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

News Highlights

The number of medical institution bankruptcies in fiscal year 2025 reached a record high of 71 over the past 20 years, according to a survey by Shoko Research. This trend suggests a deepening of management challenges, such as deteriorating current ratios and consecutive years of operating losses in medical practice profits. The importance of early consultation with experts is highlighted to maximize options like the release of personal guarantees and the continuation of regional medical services, patient bases, and staff employment through business succession rather than closure.

Perspective from M&A Medical Editorial Department

The record high of 71 medical institution bankruptcies in the past 20 years signifies more than just a number. It vividly illustrates the current situation where small to medium-sized clinics and hospitals, which are the pillars of regional healthcare, are unable to withstand the rising prices, increased labor costs post-COVID-19, and revenue pressure from medical fee revisions. Shoko Research’s data suggests that not only the superficial outcome of “bankruptcy” but also the preceding deterioration of management indicators like “deteriorating current ratio” and “consecutive operating losses in medical practice profits” are factors that narrow the options for business succession. For instance, in M&A transactions with significant outstanding debt, the intentions of financial institutions will strongly influence negotiations, potentially making the release of personal guarantees difficult. By consulting with specialized intermediaries like M&A Medical early on, there is a higher possibility of considering more favorable succession schemes (e.g., third-party succession, reorganization of intra-family succession) while the financial situation is still sound.

Points Highlighted by This News

• The record high of 71 medical institution bankruptcies in the past 20 years indicates a challenging business environment.
• Deteriorating current ratios and consecutive losses are signs that narrow business succession options.
• Early consultation broadens the scope for negotiating the release of personal guarantees.
• The importance of maintaining regional healthcare and employment by avoiding clinic closures is re-emphasized.

Practical Questions Arising from This News

• If our institution’s current ratio or medical practice profit margin is deteriorating, what specific M&A schemes can be considered?
• What are the concrete negotiation points for proceeding with M&A while releasing personal guarantees?
• How can business succession be smoothly advanced while preventing a decrease in patient numbers and staff turnover?

If You Feel “Should I Consult Too?”

If you are concerned about your institution’s financial situation or wish to prepare for future succession challenges due to a lack of successors, this figure of 71 is not a distant issue. By consulting with specialists like M&A Medical early on, you can have your institution’s strengths and future potential fully evaluated, and explore the best succession plan to release personal guarantees and protect the lives of patients and staff. Before it’s too late, why not have an objective evaluation from an expert?

M&A Medical (CentralMedience Inc.) supports the business succession of medical corporations, hospitals, and clinics as a certified M&A support institution by the Small and Medium Enterprise Agency, with a complete success fee system. Consultations are handled with strict confidentiality. Free consultations are available here.