American Bankruptcy Institute Journal Reprint: A Pulse Check on the Healthcare Industry

As the healthcare industry experiences economic stabilization, many organizations are moving from recovery to growth mode. Despite this positive shift, industry-wide challenges such as stagnant reimbursement rates and rising operating expenses continue to create pressure on profit margins. In 2023, healthcare companies accounted for a disproportionate share of leveraged loan defaults and saw a significant increase in Chapter 11 cases. The healthcare industry is at a critical juncture, and leadership will want to be proactive in addressing these financial and operational challenges. 

Healthcare service providers can consider the following strategies/initiatives as part of a multifaceted approach to navigate these issues effectively:

• Cost-Optimization Mechanisms
• Payor Contract Re-negotiations
• Enhanced Workforce Retention Programs
• Investment in Cybersecurity and System Upgrades
• Optimized Patient Engagement Tools
• Improved Revenue Cycle Management
• Chapter 11 Reorganization/Restructuring
• Stakeholder and Community Impact Assessment(s)
  
  

Download the full article published in the ABI Journal by Steven Wang, Director with BDO’s Turnaround and Restructuring Services practice, to read real-world examples and discover more actionable insights on the signs of financial distress and how healthcare leaders can effectively address liquidity constraints and financial issues. 

Reprinted with permission from the ABI Journal, Vol. XLIII, No. 7, July 2024.

Turnaround and restructuring services as well as operational value creation services within the United States are offered through BDO Consulting Group, LLC, a separate legal entity and affiliated company of BDO USA, P.C., a Virginia professional corporation. Certain turnaround and restructuring services may not be available to attest clients of BDO USA under the rules and regulations of public accounting.