U.S. healthcare bankruptcies reach five-year high in 2023 — study
TENNESSEE, UNITED STATES — Healthcare bankruptcies in the United States spiked in 2023 with 79 cases, the highest in the past five years, according to healthcare restructuring advisory firm Gibbins Advisors.
The report includes companies with more than $10 million in liabilities. The 79 bankruptcy cases were also more than three times the level observed in 2021.
“Some of the recent data was surprising,” said Tyler Brasher, Director at Gibbins Advisors. “Total healthcare filings spiked in Q3 and then receded in Q4 2023, and there were no senior care bankruptcies filed in Q4 2023 when we expect to see about 5 per quarter. We will closely monitor in 2024 to see if the market is changing”.
A multitude of factors drove healthcare organizations to file Chapter 11 bankruptcies, including surging interest rates, increasing labor and supply costs, and the shift to outpatient homes.
Several high-profile healthcare firms filed for bankruptcy last year, including staffing company Envision Healthcare, physician staffing firm American Physician Partners, retail pharmacy Rite Aid, and digital therapeutics company Pear Therapeutics.
For 2024, Gibbins still sees a tough environment for healthcare firms.
“As for total case volume, we are seeing a lot of distress in healthcare as the market remains very challenging for providers, so we expect to see continued levels of healthcare bankruptcies in 2024 that we saw last year,” noted Brasher.
