Bankruptcy in Long-Term Care Facilities Tied to Worse Patient Outcomes, Study Finds

Residents in bankrupt long-term care facilities face significantly higher risks of harm, according to a new working paper analyzing the effects of Chapter 11 filings on patient care. The study found that following bankruptcy, patient hospitalizations within 90 days rose by 1.4 percentage points, and incidents of physical restraints and bedsores increased by 77% and 14% of the mean, respectively. Researchers attribute much of the decline in care quality to a 10% spike in staff turnover, leaving less experienced employees to manage vulnerable patients. While most facilities continued operating post-bankruptcy, care quality sharply declined.

The use of physical restraints and catheters—often for staff convenience rather than medical need—raised alarm, with the authors and CMS noting such practices may amount to abuse. As provider bankruptcies increase, researchers call for stricter oversight during restructurings and limits on debt financing to prevent further harm in the already fragile long-term care sector.

22-05-2025