Healthcare Mergers and Acquisitions in 2025: Highlighting Significant Transactions in the Industry
In this vibrant and engaging world of healthcare, we witness a stirring blend of strategic maneuvers and economic pressures playing out across Q1 2025. Many community, rural, and independent hospital organizations banded together or aligned with larger entities, allowing them to continue delivering top-notch healthcare services to their dedicated audiences. This quarters also saw consolidation within the home health, hospice, and senior living space.
A recent Kaufman Hall report unveiled Q1 2025's lower-than-expected activity for hospitals and health systems, with only five transactions announced compared to the pandemic-era low of seven in Q3 2021. Market volatility due to tariffs and federal policy changes dashed the hopes for a more robust healthcare M&A scene.
State regulations saw a mixed bag of fortune, with Indiana's house passing legislation—House Bill 1666—requiring almost all healthcare M&As to be approved by a state board. Conversely, New Mexico saw a bill seeking increased oversight of healthcare M&A activity falter in committee.
Here are some of the most buzz-worthy mergers and acquisitions that took place among healthcare providers during Q1 2025:
Sanford Health & Marshfield Clinic Health System
In a combined effort, Sanford Health—a large rural health system based in Sioux Falls, S.D.—and Marshfield Clinic Health System—an integrated health system with locations in rural Wisconsin and Michigan's Upper Peninsula—united their forces in January. Dubbed as a non-profit integrated health system, the united entity will operate under the Sanford Health moniker, with MCHS becoming a region of the larger organization, maintaining its branding within said region.
Sanford proclaimed its intentions to invest a substantial $500 million into the Marshfield region over the next five years, a portion of which will be allocated towards migrating MCHS’s electronic health records to the Epic platform. This partnership follows years of attempts from both parties to collaborate with other organizations.
UnitedHealth Group & Amedisys
UnitedHealth Group's $3.3 billion acquisition of home health and hospice provider Amedisys faced antitrust concerns from the Department of Justice, leading to the DOJ's intent to block the deal in November 2024. UHG presented a response challenging the DOJ's claims and proposing to divest a minimum of 128 home health and hospice facilities, aiming to resolve competition concerns. The sale could see UHG operating just 10% of total home health services and 4% of hospice services in the United States.
Prime Healthcare & Ascension Illinois
In March, eight Ascension Illinois hospitals joined forces with Prime Healthcare, a for-profit health system with 51 hospitals across 14 states. The cost of this acquisition was set at $375 million, a combination of which Prime Healthcare plans to invest $250 million in facility, technology, and system upgrades.
The group of hospitals consists of four senior living and four post-acute care sites, including Holy Family Medical Center, Mercy Medical Center, Resurrection Medical Center, Saint Francis Hospital, Saint Joseph Medical Center, Saint Joseph Hospital, St. Mary's Hospital, and Saint Mary of Nazareth Hospital.
OSF HealthCare & Katherine Shaw Bethea Hospital
Katherine Shaw Bethea Hospital in Dixon, Ill. joined forces with OSF HealthCare, an integrated health system with 17 hospitals across Illinois and Michigan, on January 1, operating as OSF HealthCare Saint Katharine Medical Center. The deal, first announced in 2024, will maintain the six clinic locations of the hospital and offer OSF MyChart integrated with Epic.
University of Minnesota & Essentia Health
Negotiations between University of Minnesota and Essentia Health, aiming to create an all-Minnesota healthcare solution, have hit a bump in the road. The stalemate led Minnesota Attorney General Keith Ellison to intervene, aiming to jump-start discussions and prioritize the public interest in the resulting healthcare landscape.
Throughout Q1 2025, the healthcare sector displayed a dynamic landscape, with strategic mergers and acquisitions fueling the quest for quality healthcare services and operational efficiencies. Stay tuned for updates on the evolving healthcare M&A landscape and its impact on your community.
- Despite the vibrant landscape of healthcare in Q1 2025, the finance sector saw more subdued activity for hospitals and health systems, with only five transactions announced, as revealed by Kaufman Hall's report.
- In the realm of business, mergers and acquisitions continue to shape the healthcare industry, as demonstrated by the unified Sanford Health and Marshfield Clinic Health System, a partnership that involves significant investing, with Sanford committing to invest $500 million into the Marshfield region over the next five years.
