Healthcare Bankruptcies More Than Triple in 2017

By: Laura Day DelCotto

Becker’s Hospital Review quoted the November 28, 2017 Bloomberg article indicating that hospitals, specialty medical providers, and other healthcare-related companies are experiencing increased financial distress for a number of reasons.   Ongoing and constant regulatory changes are challenging to deal with on an operating level, especially for smaller businesses.   The article predicts that rural hospitals will be the hardest hit, due to the upcoming reduction in Disproportionate Share Hospital (“DSH”) payments.

The healthcare industry is exhibiting what we are seeing across many different industries: the growing divide between the haves and the have nots.  At the same time fiscal distress has increased exponentially for many, other health care systems report record income and earnings. Banner Health recently reported a 3x growth in net income, at the same time that other systems report major distress and job cuts and even bankruptcy in some cases.

I recently participated as a speaker at the ABI (American Bankruptcy Institute) Annual Leadership Conference.   The healthcare presentation panel dissected the high costs to the Electronic Health Record System (EHR, and also called EMR by some – Electronic Medical Records) implementation: not only in dollars, but also the training and man hours involved as well.  Cybersecurity concerns are also high in the face of any breach.   The capital investment cost of any system is tremendous, and some smaller systems are struggling to bear the upfront costs.

We have seen our fair share of healthcare chapter 11 bankruptcy cases, along with a healthcare/county hospital chapter 9 cases in Kentucky.  Please contact me if you wish to discuss further, as our Firm has been involved in all these cases. We are well versed in working with clients’ management teams and outside healthcare counsel and other professionals in guidance on whether reorganization is a feasible option to move through these challenges.

About DelCotto Law Group

DelCotto Law Group is Kentucky’s asset protection law firm known for its commitment to the lifetime success of its clients. With offices located in Lexington, Louisville and Danville, DLG serves Kentuckians with complicated financial matters, especially in the areas of bankruptcy, complex litigation, and estate planning. For more information about filing bankruptcy or DelCotto Law Group, please call (859) 231-5800 or email



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