Key Points:
- The Private Equity Stakeholder Project reports a 112% increase in private equity bankruptcies in the healthcare sector over the past five years, with 21% of all healthcare bankruptcies in 2023 involving organizations owned by financial firms.
- The year 2023 set a record for healthcare sector bankruptcies, with significant bankruptcies involving major organizations like Envision Healthcare, Air Methods, and the Center for Autism and Related Disorders, all owned by private equity firms.
- The report indicates a trend of financial instability within firms owned by private equity, with multiple bankruptcies noted from the same firm. For example, KKR owned two major healthcare companies that filed for bankruptcy in 2023 and possesses three other companies in distress.
- Unmanageable debt is identified as a critical factor in these bankruptcies, with private equity’s focus on short-term gains compromising the stability of essential healthcare services.