How State Laws, Regulations Could Shape Hospital Deals in 2025

Healthcare attorney Colin Luke was quoted by Modern Healthcare about the anticipated rebound in hospital mergers and acquisitions (M&A) in 2025, tempered by new state oversight laws. Even though announced hospital deals declined 13 percent last year, activity is expected to rise, albeit with a potential shift in focus from hospitals to outpatient facilities because of prolonged regulatory reviews. Industry professionals also predict that healthcare systems will look for opportunities to acquire financially struggling hospitals, especially as some national systems divest in uncompetitive markets. The article additionally highlighted concerns regarding potential Medicaid funding cuts under President-Elect Donald Trump, which might increase the uninsured population and influence defensive M&A strategies. Mr. Luke summarized the current state of play.

"There are a lot of divestitures going on," he commented. "Health systems don't want to have a single hospital in a state. They want enough market concentration for a hub-and-spoke model where they can negotiate better contracts with payers or employers. There is a lot of concern about what is going to happen with Medicaid."

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