Kaufman Hall Forecasts Continued Hospital M&A Activity Amid Financial Distress

In 2024, the landscape of hospital mergers and acquisitions was predominantly shaped by a significant increase in divestitures and the sale of distressed health systems, as reported by Kaufman Hall. The consultancy highlighted that divestitures formed a large portion of the 72 announced deals, indicating financial distress across the sector. The average deal size recorded at $401 million points to larger organizations seeking partners due to financial strain. While total transacted revenue in the sector was high, this underscores underlying operational challenges. Additionally, the dynamics of mega-mergers shifted, with smaller health systems merging with larger entities. The consultancy forecasts ongoing trends in consolidation due to financial pressures, fueled by leadership changes and strategic pursuits in underserved markets.