Hospital mergers in 2026 exceed last year, and more deals are likely

The pace of hospital merger activity isn’t cooling, and analysts say they expect to see more transactions in the months ahead.

There were 16 announced hospital mergers and acquisitions in the third quarter of 2026, according to data released this week from Kaufman Hall, a healthcare consulting firm.

Through the first nine months of the year, there have been 56 hospital mergers. The number of deals in 2026 has already surpassed the total number of transactions in all of 2025.

In 2025, there were 46 announced hospital mergers or acquisitions, which was the lowest number in 15 years. Analysts say some health systems paused merger plans to assess federal policies after President Trump’s return to the White House. But deal-making has accelerated over the past year.

Analysts at Kaufman Hall say they are projecting a strong pace of hospital mergers for the foreseeable future.

“We're on pace to potentially have the most robust activity this year in 2026 since the start of the pandemic, and it kind of continues this steady march that we've kind of seen bubbling beneath the surface over the last 12 to 18 months or more,” says Courtney Midanek, a managing director and M&A practice co-leader at Kaufman Hall. “These transactions often take a long time to see the light of day, so we believe it's going to continue.”

There were 72 hospital mergers in 2024, the most since 2020, and that number is certainly within striking distance.

Opportunity over necessity

In addition to the brisk pace of hospital mergers, the industry is seeing some deals involving larger health systems. There has been an uptick in “mega mergers,” which Kaufman Hall defines as transactions where even the smaller party has more than $1 billion in revenue. In the third quarter, the smaller party had average annual revenue of $586 million.

Just this week, Rush University System for Health and Endeavor Health have announced their intention to merge. If regulators sign off on the deal, they will create a 12-hospital system with $11 billion in revenue serving the Chicago area.

In late September, HealthPartners and Essentia Health, two nonprofit systems in Minnesota, said that they are looking to combine and form a single organization. Under the deal, HealthPartners would acquire Essentia, forming a system with 22 hospitals and more than $12 billion in revenue.

Prisma Health in South Carolina announced in July that the system plans to acquire

Erlanger Health System, based in Chattanooga, Tennessee. If finalized, the merged system would have a combined revenue of about $9 billion and 26 hospitals.

Earlier this year, Sutter Health, based in California, announced plans to acquire Allina Health in Minnesota. The combined organization would create a system with 39 hospitals and $26 billion in revenue.

Kris Blohm, managing director and M&A practice co-leader at Kaufman Hall, says health systems are looking beyond just market presence in some larger deals.

“Larger and healthier organizations are increasingly pursuing partnerships from a position of opportunity versus a position of necessity,” Blohm tells Chief Healthcare Executive®.

He says hospitals “are much more strategic about capabilities and either enhancing those capabilities or conversely filling the gaps versus plain vanilla scale geographic reach.”

Midanek sees health systems thinking differently to adapt to a healthcare environment that is changing significantly. Health systems are examining their capabilities in an evolving landscape.

“It's really strategic factors that are driving a lot of these very large transactions,” she says. “And we don't want to ignore the fact that there are continued significant headwinds financially for organizations. There are reimbursement headwinds, and that's going to accelerate in 2027.”

Hospitals are bracing for cuts in Medicaid programs in the coming years due to the sweeping tax and spending package known as HR 1. Millions are projected to lose Medicaid coverage due to new work requirements beginning in 2027 and more frequent proof of eligibility for coverage.

Blohm and Midanek both say they didn’t expect the unfolding Medicaid cuts to be a major driver that could lead to more merger activity. But they both say health systems are going to be planning for regulatory changes ahead.

“I think the urgency for organizations is to really look at their strategic positioning because if it's not HR 1, it will be something else tomorrow that will create that level of uncertainty again,” Blohm says.

Partnerships beyond mergers

Health systems are increasingly looking at partnerships beyond mergers to explore strategic possibilities or meet needs.

This week, Duke Health and CaroMont Health announced they are partnering on a joint venture to build two new hospitals in Charlotte, North Carolina. The two health systems aren’t merging, but they are creating a new organization to build and run the hospitals.

In July, AdventHealth and Intermountain Health, two of America’s largest nonprofit health systems, announced plans to form a joint venture involving eight hospitals and assorted clinics in the Denver area. The partnership would include five AdventHealth hospitals and three Intermountain hospitals. Under the plans, AdventHealth will manage the daily operations of the hospitals and the clinics.

Midanek says she expects to see more similar partnerships in the future as health systems consider ventures beyond traditional mergers.

“What you have right now is everyone is sort of thinking about the capabilities they need and the headwinds that they face, all of these things together,” Midanek says. “They're sort of saying, ‘What are the levers we can pull?’”

“And it does really go beyond just thinking, ‘Oh, I'm going to join this other system, or I'm going to become fully integrated with another.’ It could be a joint venture in a certain geography. It could be looking at a non-acute partnership in a business line,” Midanek says.

Plenty of hospitals and health systems are facing financial difficulties, with cost pressures looking to mount as Medicaid cuts unfold in the coming year and other regulatory changes occur.

Hospitals facing financial difficulty, including rural hospitals, should look strategically and consider mergers or other kinds or partnerships with larger systems before their situation deteriorates, analysts say.

For hospitals that are in trouble, waiting to pursue partnerships could make them less appealing to larger systems leery of risk.

“Timing, as we know, is everything, and these organizations again need to be a little bit proactive about when they start to think about their options,” Blohm says.