Hospital, health system mergers reach new heights

Editor's Note

A total of 27 announced deals for Q3 marks the highest point yet this year for hospital and health system transactions, DOTMed reported October 8, citing data from Kaufman Hall. “The increase aligns with pre-pandemic transaction levels, driven significantly by the bankruptcy of Steward Health Care, which accounted for 11 of the 27 transactions,” the outlet reports.

Notably, four "mega mergers" involved sellers with over $1 billion in revenue. Health Care Systems of America assumed control of eight Steward hospitals, while other significant transactions included Orlando Health acquiring Brookwood Baptist Health from Tenet, Prime Healthcare purchasing eight Ascension-owned hospitals in Illinois, and a merger between Sanford Health and Marshfield Clinic Health System.

Excluding Steward-related deals, 16 other mergers reflected typical pre-pandemic patterns seen in 2018, 2020, and 2023. Total transaction revenue reached a record $13.3 billion. Despite the increase in overall activity, the average seller size shrank, with average revenue dropping from $984 million in the previous quarter to $492 million in Q3, DotMED reports. Total transacted revenue reached a record $13.3 billion.