Hospital mergers hit 15-year low

Even with an uptick in hospital merger activity in the second half of 2025, the number of transactions remained well below previous years.

In 2025, there were 46 announced hospital mergers or acquisitions, according to an analysis released Thursday by Kaufman Hall, a healthcare consulting firm. That marks the lowest number of deals in 15 years.

It’s a sharp drop from the 72 hospital mergers that took place in 2024. The closest comparable year came in 2021, when there were 49 mergers and acquisitions, and that was a year when deal-making was affected by the COVID-19 pandemic.

Hospitals and health systems largely paused merger activity in the first half of the year, with deals dropping to record lows in the first and second quarters, Kaufman Hall says. But more deals took place in the summer and fall, as merger activity approached more consistent levels seen in past years.

In the fourth quarter of 2025, there were 17 announced hospital deals, Kaufman Hall says.

During the first half of the year, hospitals and health systems likely took a pause to get a better understanding of federal healthcare policies with President Trump’s return to the White House, Anu Singh, managing director at Kaufman Hall, told Chief Healthcare Executive® in an interview last summer.

“I think it set a tone for a lot of organizations ... if there's going to be this significant amount of change, what we ought to do is pause on some of our strategic execution here, and let's see what it's going to look like,” he said.

But Singh also expected to see more mergers taking place now that health systems have a better sense of the administration’s policies. “I think that trajectory continues now that we have clarity,” Singh said.

Most of the hospital deals took place in the second half of the year, as health systems had more clarity on the administration’s policies, including the passage of the HR 1 federal tax package. The package calls for significant cuts in Medicaid programs over the next decade, which hospitals said will leave millions without coverage and health systems facing more cost pressures that could lead to reduced services and facility closures.

Some analysts say that could drive more hospital mergers, as struggling providers look to join bigger and healthier partners to stay afloat.

Financial distress is playing a bigger role in hospital mergers, Kaufman Hall says. In 2025, 43.5% of hospital deals involved a party in financial distress, a record high, according to Kaufman Hall.

In addition to the reduced volume of mergers, some of the parties involved were smaller. The total transacted revenue in the 2025 hospital deals fell to $18.5 billion, the lowest figure in several years. It was less than half the total revenue of the deals in 2024 ($39.7 billion).

Still, there were some bigger deals as the year progressed, with four mega-mergers taking place in the fourth quarter. Kaufman Hall defines mega mergers as transactions where the smaller party’s revenue tops $1 billion.

Over the last few months, some notable deals emerged. The MultiCare Health System, based in Tacoma, Washington, announced plans to acquire Samaritan Health Services in Oregon. The organizations hope to finalize the deal later this year.

Hartford HealthCare is planning to acquire Manchester Memorial Hospital and Rockville General Hospital. Connecticut state officials said in December that they had signed off on the transaction.

The West Virginia University Health System has announced plans to acquire the Independence Health System, which operates five hospitals in western Pennsylvania.

Health systems are also looking beyond hospitals as they eye potential targets for mergers and acquisitions, with some looking at outpatient facilities and urgent care centers.

A majority of healthcare leaders and life sciences executives said they expect to see more merger activity in 2026, according to a KPMG survey released last week.

Drew Corrigan, KPMG’s U.S. Sector Leader for Healthcare, told Chief Healthcare Executive® that was surprised to see such optimism among hospital and health system leaders.

“With all the crazy headwinds that I see over this last year on the healthcare side, there’s still a pretty good, bullish view on M&A and transactions and opportunities for growth, even among the healthcare entities,” Corrigan says.