Another US Health Care Firm Files for Bankruptcy, Joining Growing Trend
November 22, 2025 – A third major US health care company with over $1 billion in assets has filed for Chapter 11 bankruptcy protection in the first seven months of 2025, signaling continued financial distress within the sector. The filings come amidst concerns about debt burdens and shifting policy landscapes.
The companies include:
* Prospect Medical holdings: The Los angeles-based firm filed for bankruptcy in January and is currently working to sell off most of its hospitals.
* LifeScan Global: This provider of glucose-monitoring and diagnostic equipment sought Chapter 11 protection in July, aiming to reduce its debt by more than three-quarters through restructuring.
* Genesis HealthCare: A leading provider of post-acute and long-term care services, Genesis HealthCare also filed in July, citing “legacy liabilities associated with previously divested operations.”
The wave of bankruptcies has prompted discussion about potential contributing factors. David Himmelstein, a professor of public health and health policy at the CUNY School of Public Health, pointed to the role of private equity firms and their practice of “loading acquisitions with debt while stripping them of assets.” Though, LifeScan Global refuted this as a primary driver, attributing its filing to declining sales of its blood glucose monitoring business, unsuccessful prior restructuring attempts, and a $1.4 billion debt burden.
Further insight into the challenges facing healthcare providers came from Omni Health Services, who spoke to Newsweek via email.A spokesperson revealed the closure of nine clinics in Pennsylvania due to significant financial losses – “losing 25-30k a week” – which ultimately led to lawsuits from landlords and contributed to the Chapter 11 filing.
“We have 9 clinics now [and] we want to stabilize them,restructure our debts and be financially strong,we will continue to provide quality care services and survive,” the spokesperson stated. “Hope to emerge out more stronger soon.”
The situation paints a bleak picture, according to Professor Lawton Robert Burns, author of The U.S. Healthcare ecosystem, who told Newsweek in August: “There’s a lot of wreckage out there along the highway of health care.” he added, “There haven’t been any positive developments or reasons why we should think the healthcare sector is going to be on stronger footing in 2025 and 2026.”
Looking ahead, gibbins Advisors suggests a potential modest increase in health care bankruptcies in the fourth quarter. They also note that recent policy changes, including spending reductions within the One Big Stunning Bill Act, could create further difficulties for healthcare providers.
