Hospital and health system M&A activity growth accelerated in the second quarter as mega mergers surged and executives take a more proactive approach to strategic partnerships, according to Kaufman Hall’s Q2 2026 M&A report published by Vizient.
“Healthcare M&A demonstrated meaningful evolution this quarter,” said Kris Blohm, managing director and co-leader of Kaufman Hall’s M&A practice. “Organizations are now evaluating options earlier in their strategic planning cycles, seeking complementary capabilities rather than waiting until partnerships become necessary. We’re witnessing proactive positioning over reactive consolidation.”
Ten takeaways from the report:
1. Deal volume stayed above historical Q2 averages. The 18 announced transactions mark one of the highest second quarter totals recorded since 2019, continuing momentum that began in the second half of 2025 and carried through the first quarter of 2026’s 22 deals.
2. Average seller size climbed to $428 million in annual revenue, in line with recent year-end averages, driven in part by three “mega mergers,” which are deals where the smaller party generates more than $1 billion in annual revenue.
3. Six “mega mergers” have been announced so far in 2026, already surpassing the total for all of 2025 as organizations in the $500 million to $3 billion revenue range pursue partnerships to build capability rather than wait for financial necessity.
4. Total transacted revenue hit $7.7 billion, a sharp rebound from the same quarter last year’s low. However, it’s still well below the $10.8 billion for the second quarter of 2024 and $13.3 billion for Q2 in 2023.
5. Proactive partnership-seeking dominated the quarter, even among hospitals doing well. Independent systems seeking a partner from a position of strength accounted for two-thirds of second quarter transactions.
6. Divestitures made up one-third of deals. Six of the 18 transactions were divestitures, while nonprofit systems were the buyer in nearly every announced deal.
7. Quorum Health’s nonprofit conversion stood out as a first-of-its-kind transaction. The Brentwood, Tenn.-based system, which operates 11 hospitals across nine states, agreed to transition from a for-profit, private equity-backed model to nonprofit status through an acquisition by newly formed Healthside Partners.
8. Scaled organizations are increasingly striking deals from a position of opportunity, not distress. Kaufman Hall pointed to Sioux Falls, S.D.-based Sanford Health’s planned combination with Robbinsdale, Minn.-based North Memorial Health, and Charlotte, N.C.-based Atrium Health’s proposed combination with Raleigh, N.C.-based WakeMed Health & Hospitals, as examples of this larger-scale trend.
9. There have been fewer “reactive” mergers and acquisitions as hospitals are increasingly seeing these deals as strategic. Health systems are evaluating partnerships earlier in their planning cycles as they prepare for macroeconomic pressures ahead, according to the report.
10. The shift to outpatient surgery is also influencing hospital strategy and deals. St. Louis-based Ascension closed its deal to acquire more than 250 ASCs for $3.9 billion in June. Other health systems are expanding their ASC strategy as well.
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