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CDC nominee pulled and Dr. Oz faces confirmation hearing, HCSC acquisition closes, probationary HHS employees rehired

This week’s graphic highlights data from Kaufman Hall’s recently released 2024 Hospital and Health System M&A in Review report on the current dynamics in health system merger and acquisition (M&A) activity.

Next round of drugs for Medicare drug price negotiations announced, Trump health policy actions in second term, ACA exchanges see record enrollment in 2025

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.

Trump picks his healthcare cabinet nominees, PBMs sue the FTC over its insulin case, and controlled substance telehealth flexibilities are extended yet again.

With 27 announced transactions, Q3 had the highest level of activity thus far in 2024. Total transacted revenue of more than $13 billion was the highest Q3 total in the last eight years.

Leaders of publicly owned hospitals should make an ownership model analysis a regular part of their strategic planning process. While public ownership confers many advantages, this analysis will help leadership ensure that the ownership model aligns with strategic goals and long-term viability.

A judge orders a partial, preliminary injunction of the FTC’s noncompete ban, Sanford Health and Marshfield Clinic announce plans to combine, and CMS proposes a nearly 3% cut to Medicare physician pay for 2025.

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.

Health systems are faced with two conflicting realities. The first is that partnerships will continue to be a necessary and critical part of healthcare strategy. The second is that antitrust enforcement will continue to create strong barriers to these same partnerships.

The decision to partner with another health system is always a high-stakes decision for a board. The creation of a community foundation is one way to ensure that a health system’s focus on its community remains intact, with new potential to improve the lives of community residents.