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Healthcare in the United States is rapidly evolving, and one of the driving forces behind that change is the rise of mergers and acquisitions (M&A). Many hospitals, clinics, and health systems are joining together to expand their reach, gain access to advanced technologies, and serve more patients. These strategic partnerships play an important role in how healthcare organizations operate and how patient care is delivered.
A conversation with healthcare executive Susan Fahmy, Vice President of Clinical Mergers and Acquisitions and Strategic Alliances at Mass General Brigham, helps illustrate why M&A activity is growing and what that means for those hoping to one day work in healthcare administration. Fahmy is a results-oriented strategic planner with over 20 years of experience in healthcare management. She leads Mass General Brigham’s network of domestic partnerships, including M&A, regional and national clinical affiliations, and care continuum collaborations, specializing in building relationships that advance the organization’s strategic objectives.
What are Mergers and Acquisitions?
A merger is when two separate organizations combine to form a new entity. They typically do so to join resources, expand services, and improve efficiency. True mergers are uncommon because it is rare for two equal companies to mutually benefit from combining.
Mergers can take on several different forms. A horizontal merger happens when organizations in the same industry, like two hospitals, combine in the same market. A vertical merger involves consolidating organizations at different stages of care, like a hospital buying an urgent care center. A cross-market merger occurs when healthcare systems in different geographic regions join together, which often allows for systems to expand and gain leverage with insurers. In recent years, cross-market mergers have made up a significant share of all mergers.
An acquisition is slightly different from mergers in structure. Instead of forming a new organization, one company purchases another and incorporates it into existing operations. The acquired organization may continue as a subsidiary or be fully incorporated into the parent company. In healthcare, this frequently takes place by larger hospital systems acquiring smaller hospitals, clinics, or physician groups. In addition to hospital transactions, Fahmy noted that many independent physician practices are being acquired by larger provider organizations, hospitals and health systems as part of this consolidation trend.
Healthcare mergers and acquisitions directly impact patient care. When healthcare organizations merge or are acquired, they often combine clinical departments, adopt the same electronic medical record, implement specialized technology, and align providers and administrators. Ideally, these transactions expand access to care but in some cases services may be closed or moved for greater efficiency, impacting local access. Also, costs often increase as a result of a merger or acquisition versus achieving greater efficiencies.
Why Healthcare Organizations Pursue M&A
M&A is driven by financial performance, changes in reimbursement, technology, and a focus on patient experience and care. After a decline in mergers and acquisitions from 2020-2023, largely due to the COVID pandemic, there has been a strong return of activity in the industry. Fahmy explained that post pandemic, “There were more distressed hospitals, because organizations that were on the brink prior to the pandemic were pushed over the edge. The pandemic compounded many of the financial challenges providers were already facing. Struggling organizations sought partnerships with stronger organizations to ensure their long-term viability.”
In 2026, companies in the healthcare industry are making deals to strengthen their financial position, gain market share, build new capabilities, and better position themselves for growth. According to a study published in the National Library of Medicine, “Over the past decade, US healthcare institutions have increasingly relied on diversification strategies to promote market growth and to improve financial solvency. The most prominent strategic method utilized during that period has been adding scale to organizations, thereby providing them with a larger patient population to care for.”
Fahmy backed this point, highlighting that there are fewer independent community hospitals left in the market. She says, “Many smaller hospitals have joined larger systems because it is really hard to be financially sustainable and independent. You need scale.” Fahmy also noted if done right, mergers and acquisitions can ensure a community resource stays a community resource, “If a provider organization is struggling, there is a risk that services will be reduced or cut. Ideally if a struggling organization joins a stronger one, clinical programs can remain local and be expanded.” This strength can lead to more services being offered in the community where patients live and the ability to attract and retain physicians, nurses, and other talent. Smaller organizations can gain access to new and expanded expertise, which may improve the quality and safety of care.
However, these transactions face scrutiny. Fahmy communicates there is significant regulatory oversight of healthcare transactions, especially in certain states, to ensure patients and communities benefit from a merger or acquisition and costs don’t rise unnecessarily. There is also increased focus on deals involving private equity. She states, “there have been transactions that have resulted in poorer quality, service reductions, hospital closures, and bankruptcies.” This attention demonstrates concerns over how certain partnerships and consolidations may negatively impact patient care and increase costs.
Strategic Differences: Nonprofit vs. For-Profit Healthcare
It is also important to recognize that incentives to merge can differ depending on whether an organization operates as a for-profit or nonprofit. For-profit healthcare organizations have to focus on financial returns and shareholder value, which can influence how they approach partnerships with other companies and their long-term objectives. Nonprofit systems must stay true to their mission and community needs. These goals and incentives shape how different types of organizations approach mergers and acquisitions.
Strategy Drives Transactions and Their Structure
Fahmy highlighted how the approach to healthcare M&A can be misunderstood if too much focus is placed on the transaction itself. She says, “We don’t set out to do a merger or acquisition. First, we define our strategic priorities and objectives. Second, we determine how best to achieve those objectives – is it by building ourselves, partnering with another organization, or via a merger or acquisition. Often a merger or acquisition does not make sense and other options or partnership structures should be pursued.” Organizations must start with their strategy and then determine what path should be pursued.
Careers Related to Healthcare Transactions
For students who are interested in healthcare administration, Fahmy emphasizes exploring the wide range of jobs the industry offers, “I recommend networking with people who work in healthcare to learn about all the different career paths. There are hundreds of interesting roles and many that students have probably never heard of.” She explains, “There are jobs in direct patient care, operations, strategy, finance, marketing communications, information technology, and more. Within each of those domains there are a variety of positions requiring different skill sets.” She encourages students to keep an open mind and be curious, “There is room in our industry for everyone as we need a diversity of talent, backgrounds, and experiences to be successful.”
Recent Acquisitions by Vanderbilt University Medical Center
Of course, to be exposed to recent trends in healthcare M&A, Vanderbilt students can just look across campus. In recent years, Vanderbilt University Medical Center, a nonprofit entity, has increased its presence across middle Tennessee through strategic acquisitions. In 2019, VUMC purchased Tennova Healthcare-Lebanon. Then in 2021, it acquired Tennova Healthcare-Shelbyville and Tennova Healthcare-Harton hospitals. Most recently, VUMC announced the $623 million acquisition of Tennova Healthcare-Clarksville in February 2026. These new additions support VUMC’s mission of serving patients across the region and providing high quality care that is also more cost effective.
These ongoing transactions demonstrate the application of M&A principles discussed by Fahmy and give Vanderbilt students a chance to observe, learn, and possibly pursue a career in healthcare management.
