Why there may be more hospital mergers in the second half of 2024

Thus far in 2024, the quantity of hospital mergers is roughly equal to the quantity of agreements declared in the previous year.The healthcare consulting firm Kaufman Hall reports that in the first half of 2024, there have been 31 hospital mergers that have been announced. Kaufman Hall reports that there were 65 hospital deals announced in 2023, up from 53 transactions in 2022.Twenty acquisitions were made in the first quarter of 2024—the most in a first quarter since 2020—but eleven merger announcements were made in the second quarter.Despite fewer sales, the second quarter's transacted revenue of $10.8 billion was still very close to all-time highs, according to Kaufman Hall.According to Anu Singh, managing director of Kaufman Hall, there are several reasons that could contribute to increased deal-making in the second half of the year and beyond, independent of the quantity of agreements or revenue.

Singh listed several elements in an interview with Chief Healthcare Executive® that ought to encourage further hospital mergers. And he adds a major contributing factor is that many hospitals are still having financial difficulties, even while certain hospitals and health systems are doing better. While they have been able to somewhat recover, several smaller hospitals are looking to combine. They want to find a deal before things get worse. Additionally, companies are saying things like,We're making every effort to lessen the negative cash flow, but we'll never get back to that.