Five notes:
1. Despite a slowdown in 2024, healthcare M&A activity remained nearly 70% higher than pre-pandemic levels. There were 1,373 healthcare deals in 2024, 1,506 in 2023, 1,708 in 2022, 1,525 in 2021, 814 in 2020 and 828 in 2019.
2. Deals worth more than $5 billion were subdued compared to recent years, with only one such deal completed in 2024. Healthcare deals were collectively worth $69 billion in 2024, $63 billion in 2023, $101 billion in 2022, $197 billion in 2021, $56 billion in 2020 and $88 billion in 2019.
3. A significant amount of available capital, possible interest rate cuts, lengthening hold periods and the pro-business stance expected from the Trump administration is fueling optimism for increased M&A in 2025. The incoming administration’s stance on antitrust enforcement, provider reimbursement, and broader regulatory issues — ranging from staffing mandates to Medicaid funding and value-based care programs — will shape investor strategies.
4. Large health systems are maintaining their focus on strategic rationalization of their portfolios and a return to pre-COVID operating margins, while payers continue to focus on vertical integration and geographic expansion.
5. Those involved with M&A should embrace flexible deal structures, focus on value creation through AI-driven solutions, and capitalize on opportunities in provider consolidation, employer-sponsored insurance programs, and tech-enabled innovations supporting value-based care.
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