Hospital mergers and acquisitions (M&A) have significantly declined in the first half of 2025, with only five transactions in Q1, down from 20 and 15 in the same periods of 2024 and 2023. Economic uncertainty and recent policy changes have led to a cautious market, evident in the smaller size of second-quarter deals and the absence of mega mergers involving parties with annual revenues exceeding $1 billion. This slowdown raises concerns about the long-term implications for hospital consolidation and funding, especially as Medicaid spending is projected to decrease sharply. However, the potential effects of the One Big Beautiful Bill Act may prompt a resurgence in M&A activity later in the year.
