In 2024, healthcare-related Chapter 11 bankruptcy filings remain high, particularly in the senior living industry which is facing intense stress. According to the latest Polsinelli-TrBK Distress Indices Report, distress in the healthcare sector has increased by 813% since 2010, marking the fourth consecutive quarter of historic distress levels. The report utilizes Chapter 11 filing data to gauge financial distress in the U.S. healthcare industry, encompassing senior living and skilled nursing facilities.
Jeremy Johnson, a bankruptcy and restructuring attorney at Polsinelli and co-author of the report, highlighted the acceleration of distress over the past year. The health care services distress index has surged by over 800 points, currently standing at 913 points compared to 712 points in the previous quarter. The southeastern region leads in index filings, comprising 67% of the total noted in the report.
Johnson emphasized the significant turmoil in the senior living sector, attributing factors such as inflation, staffing challenges, profitability issues in rural areas, and the ongoing effects of COVID-19. The report also mentions a notable case where a consolidation of physician practice groups failed to achieve anticipated synergies, citing Medicare and private pay rates as additional pressures leading to distress in the industry.
