Hospital and health system mergers and acquisitions finished 2025 on stronger footing after a slow start, with 46 transactions announced across the year, according to a new report from Kaufman Hall.

While the total number of deals was down from 2024, the fourth quarter accounted for 17 of the year's transactions — more than any other quarter — and contributed $9.8 billion to the year’s total of $18.5 billion in transacted revenue. That figure marks the lowest annual total since Kaufman Hall began tracking the data, a result of minimal activity in the first half of the year.

Four “mega mergers,” involving smaller organizations with annual revenue over $1 billion, were announced in Q4, signaling renewed momentum in the sector.
“2025 hospital and health system M&A activity started slow given the policy and market uncertainty, but momentum returned by the end of the year,” said Anu Singh, managing director at Kaufman Hall.

Singh noted that activity outside of traditional hospital M&A, such as acquisitions of ambulatory care, laboratory services, and behavioral health providers, was also notable in 2025 and is expected to continue in 2026.

Financial distress remains a significant driver of M&A decisions. In 2025, 43.5% of transactions involved at least one financially distressed party, the highest percentage on record since Kaufman Hall began tracking the metric in 2022.

In a separate analysis, Kaufman Hall’s National Hospital Flash Report found that U.S. hospitals experienced a drop in financial performance in November, with lower patient volumes reported across service lines.

“While month-to-month hospital performance softened in November, on a year-to-date basis, revenue and margins are still strong compared to previous years,” said Erik Swanson, managing director and leader of the data and analytics group at Kaufman Hall. “The continued rise in expenses requires attention. For hospital leaders, managing overall spend as patient volumes fluctuate is an ongoing challenge.”

The report draws data from more than 1,300 hospitals through Strata Decision Technology.

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