Consolidation helped fuel 20% jump in healthcare bankruptcies

An increasing number of healthcare organizations are filing for bankruptcy, and that trend is partially attributable to the rate of consolidation in the industry.

Jeremy R. Johnson, partner at New York City-based law firm Polsinelli, told Bloomberg BNA the Polsinelli/TrollerBK Distress Index, which tracks Chapter 11 bankruptcy filing data for healthcare businesses, shows bankruptcy filings in the healthcare industry have increased by more than 20 percent since 2010.

The consolidation trend in the healthcare industry is partially to blame for the growing number of bankruptcies, Mr. Johnson told Bloomberg BNA. He said many hospitals that shied away from consolidation and remained independent are facing financial stress, as they're finding it almost impossible to compete with the mega-systems in the industry.

However, some of the hospitals that merged with or acquired other facilities are also facing financial challenges. Some of these entities overextended and are exploring options such as bankruptcy or sale to get their finances back on track, according to the report.

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