For U.S. health systems, the 2025 market has been volatile, to say the least. From Medicare and Medicaid cuts to escalating costs, health systems have had to adapt to a sweep of changes in the industry. These headwinds have taken a toll on M&A volume, as health systems have had to slow down their pace. Compared with the first half of 2024, M&A activity from health systems has declined by 16% in the first half of 2025 (57 deals), with investment in hospital facilities falling by more than 50%, according to data captured in the LevinPro HC platform.
Activity in the third quarter has remained stagnant, with only eight transactions announced since July 1.
With the market in flux, we’re examining some notable transactions and trends that have defined the health system industry in 2025 so far.
Health system mergers have slowed significantly in the first half of 2025
Only five mergers have closed so far in 2025 (four if you only count U.S.-based deals), a much slower pace than the 12 announced in 2024.
The largest merger in the United States was Prime Healthcare’s acquisition of Central Maine Healthcare, which generated more than $500 million in net patient revenue in 2023 (the most recent information available), and serves approximately 400,000 patients in central, western and mid-coast Maine.
Prime Healthcare will become the sole corporate member for Central Maine Healthcare. The deal includes the following facilities: Central Maine Medical Center, Bridgton Hospital, Rumford Hospital, Rumford Community Home, Bolster Heights, Maine College of Health Professions, CMH Cancer Care Center and a combination of more than 40 physician practices.Other major health system deals this year include Emory Healthcare and Houston Healthcare’s merger in Georgia, and St. Luke’s University Health Network’s acquisition of Grand View Health in Pennsylvania.
Health systems are still pushing into the outpatient market
Hospitals are no longer the priority for health systems in the acquisition space. Increasingly, organizations are focusing on expanding outpatient services rather than bolstering bed counts. As of mid-August, health systems have announced more than 30 transactions in the physician space alone, along with acquisitions for medical outpatient buildings and ambulatory surgery centers.
Novant Health has been one of the most active acquirers in 2025, acquiring five physician practices and a diagnostics center. Its most recent deal was for Performance Orthopaedic Surgery & Sports Medicine, which offers adult and pediatric orthopedic and sports medicine care for patients in and around the Raleigh-Durham, North Carolina, metro area.
We’d be remiss not to mention Ascension’s major acquisition of AmSurg Corp., one of the largest operators of ambulatory surgery centers in the country. No price was officially disclosed, but certain media outlets reported the deal was valued at $3.9 billion.
Once finalized, the deal for AmSurg would add more than 250 ambulatory surgery centers across 34 states to Ascension’s network.
Investing in emerging technologies and AI
Health systems are exploring new areas to invest in and expand their networks, such as emerging technologies to enhance patient care.
In May, Cedars-Sinai and Redesign Health launched a new Digital Innovation Platform, where they aim to collaborate and “nurture a digital innovation ecosystem in Los Angeles to improve the delivery of high-value healthcare.”
The press release from Cedars-Sinai previewed some of the technology the partnership will be focusing on, including AI, to build solutions for personalized medicine, specialty care access, hospital workflow optimization and increased care coordination
Other healthcare systems are also investing heavily in new AI technologies.
Aidoc, a leading clinical AI platform, announced a $150 million financing round led by General Catalyst and Square Peg, with participation from NVentures (NVIDIA’s venture capital arm) and four major U.S. health systems, including Hartford HealthCare, Mercy, Sutter Health and WellSpan Health. This round also includes a $40 million revolving credit facility, bringing the company’s total funding to $370 million.
