The LevinPro HC team is working hard on the upcoming 2026 Healthcare Services Acquisition Report, so we wanted to give a quick preview of some of the data and trends we have found. Our annual report covers healthcare M&A in the services sectors, which include Hospitals, Behavioral Health, Home Health & Hospice, Physician Medical Groups, Rehabilitation and more. Last year, we expanded coverage to include the eHealth sector because technology is integral to the U.S. healthcare delivery system, from revenue cycle management to artificial intelligence.
Here are some of the key trends that will be explored in the report.
Healthcare M&A Volume Hits a 3-Year High
There were 1,793 deals announced in 2025, an approximate 7% increase from 2024 volume but about a 4% decline from 2021 activity levels. M&A activity in the Physician Medical Group sector accounted for 29% of all deals, a pattern that has held for most of the decade. Private equity firms are bullish in the physician market, especially for dental practices, and have committed vast amounts of capital to grow their platform companies. We saw a few major exits this year, but most deals were standard roll-up acquisitions.
We also tracked elevated activity in the eHealth sector, accounting for 17% of all volume in 2025. Revenue cycle management firms were unsurprisingly hot targets, driving a significant amount of deal volume. The reimbursement market has become increasingly volatile, so stabilizing finances is a priority for many providers, and investors are looking to capitalize on the demand.
Some sectors also saw large year-over-year increases in activity. Dealmaking in the Behavioral Health Care, Home Health & Hospice and Laboratories, MRI & Dialysis sectors experienced a double-digit jump from 2024 to 2025.
Other sectors, like Hospitals and Outpatient Surgery Centers, were buffeted by headwinds, especially in the reimbursement environment, which slowed deal activity.
Private Equity Activity Tumbles to 5-Year Low
There were 590 deals struck by private equity investors in 2025, a decline of about 4% from 2024 and a 29% decline from 2021. It’s the lowest level of private equity activity we’ve seen since 2020, based on both deal volume and share of overall healthcare M&A activity. In 2025, private equity investments accounted for only 33% of deal activity across healthcare services and eHealth, down from 37% in 2024 and 44% in 2021.
Private equity firms remain aggressive in some markets, such as Physician Medical Groups and Rehabilitation, where they account for roughly half of deal volume, but high interest rates and stricter state-level regulations appear to have left these investors with a smaller appetite for the healthcare market.
The Hospital Market Was Defined by Smaller, Strategic Acquisitions
Although volume in the Hospital market decreased by only a handful of deals, the number of beds and hospitals acquired declined by 26% and 32% year over year, respectively. There were only 15 health system mergers (in both the United States and international markets) in 2025, so most of the deals involved independent hospitals, such as short-term acute facilities or critical access hospitals. The volatile reimbursement market, growing liabilities and surging operating costs have forced independent hospitals and organizations to seek larger partners, creating a wave of smaller deals rather than large-scale mergers.
Other data highlights this trend. The average revenue for acquired hospitals in 2025 was 50% lower than in 2024, and the average EBITDA was 83% lower than the previous year.
High Demand in Outpatient Care Services
One of the new datasets we’ve compiled for our annual report is the healthcare M&A activity across outpatient care segments, including health clinics, urgent care centers, freestanding emergency rooms, outpatient surgery centers and more. Although deal activity slipped by approximately 11% in 2025, annual activity has averaged 130deals over the past five years, with nearly $50 billion in announced spending since 2021.
The variety of investor types in the market underscores the extent to which the healthcare industry is shifting toward outpatient care. Health systems accounted for 13% of outpatient care deals since 2021, while private equity firms accounted for approximately 24%. REITS, real estate investment firms and strategic buyers are also investing heavily in this emerging market.
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