Private Equity and Venture Capital Ownership Linked to Health-Care Company Bankruptcies in 2023, Report Finds

A new report from a health-care advocacy group has revealed that private equity-owned businesses were responsible for a significant number of bankruptcies in the industry last year. According to the report, PE-backed firms accounted for at least 17 out of the 80 bankruptcies of health-care companies in 2023, making up about a fifth of the total. The report also highlighted that venture-capital backed companies were behind another 12, or 15%, of the filings, focusing on companies with liabilities exceeding $10 million.

The report, set to be released Wednesday, identified 2023 as a “record year” for large health-care bankruptcies. The findings indicate that a wave of distress may be looming in the health-care sector, with private equity and venture capital-backed firms facing financial challenges. The data suggests that these types of ownership structures may be contributing to the financial difficulties experienced by health-care companies.

As the health-care industry continues to face uncertainty and financial strain, it is crucial for stakeholders to monitor the impact of private equity and venture capital ownership on the stability and resilience of companies in the sector. The report raises important questions about the role of private equity in the health-care industry and the potential implications for companies, employees, and patients. It underscores the need for greater transparency and accountability in the ownership structures of health-care businesses to address the challenges facing the industry.