Clinic and physician practice bankruptcies spike in 2026 so far

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Dive Brief:

• Clinic and physician practice bankruptcies snowballed in the first half of the year, even as the filings in the healthcare sector overall stabilized compared with historic averages, according to a report released Monday by restructuring advisory firm Gibbins Advisors.
• Twelve healthcare companies with more than $10 million in liabilities filed for Chapter 11 bankruptcy in the first quarter and 14 filed in the second, in line with quarterly averages since 2019, according to the analysis.
• But bankruptcies among medical practices made up nearly 30% of all healthcare filings in the first half of 2026, putting the sector on pace to reach its highest level of bankruptcies since 2019.

Dive Insight:

Healthcare bankruptcy filings fell for the second year in a row in 2025, after the sector hit a six-year peak in restructurings in 2023 amid heightened interest rates and supply and labor costs. 

Now, bankruptcy filings are on track to rise again, according to Gibbins. If filings continue at the same pace as the first half of 2026, the healthcare sector could see 52 Chapter 11 bankruptcies, a 16% increase from 2025.

The potential rise is driven by a bump in smaller cases. Eighteen companies with liabilities between $10 million and $50 million filed for bankruptcy so far this year, compared with 23 during the entire year in 2025. Filings among companies with higher liabilities are trending flat or lower than last year, Gibbins said. 

Bankruptcies among clinics and physician practices are also set to increase significantly this year. The provider groups are on pace to see 14 filings by the end of 2026, compared with just six bankruptcies in the subsector last year. 

However, bankruptcies in other healthcare sectors — like pharmaceuticals, hospitals and medical supplies — are on pace to decrease or stay flat year over year. Still, the general stability in healthcare filings in 2026 so far is a bit of a surprise, given the looming financial challenges for the industry, said Ronald Winters, a principal at Gibbins.

“There is a lot bubbling under the surface that will ultimately need to be resolved in some form of restructuring, though not all will be resolved in court,” Winters said in a statement Monday. 

For example, federal funding cuts to the safety-net insurance program Medicaid will likely result in millions of people losing coverage, decreasing revenue and adding new uncompensated care costs for providers. 

Plus, health systems are already absorbing a growing number of uninsured patients after more generous financial assistance for Affordable Care Act plans expired at the end of 2025. Last week, major for-profit hospital operator HCA slashed its earnings guidance for the year, mostly due to turmoil on the ACA exchanges. 

Payers are also feeling the financial pressure, Gibbins noted. Insurers say they’re managing increased costs and care utilization, pushing them to increase premiums and deny coverage for medical services.