Hospital M&A surges in Q3, up 79% from Q2: Report

The third quarter of 2024 saw a significant increase in hospital and health system mergers and acquisitions compared to the previous quarter as well as the third quarter of 2023, according to an Oct. 31 report published by Cain Brothers, a division of KeyBanc Capital Markets.

Third-quarter hospital M&A deals were up 79% over the second quarter of 2024 and 25% over the third quarter of 2023, according to the report. 

Five things to know:

1. Cain Brothers expects the number of hospital and health system mergers, acquisitions and divestitures to continue into 2025 at an increasing rate  as financial challenges persist.

2. The third quarter of 2024 saw a significant number of for-profit conversions to nonprofit, primarily because of divestitures by Dallas-based Steward Health Care and Tenet Healthcare.

3. Tenet sold 14 hospitals this year, including five in the third quarter. Steward had operated more than 30 hospitals before filing for bankruptcy and restructuring. The company transferred ownership of nearly all of its hospitals — while closing others — in the third quarter. 

4. The third quarter also saw a number of hospital divestitures by national systems to regional health systems.

5. Standalone hospitals are increasingly seeking partnerships with larger systems in exchange for capital investments and access to integrated care networks. 

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