Record 143 Nursing-Care Providers Go Bankrupt in 2022

The Yomiuri Shimbun

A record 143 nursing care providers went bankrupt in 2022, up 76% from the previous year according to a Tokyo Shoko Research Ltd. survey.

The bankruptcies were caused by the coronavirus pandemic as it has led to a reluctance to use nursing care services, as well as high prices. Total debts reached a record ¥22.14 billion, with these providers having debts of ¥10 million or more.

Sixty-three of the providers, or 44%, went bankrupt because of the pandemic, which saw customers shunning them for fear of being infected, or increased costs associated with COVID-19 countermeasures.

By the amount of debt, about 80% have a debt of less than ¥100 million, indicating that the majority are small businesses.

The number of bankruptcies decreased to 81 in 2021 when the financial support for small and medium-sized enterprises was expanded as part of COVID-19 countermeasures. However, the number has turned in the other direction due to the pandemic becoming prolonged. The current rise in utility costs and other expenses is putting pressure on operations. Even so, providers could not immediately pass the rising costs onto users because the nursing-care benefit payment system is revised every three years in principle.

“The number of bankruptcies in the nursing-care business will rise further in 2023 if the gap gets wider between the large companies that gain the upper hand in automation, efficiency and personnel acquisition and the small operators, which have difficulty doing so,” a Tokyo Shoko Research employee in charge said. “If small businesses continue to go bankrupt in a community, a blank area in nursing-care services may emerge.”