The statutory health insurance reform law of 1993 had a serious impact on the management of university hospitals. Firstly, the phase of strict budget caps, new in and out patient services could only be introduced when compensated with the elimination of other services. Most universities have mastered this challenge. In the second phase, an entirely new system of hospital fees will be introduced. This will lead to a high degree of uncertainty on the financial situation of the university hospitals. The new regulation on hospital fees only insufficently takes into consideration tertiary care hospitals. A severe loss of income has to be reckoned with. The funding of current subsidies for medical research, training, construction projects and big-ticket equipment is threatened by the fiscal budget crisis due to the current recession and the heavy financial burdens of the German reunification. Therefore fundamental reforms with regard to the statutory form, the form of ownership, the responsibilities of the university hospital, the organization of management and decision processes, the public service law and investment financing are all unavoidable.