Cross-market mergers — transactions between health systems operating in separate geographic regions — are becoming a more prominent trend in hospital consolidation as organizations continue to shift toward multiregion operating models.
Over the past year, several large systems have pursued cross-market deals to gain scale, diversify risk and strengthen payer negotiations, often in lieu of same-market mergers that face heightened antitrust scrutiny.
While these transactions typically do not eliminate local competition for patients, they are reshaping how health systems think about growth, leverage and long-term sustainability.
Scale without direct patient overlap
By definition, cross-market mergers involve health systems that operate in distinct geographic areas and serve separate patient populations. Because the hospitals do not directly compete for the same patients, these deals have historically drawn less antitrust scrutiny than same-market consolidation.
Recent examples include the merger between New Hyde Park, N.Y.-based Northwell Health and Danbury, Conn.-based Nuvance Health, creating a $22.6 billion system spanning New York and Connecticut, and the merger of Sioux Falls, S.D.-based Sanford Health and Marshfield (Wis.) Clinic Health System into a 56-hospital organization operating across multiple Midwest states.
Similarly, Atrium Health and Advocate Aurora Health combined in December 2022 to form Advocate Health, a 69-hospital system with operations across Illinois, Wisconsin, North Carolina, South Carolina, Georgia and Alabama — an early example of how systems can expand nationally without consolidating local markets.
Payer leverage is a central driver
Although cross-market deals do not eliminate competition for patients, they can have competitive implications when the merging systems share common commercial payers and large employer customers. Larger, geographically diversified systems may gain increased leverage in negotiations over reimbursement rates, network participation and contract terms.
Payer leverage — rather than cost savings or immediate market share gains — is increasingly driving cross-market transactions. In January 2024, St. Louis-based BJC HealthCare and Kansas City, Mo.-based Saint Luke’s Health System merged into a 28-hospital system.
The deal was not focused on cost reduction, since the two organizations had been part of the same purchasing collective for more than a decade, nor was it designed to rapidly expand market share, as both systems plan to remain largely in their existing regions. Instead, Charlie Shields, CEO of Kansas City, Mo.-based University Health, told the Kansas City Business Journal many of these types of mergers are “all about leverage” in terms of securing a stronger negotiating position with commercial payers.
Additionally, cross-market mergers are particularly attractive for systems operating in already crowded or highly consolidated regions. A recent KFF study found that regional and cross-market deals are more prevalent among health systems seeking growth opportunities outside saturated home markets, where same-market acquisitions are limited or face significant opposition.
Ontario, Calif.-based Prime Healthcare’s acquisition of eight Illinois hospitals from Ascension — as well as its plan to acquire Central Maine Healthcare — reflects that dynamic, as systems increasingly look beyond their core regions to expand. The Ascension deal marked Prime’s entry into Illinois, and the acquisition of Central Maine Healthcare would see it enter another new state.
Risk diversification and innovation opportunities
Cross-market deals also allow systems to spread operating risk across multiple markets, insulating organizations from localized volume swings, labor challenges or payer pressures. Broader geographic footprints can also expand access to academic medical centers and specialty services, while enabling systems to test and scale innovative care models across diverse markets.
That strategy underpins the growth plan of Risant Health, a nonprofit formed by Oakland, Calif.-based Kaiser Permanente. Risant has acquired Danville, Pa.-based Geisinger Health and Greensboro, N.C.-based Cone Health and plans to acquire three to four additional systems over the next five years, targeting $30 billion to $35 billion in annual revenue. The model emphasizes shared infrastructure, value-based care capabilities and operational replication rather than full consolidation.
A shifting regulatory backdrop
Federal policy changes may also influence the trajectory of cross-market consolidation. On Aug. 13, President Donald Trump revoked Executive Order 14036, a Biden-era directive aimed at promoting competition across the U.S. economy, including healthcare. The 2021 order had encouraged more aggressive enforcement against consolidation, heightened scrutiny of hospital mergers and broader oversight of payer and provider practices.
The repeal could ease regulatory pressure on mergers and affiliations, particularly smaller or regional transactions that do not raise immediate antitrust concerns. However, regulators have emphasized that existing antitrust laws remain in force, meaning large transactions that significantly reshape markets may still face scrutiny on a case-by-case basis.
For health systems pursuing strategic partnerships, the shift may signal a more permissive environment for consolidation, even as state attorneys general and federal agencies continue to monitor pricing, access and long-term competitive effects.
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