In 1997, the US Government drastically reduced Medicare reimbursement rates with the passage of the Balanced Budget Act of 1997, which had a significant impact on the nursing home industry. "The New York Times" business writer Kenneth Gilpin wrote that "The drop in payments was so dramatic that the financial structures of many of these companies were not flexible enough to adjust." He went on the mention that as of the summer of 1999, 12 percent of the 1.7 million nursing home beds were operating under Chapter 11 bankruptcy protection.