The health care transactional landscape may have been quieter than anticipated at the beginning of 2025, with providers experiencing financial strains, but the year finished out with a high level of activity, marked by opportunistic growth strategies. Transactions will continue to be anything but “cookie-cutter.” In this article, we highlight eight M&A trends demonstrating how the financial landscape, regulatory considerations, cross-disciplinary strategies and market disruptors shaped deals in 2025 and how these same factors will continue to impact deals in 2026.
1. Non-Core Asset Carveouts
Over the past year, we saw growth in strategic divestitures involving non-core assets. One area contributing to this momentum relates to the proliferation in the sale of outreach laboratory testing businesses by health care systems. This trend is driven by a combination of financial and reimbursement pressures, operational challenges and the need for greater efficiency in the provision of non-esoteric outreach laboratory services. As the market continues to evolve, we anticipate that more health care systems will find value in collaborating with lab operator specialists. Whether through joint ventures, asset sales or other arrangements, these strategic decisions will be aimed at delivering greater financial sustainability and improved patient care across the industry.
Bottom Line: Collaboration between health care systems and lab operators will continue to grow.
2. Antitrust Enforcement and Federal Policy Considerations
The first year of antitrust enforcement under the Trump administration signaled a return to more predictable merger review grounded in traditional theories of harm. Based on our experience, both the Antitrust Division of the Department of Justice and the Federal Trade Commission (each an “Agency,” and collectively, the “Agencies”) have renewed their willingness to work with parties on settlement solutions, such as divestitures or behavioral remedies, rather than pursuing protracted litigation that can derail transactions. While deals resulting in large market shares will continue to face scrutiny, the current enforcement environment under this administration offers a greater opportunity to resolve concerns collaboratively with the Agencies. Additionally, 2025 brought the arrival of the new, complex Hart-Scott-Rodino premerger notification requirements, increasing preparation time but allowing greater narrative flexibility to hopefully facilitate efficient review and quicker clearance of lawful transactions.
One thing to watch for in 2026 is the continued development of “America First Antitrust,” reflecting the Trump administration’s promotion of its own policy goals through antitrust enforcement. This regulatory environment is poised to have a heightened impact in an election year, as limited legislative progress places greater emphasis on Agency-led antitrust policy enforcement. Against this backdrop, legislative momentum on M&A policy is expected to be minimal, as election-year dynamics and divided government constrain opportunities for meaningful statutory change.
Bottom Line: Agency enforcement will remain active, but will likely be marked by a return to resolution through settlement solutions, such as divestitures or behavioral remedies, rather than protracted litigation.
3. Real Estate Trends
We expect that rising costs, hospital funding cuts and a projected decade-low supply of new medical outpatient buildings will lead to prioritization of mergers, acquisitions and the retrofitting of existing facilities over new construction. In 2025, we observed a rise in outpatient care, especially at Ambulatory Surgery Centers (“ASCs”), driven by technology, convenience and cost-effectiveness. As noted in further detail below, we expect ASCs to continue performing strongly in 2026 due to demand for cost-saving strategies and recent changes the Centers for Medicare & Medicaid Services (“CMS”) made to increase payments and expand covered procedures. We also anticipate hospitals and health care systems will increasingly focus on experiential campus development, integrating retail, hospitality and residential uses into their facilities to drive growth in expanding markets. These projects will increasingly rely on creative financing and philanthropic campaigns, such as developer-led solutions and foundation funding, to bypass traditional financial headwinds.
Bottom Line: Expect a strategic pivot toward efficiency-driven capital allocation.
4. Private Equity
Despite broad tariffs, major policy shifts and mounting trade tensions that slowed deal activity through much of the second quarter of 2025, health care M&A activity finished the year with record deal sizes and volumes. Meaningful drivers included: 1) the return of sponsor-to-sponsor deal activity; 2) a rise in transactions exceeding $1 billion in enterprise value; and 3) increased exit activity for sponsor-owned assets near the end of their fund life cycle. We remain cautiously optimistic that sponsor-driven health care M&A will sustain this upward momentum and pace in 2026. We expect continued uncertainty with respect to the U.S. regulatory and reimbursement policy to steer sponsors away from subsectors most susceptible to policy shifts and also anticipate a continued interest in tech-enabled assets, retail health care, health services, lab and diagnostic platforms pursued through bolt-ons, carveouts and sponsor-to-sponsor transactions.
Bottom Line: We remain cautiously optimistic that sponsor-driven health care M&A will sustain upward momentum and pace in 2026.
5. ASC Transactions
The 2026 Hospital Outpatient Prospective Payment System (“OPPS”) and ASC Payment System final rule increases payment rates under the OPPS by 2.6%. However, possibly more importantly, CMS added approximately 560 codes (nearly half of which were already being paid in the hospital outpatient setting and the other half of which are being removed from the inpatient-only list) to the ASC-covered procedure list (“CPL”). Fifteen of these codes are cardiology-related, including the highly anticipated cardiac catheter ablations. As more codes are added to the CPL, and as patients continue to seek care at less expensive and more convenient locations, we will continue to see care move from hospital outpatient departments to an ASC setting. Coupled with an often-favorable financial accretion to the bottom line, there will continue to be interest in the acquisition of ASCs from an M&A perspective. In addition, office-based labs and ASCs continue to be favored vehicles for physician investment in lieu of continued Stark Law-prohibited hospital ownership/expansion, and patients and payors continue to demand access to these lower-cost, proven higher-quality sites of service.
Bottom Line: 2026 is expected to bring continued growth in complex ASC orthopedic, cardiac and spine procedures with a push towards reductions of certificate of need requirements in many states, technology advancements and further expansion of national platforms.
6. Rural Health
2026 appears poised to bring continued financial pressures to many, but not all, rural hospitals. As discussed here, $50 billion will be distributed throughout all 50 states over a five-year period under the Rural Health Transformation Program (“RHTP”). However, these amounts will not be directly allocated to rural hospitals but will instead be provided to the states for distribution under state-structured plans. Because states retain substantial discretion over distribution channels, whether through direct grants, managed care intermediaries or regional collaboratives, providers should actively engage with state agencies to understand specific participation requirements and funding priorities. Independent rural hospitals facing financial difficulties will likely continue considering potential relationships with a health system, whether as part of an affiliation or an acquisition, or will look for alternative pathways to affiliate with similarly situated rural providers, even if not within a formal system structure. Despite these realities for many providers, for those hospitals leaving 2025 in a strong financial position, 2026 holds the potential for not only maintaining such a position, but for continued growth.
Bottom Line: Rural providers will need to navigate how to best position themselves within their state’s RHTP funding paradigm and remain nimble to pursue potential affiliation strategies with other providers.
7. Pharmacy
We are seeing an increased focus on transactions involving specialty and mail-order pharmacies that provide high-touch care for patients with complex disease states. There is also a trend of small chain pharmacy acquisitions by health systems, as care continues to move toward the home/ambulatory/post-acute setting for self-administered drugs. In the pharmacy benefit management (“PBM”) space, vertical consolidation in the industry continues as health plans, pharmacies and technology service providers look to expand into providing PBM or PBM adjacent service offerings directly to clients such as employers, health plans, hospices and long-term care providers.
Bottom Line: Consolidation will be a driving force impacting patients’ pharmacy options in 2026.
8. The AI Impact
In 2026, we expect Artificial Intelligence (“AI”) to be a significant driver of innovation, impacting health systems in four discrete areas – each of which will undoubtedly shape the M&A landscape in 2026 and for the foreseeable future. We expect health systems to begin to move from piloting to general use of AI, with early realization of value propositions. Health systems will mature from managing AI as a technology to management of AI as a workforce member, requiring broader organizational knowledge, skill and competence. We anticipate that medical staff and clinical leadership will hold expanded roles in monitoring and utilizing metadata regarding provider behavior to align with health system strategy. Last but not least, we expect health systems to expand the use of equity and in-kind contributions to incentivize the development of AI.
Bottom Line: Expect significant earnings before interest, taxes, depreciation and amortization multiples for sellers that offer AI-based value creation tools or who have successfully navigated how to deploy AI in their enterprise.
The following Hall Render attorneys contributed to this article. Please contact the appropriate author listed below for additional information regarding the specific topic areas noted.
- Colleen Powers
Mergers & Acquisitions
(317) 977-1471 | cpowers@hallrender.com - John Bowen
Mergers & Acquisitions
(317) 429-3629 | jbowen@hallrender.com - Liesl Muehlhauser
Non-Core Asset Carveouts
(317) 977-1438 | lmuehlhauser@hallrender.com - Hannah Clarke
Antitrust Enforcement and Federal Policy Considerations
(317) 429-3615 | hclarke@hallrender.com - Abigail Kaericher
Antitrust Enforcement and Federal Policy Considerations
(202) 742-9674 | akaericher@hallrender.com - Dougie Barnard
Real Estate Trends
(317) 977-1484 | dbarnard@hallrender.com - Rubin Pusha III
Private Equity
(773) 550-6859 | rpusha@hallrender.com - Jennifer Struck
ASC Transactions
(317) 429-3674 | jstruck@hallrender.com - Michael Greer
ASC Transactions
(317) 977-1493 | mgreer@hallrender.com - Andrew Heberling
Rural Health
(248) 740-7505 | aheberling@hallrender.com - Julie Lappas
Pharmacy
(317) 977-1490 | jlappas@hallrender.com - Michael Batt
The AI Impact
(317) 977-1417 | mbatt@hallrender.com
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
