Hospital merger activity hit a 15-year low in 2025, as an uncertain policy environment following the inauguration of President Trump caused many health systems to delay major strategic decisions. However, even with more regulatory clarity, health system M&A activity is unlikely to return to pre-COVID levels for an important structural reason: the most attractive mergers have already happened. From 2010 to 2025, over 1,300 hospital M&A transactions were announced, ranging from single-hospital acquisitions to billion-dollar megamergers. Over that period, the number of hospitals affiliated with health systems rose from 56 to 69 percent, including 80 percent of urban hospitals and a majority of rural hospitals. Acquiring systems pursued the highest-performing independent hospitals and strategically compatible smaller systems first. The remaining M&A candidates are more likely to involve distressed assets or potentially unnavigable regulatory hurdles.
 
As hospital independence declined, local hospital markets became more concentrated, with over two thirds of metropolitan areas served by three or fewer health systems in 2024; one in five markets is controlled entirely by a single health system. We know that health systems with greater market concentration charge higher prices, leading federal antitrust regulators to ramp up scrutiny of proposed deals. Regulators still expect health systems to advance toward value, however, just not through scale. Instead, systems are expected to look inward, focus on operational efficiencies, and unlock the full promise of the scale they have already achieved but not fully integrated.