[Worst Level in 20 Years] Over 80% of Public Hospitals and Over 60% of Private Hospitals Operating at a Loss: What are the Structural Problems Behind This Serious Situation? – Smart News

News Highlights

It has become clear that over 80% of public hospitals and over 60% of private hospitals are operating at a loss, reaching the worst levels in the past 20 years. This serious situation is attributed not merely to deteriorating management, but to structural issues surrounding the healthcare provision system. The news also presents points from the perspective of medical M&A and business succession, such as early expert consultation, negotiation for the release of personal guarantees, and consideration for regional healthcare by choosing business succession over closure.

M&A Medical Editorial Department’s Perspective

The figures of over 80% of public hospitals and over 60% of private hospitals operating at a loss highlight the harsh realities of healthcare institution management. Particularly, the high deficit rate in public hospitals suggests that structural challenges, such as the promotion of regional healthcare plans, the impact of medical fee revisions, and rising labor costs, are pressuring profitability beyond the scope of mere management efforts. Private hospitals are also likely facing similar pressures from physician shortages and increased burdens from capital investment. In such circumstances, it is essential to consider more complex M&A schemes, not just a simple “sell because it’s at a loss” scenario, but rather incorporating public support, business restructuring based on regional characteristics, or entry from other industries. Identifying the deterioration of the current ratio and consecutive operating losses early on, and working with experts to negotiate the release of personal joint guarantees, will lead to the maintenance of hospital functions and the continuation of regional healthcare.

Points Highlighted by This News

• The deficit rate of over 80% for public hospitals is a warning sign for the sustainability of the regional healthcare provision system.
• The deficit rate of over 60% for private hospitals suggests the need for consolidation and restructuring of medical resources.
• Structural problems are causing operating losses, and simple management improvement measures have their limits.
• Choosing business succession over closure may minimize the impact on patients, staff, and the community.

Practical Questions Arising from This News

• How are the deficits of public hospitals linked to the financial situation of local governments?
• How will this deficit situation affect future medical fee revisions?
• What specific medical services will be maintained or strengthened through business succession?

If You Feel “Should I Consult Too?”

The deficit situation, the worst in 20 years, could cast a shadow over your institution’s future. If you are beginning to feel anxious about deteriorating operating profit margins or the repayment of accounts payable and loans, it may be time to consult with an expert. By considering M&A while your institution is still sound, you create room for negotiation on terms such as the release of the director’s personal joint guarantees, enabling a business succession under more favorable conditions. To avoid the option of closure and continue contributing to regional healthcare, early consultation is recommended.

M&A Medical (CentralMedience Inc.) is certified by the Small and Medium Enterprise Agency as an M&A support institution, providing support for the business succession of medical corporations, hospitals, and clinics on a full success fee basis. Consultations are accepted with strict confidentiality. Free consultations are available here.