40% of Clinics in the Red, Japan Medical Association President Warns of “Risk to Continued Regional Healthcare”… Requests for Fee Increases and Management Support – Yomiuri Shimbun

News Highlights

The President of the Japan Medical Association has sounded the alarm about the current situation where approximately 40% of clinics are operating at a loss, stating there is a “risk that continued regional healthcare will become difficult,” and has requested an increase in medical fees and management support. This situation suggests that many clinics are facing a challenging business environment. The key points of the news include early consultation with experts when a decline in the current ratio or consecutive losses are observed, negotiation for the release of personal guarantees, and consideration for regional healthcare by choosing business succession rather than closure.

Perspective from M&A Medical Editorial Department

The shocking figure of “40% of clinics in the red,” as reported by the Yomiuri Shimbun, is not merely a report of deteriorating business conditions but suggests a situation that could shake the very foundation of regional healthcare. Clinics, in particular, are the last line of defense supporting the health of local residents, and the current precarious state of their survival is serious. Behind this situation, it is inferred that the long-standing freeze on medical fees has led to a rigid revenue structure, while rising labor costs and prices are exerting pressure. In such circumstances, M&A-based business succession can be an extremely important option, not just the choice of “closing down due to losses,” from the perspectives of continuing regional healthcare, providing services to patients, and maintaining staff employment. In particular, by considering M&A while the business is still sound, or in the early stages when losses begin to become apparent, it becomes possible to negotiate for succession under more favorable terms and to release the clinic director’s personal joint liability. This highlights the role of M&A as a “last safety net” for protecting regional healthcare.

Points Raised by This News

• The reality of 40% of clinics operating in the red suggests a risk of weakening the regional healthcare delivery system.
• Structural issues with medical fees are highly likely to be the primary cause of pressure on clinic management.
• M&A can be an effective means to prevent clinic closures and maintain regional healthcare functions.
• Considering M&A at an early stage, before losses become apparent, leads to business succession under better terms.

Practical Questions Arising from This News

• My clinic is also facing continuous losses; what specific M&A schemes can be considered?
• Is it possible to transfer the business while releasing personal guarantees and with no successor in place?
• Will the current staff’s employment be protected through M&A?

If You Feel “Should I Consult Too?”

If your clinic’s management situation falls under the “40% in the red” reported by the Yomiuri Shimbun, or is close to it, considering business succession M&A is an urgent issue from the perspective of continuing regional healthcare. In particular, by consulting with experts while the business is still sound, or in the initial stages when losses begin to become apparent, the possibility of constructing a succession scheme that maximizes the value of your clinic’s patient base, staff, and above all, its contribution to the region, increases. Before reaching the option of closure, please consider consulting with us.

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 complete success fee system. We handle consultations with strict confidentiality. Free consultations are available here.