Another USโฃ Health Care Firm Files for Bankruptcy, Joining Growing Trend
November 22, 2025 – A third major US health care company with over $1 billion โฃinโค assets has filed for Chapter 11 bankruptcy protection โคin 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 bankruptcyโ in January and โis currentlyโค working toโ sell off mostโฃ of its hospitals.
* LifeScan Global: โข This provider of glucose-monitoring andโค diagnostic equipmentโข 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 careโฃ services, Genesis HealthCare also filed in โขJuly, โคciting “legacy liabilitiesโข associated with previously divested operations.”
The wave โof bankruptcies has prompted discussion โabout potential contributing โขfactors. David Himmelstein, a professor of public health and โคhealthโข policy at the CUNY School of Public Health, pointed to โthe role of private equityโค firms and their practice of “loading acquisitionsโฃ with debt while โstripping them of assets.” Though, LifeScanโ Global refuted this as a โคprimary driver, attributing its filing to declining sales of its blood glucose monitoring business, unsuccessful prior restructuring attempts, and a $1.4 โขbillion debt burden.
Further โinsight into the challenges facing healthcare providers came from Omni Health โคServices, who spoke to โข Newsweek โฃ via email.A spokesperson revealed the closure of nine clinics in Pennsylvania due to significant financial losses – “losing 25-30k a week” – whichโ ultimately led to lawsuits from landlordsโ and contributed to the Chapter 11 filing.
“We haveโค 9 clinics now [and] we want to stabilizeโ them,restructure our debts and be financially strong,we will continue to provide quality care services and survive,” the spokesperson stated. “Hope to โขemerge out more stronger soon.”
The situation paintsโ a bleak picture, according to Professor Lawton Robert Burns,โ author of The U.S. Healthcare ecosystem, who told Newsweek in August: “There’s a lot of wreckage out โคthere along the highway of โhealth care.” he added, “There haven’t been any positive developments or reasons why โคwe should think the healthcare sector isโค going to beโ on stronger footing in 2025 and 2026.”
Looking ahead, gibbins Advisors suggests a potential modest increase in healthโ care bankruptcies inโ the fourth quarter. Theyโ also note that recent โpolicy changes, โคincluding spending reductions within the One Big Stunning Bill Act, could create โฃfurther difficulties for healthcare providers.
