Healthcare bankruptcies outpacing those in other industries

Chapter 11 bankruptcies in the healthcare industry are far outpace filings in other sectors, according to a new distress index report from law firm Polsinelli.

The report, which tracks all Chapter 11 filings with assets over $1 million, found that healthcare bankruptcies increased 125 percent in the fourth quarter of 2019 compared to the benchmark period of the fourth quarter of 2010. In contrast, Chapter 11 bankruptcy filings across all sectors dropped 50 percent in the fourth quarter of 2019, compared to the same period in 2010.

The report also found that 35 percent of healthcare bankruptcy filings took place in the Southeast in the fourth quarter of 2019. About 18.5 percent of bankruptcy filings occured in the Northwest, according to the report. 

The law firm also has a distress index that measures bankruptcy filings on a rolling four-quarter basis. The index considers any number over 100 to be considered high distress, according to the report. 

Overall, the law firm's distress index reached 225 in the healthcare sector in the fourth quarter of 2019. This compares to a distress index of 27 for the real estate sector for the same period. 

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