A new report on third quarter M&A activity in the healthcare sector found that this quarter’s hospital and health system transactions matched the third quarter of 2025, with 16 total announcements, which represented $8.2 billion in total transacted revenue. The report was released last week by Vizient, a healthcare performance improvement company headquartered in Irving, Texas.
The pace of announced mega-mergers could potentially make 2026 a record year for mergers of this size, according to the report. This year could be set to top the highest number of total annual transactions of all sizes since the Covid pandemic. The report was released just one day before the announcement that Rush University System for Health and Endeavor Health plan to merge in early 2027, pending regulatory review and approval.
The report also stated that the average annual revenue of the smaller party for these transactions was $586 million but mentioned that multiple “mega-mergers” were also announced. For these super-sized transactions, even the smaller organization had an annual revenue exceeding $1 billion. A few announcements fell just short of the $1 billion benchmark – the report concluded that this suggests M&A activity is increasingly involving larger organizations opting to partner together.
Meanwhile, larger and medium-sized organizations continued to pursue partnerships and expansion in order to offer more services and expand their geographical reach.
“Organizations of this scale continue to seek partners with a clear strategic rationale, driven by capability growth and access expansion, in anticipation of a changing environment. This activity has also been driven by organizations acting from a position of strength to secure transaction commitments, bolster their competitive position, and gain access to capabilities that enhance their communities long-term,” Vizient’s report stated.
Take the Rush-Endeavor Health’s merger, for instance.
The move would create a nonprofit health system with 12 hospitals, more than 400 care sites, and 46,000 employees across northern Illinois and northwest Indiana. If completed, the merger would create one of Illinois’ largest health systems. Rush, based in Chicago, is a nonprofit academic health system, while Endeavor Health, headquartered in Evanston, Illinois, is an integrated health system serving residents across northeastern Illinois. Under the proposed merger, the combined organization would operate under the well-recognized Rush name. Endeavor president and CEO J.P. Gallagher would lead the system, while Rush president and CEO Omar Lateef would become CEO emeritus and strategic advisor.
Leaders for the two health systems expressed a desire to further support the health of their surrounding communities, bringing together Rush’s academic and research capabilities with Endeavor’s community-based network. The announcement also includes a $1 billion investment funded by Endeavor Health, a large portion of which is set to support health initiatives that address the social determinants of health.
How this will impact employers, payers, patients, and the overall market in the Chicago area will serve as a potential example for how the broader uptick in M&A activity in the healthcare sector could impact access to affordable care in communities across the nation.
While this merger was between two in-state entities, Vizient’s report provided an example of how these partnerships are intended to expand service lines and build expertise while expanding into new markets. It points to two recent transactions by Intermountain Health, which is headquartered in Salt Lake City, Utah.The first deal led to the acquisition of two facilities in Idaho from Surgery Partners, and the second was a separate joint venture with AdventHealth in Denver.
The report provides some insight to short term trends affecting hospital mergers.
“The Q3 trends reflect a continued wave of partnership activity as organizations seek a path to reposition operations, particularly as financial and regulatory headwinds continue to mount,” according to the report. “A significant number of transactions points to larger strategic partnerships between organizations operating from a position of stability and strength. At the same time, a steadily active middle band of mid-sized hospitals and health systems is transacting proactively, before their options narrow.”
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