Healthcare bankruptcy filings increased from nine to 12 cases in the first quarter of 2026, up 33% from Q4 2025, according to a new report from Gibbins Advisors.
However, the report (PDF) notes such filings are in line with the seven-year quarterly average. Analysts used data from Chapter 11 bankruptcies with cases of at least $10 million in liability from January 2019 through March 2026 to compile the report.
Mid-market bankruptcy cases, with liabilities between $10 million and $50 million, drove” Q1 activity, the report said, as they represented approximately two-thirds of total filings. Larger cases, those with more than $100 million in liabilities, remained flat quarter-over-quarter—accounting for three filings each in Q4 2025 and Q1 2026.
Moreover, senior care and clinics and physician practices saw the highest volumes of filings in Q1, with four filings each. Medical equipment and supplies bankruptcy filings fell to zero this quarter, the report said.
Analysts noted organizations can undertake strategies, including reviews of portfolios, budget and staffing models, to confront headwinds, and urged financial leaders to seek help earlier rather than later. "Securing the early support of experienced financial and legal restructuring professionals can help to position the organization for the best possible outcome," the report said.
Analysts noted hospitals and health systems are expected to prepare for impacts from government funding, including from the One Big Beautiful Bill Act (OBBA) and Medicaid funding cuts and coverage losses.
Government funding uncertainty and Medicaid cuts were also cited as the biggest concerns for the majority of healthcare finance leaders in a recent report from Strata Decision Technology.
Labor expense was the second most-cited financial concern (48%), followed by payer rates and negotiations (30%), margin compression (28%), non-labor expenses (25%), inflation (23%), regulatory challenges (22%), labor recruitment and retention (18%) and data modernization (16%).
Consequently, 57% of leaders report reducing costs as their top priority for the year—followed by managing strategic and performance improvement initiatives (51%) and measuring and managing productivity (43%).