Characteristics of Hospitals Undergoing Mergers and Acquisitions

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Avalere found that from 2016 to 2022, hospitals undergoing mergers and acquisitions were more likely to have 500+ beds and to be a 340B covered entity.


In January 2023, the Centers for Medicare & Medicaid Services (CMS) released an update to the Hospital Change of Ownership (CHOW) dataset, which provides information on hospital ownership changes, acquisitions/mergers, and consolidations from 2016 to 2022. To explore recent consolidation and acquisition trends among certain hospitals, Avalere reviewed characteristics of hospitals found in the CHOW dataset by linking these data to hospital characteristics available in the CMS Provider of Services data. Avalere’s analysis was limited to transactions that were characterized as an acquisition or merger in the CHOW dataset.

Avalere Findings

Avalere identified 52 unique hospitals that were sold (purchased) and 49 unique hospitals that bought another hospital (buyers). All but one of these hospitals were short-term acute-care hospitals (STACH), and one purchased hospital was a critical access hospital. Characteristics of buyer and purchased hospitals were compared to STACH hospitals overall (3,450 in 2021).

While the overall count of STACHs that serve as buyers and purchased in hospital mergers and acquisitions (M&A) is low, certain characteristics, including bed size, ownership, location, and 340B status, were significantly different than the average across all STACHs (Table 1). For example, the analysis found that hospitals involved in M&A were more likely to be located in the northeast and in urban areas compared to the national average. Buyers and purchased hospitals were also more likely to be not for profit than the national average (69.4% of buyers and 59.6% of purchased compared to 53.4% overall).

Table 1. Characteristics of Buyer and Purchased Hospitals, Acquisitions in the Hospital Change of Ownership Data, 2016–2022
Table 1. Characteristics of Buyer and Purchased Hospitals, Acquisitions in the Hospital Change of Ownership Data, 2016–2022

*This category includes tribal and physician-owned hospitals.

In several characteristics, the buyers and purchased hospitals deviated both from the national average and from each other. For example, buyers were more likely than the national average to be 340B covered entities (81.6% vs. 59.9%), teaching hospitals (49.0% vs. 19.7%) and have a 500+ bed capacity (38.8% vs. 10.5%). In contrast, purchased hospitals were less likely than the national average to be 340B covered entities (28.8% vs. 59.9%), teaching hospitals (11.5% vs. 19.7%), and have a 500+ bed capacity (1.9% vs. 10.5%).

These findings help to describe the types of hospitals involved in M&A activities and provide important context for the healthcare ecosystem. Previous research has identified a relationship between hospital consolidation and increasing prices for both payers and patients. Past research has also documented that 340B hospitals are more likely to engage in vertical consolidation (e.g., hospital acquisition of physician practices). More research is needed to understand the impact of different hospital characteristics on the likelihood of M&A behaviors as well as the broader impact these transactions have on patients and the healthcare system.


Avalere used CMS’s CHOW dataset to identify hospitals undergoing mergers or acquisition from 2016 to 2022 and examined the “buyer” and “purchased” CMS certification numbers, linking them to ownership, bed size, teaching status, urban location, and geography. 340B sites were identified using the Health Resources and Services Administration’s 340B Office of Pharmacy Affairs Information System. While all 340B hospitals are not for profit, not all not-for-profit hospitals are 340B sites.

Funding for this research was provided by the Pharmaceutical Researchers and Manufacturers of America. Avalere maintained full editorial control.

To learn more about healthcare related acquisitions and mergers, connect with us.

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