Dental Industry Bankruptcies Hit 20

News Highlights

According to Tokyo Shoko Research, the number of bankruptcies in the “dental industry” in fiscal year 2023 reached 39 cases, the highest in the past 20 years. This is analyzed to be driven by the impact of recent medical fee revisions and price increases stemming from the Middle East situation, which have pressured management. The increase in bankruptcies underscores the renewed importance of business succession and M&A in the dental industry.

M&A Medical Editorial Department’s Perspective

The announcement by Tokyo Shoko Research that dental-related bankruptcies in fiscal year 2023 reached a 20-year high of 39 cases carries more significance than just a number increase. Particularly noteworthy is how external factors, namely medical fee revisions and the Middle East situation, have directly impacted dental clinics with already fragile management foundations. For instance, soaring material costs are thought to have strained management as a cost increase not fully covered by the revisions. In such circumstances, it is predicted that an increasing number of clinics facing a lack of successors or management difficulties will have no choice but to opt for business succession through M&A rather than closure. Early consultation in a sound state is likely to be key to securing more favorable terms, both from the perspective of releasing the dentist’s personal guarantees and ensuring the continuation of regional healthcare.

Key Discussion Points from This News

• The 39 dental-related bankruptcies in FY2023 represent the worst figures in 20 years, suggesting structural challenges within the industry.
• A double blow from changes in the revenue structure due to medical fee revisions and cost increases driven by the Middle East situation.
• Succession through M&A, rather than business closure, is becoming an essential option for maintaining patient and staff employment and continuing regional healthcare.
• Consulting with experts before a decline in the current ratio or consecutive losses becomes apparent can broaden business succession options.

Practical Questions Arising from This News

• Which specific aspects of the medical fee revisions have pressured the management of dental clinics?
• To what extent and in what cost areas are price increases due to the Middle East situation affecting dental clinics?
• Amidst rising bankruptcy numbers, what are the concrete steps to successfully achieve business succession through M&A?

If You Feel “Should I Consult Too?”

If your clinic feels that revenue has not improved as expected due to recent medical fee revisions, or if rising costs for materials and utilities are pressuring your management, please consult with an expert. Especially if you face a lack of successors or future management concerns, considering M&A and business succession early on can be the best strategy to avoid the worst-case scenario of closure and protect your patients and staff employment. Let’s start by objectively assessing your current business status.

M&A Medical (CentralMedience Inc.) supports the business succession of medical corporations, hospitals, and clinics with a full success-fee basis as an M&A support institution certified by the Small and Medium Enterprise Agency. Consultations are handled with strict confidentiality. [Free Consultation Here](https://ma-med.net/contact/)