Landmark Health System, which operates hospitals in Missouri, Georgia, and Florida, has filed for bankruptcy despite recent revenue growth.

The company, which opened its first Missouri facility in 2006, has expanded to manage six long-term acute care hospitals across three states.

While Landmark reported a revenue increase of over $7 million in 2023, reaching $79.4 million, soaring expenses outpaced earnings. The most significant financial burden came from contract labor, which saw a staggering 229% increase since 2020. Additionally, salaries and benefits for skilled nurses rose by nearly 29%, and pharmaceutical costs continued climbing between 2022 and 2024.

“These financial pressures have severely impacted Landmark’s ability to generate the cash flow needed to meet its debt obligations,” the company stated in court filings.

Unsuccessful Cost-Cutting Efforts

To avoid bankruptcy, Landmark implemented a series of cost-cutting measures, including layoffs at its business office in Cape Girardeau, reducing HR and accounting staff in Florida, closing an office in the state, and outsourcing hospital billing and collections. However, these efforts failed to offset mounting financial challenges.

At the time of filing, Landmark listed $70 million in assets but faced $86 million in liabilities. Its debts included a $30 million loan from Amerant Bank and approximately $13 million in unpaid lease obligations to real estate investment trusts that own its hospital properties.

Operations to Continue Amid Transition Plans

Despite the bankruptcy, Landmark reassured that it has enough cash on hand to maintain hospital operations and ensure continued patient care. However, the company plans to seek new ownership or capital investment to sustain its facilities.

Industry-Wide Struggles in Healthcare

Landmark’s financial troubles are part of a broader trend affecting hospitals nationwide. While bankruptcy filings in 2024 slightly declined from 2023’s record highs, they remain significantly higher than pre-pandemic levels, according to restructuring advisory firm Gibbins Advisors.

Last year, Steward Health Care made headlines with its Chapter 11 filing, which led to the sale of its 31 hospitals. Experts warn that if financial pressures persist—including inadequate government reimbursements—more hospital bankruptcies could follow in 2025.

Source:  Healthcare Dive