Special Report: Healthcare M&A Predictions for 2026

Read what trends our team believes will shape the healthcare industry and M&A market next year. They share thoughts on the macro-operating environment for hospitals and trends in acute care system consolidation. Several themes emerge. Welcome to 2026.

(1) Organizations that stand still will be left behind

Jordan Shields

The widening gap between strong and weak health systems is becoming one of the defining features of today’s M&A environment. Hospitals that had long assumed they’d have partnership options when they were ready to enter the market are increasingly discovering that the pool of interested partners is shrinking. As strong buyers survey an uncertain future, they are increasingly cautious about absorbing distressed balance sheets, aging infrastructure, and challenged operations even when presented with opportunities to serve attractive markets. This divergence creates real risks for organizations that wait too long to seek a partner or assume options will always be available. While transactions are getting closed, advisers are having to work harder to generate interest and pull favorable terms from the market. Unfortunately, the expectation of Rural Health Transformation Program funding and optimism that OBBB cuts will never hit seem to be giving false hope to hospital systems that should be actively pursuing partnership alternatives instead of standing still.

(2) Scale as a strategic imperative

Rex Burgdorfer

Stephen Lipstein, the former CEO of BJC Healthcare in St. Louis, wrote an excellent article in The New England Journal of Medicine in October titled “Insight into Corporate Governance – What Motivates Hospitals and Delivery Systems.” In it he describes the strategic imperatives of scale, while dispelling myths of what he calls the “corporatization” of medicine.

The growth of integrated health systems he argues can act as “a vehicle for efficient deployment of human, physical, and financial capital to achieve a healthcare mission.” Consolidation allows leaders to “make large investments into facilities and technology that serve more people and avoid cast duplication.”

Conversely, Lipstein contends that “small systems and stand-alone hospitals have difficulty recruiting specialists, payer contracting, quality programs, expanded and re-defined provider roles, and access and equity initiatives.”

A word we heard frequently when advising health systems on merger and acquisition transactions in 2025 was durability. Leaders are increasingly concerned with the sustainability of their positions in the face of current financial and clinical headwinds. Protecting and allocating is paramount. “The delivery sector must have the financial capacity to invest in workforce skill development and training, renewal and expansion of patient care infrastructure and technology, and business and enterprise management systems.”

(3) The AMC Advantage in Hospital M&A

Brent McDonald

Academic medical centers (AMCs) will expand their role as some of the most influential drivers of hospital M&A in 2026, building on several consecutive years of elevated partnership activity. While AMCs continue to face the same macro-level pressures affecting all health systems—labor shortages, persistent cost inflation, payer-provider friction and rising capital needs—they also must navigate intensifying pressures on their research and teaching missions.  Over the last 18+ months, AMC activity has remained robust, with continued transactions and partnership explorations across major university-affiliated systems as AMCs seek scale, diversification of care sites, and strengthened financial footing. AMCs are increasingly motivated by competitive threats from rapidly growing regional systems, national multi-state platforms, PE-backed ambulatory companies, and ongoing technological migration of complex care out of urban academic hospitals and into outpatient settings. As a result, AMCs are prioritizing affiliations that secure a stabilized regional referral base —an increasingly critical factor in supporting sustainable academic and research enterprises. To their structural advantage, AMCs generally bring strong reputations, high-quality outcomes, advanced specialty capabilities, and deeply embedded investments in digital technologies and enterprise EHRs, all of which remain attractive to community hospital boards seeking mission-aligned partners. In 2026, community hospitals and not-for-profit boards are expected to continue to show interest in AMC partnerships, drawn by the perceived long-term stability, quality focus, and local, regional missional commitment that university-affiliated systems offer. As competitive and technological pressures accelerate, AMCs seem poised to opportunistically remain among the most active and sought-after partners in the hospital M&A landscape.

(4) Expansion of non-equity partnerships

Farley Reardon

As headwinds gain strength, health systems, both large and small, pursue options for durability and sustainability. Regional expansion continues to overcome headwinds and create larger integrated networks of access points both through the addition of community-based hospitals and other ancillary locations to meet the health care needs across an expanding region. Uncertain of the financial risk to all from the 2025 Budget Reconciliation Act, or OBBBA, and larger health systems unsure how to respond to calls from surrounding hospital systems and providers, some health systems will look for alternatives to full integration through non-equity partnerships. The Reconciliation Act offers one option to fund alignment through the creation of the Rural Health Transformation Program. The intent of this $50 billion program is to provide resources for states to “strengthen rural communities across America by improving healthcare access.”

The RHT program provides new funds that may help offset the cost of alignment to meet the strategic goals of the program. These goals are primarily the same goals most health systems have historically targeted – support healthier communities, sustainable access, workforce development, and innovative care. While partnering through clinical or shared services programs allows for maintained independence and expanded access to supplemental resources, it may also create hurdles when the independent system’s needs become more acute for financial investment in operations and capital. Based on the planning for long-term needs, independent systems should evaluate these non-equity partnerships just as carefully as a full integration or alignment relationship. Often, these alignment agreements are less scrutinized with no change in ownership and typically with a “friendly” or strategic partner, but these non-equity partnerships should be thoroughly evaluated to make sure it is for shared, long-term benefit.

(5) More children’s hospital partnerships

Casey Webb

Providers of pediatric services are facing significant headwinds. For the last two decades, the breadth of pediatric services offered at community hospitals has decreased significantly, and those services have become more centralized within children’s hospitals and academic medical centers in urban locations. This trend was historically driven by challenges in Medicaid reimbursement, as a large percentage of pediatric services are covered by Medicaid. During the pandemic, staffing shortages further drove community hospitals to shift staff toward the adult side of facilities and reduce pediatric services.

Now with recent cuts in federal research funding and HR1’s looming threats to Medicaid, many children’s hospitals and pediatric inpatient units are facing an existential crisis. Providers of pediatric services can address these challenges through purposeful partnership models. Strong partnerships can reinforce regional access to care, improve quality, stabilize staffing, strengthen ties with the clinicians, and accelerate research by combining population pools and funds.

(6) Investing Ahead of the Curve

Chris Benson

Healthcare leaders often ask what will be different this time. The answer is not a single piece of legislation (regardless of beauty), regulation, or technology. It is the accumulated weight of pressure on organizations, forcing deferral of internal investment before the proverbial roof leaks.

Warren Buffett advocates that winning organizations keep investing through cycles, especially when things feel uncertain. In healthcare, that distinction is becoming clearer. While some organizations are reinforcing their foundations, others appear to be placing their bets on hope and legacy to carry them forward.

Over the past year, we have seen tangible signals of this divide. Many organizations have added bandwidth focused on innovation, advanced IT, analytics, and some are notably investing in coaching for the C-Suite. This signals an understanding that the challenges ahead require more than yesterday’s operating model and competencies.

Organizations investing across people, process, and capability are in a better position to respond faster, execute growth strategies more successfully, and exceed their patients’ needs. Boards and executive teams should assess if they are optimally positioned to set the investment bar at thrive or survive.

(7) Buyers’ Financial Diligence will be Earlier and more Aggressive

Adam Davis

Last year, I predicted that more distressed deals would occur in the hospital industry, and I believe that will continue in 2026. The gap between strong, well-capitalized operators and financially struggling ones continues to widen, and more hospitals and health systems will be seeking partners as a last resort. This means that 2026 will remain a “buyers’ market” whereby prospective suitors will maintain their negotiating leverage over sellers. This will result in buyers continued aggressive financial diligence earlier in processes than in previous M&A environments. They will compile robust diligence request lists, quickly consider third party advisors to assist in operational performance assessments, and focus on necessary upfront cash infusions to stabilize the target before committing to longer-term strategic capital investments. These considerations will be heavily factored into buyers’ detailed review of acquisition opportunities well before an LOI signing and will continue all the way to a potential definitive agreement. Sellers thus need to be strongly prepared to respond to buyers’ assertive behavior to achieve successful outcomes and maintain an organized transaction process. This entails performing more in-depth upfront internal financial analyses and quickly establishing an internal framework for managing various parallel workstreams.

For more information about Juniper’s work and experience, please contact us at 312-506-3000 or info@juniperadvisory.com.