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Health system M&A bounces back to pre-pandemic levels: Report

Hospital and health systems transactions returned to pre-pandemic levels in the second quarter of 2023, according to a July 13 report from Kaufman Hall.

Twenty transactions were announced in the quarter, up from 15 in the first quarter of the year, according to the report. The 20 transactions were the highest number seen in a second quarter since there were 21 announced in 2018. It was also the highest number of transactions reported in a quarter since the first quarter of 2020, the beginning of the COVID-19 pandemic. 

There were three "mega mergers" in the quarter, according to the report:

  • Milwaukee-based Froedtert and Neenah-based ThedaCare signing a letter of intent to combine as a single organization.
  • Oakland, Calif.-based Kaiser Permanente and Danville, Pa.-based Geisinger Health announcing the launch of Risant Health. 
  • St. Louis-based BJC HealthCare and Kansas City, Mo.-based Saint Luke's Health System signing a non-binding letter of intent to form an integrated academic health system.

Kaufman Hall said it noted in its first quarter report that a major driver in recent large health system transactions has been to combine, complement, expand, and optimize organizational capabilities. That trend was evident again with two of the largest transactions in the second quarter: The Froedtert Health-ThedaCare merger and the creation of Risant Health. 

There was $13.3 billion in total transacted revenue in Q2, which was down from the "very high" $19.2 billion in the same quarter last year but above pre-pandemic levels for the second quarter of 2017, 2018, 2019 and 2020, according to the report. 

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