Healthcare bankruptcies hit a record high last year, with long-term care second only to pharmaceutical companies in filings, according to a report published Thursday by healthcare restructuring advisory firm Gibbins Advisors.

Together, senior living and care companies and pharmaceutical companies accounted for approximately half of all healthcare-related filings in 2023, according to the report.

The report looked at skilled nursing facilities, assisted living communities, independent living communities and continuing care retirement / life plan communities, among other types of healthcare-related entities.

According to the data, of the 79 healthcare bankruptcy filings in 2023, 15 were in senior living and care, compared with 12 in 2022 and 13 in 2021.

Cost inflation largely is to blame, according to Gibbins Advisors, adding that payment rate increases are often not in line with cost inflation. Additionally, changes to Medicaid’s continuous enrollment last year may have significantly increased the number of uninsured older adults, according to the report.

After bankruptcies spiked in the third quarter of 2023, no long-term care bankruptcies were filed in the fourth quarter, according to the report.

“Despite the absence of senior care bankruptcy filings in Q4 2023, based on our knowledge of the market, we expect to see senior care bankruptcies return in 2024,” Tyler Brasher, director at Gibbins Advisors, said in a statement. “As for total case volume, we are seeing a lot of distress in healthcare as the market remains very challenging for providers, so we expect to see continued levels of healthcare bankruptcies in 2024 that we saw last year.”

Polsinelli attorney Jeremy Johnson told the McKnight’s Business Daily on Thursday: “We’re seeing the highest level of distress in healthcare in at least the last 14 years.” He noted that the law firm uses “a slightly different methodology” than does Gibbons, “but the point is the same.”

More than three years after the pandemic began, the senior living and care sector has suffered more than most, Polsinelli attorney Jeremy Johnson said previously

“Bankruptcy filings in senior living continue to be driven by low occupancy. For the last few years, it’s [been] the obvious post-COVID pressures, but even as sales/occupancy are increasing, CCRC balance sheets are still over-levered and need restructuring,” Johnson said on Thursday. “There is simply too much debt for most of them to service and any issue at the community, such as a pressing capex need, can put the community under pressure. Stand-alone communities are particularly at risk. We are still seeing a lot of distress in the senior living space.”