Healthcare ‘distress’ At Historic Highs As Senior Living Industry Challenges Continue

Healthcare-related Chapter 11 bankruptcy filings are still high in 2024, with the senior living industry showing “intense stress.”

According to the latest Polsinelli-TrBK Distress Indices Report, distress in the healthcare sector is 813% higher than in 2010, representing the fourth consecutive quarter the report’s researchers have noted historic levels of distress. The annual report uses Chapter 11 filing data to measure financial distress in the U.S. healthcare industry, which includes senior living and skilled nursing.

The latest number shows an acceleration of distress over the past four quarters, according Jeremy Johnson, bankruptcy and restructuring attorney at Polsinelli and co-author of the report.

“What you’re seeing with each of these is the trend lines of distress accelerating over the past year,” he said. “Notwithstanding other economic indicators, distress is higher than it has been in years. There is significant turmoil across the various sectors.”

The health care services distress index has risen by over 800 points and is currently sitting at 913 points, according to the report. The last quarter the report was released, the U.S. healthcare sector was at 712 points.

The southeast region saw the greatest number of index filings, consisting of 67% of all noted in the report.

The trend highlights “intense stress” in senior living, Johnson noted.

“We have seen several skilled nursing operators singing a similar refrain in the senior living space, with inflation, staffing issues, difficulty in providing profitable care in rural areas and COVID, all putting pressure on operations,” he wrote. “Another major filing is the classic example where a roll-up of physician practice groups was never able to realize the ‘synergies.’ Medicare and private pay rates were listed as pressure points for both filing, as well as some others. Distress in health care is simply not abating any time soon.”

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