Medical Institution Bankruptcies in Kyushu at Record Pace; Rising Prices, Unmatched Consultation Fees… – Nishinippon Shimbun Me

News Highlights

The pace of bankruptcies among medical institutions in the Kyushu region is on track to reach a record high. The background to this situation is the rising cost of living, which is outpacing the revisions to consultation fees. This situation suggests that the management difficulties of medical institutions are becoming more severe, and the need to consider business succession and M&A is likely to increase.

Perspective from M&A Medical Editorial Department

As reported by Nishinippon Shimbun, the fact that medical institutions in Kyushu are facing bankruptcies at a record pace highlights the fragility of regional healthcare. In particular, the structural problem of increased expenses due to soaring prices, which are not being matched by revisions to consultation fees, is presumed to be putting pressure on many medical institutions. For example, increases in personnel costs and the cost of pharmaceuticals and medical supplies account for a large portion of fixed costs, and cannot be absorbed by the slight increases in consultation fees. In such circumstances, rather than simply dismissing it as a “successor problem,” analyzing management indicators such as deteriorating current ratios and consecutive operating losses at an early stage, and considering M&A for business succession, may be the only way to maximize the potential for protecting the patient base and staff employment, and for negotiating the release of the clinic director’s personal guarantees. Collaboration with experts is essential to avoid the option of closure.

Points Highlighted by This News

• The record pace of medical institution bankruptcies in Kyushu is a symbolic event indicating the harsh management environment for regional healthcare.
• The structural problem of rising costs due to soaring prices, which is pressuring management due to delays in consultation fee revisions, is becoming apparent.
• Deteriorating management indicators such as a worsening current ratio and consecutive operating losses are signs that prompt M&A consideration is needed.
• M&A conducted in a sound financial state increases the possibility of favorably advancing negotiations for the release of the clinic director’s personal guarantees.

Practical Questions Arising from This News

• If management continues as is, what specific management indicators are likely to deteriorate, increasing the risk of bankruptcy?
• When considering M&A, how will the increased costs of pharmaceuticals and medical supplies be reflected in the acquisition price?
• From the perspective of protecting regional healthcare, how will the continuation of patient care and staff employment be guaranteed during M&A?

If You Feel “Should I Consult?”

If your institution’s current ratio is on a downward trend and your operating profit margin has been in consecutive deficit, this news is not unrelated to you. By consulting with experts at an early stage, you can expand your options for business succession that protect patients and staff employment, rather than closing down. Furthermore, if you consult while your business is still sound, you may be able to favorably negotiate conditions such as the release of the clinic director’s personal guarantees.

M&A Medical (CentralMedience Inc.) supports the business succession of medical corporations, hospitals, and clinics with a complete success fee system as an M&A support institution certified by the Small and Medium Enterprise Agency. We accept consultations with strict confidentiality. Free consultation here