Major healthcare providers file for bankruptcy amid industry headwinds.

Several major healthcare providers have filed for Chapter 11 bankruptcy protection this year, including Genesis Healthcare, Landmark Holdings of Florida, Prospect Medical Holdings, and ModivCare. These filings are attributed to severe industry headwinds, unsustainable capital structures, and deteriorating liquidity. The healthcare sector has seen a significant increase in bankruptcy filings over the past two years, with 79 cases in 2023 and 57 in 2024.

Several major healthcare providers have filed for Chapter 11 bankruptcy protection this year, including Genesis Healthcare, Landmark Holdings of Florida, Prospect Medical Holdings, and ModivCare. These filings are attributed to severe industry headwinds, unsustainable capital structures, and deteriorating liquidity. The healthcare sector has seen a significant increase in bankruptcy filings over the past two years, with 79 cases in 2023 and 57 in 2024 [1].

Genesis Healthcare, a large healthcare facilities operator, filed bankruptcy on July 9, 2025, seeking a sale of its assets to a stalking-horse bidder. Landmark Holdings of Florida, the parent company of six Landmark Hospital specialty facilities, filed for Chapter 11 bankruptcy on March 9, 2025. Prospect Medical Holdings, which filed on January 11, 2025, has plans to reorganize certain medical assets and sell two medical centers in Rhode Island. ModivCare, which provides non-emergency medical transportation, personal care services, and remote patient monitoring, filed for prearranged Chapter 11 bankruptcy on August 20, 2025, seeking to reduce its $1.4 billion in debt [1].

The industry headwinds that caused financial distress include reimbursement pressure from state Medicaid programs, labor cost inflation, and mounting competition from regional and tech-driven companies. Regulatory changes that cut state Medicaid funding and eligibility, as well as Medicare Advantage plan design changes, have further pressured revenues. ModivCare generated $2.79 billion in revenue in the fiscal year ending Dec. 31, 2024, with a net loss of $201.3 million. The debtor's revenue in the first quarter of 2025 declined by almost 5% year-over-year [1].

The increasing number of bankruptcy filings highlights the challenges faced by the healthcare sector. As the industry continues to navigate these headwinds, investors and financial professionals should closely monitor the situation to assess potential risks and opportunities.

References:
[1] https://www.thestreet.com/breaking-news/giant-healthcare-services-provider-files-chapter-11-bankruptcy
[2] https://www.ainvest.com/news/danaher-dhr-plunges-3-55-650m-volume-ranking-116th-earnings-haze-lingers-margin-squeeze-sector-headwinds-2508/