Hospital mergers are gaining momentum as drastic cuts to Medicaid spending under the One Big Beautiful Bill Act loom. A new analysis from Kaufman Hall reported 46 hospital and health system transactions in 2025, with merger activity picking up in the third quarter and sustaining momentum into the fourth quarter.
In this article: What drives hospital mergers? | Merger activity trends | FAQ | Conclusion | Disclaimer | Announcement Line
What drives hospital mergers?
The One Big Beautiful Bill Act, signed into law by President Trump, is projected to reduce federal spending on Medicaid insurance for poor Americans by about $1 trillion over a decade. This significant reduction in funding is driving hospital mergers as healthcare providers seek to consolidate and reduce costs.
Merger activity trends
According to Kaufman Hall, the percentage of financially distressed hospitals being part of merger activity has been steadily increasing since 2022 and is likely to continue into 2026. The most recent data from Kaufman Hall’s National Hospital Flash Report showed hospital financial and operational performance declined in November, with lower volumes across all services.
Merger details
California-based Prime Healthcare, an investor-owned chain, recently acquired 214-bed Franciscan Health Olympia Fields and an affiliated physician group in the south suburb of Chicago. This acquisition is part of a larger trend of hospital mergers and acquisitions in the region.
FAQ
- What is driving hospital mergers? Hospital mergers are being driven by the looming Medicaid cuts under the One Big Beautiful Bill Act.
- How many hospital transactions occurred in 2025? There were 46 hospital and health system transactions in 2025.
- What is the projected reduction in federal spending on Medicaid? The projected reduction is about $1 trillion over a decade.
Conclusion
In conclusion, hospital mergers are gaining momentum as the healthcare industry prepares for significant cuts to Medicaid spending. As the financial pressure on healthcare providers continues to grow, we can expect to see more mergers and acquisitions in the coming years.
Disclaimer
This article is for informational purposes only and should not be considered as financial advice.
Announcement Line
This article is based on publicly available financial information.