📖 Approx. 3 minutes / Updated: 2026.06.13
Reconstruction strategies for hospitals that have become unprofitable after the 2024 medical fee revision. Covers cost structure reform, departmental reorganization, and economies of scale through group-participating M&A.
Hospital Deficits: The Current Situation Based on Industry Data
According to a survey by Tokyo Shoko Research, the number of bankruptcies and business closures in the medical industry (hospitals, clinics, dental clinics) has remained high in recent years. In 2024, the business environment has become particularly challenging for small and medium-sized medical institutions due to medical fee revisions, soaring personnel costs, and rising energy costs.
The Ministry of Health, Labour and Welfare’s Survey of Medical Institutions shows months where the number of clinic closures has exceeded new openings, making early consideration of business succession essential for maintaining regional healthcare.
Major Factors Leading to Deteriorating Management
- Impact of Medical Fee Revisions: Reductions in insurance medical treatment unit prices, stricter facility standards
- Soaring Personnel Costs: Difficulty in hiring nurses, pharmacists, and administrative staff, and pressure for wage increases
- Burden of Capital Investment: Electronic medical record updates, CT/MRI replacements, advancement of medical equipment
- Aging of Directors and Lack of Successors: Delays in decision-making and undeveloped succession systems
- Decrease in Patient Numbers: Decline in outpatient numbers in depopulating areas, increase in competing medical institutions
- Rising Interest Rate Environment: Increased burden of interest on borrowings and difficulty in refinancing
10 Early Warning Signs of Management Crisis
- Current ratio below 100% (worsening short-term payment ability)
- Operating profit margin below industry average (5-8%) for three consecutive periods
- Notices of seizure of medical fees or tax arrears occur
- Requests for additional loans from financial institutions are rejected
- Negotiating payment deferrals for lease fees or rent
- Delayed salary payments, bonus cuts
- Cancellation of medical equipment maintenance contracts
- Demand for cash transactions from pharmaceutical wholesalers
- Successive staff resignations
- Requests for additional personal guarantees from the director
Options and Resolution Schemes
When facing management difficulties, options are considered in stages depending on the severity of the situation.
- Stage 1: Management Improvement (Early) – Cost structure reform, revenue enhancement measures, credit line expansion
- Stage 2: Business Succession M&A (Mid-term) – Secure transfer proceeds through group participation or third-party succession
- Stage 3: Private Reorganization / Sponsor M&A (When debt adjustment is necessary) – Succession to a sponsor company after creditors’ consultation
- Stage 4: Legal Reorganization (Last resort) – Reconstruction through civil rehabilitation/corporate reorganization, or liquidation through bankruptcy
Succession “While Healthy” is Overwhelmingly Advantageous
In cases of reorganization after becoming insolvent or facing bankruptcy, the transfer price is often zero or negative, leaving only the director’s personal guarantee liabilities.
On the other hand, by choosing third-party succession while the business is still profitable, you can secure a transfer price that appropriately reflects the business value, while also achieving the maintenance of staff employment, continuity of patient care, and sustainability of regional healthcare.
Our support track record shows an average period from consultation to closing of 6-10 months for clinics without beds and 9-18 months for medical corporations. Early consultation when signs of management deterioration appear leads to the best outcome.
Frequently Asked Questions
Q. Is it possible to transfer ownership even if the company is insolvent?
A. Yes, it is possible. There are schemes such as sponsor M&A and third-party succession involving creditor adjustments. We have extensive experience supporting cases of insolvency.
Q. Will my creditors or staff know that I have consulted you?
A. Information is disclosed only to a limited extent after signing an NDA, and there is no need to disclose it to related parties before the final contract. We strictly maintain confidentiality.
Q. What happens to the director’s personal guarantee?
A. It depends on the transfer scheme. In group-participating M&A, the release of guarantees is incorporated as a condition of transfer. The Guidelines for Business Owner Guarantees can also be utilized.
Q. Will I receive more money by transferring than by going bankrupt?
A. Almost certainly, yes. In bankruptcy, there is little left after liquidation costs and debt repayment, whereas with a transfer, you can secure proceeds based on business value.
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To Medical Institutions Facing Management Challenges
Strict confidentiality, free initial consultation. The earlier you consult, the more options you will have.