There were 46 announced hospital and health system M&A deals in 2025, down from 72 last year, according to a Jan. 15 report from Kaufman Hall.
Five things to know:
1. Transacted revenue for 2025 totaled $18.5 billion, the lowest level since Kaufman Hall began tracking the data. The firm attributed the slowdown largely to weak deal activity in the first half of the year, driven by persistent financial challenges among smaller independent hospitals and early uncertainty surrounding the Trump administration’s policy agenda.
2. M&A activity picked up in the third quarter with 15 announced deals and continued into the fourth quarter, with 17. Fourth-quarter deals included four “mega mergers,” meaning transactions in which the annual revenue of the smaller party exceeded $1 billion. More than half of the year’s transacted revenue — $9.8 billion — was recorded in the fourth quarter.
3. Financial distress was a primary driver of transaction activity in 2025, with a record-high 43.5% of deals involving financially distressed organizations, according to the report. Transactions involving financially distressed organizations have increased over the past several years. In 2022, 15% of deals involved a financially distressed party. The following year it jumped to 27.7% and then 30.6% in 2024. Kaufman Hall expects this trend to continue in 2026.
4. For-profit organizations were the seller in 11 transactions in 2025, but the acquirer in only one deal, according to the report. Kaufman Hall said this is a “signal of the financial challenges facing hospitals in the current environment and illustrates a shift in for-profit entities’ investments to other healthcare services subsectors or an exit in general.”
5. “Some of the most interesting activity in 2025 occurred outside of hospital and health system transactions, with organizations making significant deals in acquiring ambulatory care, lab services, and behavioral health providers, Kaufman Hall Managing Director Anu Singh, said in a Jan. 15 news release shared with Becker’s. “We anticipate this trend to continue in 2026.”
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