Private Equity and Venture Capital: Contributing to Health-Care Industry Bankruptcies?

In 2023, the health-care sector experienced a record number of bankruptcies, with private equity and venture capital-backed firms responsible for a significant portion of these filings. The report from an advocacy group that monitors the health-care industry reveals that PE-backed firms were behind at least 17 out of the 80 bankruptcies, accounting for about a fifth of the total. Additionally, venture-capital backed companies were responsible for another 12, or 15%, of the filings, focusing on companies with liabilities exceeding $10 million.

The findings suggest that private equity and venture capital ownership may be contributing to the financial difficulties experienced by health-care companies. As stakeholders continue to face uncertainty and financial strain in the industry, it is crucial to monitor the impact of these ownership structures on the stability and resilience of companies in the sector. The report raises important questions about the role of private equity in the health-care industry and the potential implications for companies, employees, and patients. It underscores the need for greater transparency and accountability in the ownership structures of health-care businesses to address the challenges facing the industry.