Kurume University Medical Center to Fully Close End of 2027; Wakamatsu Hospital of University of Occupational and Environmental Health to Also Cease Operations in Fukuoka – NNN

News Highlights

It has been revealed that Kurume University Medical Center in Fukuoka Prefecture plans to close at the end of 2027, and Wakamatsu Hospital of the University of Occupational and Environmental Health also plans to cease operations. From the perspective of medical M&A and business succession, while closure incurs costs of several million yen, business succession typically aims for a valuation of 0.5 to 1.5 times annual sales. Succession of clinics without beds is often completed within a standard timeframe of 4 to 10 months from consultation to agreement, and consulting before closure may allow for the continuation of staff employment and patient care.

M&A Medical Editorial Department’s Perspective

The fact that Kurume University Medical Center and Wakamatsu Hospital of the University of Occupational and Environmental Health, medical institutions that have played a certain role in regional healthcare, will close at the end of 2027 is a signal that cannot be overlooked by healthcare institution managers not only in Fukuoka Prefecture but nationwide. In particular, the fact that business succession is being presented as an option, rather than a simple closure, is important. The figure of several million yen in closure costs is not insignificant when considering the廃業 (hai-gyo – business closure) procedures, settlement of outstanding debts, and severance pay associated with closure. In contrast, business succession through M&A is generally expected to yield a valuation of 0.5 to 1.5 times annual sales. This valuation can vary significantly depending on the profitability, location, facilities, and brand strength of the medical institution, but it suggests the possibility of obtaining a valuation that exceeds or equals the closure costs. Considering business succession before closure not only increases the likelihood of fulfilling the social role of medical institutions, such as continuing staff employment and patient care, but also leads to a reduction in the economic and mental burden on the management themselves. This news underscores the importance of considering options other than closure early on as an “exit strategy” for medical institutions.

Points Raised by This News

• The policy to close Kurume University Medical Center and Wakamatsu Hospital of the University of Occupational and Environmental Health in Fukuoka Prefecture will have a significant impact on the regional healthcare system.
• The comparison between closure costs (several million yen) and business succession valuation (0.5 to 1.5 times annual sales) is a crucial factor in management decisions.
• Early consultation before closure is key to fulfilling social responsibilities such as continuing staff employment and patient care.
• It suggests the need to consider business succession as an alternative to closure early on as an “exit strategy” for medical institutions.

Practical Questions Arising from This News

• What specific costs are incurred when closing a facility?
• How will the employment of current staff be protected through business succession?
• What kind of support system will be established to ensure a smooth transition for patients to other medical institutions?

“Should I Consult?” If You Feel That Way

Now that the closure date of your institution has been clearly set for the end of 2027, it is time to specifically consider the costs associated with closure and the impact on staff and patients. If you are interested in an option other than closure, namely handing over the reins through business succession, the first step is to understand your institution’s current situation and accurately grasp the merits and demerits of business succession. We offer comprehensive support, from comparing with closure costs and considering the impact on staff and patients after succession, to proposing schemes that maximize your institution’s value. Before making the decision to close, please consult with an expert about the possibility of business succession.

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