Bankruptcies in the healthcare industry are at their lowest since 2010, according to a new report.
Record-keeping began in 2010. The second quarter of this year was the lowest the Health Care Services Distress Research Index had ever recorded, according to the latest Polsinelli-TrBK Distress Indices Report. The index decreased more than 333 points since the last quarter and is more than 446 points lower than the same time last year. A lower index is likely in a strong economy, according to the report.
The quarterly research report from the law firm relies on Chapter 11 data to measure the state of the U.S. economy, with specific breakdowns in the real estate and healthcare fields. The report notes that non-service healthcare businesses are typically excluded from the survey, as they don’t meet the definition of a “healthcare business” on their Chapter 11 petitions.
“We’re seeing a truly remarkable change in the health care industry right now. This is the lowest rate of health care bankruptcy filings the Index has ever seen, and we’re seeing clear reasons for that,” said Jeremy Johnson, a bankruptcy and restructuring attorney as well as co-author of the report, in a press release.
Johnson added that the reason for this drastic shift is believed to be because of “substantial and continued government support for the most vulnerable of health care industries during the pandemic.”
The southeast was the region with the largest number of bankruptcy filings overall and for the healthcare industry, with more than a third of healthcare-related filings coming from that region.
When looking at a breakdown by asset size for current filings in the healthcare industry, the report found that 50% of filings come from companies with $1 million to $10 million in assets. Nearly 24% have assets worth between $10 million and $50 million. About 13% have assets worth $50 million to $100 million, and the same goes for those worth $100 million to $500 million.