Medical Institution Bankruptcies Hit Record 71 Cases in FY2025, According to Shoko Research – Nikkei

FY2025 Medical Institution Bankruptcies Reach Record 71 Cases

According to a survey by Shoko Research, the number of medical institution bankruptcies in FY2025 reached 71, the highest in the past 20 years. This reality indicates that a combination of factors, including soaring prices, rising labor costs, and pressure on revenue due to revisions in medical fees, are directly impacting the management of medical institutions.

This situation provides extremely important implications within the context of medical M&A and business succession. To avoid the worst-case scenario of bankruptcy, it is crucial to consider business succession before management deteriorates and the institution falls into insolvency. Consulting with experts early increases the likelihood of achieving succession under more favorable terms, such as securing transfer consideration, maintaining employee employment, and ensuring continuity of patient services.

Particularly in the case of privately owned clinics and small hospitals, the personal management responsibilities and guarantees of the director often weigh heavily. If M&A can be pursued while the institution is in a sound financial state, negotiations for the release of these personal guarantees may proceed more favorably. As providers of regional healthcare, achieving a smooth transition to a new management entity, rather than opting for closure, is extremely important from the perspective of maintaining the health of local residents. Medical institutions grappling with management or succession issues should view these 'bankruptcy' figures as a serious warning to consider the future of their own facilities.