In 2023, the health-care sector faced a significant wave of bankruptcies, with private equity-owned businesses being a major contributor. The advocacy group that monitors the health-care sector has revealed that PE-backed firms accounted for at least 17 out of the 80 bankruptcies in the industry last year, which is about a fifth of the total. The report also highlighted that venture-capital backed companies were behind another 12, or 15%, of the filings, focusing on companies with liabilities exceeding $10 million.
The report set to be released Wednesday has identified 2023 as a “record year” for large health-care bankruptcies. The findings indicate that a wave of distress may be looming in the health-care sector, with private equity and venture capital-backed firms facing financial challenges. The data suggests that these types of ownership structures may be contributing to the financial difficulties experienced by health-care companies.
As stakeholders continue to face uncertainty and financial strain in the health-care industry, it is crucial to monitor the impact of private equity and venture capital ownership on the stability and resilience of companies in the sector. The report raises important questions about the role of private equity in the health-care industry and its potential implications for companies, employees, and patients. It underscores the need for greater transparency and accountability in the ownership structures of health-care businesses to address