Hospital Management Corporations: Nearly 50% in the Red Due to Worsening Profitability; Revenue Slightly Up, Profits Down Over 1 Trillion Yen Since COVID

According to a survey by Tokyo Shoko Research, a serious situation has been revealed where nearly 50% of hospital management corporations are operating at a deficit. This indicates that a combination of factors, including stagnant medical service fees, soaring personnel costs, and increased burdens from capital investments, are pressuring the profitability of medical institutions.

This deterioration in financial conditions presents an urgent challenge when considering business succession for medical institutions. Specifically, 'early business succession' before falling into insolvency is key to securing transfer consideration and minimizing the impact on local healthcare (e.g., staff employment and ensuring patient care continuity). Consulting with experts at the first signs of management deterioration significantly expands the possibilities for smooth succession through M&A.

Medical institutions facing management or succession issues should not view this news as irrelevant but should calmly analyze their own financial situation and prepare for future risks. To avoid the worst-case scenarios of personal guarantee liabilities or closure due to a lack of successors, considering an early business succession strategy in parallel with profitability improvement measures will contribute to maintaining a sustainable healthcare delivery system.