Hospital and health system mergers and acquisitions started at a slower pace in the first half of 2025, according to Kaufman Hall. The healthcare consulting firm attributed the sluggish start to high levels of volatility and economic uncertainty surrounding global trade issues, and the potential for significant policy changes affecting healthcare.
With the signing of the One Big Beautiful Bill Act, some of the uncertainty is now resolved, giving hospitals and health systems the “clarity and visibility needed to refocus their strategy and transformation efforts,” KaufmanHall said in a July 10 report
“This may lead to an interesting dichotomy in health system M&A activity, with the acceleration of organizations looking for partners in response to new financial challenges, but a careful and measured approach being taken by well-positioned health systems,” the report said.
KaufmanHall is anticipating that hospital and health system M&A will accelerate, but may return at a slower pace than it fell, as the industry absorbs the effects of legislative and policy changes.
A ‘modest’ M&A uptick in Q2
There were eight hospital and health system M&A deals announced in the second quarter, up from five in the first quarter, according to the report. Despite the increase, Q2 M&A activity remained low by historical averages. There were 11 deals in the second quarter of 2024; 20 in 2023 and 13 in 2022.
About half the deals announced in Q2 involved divestitures, “part of a market realignment process for large regional and national health systems — both for-profit and not-for-profit — that has been going on, and recently accelerating, over the past several years,” the report said.
The acquirers in all eight Q2 deals were nonprofit systems. Three were religiously affiliated and one was governmentally owned. Two of the acquired organizations were for-profit. Of the six remaining nonprofits, three were religiously affiliated and two were governmentally owned.
There were no mega mergers — transactions in which the annual revenue of the seller exceeds $1 billion — in the second quarter.
A ‘representative deal’
One of the biggest deals in the second quarter was not included in KaufmanHall’s report because it was not a deal between two hospitals or health systems, but was “representative of much of the M&A activity that health systems are currently pursuing in the non-acute space.”
St. Louis-based Ascension entered an agreement June 17 to acquire AmSurg, an ASC operator with more than 250 facilities across 34 states.
“With this acquisition, Ascension has acquired a platform that will enable a pivot to a strategy emphasizing access to convenient, lower-cost alternatives to inpatient care,” KaufmanHall said.
