■NEWS Record 64 Hospitals and Clinics Bankrupted in 2024 – Influenced by Changes in Patient Behavior, etc. – Nihon Iji Shimpo

The news that the number of bankruptcies among hospitals and clinics reached a record high of 64 in 2024 highlights the deepening structural challenges within the healthcare industry.This situation is not solely due to succession issues such as the aging of management or lack of successors. It also reflects a complex pressure on management stemming from stagnant revenue growth due to revisions in medical fees, rising prices and labor costs, and the financial burden of investing in increasingly advanced medical equipment. Changes in patient behavior, such as the spread of online consultations and a concentration of patients towards highly specialized medical institutions, may also be contributing to difficulties in patient acquisition for some medical facilities.

From the perspective of medical M&A and business succession, this situation underscores the importance of crisis management and early intervention.To avoid the worst-case scenario of bankruptcy and maximize business value, it is essential to identify early warning signs of deteriorating management, such as a decline in the current ratio or consecutive years of operating losses, and consult with experts promptly. By choosing M&A for business succession while the business is still in a sound financial state, the likelihood of achieving better outcomes, such as securing a favorable sale price, negotiating the release from personal guarantees, and most importantly, ensuring the continuity of regional healthcare and maintaining staff employment, increases significantly.

A key takeaway for readers facing management or succession challenges is to move beyond the fixed notion of "bankruptcy = end of business" and adopt the perspective of "succession = new beginning."Early consultation with experts can open up possibilities beyond closure, including succession by competitors or other industries, or new growth strategies through M&A. To gain the time and mental space to objectively assess your institution's situation and compare multiple options, we recommend starting with information gathering, perhaps by utilizing free consultations.