In recent months, the financial downfall and bankruptcy of Steward Health Care has dominated the news. But aside from Steward, Chapter 11 filings are less prominent, though the industry is still facing financial headwinds. An August 14 report by Gibbins Advisors, a healthcare restructuring advisory firm, analyzed Chapter 11 bankruptcy cases among medical industry companies with more than $10 million in liabilities from the beginning of January 2019 to the end of June 2024. Researchers found that while there was a sharp rise in bankruptcies in Q3 2023, the number of filings has decreased in the following three quarters through Q2 2024. So far, there have been 58 cases filed in 2024. Compared to the 79 cases filed in 2023, 2024 is on track to see a 27% overall decline in bankruptcy filings, according to the report. Size matters. The decline in filings, researchers reported, is due to the bankruptcy filing activity among middle-market companies—companies with liabilities ranging from $10 million to $100 million—which is currently 33% lower in 2024 than last year. However, bankruptcy filings from large healthcare companies, with liabilities over $500 million, remain as high as 2023 and are on track to report 12 bankruptcies, the report found. Keep reading here.—CM |