Report on the Status of Medical Services for the Advanced Elderly

The “Report on the Status of Medical Services for the Advanced Elderly” indicates a future increase in medical expenses and an expansion of demand for elderly medical care. This is an urgent issue closely linked to the business succession problems of aging physicians, directly impacting the sustainability of regional healthcare. Instead of closure or discontinuation, considering third-party succession over a 5-10 year span starting around age 60, and utilizing specialized advisors in the healthcare industry, is essential for smooth succession and the continued operation of medical institutions.

New Challenges for Medical Institution Management Revealed by Trends in Medical Expenses for the Advanced Elderly

The data presented in the “Report on the Status of Medical Services for the Advanced Elderly” serves as a crucial indicator that cannot be overlooked in future medical institution management. The increase in the advanced elderly population is already a definite trend, and the accompanying rise in medical expenses is presumed to directly impact the allocation of financial resources in medical fee revisions and the revenue structure of each medical institution. Particularly for clinics and hospitals with a high proportion of advanced elderly patients, such as internal medicine, orthopedics, and ophthalmology, it is necessary to closely monitor changes in the medical fee system and movements towards the rationalization and consolidation of healthcare delivery systems within regional healthcare visions. As pressure to curb medical expenses increases, revising management strategies, strengthening collaborations, or optimizing business scale (including M&A) will be indispensable for maintaining an efficient and high-quality healthcare delivery system.

Aging Physicians and the Sustainability of Regional Healthcare: The Urgency of Business Succession

While the demand for advanced elderly medical care is expanding, the aging of physicians, who are the providers of healthcare, is a serious issue. Many medical institutions face a shortage of successors as their directors and hospital presidents reach their late 60s and 70s. This “Report on the Status of Medical Services for the Advanced Elderly” suggests that future medical needs will further increase. Choosing closure or discontinuation due to a lack of successors would create a significant void in regional healthcare and lead to the loss of long-cultivated medical resources (patients, staff, community partnerships). Under these circumstances, to ensure the continued operation of medical institutions and maintain regional healthcare, business succession to a third party emerges as a viable alternative to closure or discontinuation.

Practical Considerations and the Importance of Early Preparation in Medical Corporation M&A

Business succession and M&A for medical corporations involve a more complex process compared to general corporations. Therefore, as highlighted in the news summary, it is extremely important to start “preparation over a 5-10 year span, starting around age 60 for directors and hospital presidents.” During this period, it is essential to first confirm the type of medical corporation (with or without equity interests, fund contribution type, etc.). If equity interests exist, their valuation and tax considerations regarding capital gains tax are mandatory. Furthermore, a wide range of legal, tax, and labor-related issues must be addressed, including procedures for changing directors and members, succession of clinic establishment permits, maintenance or modification of facility standards, handling of real estate, and continuation of staff employment. These procedures require specialized knowledge and involve coordination with licensing authorities. Therefore, collaboration with M&A support organizations specializing in the healthcare industry, and experts such as tax accountants, certified public accountants, and lawyers well-versed in healthcare legal and tax matters, is indispensable. Starting the review early can broaden the options for the optimal succession scheme and increase the likelihood of achieving M&A under smooth and favorable conditions.

If you are considering the succession or M&A of a medical corporation or clinic, please utilize our free quick assessment or individual consultation (strict confidentiality, fully success-fee based).