Independent practices are increasingly merging or selling to larger health systems to negotiate better payment rates and manage regulatory burdens, with a 46% rise in hospital-owned physician practices since 2012. However, this consolidation trend raises concerns about reduced competition, higher costs, and diminished physician autonomy, as many smaller facilities may close due to market overlap. The Federal Trade Commission has intensified scrutiny of these mergers, blocking several high-profile deals since 2020.
The healthcare industry is witnessing significant cross-market mergers aimed at enhancing care delivery and ensuring sustainable growth. Notable mergers include Sanford Health and Marshfield Clinic Health System forming a 56-hospital network, Northwell Health and Nuvance Health creating a nonprofit system with 28 hospitals, and BJC HealthCare merging with Saint Luke's Health System to consolidate $10 billion in revenue. Additionally, Risant Health acquired Geisinger Health, while Atrium and Advocate Aurora established Advocate Health, a 69-hospital system with over 155,000 employees.
Hospital mergers and acquisitions are accelerating, driven by financial pressures and the need for operational efficiency. Larger systems can enhance patient care through advanced technologies and better workforce development, while regulatory scrutiny from the FTC is increasing, particularly regarding market consolidation and competition. Cross-market mergers are gaining traction as health systems seek to diversify and expand access without eliminating competition in local markets.
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