Dive Brief:
- Healthcare bankruptcies declined in 2025, even as the sector faces financial headwinds on the horizon, according to an analysis published last week by restructuring advisory firm Gibbins Advisors.
- The industry recorded 45 bankruptcy filings for debtors with liabilities of at least $10 million last year, down 21% from 2024 — and a steep drop from the 79 cases logged in 2023. However, hospital bankruptcies rose.
- Another year of falling Chapter 11 bankruptcy filings doesn’t necessarily signal financial health in the sector, the report cautioned. Healthcare remains under “significant pressure” as the industry faces looming challenges like historic cuts to Medicaid, according to Gibbins.
Dive Insight:
Most healthcare filings took place at the beginning of the year, with around 38% of the cases recorded in the first quarter, according to the report. And around two-thirds of bankruptcies in 2025 came from “middlemarket” sized firms, or companies with $10 million to $100 million in liabilities.
Healthcare bankruptcies fall for second consecutive year
Chapter 11 filings with liabilities of at least $10 million, 2019-2025
Most healthcare subsectors recorded bankruptcies in 2025. For example, clinics and physician practices logged six filings compared with 10 in the previous year.
However, some areas still saw an increased number of bankruptcies. Senior care bankruptcies rose 18% year over year. And hospital bankruptcies rose 60%, from five filings in 2024 to eight last year.
Hospitals in particular are facing heightened financial pressures in the wake of policy changes that will likely increase the uninsured population. Last summer, President Donald Trump signed a massive tax and policy bill into law that includes nearly $1 trillion in cuts to safety-net insurance Medicaid, potentially culling millions of people from the program.
Plus, more generous financial assistance for people who buy coverage on the Affordable Care Act exchanges lapsed at the end of 2025, causing premiums to spike and likely pushing more people to drop their insurance.
“From where we sit today, the impact of impending funding cuts is not theoretical,” Ronald Winters, principal at Gibbins, said in a statement. “With effects beginning in 2026 and likely escalating over the next five years, providers that do not model these scenarios, plan ahead, and make disciplined decisions about strategy, priorities, and resource allocation risk being forced into reactive decisions.”
Healthcare is facing other financial pressures too, according to the report. For example, a growing number of reimbursement challenges and claims denials from payers facing their own financial headwinds impacts providers.
Plus, labor costs and workforce shortages continue to stress providers’ finances, while tariffs could add increased supply costs, according to the analysis.
