With America's current stagnant economic situation it seems like businesses can face a financial crisis at almost any given point in time. It has been several years since the nation's economy has been in a healthy state, and, unfortunately, there doesn't appear to be a full recovery on the horizon any time soon. As a result, businesses are being put in a position where all options need to be on the table to address financial issues. For some, that can even include a Chapter 11 bankruptcy filing.
A recent article noted that in the healthcare field in particular, financial strain can build over time. While some of our Escondido readers may think that a single, cataclysmic event may be the cause of many bankruptcy filings, the recent article noted that many hospital bankruptcy filings are due to a system of poor financial practices that build over years, eventually leading to a bankruptcy filing as a last-ditch option.
Businesses in many different sectors of the American economy can learn from the mistakes that are apparent in the healthcare field. For starters, it can be crucial to avoid putting off addressing major financial concerns, especially when there is a possibility that the issues will only get worse with time.
But, on the other hand, it is equally important to remember that a bankruptcy filing under Chapter 11 doesn't have to mean the end of the company. Chapter 11 is the means by which thousands of companies turn around their questionable financial issues every year. Going through the process often gives the company leaders enormous insight into the most troubling aspects of their business - allowing them to make the necessary changes to ensure that the company will survive and thrive into the future.
Source: Healthcare Finance News, "Hospital bankruptcies a result of trends, not a single event," Tammy Worth, Jan. 30, 2014