Performance in February has remained stable. Volumes stayed strong, including in emergency departments. Non-labor expenses have been the primary driver of expense growth thus far in 2025.

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.

Hospital performance remains stable at the start of 2025. Inpatient revenue grew more quickly than outpatient revenue in January, and the rate of cost growth has slowed considerably.

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.

In the fourth quarter of 2024, the median investment/subsidy per physician was $306,792, an increase of 5% compared to Q4 2023.

In 2024, hospital financial and operational performance stabilized. Outpatient revenue increased, and patient observation days decreased. Though expenses in 2024 rose, they did not outpace inflation on a volume-adjusted basis.

The latest Kaufman Hall Report includes highlights from the 35th annual Healthcare Leadership Conference, which featured high-level thinking and reflection on how our industry’s ongoing transformation will progress into the future.

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.

While patient volumes decreased this month, expenses rose. The workforce continues to be competitive as labor expenses rose despite the dip in patient volumes.

This month’s data show general stability, with continued growth in outpatient revenue and expense reductions on a volume-adjusted basis.

Numerous headwinds in recent years have threatened liquidity, exposed organizations to counterparty risk, and heightened uncertainty about long-term financial sustainability. This report discusses six trends and related action steps to help position your organization for tomorrow’s Treasury Operations needs.

In the third quarter of this year, the median investment/subsidy per physician was $304,312—rising above $300,000 for the first time. Other expense metrics such as the total direct expense per provider FTE and labor as a percentage of total expenses increased.