This week’s graphic highlights data from Kaufman Hall’s recently released 2024 Hospital and Health System M&A in Review report on the current dynamics in health system merger and acquisition (M&A) activity. With 72 announced transactions in 2024, the volume of health system mergers is ticking back up and trending towards pre-pandemic levels. The average size of the smaller party involved in the transaction was $559M, a figure similar to that of 2023 yet elevated when compared to the years leading up to the pandemic. Most notably, after emerging as a prominent trend in 2023, financial distress continues to be a key driver behind M&A activity. Distressed M&A activity reached an all-time high in 2024, with more than 30% of all transactions involving a financially distressed party as well as the average revenue of this party nearly tripling to $401M. Additionally, 62.5% of announced transactions involved a divestiture. While improved industry outlooks from the rating agencies signal a better 2025, the M&A landscape in 2024 suggests that recovery continues to be uneven, and systems will likely continue to search for stronger partners that can help them expand their offerings while pursuing financial stabilization.
