Bankruptcies in healthcare hit a five-year high in 2023, when 12 hospitals and health systems filed for bankruptcy. This trend has slowed in 2024, as average operating margins have improved across the hospital sector.
Here are seven hospital and health system closures to know in 2024:
1. Pontiac (Mich.) General Hospital sought Chapter 11 protection Nov. 23, a move that came after the hospital filed a Nov. 15 WARN notice to cut 248 employees after learning it lost Medicare funding. The hospital believes the Medicare fund exclusion is temporary and should last no more than six months.
2. Bradenton, Fla.-based MCR Health, a nonprofit medical group, sought Chapter 11 protection Nov. 11. Some of the operational decisions, which include cuts to the workforce, will be completed in phases. The company pointed to factors like damage and disruption following hurricanes Helene and Milton, along with cuts to reimbursement rates for behavioral health services.
3. Jersey City, N.J.-based CarePoint Health filed for Chapter 11 protection Nov. 3. The three-hospital safety net system secured $67 million in funding to ensure that care is not disrupted and its hospital stays open. CarePoint also plans to affiliate with Secaucus, N.J.-based Hudson Regional Hospital under management services organization Hudson Health System. The Chapter 11 filing was driven mainly by low state funding, rising post-COVID costs and reimbursement issues.
4. Plymouth, N.C.-based Washington Regional Medical Center sought Chapter 11 protection Oct. 29 to help reorganize the hospital's finances while continuing patient care. The 25-bed critical access hospital claims it will maintain operations without patient care, employee or daily service disruptions.
5. Miami Beach, Fla.-based Clinical Care Medical Centers entered into an agreement with Conviva, a subsidiary of Humana, for $45 million after it sought Chapter 11 protection Oct. 13. CCMC lenders have agreed to provide a $10 million credit facility to fund administrative and operational expenses for the medical group. Conviva runs more than 300 locations across 15 states under Conviva and CenterWell Senior Primary Care brands. Once the transaction closes, CCMC will be integrated into CenterWell's primary care organization, a Humana spokesperson told Becker's.
6. Gardner, Mass.-based Heywood Healthcare exited Chapter 11 bankruptcy Sept. 30 after addressing financial issues, improving contracts and restructuring debt. The system sought Chapter 11 protection on Oct. 2, 2023. Heywood comprises a 25-bed critical access hospital, a 134-bed acute care hospital and a medical group.
7. Dallas-based Steward Health Care, which operated 31 hospitals in eight states at the start of the year, filed for bankruptcy in May. The health system closed or sold its hospitals as part of its restructuring efforts.
Several health systems stepped in to acquire Steward's hospitals amid bankruptcy proceedings, including Scottsdale, Ariz.-based HonorHealth, Orlando (Fla.) Health, Lawrence (Mass.) General Hospital, Glendale, Calif.-based American Healthcare Systems, Irving, Texas-based Christus Health, Providence, R.I.-based Lifespan, Boston Medical Center, Brentwood, Tenn.-based Quorum Health and Flint, Mich.-based Insight Health Systems.
In June, UnitedHealth Group's Optum withdrew from a plan to acquire Steward Health Care's 1,700-physician group. Steward then entered into a definitive agreement to sell the group to Nashville, Tenn.-based Rural Healthcare Group, part of PE firm Kinderhook Industries, for $245 million.