Nursing care business failures hit record high in 2016

Kyodo

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Bankruptcies in the nation’s nursing care industry in 2016 hit a record high for the second consecutive year amid a cut in government-set service payments and increasing competition, a survey showed Wednesday.

The number of failures in the industry this year by businesses with debt of more than ¥10 million (about $86,000) rose 42.1 percent from 2015 to 108, Tokyo Shoko Research said.

The credit research agency attributed the rise to a reduction in nursing-care service payments in 2015 as a result of changes in government-determined tariffs. The annual amount of debt incurred surged 47.2 percent to ¥9.4 billion in 2016, it said.

The agency also cited a chronic worker shortage as a factor behind the increased bankruptcies.

According to the agency, bankruptcies in the industry have been increasing since 2012 with the figure reaching 76 in 2015, the highest since Japan introduced the nursing care insurance scheme in 2000.

The survey showed that small and new companies were especially vulnerable to the downward trend in the industry as 73 percent of the 108 failed firms had less than five employees and half of the total were established within the last five years.

By sector, failures of home visit nursing services were the highest in the 2016 tally at 48 cases, up from 29 in 2015, according to the survey.