Private Equity and Venture Capital Blamed for Healthcare Company Bankruptcies in Record Year, Raising Concerns about Stability in the Sector

According to a new report from an advocacy group that monitors the health-care sector, private equity-owned businesses were responsible for a significant number of bankruptcies in the industry last year. The report revealed that 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. Venture capital-backed companies were behind another 12, or 15%, of the filings, focusing on companies with liabilities exceeding $10 million.

The report identified 2023 as a “record year” for large health-care bankruptcies. The findings suggest that private equity and venture capital ownership may be contributing to the financial difficulties experienced by health-care companies. As stakeholders continue to monitor the impact of these ownership structures on stability and resilience in the health-care sector, it is important to raise important questions about their role in the industry and potential implications for companies, employees, and patients.