Healthcare (Short Predictions, Long Distress)

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"What comes next?" we asked back in June. Looks like a lot of professionals are becoming increasingly convinced that '18 will be rife with healthcare activity as distress rises to "epidemic" levels. Hmmm. Okay. We'll see. Distress watchlists in the space DO seem to be expanding with names like HCR Manorcare, Genesis Healthcare Corporation ($GEN), Prime Healthcare Services Inc., Signature Healthcare LLC, and Community Health Systems ($CYH), among many others. Meanwhile, to the degree that healthcare providers are suffering from regulatory and other headwinds, management may want to move data security up higher on their list of priorities. After all, 21st Century Oncology Holdings and Morehead Memorial Hospital both serve as examples of what can happen when precautions aren't implemented early. One last note on healthcare distress, looks like biglaw attorneys aren't immune to increased healthcare spending. According to Abovethelaw.com, certain biglaw shops aresurreptitiously passing the cost of rising healthcare coverage costs to their associates. Living the dream.

Distressed Healthcare: Short Grandma

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Everyone in the restructuring space has been pontificating about increased healthcare distress and yet the action has been relatively limited. This past week, however, Genesis Health Inc. ($GEN), one of the largest nursing home operators in the US, reported earnings and indicated that bankruptcy is a possibility. With 450 locations and nearly $1b of debt, this will surely pique a lot of interest. The company blames shortened stays, wage inflation, professional liability issues and escalating lease payments for the company's distress. Accordingly, it has entered into sale leaseback bandaids...uh, agreements...with two landlords, Sabra Healthcare REIT Inc. ($SBRA) andWelltower Inc. ($HCN). Will the company file for bankruptcy? It's capital structure is relatively un-complex and so this would seem to be an out-of-court candidate. But you never know.