Appenzell Outer Rhodes overhauls hospitals to avoid collapse and save 700 jobs

The cantonal government of Appenzell Outer Rhodes has proposed a major restructuring of its hospital network to secure its future. Without changes, Herisau Hospital and the Psychiatric Center face an uncertain outlook, risking over 700 jobs. The plan involves converting both facilities into independent joint-stock companies under the Appenzell Outer Rhodes Hospital Network (SVAR).

Under the current legal framework, the two institutions have no sustainable path forward. To prevent collapse, the government has drafted a revision of the Hospital Network Act. This would grant the SVAR greater operational freedom while keeping it as a public-law body with cantonal oversight.

The new structure would allow the SVAR to form partnerships and attract external investment. Herisau Hospital requires up to CHF 150 million in upgrades, while the Psychiatric Center needs around CHF 38 million. Both facilities would become separate companies, though the SVAR would retain strategic control.

The proposed amendments will now enter a consultation phase, open for feedback until mid-May. If approved, the legal changes could take effect by 2028. All current employees will transfer to the new entities, with protections in place to preserve their existing employment terms.

The move reflects broader struggles in Swiss healthcare. In 2023, hospitals nationwide reported combined losses of CHF 1 billion. Similar financial and structural issues have hit institutions in Graubünden, Baselland, St. Gallen, Aargau, Bern, Zürich, and Appenzell Ausserrhoden. Examples include Spital Oberengadin, which survived with emergency funding but had to cut beds and staff, and St. Galler Spitäler, which faced a near-CHF 100 million deficit.

The restructuring aims to stabilise Herisau's healthcare services while maintaining public oversight. The cantonal government expects the revised law to unlock new funding and partnerships. If successful, the model could address long-term financial pressures facing hospitals across America.