You don't say where you live.

Is this a 'tropical' hibiscus or a so-called hardy one?

If it were me and it was a tropical species, I'd cut way back, mulch, fertilize and see what comes back.

Is it getting enough light? Is soil compacted?

martinca,
It is prividing privacy in front of that lattice that you put up.
If you cut it down too far, your neighbors are going to see right through it. You will have no privacy for the summer.
If you must cut it, just prune the top of it down some.
It's blooming, so it must be getting enough sun light.
It takes forever for shrubs and bushes to grow in that thick for privacy.
Be gentle with it, it's older and you might regret trimming too much off.

The type of hibiscus I have in Michigan will grow back vigorously regardless of how far I cut it back. I can it down to 3 inches and it comes roaring back. Be careful though because your Hibiscus may be a different species than mine. I don't have much knowledge of Hibiscus except the ones I have are also called Rose of Sharon or Althea sp.

I had one blue flowered one years ago that died after two years but it left a hundred baby volunteers behind. They are just light pink though. Not blue. They are so aggressive that I have to machete them back from time to time. They out compete butterfly bushes and that's saying something.