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Explore how hospitals and health systems are navigating persistent financial headwinds through strategic mergers, partnerships and realignment. The 2025 M&A Review, offers expert insights on evolving deal structures, capital constraints and the growing role of scale and specialization.

Following a modest uptick in hospital and health system M&A activity in Q2 2025, with eight announced transactions, Q3 continued to trend upwards, with 15 transactions announced—an activity level more in line with historical observations.

Q2 2025 showed a modest uptick in hospital and health system M&A activity over Q1, with eight transactions announced. Partnerships and affiliations in other areas – including rural healthcare and ambulatory services – remains robust.

Only five hospital and health system M&A transactions were announced in Q1 2025, reflecting an environment of economic uncertainty and volatility. Financial distress was a driver in many of the announced transactions, continuing a trend from 2024.

Senior living mergers and acquisitions involving not-for-profit entities continued to rise in 2024, with 62 announced transactions—up from 59 in 2023—according to a new analysis by Kaufman Hall, a Vizient company.

The numbers from hospital and health system M&A activity in 2024 confirm the unevenness of recovery and the challenges that many organizations continue to face. The percentage of transactions involving a financially distressed party and the percentage of transactions involving a divestiture both reached record highs.

M&A activity in Q2 2024 slowed from a very busy Q1, with 11 announced transactions. Several large transactions in the quarter, however, generated an average seller size by revenue that significantly exceeded year-end averages dating back to 2017.

The 20 transactions announced in Q1 2024 continued a steady climb out of the slowdown in activity experienced during the Covid pandemic, significantly exceeding the number of transactions announced in Q1 of 2021, 2022, and 2023.

Financial distress emerged as a key factor in hospital and health system M&A in 2023, with 28% of announced transactions involving a financially distressed partner. This is almost double the percentage of transactions in which financial distress was cited as a factor in 2022.

With 18 announced transactions, Q3 2023 continued the momentum in activity we have seen throughout the year. A high percentage of financially distressed organizations in this quarter’s transactions reflected the impact of challenging operational and financial headwinds.

The latest Kaufman Hall Report includes an inside look at the strategic alternatives for health system outreach laboratories—and key challenges and opportunities for health systems.

Hospital and Health System Transactions In the final quarter of 2022, we noted an uptick in transaction activity with 17 announced transactions. That activity level was almost matched...