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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.

Partnerships with imaging companies can offer a unique value proposition for health systems looking to blend their imaging offering between hospital outpatient department and independent diagnostic testing facility settings.

As ambulatory services grow, so does competition in the area of ambulatory surgery center (ASC) management services. Health systems have an ever-expanding range of potential partners that are offering increasingly flexible alignment structures.

Evolving industry dynamics will prompt further consolidation among not-for-profit life plan communities, especially as organizations look to add scale to their platforms. This activity will have strategic implications for LPC organizations of all sizes.

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.

In recent years, the Medicare Advantage (MA) program enjoyed both rapid membership growth and positive attention from healthcare organizations and advocates. As of the beginning of 2024, 33.4 million Americans were enrolled in MA, up 7% from 2023.

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.

Health system leaders focused on the day-to-day needs of their organization can sometimes lose sight of key developments in other sectors of healthcare. But in an interconnected healthcare ecosystem, understanding the trendlines their payer counterparts are facing is an essential task.

To successfully reduce length of stay, health system management will need to combine performance improvement efforts with efforts to successfully align themselves more closely with skilled nursing providers.

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.