the second part, the German hospitals’ situation is described. In the third part of the paper; it is discussed whether privatization is advantageous or risky by consideration of various indications. Lastly, conclusions and recommendations are presented. Until 1985, making profit in hospitals was forbidden by law in Germany. After introduction of DRGs, this law was cancelled. Before 1985, there were no private clinics except a few for rich people. This situation has changed since 90’s. The share of private hospitals reaches 36.2% in 2016. It is expected that privatization is going to grow in the presence of DRGs. Due to the financial gap in hospitals, funds for new investments and operational activity are missing. While many of public and charitable hospitals make loss, private hospitals are profitable.

PRIVATIZATION OF GERMAN HEALTHCARE SECTOR - FINANCIAL AND SOCIAL CONSEQUENCES AND RISKS