The healthcare sector has battled financial distress since the end of the Covid-19 pandemic as rising inflation drove up labor and operating costs, liability insurance costs increased and reimbursement rates declined.
Data from healthcare restructuring advisory firm Gibbins Advisors showed a trend of a higher level of bankruptcy filings recorded in 2023 with 79 and 2024 with 57, compared to an average of 42 filings a year from 2019 to 2022.
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Hospital bankruptcies fell last year, however, as only five hospital operators filed for bankruptcy in 2024, compared with 12 in 2023. Filings have already begun in 2025. But the hospital bankruptcies filed in 2024 were significant ones.
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Landmark Holdings of Florida LLC, the parent company of six Landmark specialty hospital facilities, on March 9, 2025, filed its petition in U.S. Bankruptcy Court for the Middle District of Florida, to reorganize its businesses that are located in three states in the Midwest and South.
Landmark listed $10 million to $50 million in assets and $50 million to $100 million in liabilities.
Major healthcare provider Prospect Medical Holdings, which owned and operated 16 acute care and behavioral hospitals in California, Connecticut, Pennsylvania, and Rhode Island, filed for bankruptcy in January 2025 with plans to reorganize certain medical assets, sell two medical centers in Rhode Island, and divest from another in Pennsylvania.
Large hospital operator files for bankruptcy
The largest U.S. private hospital operator Steward Health Care, which operated 31 hospitals in eight states, in May 2024 filed for bankruptcy to sell its assets and reduce $9 billion in debt. The debtor sold six hospitals in Massachusetts for $343 million in September 2024.
Hospitals and health center operator CarePoint Health Systems, whose facilities operate as safety nets for a large underprivileged community, on Nov. 4, 2024, filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware to reorganize its unsustainable debt.
Wellpath Holdings, a leading healthcare provider for prisons and mental health facilities, and 38 affiliates on Nov. 11, 2024, filed for Chapter 11 protection in the Southern District of Texas to reorganize its businesses and sell certain assets to an ad hoc group of its prepetition lenders.
The Nashville, Tenn.-based debtor blamed rising operating and labor costs, increased liability insurance expenses, underperforming contracts, and declining liquidity for causing its financial distress.
Michigan Health Clinics files for bankruptcy
Finally, healthcare provider Michigan Health Clinics P.C. filed for Chapter 11 bankruptcy protection on April 17, 2025, to reorganize its debts.
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The Saginaw, Mich., chain of three medical clinics, which was established 22 years ago, listed $1 million to $10 million in assets and liabilities in its Subchapter V petition filed in the U.S. Bankruptcy Court for the Eastern District of Michigan in Bay City.
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Michigan Health Clinics operates three clinics in Saginaw, Bad Axe, and Cass City, Mich., which serve nine counties in the Wolverine State, including Huron, Sanilac, Isabella, Tuscola, Lapeer, Bay, Midland, Saginaw, and Gratiot. The clinics are open Monday through Thursday, 8 a.m. through 5 p.m.
The health clinics offer about 15 different services, including:
- Urgent Care,
- Pediatrics and Family Practice,
- Dermatology,
- Endocrinology,Â
- Rheumatology,
- Women’s Health,
- Wound Care/Lymphedema,
- Imaging Center,
- Infusion Center,
- Laboratory,
- Infectious Disease,
- Occupational Health,
- Employee Health,
- Physical Therapy,
- Pain Management
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