Healthcare bankruptcies have slowed since a five-year high in 2023, when 12 hospitals and health systems filed for bankruptcy, according to a report published Aug. 14 by Gibbins Advisors, a healthcare restructuring consulting firm.
Here are five key notes:
1. There were 79 bankruptcy cases filed in 2023. According to the report, based on the current rate, the year is on track to see 58 cases in 2024.
2. In the first half of 2024, only Dallas-based Steward Health Care has filed for bankruptcy in the first half of 2024, but 31 hospitals are under the company's umbrella.
3. Six large bankruptcy cases with liabilities over $500 million include sizeable healthcare companies.
4. Average hospital margins are improving, but there is a widening gap between higher and lower performers, with smaller and rural providers most at risk.
5. "We are seeing elevated financial distress in nursing homes, senior living, pharmacy, physician practices and rural and standalone hospitals … strained by legacy debts, cash shortages and profitability challenges," Ronald Winters, principal at Gibbins Advisors, said.