Among six hospitals, health systems and physician groups that filed for bankruptcy in September, common factors include rising medical costs and a difficult market.
Here is a summary of those bankruptcies and the causes behind them:
1. EHR transition costs. Gardner, Mass.-based Heywood Healthcare cited a "lengthy electronic medical record transition" as a factor in its decision to file for Chapter 11 bankruptcy protection. In 2019, Heywood was one of several Massachusetts health systems that opted for Meditech Expanse as its EHR vendor.
2. Rising debt and lawsuits. Rite Aid proposed closing nearly one-fourth of its 2,100 pharmacies and declaring bankruptcy, people familiar with the matter told The Wall Street Journal. The pharmacy chain is preparing to file for Chapter 11 bankruptcy as it faces $3.3 billion in debt and numerous lawsuits over its alleged role in the opioid epidemic.
3. Private equity backers filing for bankruptcy. Asheville, N.C.-based GenesisCare Surgical Specialists will close after its private equity-backed management company GenesisCare filed for bankruptcy.
4. Financial challenges and difficult market conditions. Medical staffing company American Physician Partners voluntarily filed for Chapter 11 protection under the U.S. Bankruptcy Code. APP said its "management team has made an extraordinary effort to focus on patient care above all else and advocate for the valued team serving its patients and supporting clinicians, while navigating financial challenges and difficult market conditions."
5. Inflation, rising costs of labor, supplies and drugs and labor shortages. A West Lake Hills, Texas-based physician-owned hospital, The Hospital at Westlake, filed for Chapter 11 bankruptcy protection. The filing is an effort to manage debt that existed before the COVID-19 pandemic but has since been exacerbated.
6. Bank relations. St. Margaret's Health CEO Tim Muntz blamed the June closure of St. Margaret's Health Spring Valley (Ill.) on Spring Valley City Bank. According to Mr. Muntz, the bank "swept nearly $7.3 million" in funds despite a "forbearance agreement" that the two parties entered into six weeks earlier. The bank's actions left the hospital "no choice" but to close, Mr. Muntz said in a court filing.