M&A Volatility Will Continue – Impacting Patient Access and Care

Despite near-term economic uncertainty, M&A activity remains robust, and deal volume is poised to increase in 2025 compared to the previous year. Healthcare organizations will focus their M&A efforts on strategic consolidations, operational efficiencies, expanding service offerings and adapting to the evolving healthcare environment.

Private equity’s (PE) appetite for healthcare investments has increased over the years and will continue to grow, as outlined by the Private Equity Stakeholder Project¹. Digital health M&A will be an attractive option for companies with complementary offerings or those that enable an acquiring company to gain access to new markets or achieve new revenue streams. Advancements in AI and digital health will drive acquisitions aimed at integrating innovative technologies. Healthcare organizations will also pursue M&A to create cost-efficiencies, enhance competitiveness and expand service offerings – for example, hospitals and health systems pursuing consolidation to achieve economies of scale and enhance financial stability following post-pandemic losses. 

Regardless of who comes out on top in the M&A game, there is a significant impact on patient access and migration. As more provider groups consolidate, for example, patients are affected by the resulting operational changes, and some studies show a decline in patient experience post-acquisition². With this level of volatility, data-driven insights into patient and provider migration trends and other market factors will be critical to business development and patient care.

What does this mean for organizations and patients?

Consolidation of healthcare organizations through M&A has a wide-ranging impact on patients and organizations. On the one hand, an American Hospital Association analysis found that hospital acquisitions and mergers can improve key quality indicators and lower readmission rates³.

There is also evidence that M&A can be advantageous for rural hospitals. Acquisition by larger health systems may help to secure financial stability and preserve patients’ access to care in rural areas. One analysis found that 45% of high-risk rural hospitals were no longer in the high-risk category after being acquired by, merging with or affiliating with a larger health system between 2011 and 2021⁴. The same analysis shows that rural hospitals saw an increase in average total margins post-merger. While M&A may not be appropriate for all rural hospitals, data shows that integration between rural and large health systems can ensure patient access and improve patient experience.

On the other hand, M&A also risks negatively impacting patients. Consolidation of hospitals and health systems, for example, can saturate the market, reduce competition, and raise costs. Research shows that prices associated with hospital mergers may increase by up to 65% and that these increases lead to higher healthcare spending⁵. Similarly, a study conducted by the US Department of Health and Human Services showed that PE’s involvement in healthcare yields higher costs and less access⁶. Other studies show a decline in patient experience post-acquisition.

Continued M&A volatility makes it critical for organizations to leverage up-to-date healthcare market insights, such as claims data, and healthcare consumer insights, such as contact and social determinants of health (SDOH) data, to navigate through uncertainty and mitigate patient impact⁷.

How Can Data Help?

1. Data Interoperability and Identity Matching 
M&A often leaves organizations struggling with disparate patient records across systems. Record linking and identity resolution ensure consistent, updated views of patient profiles post-merger. This helps to improve patient engagement and experience, reduce redundant tests, maintain continuity of care and minimize errors.

2. SDOH Insights 
Consolidated organizations need to identify and address non-clinical barriers to care across new and diverse populations to meet value-based requirements. SDOH data can reveal these non-clinical barriers to care, driving more equitable strategies to reduce readmissions and improve outcomes. Organizations can also use SDOH insights to understand community-level trends and market needs to develop and implement population health programs and invest in new service lines that meet diverse demands.

3. Identity Verification 
Verifying identity is crucial to ensure secure patient access and create a positive digital experience. Identity verification solutions ensure the right individuals can access sensitive health information, refill prescriptions, and more, protecting systems and data while building patient trust. Organizations should look for solutions that can evaluate devices, behaviors and digital identifiers while creating a minimal amount of friction for patients and members. Options such as customizable identity verification and multi-factor authentication combat the toughest cybersecurity challenges without disrupting the patient experience.

4. Provider Data Accuracy 
Accurate provider directories are critical during transitions, particularly in payer-provider integrations or when updating referral networks. Curated, continuously updated provider data supports compliance, improves access and ensures patients can connect with in-network care to avoid surprise billing and find the right provider the first time.

Pharmacies may also face increased complexity in verifying prescriber credentials with new providers entering the ecosystem through retail health expansion. M&A activity can lead to fragmented or outdated provider records, increasing the risk of prescription fraud and workflow disruption. Dynamic, continuously updated provider data is critical to ensure continuity and compliance, reduce fraud, enable retail health expansion and inform care network strategy.

5. Claims Data for Strategic Planning 
Health systems and hospitals navigating M&A need to understand market share, referral leakage and population health dynamics. Comprehensive claims data and analytics can help empower strategic decision-making, from M&A targeting to network optimization, informing smart expansion and investment decisions while aligning care delivery with patient needs. Having claims data is just the beginning, as the real value comes from turning that data into actionable insights. Organizations should embed claims data into their existing workflows and align it with their strategic priorities. When organizations are equipped to bridge the gap between insights and action, they can use claims data to drive growth and innovation.

Amid so much uncertainty and fluctuating market conditions, healthcare organizations must remain agile and informed, leveraging insights into patient and provider populations to adapt to the evolving M&A landscape. This insight-driven adaptability will be crucial for achieving value-based care quality metrics, meeting the demand for complex patient populations, and creating an enhanced care experience.