2024 health care bankruptcies down from 2023, but still greater than recent average

There were 10 clinic and physician practices filing bankruptcy in 2024, making it the highest level of the last six years, according to a new analysis of cases with liabilities of at least $10 million.

Meanwhile, the Steward Health Care System bankruptcy, which was based in Massachusetts but making headlines across the nation, has become “the largest hospital sector bankruptcy by far in the last 30 years,” according to a new analysis by Gibbins Advisors, based in Nashville, Tennessee.

Health care bankruptcy filings totaled 57 last year, down from 79 in 2023, said “Healthcare Restructuring: Trends and Outlook.” The report analyzed Chapter 11 health care bankruptcy cases with liabilities of at least $10 million, since 2019.

Last year’s total was down 28% from 2023’s peak, but greater than the 2019 to 2022 average of 42 filings a year, the report said.

2025 outlook

The new year brought a change at the White House, but President Donald Trump may not immediately alleviate the financial conditions pushing some physicians, hospitals and health care systems to bankruptcy court.

“While the new presidential administration introduces some uncertainty to the health care system, the core factors driving health care distress remain unchanged,” Gibbins Advisors Principal Ronald Winters said in the news release announcing. “Standalone and rural providers will continue to face significant financial challenges, and collaborating with communities on effective restructuring solutions is vital to preserving essential health care services in those regions.”

By the numbers

• 12: bankruptcies with liabilities of $500 million or more. That is up from nine in 2024 and the average three per year from 2019 to 2022.
• 34: “Middle market” cases involving health care companies with liabilities from $10 million to $100 million. That is down from 51 cases in 2023.
• 14: Filings with liabilities from $100 million to $500 million, a drop from 16 in 2023. There were none in the third quarter of 2024, but eight in the fourth quarter.

By the sector

Among the clinics and physician practices, the 2024 filings was the greatest level of the last six years. Those entities, and medical equipment and supplies, have grown steadily since 2021, the report said.

Senior care and pharmaceuticals made up almost half of the total numbers. Hospitals made up just five filings in 2024, compared with a dozen the year before. But the report noted Steward Health Care System involved 31 hospitals, making it the largest hospital sector bankruptcy in three decades.

Filing or not?

There has been public debate and worry about health care access as hospitals close around the country. From 2019 to 2023, there were 117 total acute care hospital closures, while 68 opened, resulting in net closure of 49 facilities. Rural hospitals trended upward from 2021 to 2023, but last year saw four closures, according to Gibbins Advisors.

Hospital closures can be a market indicator of financial, the report said, because operators of failing hospitals don’t always file a bankruptcy case. Gibbins Advisors listed a few key reasons:

• Bankruptcy may not be needed if a large health system closes a hospital and resolves its obligations.
• Bankruptcy may be ineffective if a distressed hospital has wound down operations and has not buyers or financial backers.
• Operators may pursue other alternatives, such as receivership.