71 Medical Institutions Filed for Bankruptcy Last Year, the Highest in 20 Years, Due to Decreased Patient Numbers and Rising Utility and Labor Costs – TV Asahi News

News Highlights

The number of medical institutions filing for bankruptcy last fiscal year reached 71, the highest in the past 20 years. The primary factors were a decrease in patient numbers, coupled with soaring utility and labor costs that strained management. This situation highlights the importance of early consideration of business succession and M&A. If a deteriorating current ratio or consecutive years of operating losses are observed, consulting with experts can broaden options. Furthermore, proceeding with M&A while the business is still in sound financial health can facilitate negotiations for the release of the clinic director’s personal guarantees. Choosing business succession over closure can lead to the continuation of regional healthcare services, patient base, and staff employment.

Perspective from M&A Medical Editorial Department

The figure of 71 medical institutions filing for bankruptcy last fiscal year is not merely a warning of deteriorating business conditions; it poses a serious question about the sustainability of regional healthcare. In particular, the double blow of declining patient numbers and increasing costs is a common challenge for clinics and small to medium-sized hospitals in rural areas. For instance, this trend is presumed to be more pronounced in prefectures and cities like XX Prefecture and XX City, where depopulation continues. In such circumstances, it is necessary to discuss not just urging “early consultation,” but how specific M&A schemes, such as “business transfer from a medical corporation to another medical corporation” or “sale of a clinic’s business,” can protect the living foundations of patients and staff, and simultaneously reduce the personal debt risk of the clinic director (especially personal guarantees), with concrete examples. The figure of 71 suggests a growing underlying M&A demand, and it is time for us M&A intermediaries to build a more comprehensive support system to help these medical institutions avoid the worst-case scenario of closure.

Points Raised by This News

• The 71 bankruptcies, the highest in 20 years, clearly indicate the harsh reality of medical institution management and increase the risk of hollowing out regional healthcare.
• The combined impact of declining patient numbers and soaring utility and labor costs is exacerbating the financial strain, particularly on small and medium-sized medical institutions.
• M&A conducted under sound financial conditions creates room for negotiating the release of the clinic director’s personal guarantees, also impacting the director’s own second-life planning.
• Choosing business succession over closure offers the potential to maintain the long-cultivated patient base and regional employment, thereby continuing contributions to the local community.

Practical Questions Arising from This News

• Amidst the increasing number of bankruptcies, what specific M&A schemes can ensure smooth business succession while minimizing the impact on patients?
• At what stage of M&A and under what conditions is it most effective to negotiate the release of personal guarantees?
• If a clinic is forced to consider closure, what are the concrete steps to find a successor who can continue contributing to regional healthcare?

If You Feel “Should I Consult?”

If you are a manager who feels that the news of 71 medical institutions filing for bankruptcy last fiscal year is not just someone else’s problem, start by objectively reviewing your own clinic’s or hospital’s financial situation. In particular, consecutive years of operating losses or a deteriorating current ratio are signs to begin considering business succession and M&A early. Consulting with experts (such as M&A intermediaries or tax accountants) can provide specific advice on what business succession paths are available besides closure, and how to mitigate your personal guarantee risks.

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