Healthcare enterprises bankruptcies up 84% in 2022

January 30, 2023 : Healthcare enterprises are currently working through a “COVID holdover” as they deal with aspects like continually high labor costs and staffing and supply deficiencies, according to the report.

Companies are also facing price increases amid inflation, low returns on invested acquisitions, and interest rate hikes, which can push a company’s cash flow and access to funds.

From 2019 to 2022, senior care organizations accounted for about 26% of healthcare enterprise bankruptcy filings, while pharmaceutical companies were counted for about 23%.

Hospitals made up about 13%, pursued closely by medical supply companies, hospitals, and physician practices.

Filings rose greatly throughout the year, with about three times additional fillings in the fourth quarter of 2022 than in the first half.

There was also an uptick in comprehensive bankruptcy filings, defined as companies with penalties greater than $100 million. Only one large bankruptcy was pointed in the first half of 2022, analogized to six in the year’s second half.

Filings among more inferior middle-market companies, defined as detriments in the $10 million to $50 million range, also rebounded to grades higher than those seen when the pandemic started.

This year, Gibbins predicts the senior care and pharmaceutical industries to persist dealing with market consolidation and other financial concerns, with rural and standalone hospitals, in particular, likely to encounter the exact.

Hospital bankruptcy filings, nevertheless, were down in 2022 corresponded to 2019, with just two suits filed — at Pipeline Health System, a California-based system with seven safety net hospitals in California, Illinois, & Texas, and San Jorge Children’s Hospital in Puerto Rico.

For the information, Gibbins studied data from covering filings among healthcare enterprises with liabilities of $10 million or more from 2019 to 2022 broken out by area.