Regarding the Convening of the “3rd Working Group on the Application of Statistical Classification Compliant with ICD

News Highlights

The Ministry of Health, Labour and Welfare held the “3rd Working Group on the Application of Statistical Classification Compliant with ICD-11 for Vital Statistics” on May 12. This forum is to discuss how to apply the classification of Japan’s vital statistics in preparation for the transition to ICD-11, the latest version of the International Classification of Diseases (ICD). Compliance with ICD-11 will enhance consistency with international statistical standards and enable more precise analysis of diseases and causes of death.

M&A Medical Editorial Department’s Perspective

The current discussion on ICD-11 compliance in vital statistics may appear, on the surface, to be merely an update to statistical methods. However, it has an indirect but undeniable impact on the management of medical institutions, particularly when considering business succession. The transition to ICD-11 will bring changes to disease coding and the methods for aggregating and analyzing associated medical data. This could also affect future healthcare provision systems and the evaluation items in due diligence (DD) during M&A. For instance, if the accuracy of data analysis regarding treatment outcomes and prognoses for specific disease groups improves, acquiring parties will be able to more accurately assess the target medical institution’s future profitability and specialization. Furthermore, from a long-term perspective, it cannot be ruled out that changes in healthcare policy and revisions to the medical fee system may occur based on data compliant with ICD-11. Business owners considering succession should grasp these macro-level signs of change and begin considering early on how to reflect them in their own institution’s business plans and succession schemes.

Points Raised by This News

• Changes in statistical classification due to ICD-11 compliance will contribute to improved accuracy in future medical data analysis.
• Improved analytical accuracy may impact the evaluation items in M&A due diligence.
• Alignment with international statistical standards also suggests indirect effects on healthcare policy and the medical fee system.
• Medical institution managers need to consider reflecting changes in statistical standards in their long-term business plans and succession strategies.

Practical Questions Arising from This News

• What specific changes in disease classification will the transition to ICD-11 involve?
• How will changes in statistical classification affect the valuation of actual medical institutions in M&A?
• What can be done now to prepare our institution’s data for analysis compliant with ICD-11?

If You Feel “Should I Consult About This?”

This discussion on ICD-11 compliance can be seen as a move towards international standardization of data management and analysis for medical institutions. For medical institution managers considering future M&A or business succession, this is a good opportunity to begin discussing with experts how these changes might affect the evaluation of their institution’s treatment outcomes and future profitability analysis. Please consult with us to understand how your institution’s data may be utilized or pose challenges in future valuations, and to establish an appropriate succession strategy.

M&A Medical (CentralMedience Inc.) supports the business succession of medical corporations, hospitals, and clinics on a full success fee basis as an M&A support institution certified by the Small and Medium Enterprise Agency. Consultations are kept strictly confidential. Free consultation here