Financial Distress in the Healthcare Sector

The healthcare industry in the US has been experiencing increasing financial distress, especially exacerbated by the pandemic. Factors such as structural changes in healthcare delivery and labor shortages, particularly for nurses, are contributing to the industry's financial challenges. Increased labor costs, driven by the need to hire traveling or visiting nurses, have put additional pressure on healthcare entities. Additionally, supply costs are rising, and healthcare providers are unable to pass on these increased costs due to contracts with government agencies and health plans. The reduction in COVID-related funding and declining investments are further impacting the financial health of healthcare companies.