Healthcare Bankruptcy Spike Underscores Unique Vulnerabilities

Healthcare bankruptcies have recently spiked as labor shortages and rising interest rates neutralize an industry boost once fueled by the government’s pandemic aid.

In the first quarter of this year, 17 healthcare companies with more than $10 million in liabilities—ranging from a hospital to senior living centers to early stage pharmaceutical product developers—filed Chapter 11, according to data compiled by Gibbins Advisors, a healthcare restructuring consulting firm. In the year-ago period, seven companies filed.

Sorrento Therapeutics, Invacare Corp. and Envision Healthcare are among the healthcare companies that have recently filed for bankruptcy protection.

“Once the government money ran out, once ...