Issue link: https://beckershealthcare.uberflip.com/i/1521009
11 CFO / FINANCE Private equity healthcare bankruptcies are on the rise: 8 things to know By Alan Condon H ealthcare bankruptcies spiked in 2023 amid high debt levels and rising interest rates, with private equity firms owning 17 out of the 80 (21%) companies that filed for bankruptcy last year, according to a report published April 17 by the Private Equity Stakeholder Project. Eight things to know: 1. Air Methods, a helicopter ambulance business, and physician staffing companies Envision Healthcare and American Physician Partners were among the most high-profile private equity-owned healthcare companies to file for bankruptcy in 2023. 2. e number of private equity healthcare bankruptcies has increased significantly in recent years. In 2019, there were eight private equity healthcare bankruptcies, marking a 112.5% increase over the last five years. 3. About 460 U.S. hospitals are owned by private equity firms. at represents 8% of all private hospitals and 22% of all proprietary for-profit hospitals, according to PESP. At least 26% of private equity-owned hospitals serve rural populations. 4. Private equity's reliance on debt and aggressive financial strategies are highlighted as factors for the surge in healthcare bankruptcies in 2023, according to the report. 5. Rising interest rates, high labor costs and regulatory shis also compound the challenges faced by healthcare companies — particularly those burdened with high levels of debt under private equity ownership. 6. Healthcare company bankruptcies like these threaten to disrupt critical healthcare services, burden providers and strain publicly-funded healthcare infrastructure, including Medicare and Medicaid programs. 7. Most financially distressed healthcare companies are currently owned by private equity firms, which presents risks to the healthcare industry and infrastructure, according to the report. Researchers expect another wave of private equity-driven healthcare distress, restructuring and bankruptcies this year, intensifying concerns for the stability of essential healthcare resources. 8. In February, Miami-based Cano Health, a value-based primary care provider, filed for Chapter 11 bankruptcy. InTandem Capital Partners, Cano's private equity minority investor and previous owner, loaded it with $655 million in debt before the company went public. Cano laid off about 700 workers in 2023 and aims to emerge from the restructuring process in the second quarter of this year. n Image Credit: Adobe Stock Medical City hospital taps assistant CFO By Andrew Cass Medical City Fort Worth (Texas) has named Benjamin Bag- gi assistant CFO. Mr. Baggi joins the hospital from Tampa-based Florida Cancer Specialists & Research Institute, where he served as the financial systems and reporting manager, according to a May 14 Medical City Fort Worth news release shared with Becker's. At Florida Cancer Specialists, he helped im- plement a new financial reporting and recording system. In his new role, Mr. Baggi will also support Medical City Weatherford (Texas), according to the release. Dallas-based Medical City Healthcare is an affiliate of Nashville, Tenn.-based HCA. n