The healthcare sector was fortunate last year as hospital operator bankruptcies declined compared to the previous year, as only five operators filed for bankruptcy in 2024, while over twice as many filed in 2023 with 12 operators filing.
Those hospital operators who filed for bankruptcy, however, were significant companies.
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The largest U.S. private hospital operator, Steward Health Care, which operated 31 hospitals in eight states, filed for bankruptcy in May 2024 to sell its assets and reduce $9 billion in debt. The debtor sold six hospitals in Massachusetts for $343 million in September 2024.
Related: Major healthcare provider files Chapter 11 bankruptcy
Hospitals and health center operator CarePoint Health Systems, whose facilities operate as safety nets for a large underprivileged community, on Nov. 4, 2024, filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware to reorganize its unsustainable debt.
The parent company of six Landmark Hospital specialty hospital facilities filed for Chapter 11 bankruptcy on March 9, 2025, to reorganize six facilities that are located in Florida, Georgia, and Missouri.
Prospect Medical Holdings files for bankruptcy
Prospect Medical Holdings and 66 affiliates on Jan. 11, 2025, filed for Chapter 11 bankruptcy protection with plans to reorganize or sell certain medical assets.
The debtor, which employed about 12,600 workers, owned and operated 16 acute care and behavioral hospitals in California, Connecticut, Pennsylvania, and Rhode Island, providing a wide range of inpatient and outpatient services.
PHP Holdings, LLC and related subsidiaries, including Prospect Health Plan, Inc., Prospect Medical Systems, LLC, and its affiliated medical groups in California, Arizona, and Texas, Gateway Medical Center, and Foothill Regional Medical Center, were not parties to the Chapter 11 proceedings.
The debtor’s non-debtor affiliates operate physician-related services, which are not included in the bankruptcy case, such as owned and managed medical groups, independent physician associations, managed services organizations, and risk-taking entities.
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PHP Holdings and Astrana Health Inc. on Nov. 8, 2024, reached an agreement for Astrana’s acquisition of certain Prospect Health System businesses and assets for $745 million, including California licensed health care service plan, Prospect Health Plan; medical groups in California, Texas, Arizona, and Rhode Island; its management service organization Prospect Medical Systems; pharmacy RightRx; and Foothill Regional Medical Center, a 177-bed fully accredited acute care hospital.
Prospect Medical Holdings is closing two Pennsylvania hospitals.
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Prospect Medical Holdings closes 2 hospitals
Prospect Medical Holdings continued having problems and won bankruptcy court approval to close its two remaining Crozer Health hospitals in Pennsylvania — Crozer-Chester Medical Center in Chester, Pa., and Taylor Hospital in Ridley Park, Pa. — after failing to find a buyer for the properties.
Related: Major national healthcare chain files for Chapter 7 liquidation
Prospect closed two other Crozer hospitals, Delaware County Memorial Hospital in Drexel Hill, Pa., and Springfield Hospital in Springfield, Pa., in 2022.
Judge Stacey Jernigan on April 23 signed an order authorizing the closing of the two hospitals as well as the beginning of bidding procedures for the sale of certain assets of the debtor.
The company will lay off 2,651 workers at its Crozer facilities beginning on April 25 and ending on May 2, according to its Worker Adjustment and Retraining Notification notice filed with the State of Pennsylvania.
The emergency departments will no longer accept ambulance patients after April 26, and walk-in patients would be accepted by the end of the following week, Healthcare Dive reported.
Related: Major healthcare company files for Chapter 7 liquidation
