Structural Tensions
Contract Negotiations in University Medicine
Dirk Böhmann
The current reality of negotiations in university medicine is both complex and challenging. Contract negotiations offer opportunities for innovation, but at the same time carry the risk of imposing one-sided burdens on the physicians concerned — risks that must be addressed consistently.
Contract negotiations in university medicine have attracted considerable attention for years. This is not least because they concentrate structural tensions that extend far beyond individual career issues and negotiation processes. They mark a point at which academic achievements, clinical responsibility, public-law frameworks and economic control mechanisms directly intersect.
In this respect, contract negotiations in university medicine are more than mere employment-law negotiations. In fact, medical leaders at university hospitals negotiate not only their remuneration, resources or contract terms, but also the specific configuration of their role within a highly complex institutional structure. These negotiations determine whether medical leadership functions are equipped with real scope for action or whether responsibility is transferred without corresponding decision-making authority.
A central structural feature of university medicine is its institutional complexity. Medical leaders regularly negotiate not with just one negotiating partner, but with a network consisting of the hospital board, the dean’s office, the university leadership and, indirectly, the responsible state ministry. This constellation is not only organisationally demanding; it also fundamentally shapes the negotiation situation. Decision-making powers are distributed, and responsibilities are fragmented. For those who have received a call to a position, this creates a complex negotiation situation, which is exacerbated by the difficult economic position of university hospitals. A considerable proportion of German hospitals operate at a deficit, and university hospitals are no exception. The causes are structural. Primary factors include insufficient investment funding by the federal states, rising personnel and material costs, increasing regulatory requirements and a flat-rate case-based system for operating costs that only incompletely reflects the special tasks of maximum-care university medicine. These economic conditions significantly shape the stance taken by university hospitals in contract negotiations. Negotiations therefore increasingly take place under the implicit reservation of scarce resources.
In contract negotiations in recent years, institutional risks have increasingly been delegated to the medical level. Medical leaders are entrusted with extensive responsibilities, for example for the economic situation of their department, staff management and compliance with typical employer obligations, without being granted the necessary decision-making powers to the same extent. Such an asymmetry between responsibility and controllability is not an individual failure, but an expression of an employer logic that attempts to individualise structural problems.
Contract negotiations in a difficult environment
Under such conditions, the success of contract negotiations depends to a considerable extent on the respective negotiating position. This is by no means solely a matter of personal negotiating skills; rather, it results from a variety of objective and subjective factors. These include academic reputation, the clinical importance of the subject area for the location, the existence of realistic alternatives and, not least, the hospital boards’ assessment of the clinical and economic performance capacity of the appointees. Parallel negotiation options will also expand the possible negotiation outcomes. In practice, the relevance of the individual negotiation situation is often underestimated or suppressed. It is not uncommon to suggest that successful negotiations are primarily a matter of the right arguments or personal assertiveness. Such a view misjudges the structural dimension of the negotiation situation. In university medicine, negotiations do not necessarily take place on an equal footing, but within institutional power imbalances that can be compensated for individually only to a limited extent, even with optimal preparation. Anyone who ignores this reality runs the risk of contractually assuming responsibility without having the necessary resources or safeguards. Overall, preparing for contract negotiations is therefore of decisive importance. A realistic analysis of one’s own negotiating position, the institutional framework conditions and the interests of the other side is indispensable. Contracts in university medicine operate at the intersection of employment law, higher education law, hospital law and budgetary law. Their long-term effects can hardly be reliably assessed without specialised expertise.
This development is closely linked to the increasing economisation of hospital governance. Economic indicators are gaining importance, while qualitative aspects of research and teaching are more difficult to measure and are therefore often underrepresented in target agreements.
Reform of the GOÄ
The announced reform of the Fee Schedule for Physicians (Gebührenordnung für Ärztinnen und Ärzte, GOÄ) intensifies this dynamic. Former Federal Minister of Health Nina Warken has announced implementation in 2026 of the GOÄ reform that has been planned for years.
The existing remuneration system under the fee schedule can be described as a historically developed catalogue of individual items tied to services and time. It represents the provision of medical services in the treatment of privately insured patients through formal billing items and multiplier factors, but it only incompletely reflects the actual effort involved in care. The new fee schedule replaces this principle with remuneration more strongly oriented towards the medical effort and complexity of service provision. What specific effects this will have on individual medical specialties remains open at present. It is, however, indisputable that the remuneration of the physicians concerned is likely to change as a result of the new fee schedule.
The situation for senior hospital physicians is additionally exacerbated by two decisions of the Federal Court of Justice (Bundesgerichtshof, BGH) of 13 March 2025 (case nos. III ZR 426/23 and III ZR 40/24), which are of considerable practical importance for chief physicians and hospital operators. In the first judgment, the BGH confirmed that a comprehensive hospital admission contract enables the hospital operator itself to agree optional physician services directly with the patient and to bill them independently by way of hospital liquidation. In the second judgment, the BGH made clear that chief physicians cannot simply appoint arbitrary physicians on a blanket basis to provide optional physician services in their name as part of private liquidation. The BGH held such “representation without conditions” to be unlawful. Chief physicians should carefully review existing service contracts in light of this case law and, where necessary, adapt them accordingly. Even though the judgments do not introduce a new remuneration system, they alter the legal framework for private liquidation and increase risks, particularly for the physicians concerned, in interaction with a changing fee schedule.
Against this background, it is remarkable how self-evidently current contract negotiations attempt to individualise risks related to the GOÄ. As long as it remains unclear how revenue structures in the private medical sector will develop, the contracting parties operate with assumptions, forecasts and safeguard mechanisms. In practice, this often means that risks are priced in anticipatively, but regularly not symmetrically. Hospitals protect themselves by making participation models more flexible or more restrictive, while medical leaders must integrate the uncertainty into their individual income prospects. Such a one-sided allocation of risk to the detriment of those concerned is rarely addressed openly.
Target agreements
The development described above is closely linked to the increasing importance of target agreements. In university medicine, target agreements have now become a standard instrument, particularly for chief physicians and senior consultants. Their substantive design, however, is often problematic. It is not uncommon for targets to be agreed whose achievement depends substantially on external factors, such as staffing levels, investment decisions by the hospital operator, structural conditions relating to buildings, or regulatory requirements. Nevertheless, failure to meet targets is individualised and may have direct financial consequences.
The linking of variable remuneration to economic targets must be viewed particularly critically. University hospitals are subject to specific healthcare and training mandates that cannot readily be translated into business-management indicators. Nevertheless, target agreements are regularly based on revenue figures and other economic efficiency parameters. Research and teaching, by contrast, often appear not at all or only in formulaic terms, without their structural importance for university medicine being adequately taken into account. This threatens a gradual shift in institutional priorities, one that is not implemented explicitly but through contractual governance instruments. This development is particularly problematic in the context of current health and hospital reforms. The politically intended reorientation of the hospital landscape — with stronger standby funding, changed service planning and regional concentration — creates considerable uncertainty at the level of hospital operators. The problem is further intensified by the current case law of the Federal Administrative Court (Bundesverwaltungsgericht, judgment of 4 December 2025, case no. 3 C 3.24). According to this ruling, even against the background of academic freedom under Article 5(3) of the German Basic Law, a university hospital cannot demand to be included in the hospital plan with a particular range of services. Against this background, variable remuneration components often function in practice as a buffer to pass on institutional risks flexibly. For medical leaders, this raises a fundamental question: to what extent are they willing to bear risks that they neither caused nor can fully control? This question is often not asked explicitly in contract negotiations, but it is central to their long-term assessment. Target agreements concluded under conditions of structural uncertainty carry the risk of retrospectively appearing to have been misguided decisions — not because of individual failure, but because the framework conditions have changed.
In light of current reform processes at the latest, it becomes clear that contract negotiations in university medicine can no longer be understood merely as individual career episodes. They are an expression of a fundamental change in the governance structures within which medical leadership now takes place. What was previously negotiated implicitly is now openly apparent: the question of how much institutional responsibility individual physicians should bear — and how much institutional protection they are actually granted in return. Against this background, a realistic assessment of one’s own negotiating position becomes centrally important. Not every appointment position is equally strong, and not every retention negotiation opens up the same scope for action. Academic reputation, clinical indispensability, revenue expectations on the part of hospital boards and personal external options often determine the corridor for negotiation more strongly than formal arguments. Anyone who fails to analyse these factors soberly runs the risk of being left with contract effects that are unfavourable in the long term.
At the same time, it can be observed that the expectations of hospital operators themselves are becoming increasingly ambivalent. On the one hand, medical leaders are expected to assume strategic co-responsibility, for example for structural decisions, service portfolios or economic consolidation. On the other hand, key decisions such as investments, staffing positions and construction measures usually remain outside their sphere of influence. This discrepancy creates an attribution of responsibility without corresponding steering power, which can only be resolved with difficulty in contract negotiations. Added to this is the dynamic of negotiations recurring annually. What appears to be routine continuation is in fact a permanent negotiation process in which institutional priorities gradually shift. Small adjustments in target definitions, assessment criteria or weightings can have considerable effects over the years. Anyone who underestimates this cumulative effect risks long-term disadvantages that are barely noticeable in the short term. Against this background, involving specialised legal advice is not a sign of inadequate negotiating competence, but an expression of professional responsibility. Contracts in university medicine are not standard employment contracts, but highly complex regulatory frameworks with long-term effects. Their analysis requires knowledge of higher education law, hospital law, employment law and remuneration law, as well as an understanding of institutional practice. Anyone who relies here on informal arrangements or supposed self-evident understandings places themselves in a structurally inferior position.