‘European hospitals face increasing pressure’ has become something of a cliché, but for good reason: the reality behind it is intensifying. Workforce shortages, rising operational costs, constrained capacity, and growing demand are pushing hospitals to their limits. Incremental improvements are no longer enough.
What is often overlooked is that many hospitals continue to operate within largely unchanged organisational models. Most still aim to provide a broad range of services, supported by similar structures across departments. On paper, this appears comprehensive, but in practice it often leads to inefficiencies.
This article examines why the current model is coming under increasing strain. It shows how spreading services too thinly leads to inefficiency, how insufficient volumes undermine quality, and how a more deliberate, data-driven organisation of care can improve outcomes.
The main question to be asked is: how should services be organised to ensure both financial sustainability and high-quality care?
In practice, this requires acknowledging that not every hospital can offer the full spectrum of services at a single location.
Several structural factors underpin this:
- Uneven demand across services
Certain specialties attract sufficient patient volumes to remain viable, while others struggle to reach the activity levels required to sustain both quality and cost-efficiency. One illustration of this is the case of prostate cancer surgery in the Netherlands. In lower-volume settings, urinary incontinence rates were substantial, varying widely, reaching up to 85% in some hospitals. Volume-related factors contributed to this variation (Schepens et al., 2023). As a result, minimum volume standards were introduced, concentrating surgeries in fewer centres.
- High fixed costs
Many hospital services require significant upfront investment in infrastructure AND technology. When utilisation is low, these fixed costs are distributed across too few patients, resulting in structural financial pressure.
- Workforce constraints
On top of workforce shortage, many healthcare professionals are highly specialised and cannot be easily redistributed across all service lines. For example, a delivery nurse cannot simply step into an ICU role where demand may be growing.
When these factors are not addressed through a more structured organisation of care, the consequences extend beyond financial strain. Hospitals face longer waiting times and growing backlogs, while clinicians, as mentioned earlier, may lose proficiency if patient volumes are too low to maintain routine practice.
This results in inefficiencies that affect both the patient experience and operational performance.
Two contrasting realities in Europe
Germany: fragmentation and low volumes
These structural challenges are already visible across European healthcare systems. Germany provides a clear example of a highly decentralised model, where many hospitals within the same region offer overlapping services. While this model ensures local accessibility, it has led to low patient volumes per specialised service in many hospitals (Blümel et al., 2024).
As a result, Germany is undergoing a major reform aimed at reorganising hospital structures and redefining the role of providers within regional care systems (Detecon, 2026). This reform focuses on clearer service differentiation, encouraging specialisation, and reducing duplication across hospitals within the same area. While this may lead to mergers or closures in the short term, the long-term objective is clear: to ensure that care delivery remains both financially sustainable and clinically robust.
The United Kingdom: imbalance in access and capacity
A different but equally important challenge can be observed in the United Kingdom.
Here, the challenge is about the uneven distribution of capacity and expertise (Interweave, 2023). Some regions face significantly longer waiting times and limited access to specialised care, while others are better equipped. This misalignment reflects gaps between where demand exists and where services and expertise are located.
Despite these different starting points, both contexts point to a common challenge for hospital leaders: understanding where current models fall short and where change will have the greatest impact.
What hospital leaders need clarity on
To address these challenges, hospital leaders need a clearer view of where inefficiencies arise and what explains them. This requires moving beyond isolated indicators and looking at how performance, demand, and patient flows interact across the system.
This perspective is consistent with broader approaches to healthcare planning, which emphasise the need to combine insights on service performance, population needs, and patient movement when evaluating how care should be organised (Fady, z.d.).
1. Hospital performance
Leaders need a comprehensive view of what is going on at the hospital:
- Reimbursement & Cost Control: what is our financial performance, overall and per activity?
- Clinical process performance: are our patient pathways, our healthcare utilisation (HCRU) and our clinical and patient outcomes optimised?
- Is the productivity and availability of our workforce sufficient for each of our activities?
This enables a clear assessment of which services are sustainable and which are structurally underperforming.
2. Regional care demand
Understanding demand goes beyond current activity levels. It requires insight into:
- Demographic trends and population health needs
- Future demand projections by specialty
- Variations across regions and patient groups
This forward-looking perspective is essential for long-term planning.
3. Referral patterns and patient flows
Patients move across providers and regions, often in complex ways. Leaders need insight into:
- Where patients originate from and where they receive care
- How referral networks function in practice
- Where inefficiencies or bottlenecks occur
- How hospital reputation influences patients’ preference
These insights highlight opportunities for better coordination and service alignment.
When brought together, these dimensions provide a stronger foundation for informed, objective decision-making.
A strategic imperative for the years ahead
Each European healthcare system is aware of these challenges, and new policies are regularly put in place to address them. A clear example can be seen in the UK, where commissioning decisions are shifting routine outpatient care to community settings. While this is clinically appropriate, these changes can rapidly reduce hospital activity, while underlying cost structures remain largely fixed. This illustrates the urgency of the situation: if hospitals are not strategic about their own future, policy changes may be imposed that lead to other major issues.
Hospital boards do not need to stand idly by, nor rely on gut feeling when planning for the future. A significant part of the solution already lies in the data they have. The challenge is to gain clarity on what truly matters and to translate fragmented data into a coherent view of where inefficiencies exist and where change is needed most.
