111OUTLOOK MANAGEMENT REPORT legislation, organic growth is possible only with lim- its ­ generally up to 5%. We are realising our goal of establishing national, generalised outpatient and in- patient healthcare coverage primarily through acqui- sitions and partnerships. In external growth we continue to follow our dual strategy of "competence and reliability in acquisi- tions" as well as "quality before quantity". For this reason we will consistently exploit every medically as well as economically sensible opportunity to ex- pand our healthcare network. We are seeking signifi- cant revenue growth driven by hospital acquisitions and at the same time are determined to forge ahead with the establishment of medical care centres (spe- cialist MVZs), the construction of portal clinics and the expansion of hospital sites through acquisitions and co-operation schemes. Looking forward, we are seeking a market share of 8% on the German hospital market. Every patient in Germany should have no more than a one-to-two-hour journey to reach one of our healthcare facilities. We will further promote the transfer of knowledge from our university hospitals in Gießen and Marburg, Herzzentrum Leipzig and the other scientific sites to our other hospitals. All our hospitals are to have access as quickly as possible to the latest scientific findings implemented in diagnosis and treatment procedures. ECONOMIC AND LEGAL ENVIRONMENT In 2010 we assume that the recession of 2009 in Germany has bottomed out and that gross domes- tic product (GDP) can be maintained at the current level or even slightly raised. This will depend to a de- cisive extent on the economic stimulus measures of 2009, due to be phased out gradually in 2010, being replaced by a self-sustaining economic development. For this it is not only necessary for domestic demand to stay more or less at the level of 2009 but also for exports to pick up again sharply. On the employment market we expect a slight de- cline in employment. At the same time, tax revenue will fall sharply due to the lag in the effects from the downturn in the economy in 2008 and the tax cuts that will come into effect starting in 2010. Coupled with the sharp rise in spending to service the debt- financed economic stimulus programmes and to finance social expenditures, we believe this will re- sult in a sharp rise in public debt. With regard to the trend in interest rates, we do not foresee any rise, at least not for the first two quarters of 2010. Neverthe- less, interest premiums to reflect the credit risks of debtors will continue to be relatively high. For the public healthcare segment we expect the long-standing trend in service volumes to continue, in which demographic developments alone will see a further steady rise in the demand for outpatient and inpatient healthcare service by roughly 1% to 2%. In 2010 revenues of the healthcare system are com- prised of employee and employer contributions to social insurance, of co-payments of insured members charged for the first time and of state allocations to the centralised health fund. Currently the shortfalls compared with the expected expenditure volume are being put at around 4 billion. That means that financial year 2010 will once again see only a mod- erate rise in prices for services, thus continuing the trend of steadily mounting pressures on providers as in past years. On the expenses side, the declining real prices will not be able to finance the increases in personnel costs on a massive scale that are loom- ing on the horizon. Assuming that hospitals have exhausted their efficiency reserves, the already exist- ing pressures on earnings and margins will increase even further. The survival of many public, non-profit and private hospitals will depend on the extent to which they will be able to cover deficits either from still existing liquidity and credit reserves or from the contributions of their owners or shareholders. With regard to public funding of hospital investments, we do not foresee any significant increases for 2010 ei- ther. The investment backlog put at some 50 billion will persist. As a consequence of their lack of invest- ment capacity, many hospitals will be denied the opportunity of reaping potential efficiency gains with the aid of rationalisation investments.
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