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Private equity firms were responsible for a significant number of healthcare sector bankruptcies last year, and another round of bankruptcies is anticipated in 2024. Nearly all of the financially strained healthcare companies in the United States are under private equity ownership, according to a report from the nonprofit Private Equity Stakeholder Project (PESP), which analyzes the impact of private equity ownership across multiple industries. PESP reported that last year, private equity-backed companies accounted for at least 17 out of 80 healthcare company bankruptcies, marking 2023 as a record year for major healthcare bankruptcies. Notable bankruptcies included Envision Healthcare Corp., a staffing company, and GenesisCare, a cancer-treatment provider (both owned by KKR Group Co.). Global Medical Response, another KKR-backed entity, faces over $4 billion in debt, according to the report. This year, healthcare entities are facing credit rating downgrades and possible defaults, particularly among private equity portfolio companies.

Current status: Higher operating costs are putting many healthcare organizations at risk, regardless of ownership, meanwhile, higher interest rates are predicted to slow PE investment. See the list of PE ownership in the JUCM archives: Private Equity Ownership In Urgent Care By Number Of Centers, 2024

Private Equity Bracing For Healthcare Bankruptcies