Major Healthcare Provider Declares Bankruptcy And The Reason Couldn't Be Clearer

Seeking adequate healthcare for yourself or a loved one can create significant financial and emotional distress, and that's all before the possibility that your provider could declare bankruptcy. This situation can be even more stressful if complex care is needed, but your provider is backed by profit-minded private equity firms, or is suffering from surging costs and slowed-down Medicaid and Medicare reimbursements. A combination of these issues can prove fatal, in all senses of the word. 

Just like many beloved restaurants that have faced bankruptcy and the plethora of retail chains forced to file for bankruptcy, for-profit healthcare providers can also end up in bankruptcy when the going gets tough. This can, in turn, make the going especially tough for patients, providers, and their families. Whether a healthcare provider ends up being one of the companies that came back stronger after bankruptcy or a cautionary tale about the perils of private equity, healthcare company bankruptcies seem to be an increasingly permanent part of the collapsing company conversation.

Following in the relatively recent footsteps of Steward Healthcare and CarePoint, Florida-based Landmark Hospitals has filed for Chapter 11 bankruptcy protection, under Landmark Holdings of Florida, LLC. The March 2025 filing for the long-term acute care provider, and its affiliates, lists $86 million in liabilities to the company's $70 million in assets. The filing also cited slowing Medicaid reimbursements and higher operational, pharmaceutical, and personnel costs as reasons for the bankruptcy — without explicitly calling out a significant factor in the company's current unsustainable debt: private equity.

Landmark Hospitals comprise six private long-term acute care facilities serving patients seeking critical, higher-level care in Florida, Georgia, and Missouri. The typical clientele at Landmark facilities are patients seeking to wean themselves from ventilators or who require intensive therapies and assistance after severe strokes and bodily failures. Originally founded by retired orthopaedic surgeon Dr. William Kapp III in 2006, Landmark benefited from a $12 million investment of senior subordinated debt from Praesidian Capital, a private equity firm, in 2015. Praesidian then successfully exited the investment in 2021, with Jason Drattell, the founder of Praesidian Capital, saying in a statement at the time, "We are very pleased with the outcome of this investment."

However, by 2025, the outcome of that investment for Landmark had led to unsustainable debt and a flurry of emergency bankruptcy motions. Of the millions of dollars in unsecured outstanding debts that Landmark lists in its bankruptcy filing, $13 million in rent is owed to Ventas, Inc., a Chicago-based real-estate investment trust. Per a statement on the company's main website, Landmark's bankruptcy filing aims to restructure the company's considerable debt while its locations remain fully operational as it seeks a potential buyer and debt restructuring solution. However, while no Landmark closures have been announced or even hinted at yet, the company's filing immediately calls to mind the 2024 bankruptcy, site closures, and asset selloff of Steward Healthcare, as well as the drawn-out, disastrous decline of Manorcare.

Per a 2015 Praesidian press release, Landmark's founder, Dr. Kapp, referred to Landmark hospitals as the "dominant" provider of long-term acute care in each of the hospitals' six regions. However, that dominance could now mean imminent danger for patients and their families due to the hospitals' struggling business affairs. Continuity of care for Landmark patients could be a matter of life and death. While patients and employees have a lot to lose in the aftermath of investments gone awry, business leaders, firms, and investors are simply freed up to invest elsewhere, such as Dr. Kapp's new AI-assisted longevity healthcare provider, Fountain Life.

Private equity in healthcare and the subsequent healthcare bankruptcies that occur as a result are a major flashpoint, and will likely continue to be. However, as hospitals continue to operate as businesses, they are sure to continue to appear as attractive investment opportunities for potentially shortsighted private equity firms. While this equity can absolutely make rapid expansion and innovative growth possible for many hospitals, the soaring costs of medicines and staffing required for such growth often comes at a very high cost, usually in the form of crippling debt even after a private equity partnership ends. Private equity may temporarily save Landmark again, or perhaps the company will be acquired by another major healthcare group. Whatever happens, Chapter 11 bankruptcy filing exists to protect the reorganizing business, and in this case, that business' patients. However, patients may find being asked to take a struggling company's word for it a tough pill to swallow.