10 hospital bankruptcies in 2023

Nacogdoches Memorial Hospital in Texas became the latest hospital to file for bankruptcy in 2023. Here is more information about that and nine other hospital bankruptcies in 2023: 

1. Lion Star Nacogdoches (Texas) Hospital, the group that operates Nacogdoches Memorial Hospital, filed for Chapter 11 bankruptcy in the Northern District of Texas on Nov. 17. The filing outlines that the hospital owes as much as $50 million to creditors. At least 200 creditors have claims against Lion Star, and the largest 20 credit claims total more than $8 million. 

2. Gardner, Mass.-based Heywood Healthcare filed for Chapter 11 bankruptcy Oct. 2, citing a string of challenges "hindering its sustainability." The health system said workforce shortages, supply chain issues and low reimbursement rates have contributed to financial instability. It has also undergone a "costly and lengthy" electronic medical record transition while managing aging infrastructure and a "milestone construction project" — a surgical pavilion set to open in April.

3. The Hospital at Westlake Medical Center, a physician-owned hospital in Westlake Hills, Texas, announced Sept. 8 it is filing for Chapter 11 bankruptcy protection. The hospital had significant debt before the COVID-19 pandemic, and the pandemic exacerbated the situation. The hospital will continue all its operations during bankruptcy proceedings.

4. St. Margaret's Health, which has been closed since June, filed two petitions of Chapter 11 bankruptcy for its St. Margaret's Spring Valley (Ill.) and St. Margaret's Peru (Ill.) facilities. The health system reported that it had at least 1,000 creditors that are owed between $10 million and $50 million. Peoria, Ill.-based OSF Healthcare has since received approval to take over the Peru facility. Filing for bankruptcy will allow OSF to begin the purchasing process. So far, OSF has hired more than 320 former St. Margaret's employees.

5. Trinity Regional Hospital Sachse (Texas) filed for bankruptcy Aug. 29. The hospital opened two years ago and since has defaulted on around $70 million of municipal bonds that were issued in 2020. Trinity Regional Hospital Sachse's owner listed assets of $50 million to $100 million and liabilities of $100 million to $500 million on the bankruptcy petition. The hospital aims to find a buyer.

6. Mercy Iowa City filed for Chapter 11 bankruptcy Aug. 7. Iowa City-based University of Iowa Health's bid to buy the bankrupt facility was approved Nov. 6.

7. Martin General Hospital, a 49-bed facility in Williamston, N.C., suspended operations Aug. 3 and plans to file for bankruptcy. The hospital, which lost $13 million in 2022, cited financial challenges related to declining population and utilization trends as reasons for the decision.

8. San Benito Health Care District, the board overseeing Hollister, Calif.-based Hazel Hawkins Memorial Hospital, voted May 22 to file for Chapter 9 bankruptcy. Since the filing, Modesto, Calif.-based American Advanced Management has signed a letter of intent to operate the hospital, and Salinas (Calif.) Valley Health and San Benito County submitted a joint proposal to the district to govern, operate and finance the hospital, its skilled nursing facilities and physician clinics.

9. Montebello, Calif.-based Beverly Hospital filed for Chapter 11 bankruptcy April 19. The hospital secured $13 million in financing to keep operating as it looks for a buyer.

10. Madera (Calif.) Community Hospital filed for Chapter 11 bankruptcy March 10. The hospital officially closed at midnight Dec. 30 after Livonia, Mich.-based Trinity Health's plan to buy the hospital fell through.

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