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

News Highlights

According to Money Post WEB, over 80% of public hospitals and over 60% of private hospitals are operating at a loss, reaching the worst level in the past 20 years. This serious situation is pointed out to be rooted not just in deteriorating management, but in structural issues inherent in the medical system and regional characteristics. The importance of early expert consultation, negotiation for the release of personal guarantees, and choosing succession over closure is suggested.

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 clearly indicate the harsh reality of medical institution management. Particularly, the high deficit rate in public hospitals suggests a divergence between their role as providers of regional healthcare and management efficiency, pointing to issues beyond just personnel costs or capital investment. For private hospitals as well, structural challenges such as lack of successors and stagnant growth in medical fees are leading to a deterioration in the current ratio and a decline in operating profit margins. Consequently, issues that should ideally be negotiated in a sound M&A, such as the ‘release of personal guarantees,’ are becoming conditions for business survival. This news underscores the critical importance of early business succession and M&A consultations.

Points Raised by This News

• A situation indicating a crisis in the very foundation of regional healthcare, with over 80% of public hospitals operating at a loss.
• Over 60% of private hospitals operating at a loss, potentially due to a combination of successor issues and structural challenges in medical fees.
• The reality that the reliance on the management's personal assets is so high that the 'release of personal guarantees' can become a focal point of M&A negotiations.
• The importance of choosing ‘succession’ over closure as an option to protect the patient base and staff employment.

Practical Questions Arising from This News

• What specific structural issues are causing the deficits in public hospitals, and how do they affect the management of our private hospital?
• Up to what level of deficit is there room for negotiation regarding the release of personal guarantees?
• From the perspective of ensuring regional healthcare, what kind of support can M&A intermediaries provide?

If You Feel “Should I Consult Too?”

Please check if your hospital’s current ratio is showing a downward trend or if your operating profit margin has been in the red for two consecutive periods. If these signs are present, we strongly recommend consulting with an expert early on, including negotiations for the release of personal guarantees, to maximize the option of ‘succession’ that protects patients and staff employment, rather than closure. This will enable the consideration of an optimal M&A scheme tailored to your hospital’s situation.

M&A Medical (CentralMedience Inc.) supports the business succession of medical corporations, hospitals, and clinics as a Small and Medium Enterprise Agency-certified M&A support institution, with a completely success-fee-based system. Consultations are accepted with strict confidentiality. Free consultation here