Private Equity Ownership Responsible for Significant Number of Health-Care Company Bankruptcies
A new report from an advocacy group that monitors the health-care sector has revealed that private equity-owned businesses were responsible for a significant number of bankruptcies in the industry last year. According to the report, PE-backed firms accounted for at least 17 out of the 80 bankruptcies of health-care companies in 2023, making up 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 findings suggest that private equity and venture capital ownership structures may be contributing to financial difficulties experienced by health-care companies. The report set to be released Wednesday identified 2023 as a “record year” for large health-care bankruptcies and raised important questions about the role of private equity in the health-care industry and its potential implications for stakeholders.
The report underscores the need for greater transparency and accountability in the ownership structures of health-care businesses as they face uncertainty and financial strain. As stakeholders continue to monitor the impact of private equity and venture capital ownership on stability and resilience within the industry, it is crucial to address these challenges head on to ensure that patients receive high quality care while maintaining healthy financials for their providers.