Newsweek : Bankruptcies Are Hitting America’s Health Care Giants

Bankruptcies are reshaping American healthcare

A new Newsweek investigation highlights the alarming rise in bankruptcies across the U.S. healthcare sector, underscoring deep structural risks tied to private equity ownership. The trend is increasingly widespread, as some of the country’s largest healthcare companies are collapsing under unsustainable financial pressures.

According to Newsweek, healthcare bankruptcies have soared well above historical averages, with 79 filings in 2023 and 57 in 2024, both exceeding the annual average of 42. Early 2025 brought a wave of failures among senior care providers and hospital systems, showing that financial instability is spreading across the industry. These bankruptcies don’t just signal financial losses; they threaten patient care, workers’ livelihoods, and local economies.

The Private Equity Stakeholder Project (PESP) emphasized the broader implications in its statement to Newsweek:

“Bankruptcies are a key bellwether signaling the broader risks associated with private equity investments,” the Private Equity Stakeholder Project (PESP) told Newsweek. “The heightened risk of bankruptcy threatens job security for workers, disrupts services for consumers, and creates ripple effects across local economies. Private equity’s growing presence raises questions about the sustainability of this financial model and its long-term impact on the broader economy.”

Genesis Healthcare: A case study in financial extraction

One of the most striking examples cited in Newsweek is the recent bankruptcy of Genesis Healthcare, among the nation’s largest skilled nursing operators. The company’s downfall, PESP has noted, was hardly surprising given the tactics that hollowed it out. Private equity-driven financial strategies, including leveraged debt and sale-leaseback transactions, drained resources while leaving the company unable to sustain its core mission of patient care.

Michael Fenne, PESP’s senior research coordinator said,

“Genesis Healthcare’s bankruptcy was a predictable result of a financial strategy that extracted value through debt and real estate transactions while leaving the company with fewer resources to sustain care,” wrote Michael Fenne, PESP’s senior research coordinator.

PESP’s ongoing analysis of the Genesis case highlights:

• Massive debt burden—liabilities estimated between $1 billion and $10 billion—driven in part by leveraged buyouts, sale-leasebacks, and high-risk borrowing.
• Industry-wide pattern—private equity firms were behind 7 of the 8 largest healthcare-related bankruptcies in 2024.
• Policy relevance—Genesis exemplifies how private equity’s business model can weaken critical healthcare providers.

The collapse of Genesis serves as a stark reminder: when financial engineering takes precedence over healthcare delivery, local communities and long-term healthcare access bear the cost. Together, the mounting bankruptcies across the sector signal a troubling future if private equity continues to acquire healthcare companies unchecked.

PESP’s latest analysis also shows that Genesis is not alone—70 percent of large U.S. bankruptcies in Q1 2025 were tied to private equity-backed companies, despite such firms comprising just 6.5 percent of the U.S. economy (pestakeholder.org). Healthcare has been particularly hard hit, with private equity involved in more than half of large healthcare bankruptcies in 2024.