Medical Institutions’ Closures and Dissolutions Exceed 700 in FY2023, a Record High – Nikkei Medical

The fact that closures and dissolutions of medical institutions exceeded 700 in FY2023, a record high, is not merely due to an increase in retirements caused by aging, but rather indicates that we have reacheda structural turning point in the healthcare delivery system.The repayment of zero-interest loans, soaring prices, and increased personnel costs associated with the "physician work style reform" have directly impacted small clinics with weak financial strength. This trend is evident not only in rural areas but also in competitive urban areas, where the choice of "early retirement" is becoming more pronounced as future profitability is reassessed.

From an M&A perspective in the medical field, this figure of "700" suggests the potential disappearance of valuable medical resources before they can be assessed in the market. Many institutions that chose to close decided on "winding down" before exploring succession possibilities. However,even with operating losses or excess liabilities, the patient base in terms of location and specific medical specialties often holds strategic valuefor surrounding corporations or new practitioners. Delays in exit strategies are nullifying potential proceeds that could have been obtained and are undermining the regional healthcare infrastructure.

Medical institution managers need to calmly assessthe "expiration date of their business"before their institution becomes lost within these "700 cases." Considering the possibility of third-party succession early on is synonymous not only with securing profits as a founder but also with fulfilling one's final social responsibility to the local community.