By Megan R. Wilson and Rebecca Adams

In today’s issue:

• Hospital mergers are picking up again, with 40 deals announced in the first half of 2026 alone
• The biggest deals are getting bigger, prompting concerns about rising costs for patients
• Financial pressure is pushing hospitals to rethink their business models and look beyond inpatient care

Good afternoon, and thanks for checking in with Health Brief. Deal activity throughout the health care industry has been in flux since the pandemic, but, over the next few days, I want to take a closer look at sectors that are experiencing a major investment rebound: hospitals, drugmakers and medtech.

I’m leaning on my WP Intelligence colleague Rebecca Adams, for the hospital portion today, while jumping into my own research on pharma and health tech. Let’s dive into some of what’s driving it, and what some of the ripple effects might be.

Got any health care M&A insights? Reach out. You can find me at megan.wilson@washpost.com — or message me securely on Signal at megan.434. And what health industry topic would you like to see Rebecca write 2,000 words about? Let her know: rebecca.adams@washpost.com.

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Sutter Health and Allina Health are pursuing a merger that would create a $26 billion behemoth. (Rich Pedroncelli/AP)

The number of U.S. hospital mergers and acquisitions is climbing again, as health systems brace for financial pressure from federal policy changes and continue to look for new ways to expand beyond traditional hospital care.

Forty deals were announced in just the first half of 2026, according to Kaufman Hall — a sharp rebound from 2025, when deal activity hit a 15-year low of 46 agreements over the full year.

WP Intelligence Lead Health Care Analyst Rebecca Adams breaks down the numbers and the forces behind the number of deals in her latest report.

Why it matters: Consolidation can help struggling hospitals stay open, particularly in rural and underserved areas, and provide large health systems more leverage in negotiations with insurers. However, there are several studies showing that hospital mergers can also drive up costs for patients — sometimes by as much as 65 percent, according to a Biden-era Department of Health and Human Services report.

→ And lawmakers in Washington are taking notice. Joel White, president of the Council for Affordable Health Coverage, testified about consolidation in congressional hearings four times between November and January.

“What I saw was strong bipartisan concern with just how consolidated markets have become,” White, who also lobbies on behalf of pharmaceutical interests, told Rebecca.

“Every time a dominant health system swallows up a competitor or physician practice, it gains more power, raises prices, and squeezes employers and families,” White said.

The deals are getting bigger: The rebound isn’t just about volume. Mega-mergers and deals involving systems in different parts of the country are also taking shape.

• Sutter Health and Allina Health are pursuing a merger that would create a system spanning California, Minnesota and Wisconsin, with 39 hospitals and more than $26 billion in annual revenue.
• Lifepoint Health acquired eight hospitals across six states in June from ScionHealth. The combined institution includes 68 community hospitals, more than 70 rehabilitation and behavioral health hospitals, and over 300 other sites of care.
• Sanford Health completed its acquisition of Minnesota-based North Memorial Health this week. The system now includes 60 hospitals, 310 clinic sites, 60 pharmacy and retail locations, 145 senior care communities, and 4,950 physicians and advanced practice providers.

→ Cross-market deals can face less antitrust scrutiny because it is harder for regulators to show that they reduce competition in a single geographic market, experts said.

But research suggests consumers can still feel the effects: Prices rose nearly 13 percent six years after cross-market acquisitions, according to a 2024 study that looked at claims data. For systems that had made four or more acquisitions, prices jumped roughly 16 percent.

What’s driving the shift: Experts point to policy changes and cuts to Medicaid that have resulted in an increase of uninsured patients less likely to be able to pay for care, in addition to regulatory shifts that encourage hospitals to move some services away from high-cost inpatient care to outpatient clinics as a way to cut Medicare costs, further decreasing their revenue.

→ Hospitals are responding by broadening what they offer, said Zach Gaumer of the Bipartisan Policy Center. The goal is to “diversify” their business and capture more care as it moves outside the hospital.

The hospitals pursuing deals are increasingly under financial strain, with the share of financially distressed hospitals involved in deals nearly tripling in recent years.

That doesn’t necessarily mean hospitals are on the brink of collapse, said Courtney Midanek, a managing director at Kaufman Hall. Instead, she said, executives are thinking further out: How can they remain financially sustainable over the next three, five or more years?

What to watch: More deals are likely. Midanek said that hospital executives have been having exploratory conversations that can take months to surface publicly. In the meantime, regulators will be monitoring several major combinations that have already been announced.

Read the full report: “Hospital consolidation is back. What to expect next.”

“Fall vaccine guide: What to know about covid, flu and RSV shots this year,” Lena H. Sun reports at The Post.

“Takeaways from Massachusetts, where generational challenges fizzled,” reported The Post’s Erin Cox and Laura Beveridge.

“McKesson confirms data theft in cyberattack involving third-party apps,” Sy Mukherjee reports for Healthcare Dive.

“Healthcare tops the Democrats’ to-do list if they win control of the House in 2026,” Sahil Kapur and Scott Wong report at NBC News.

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