Kaufman Hall Reports Healthcare M&A Chill Amid Economic Uncertainty

The latest Kaufman Hall Mergers and Acquisitions Quarterly Activity Report reveals a significant downturn in the volume and size of hospital mergers and acquisitions in the first quarter, indicative of broader economic challenges such as market volatility, tariff concerns, and policy uncertainties under a new administration. Only five transactions were announced, marking the lowest in recent history and even fewer than during the severe COVID-19 impacts in 2021. The average seller size was approximately half of what was typical in 2024, reflecting the absence of any major mergers. The report highlights strong hospital volumes yet amplified expenses, which stressed margins while still outperforming the previous year's levels. Additionally, a rise in credit downgrade actions was observed among nonprofit hospitals, driven by slower revenue growth and increasing debt, signaling significant pressure on the financial stability and future consolidation opportunities in the healthcare sector.