Resource | Baker Tilly Capital Insider
Healthcare M&A update: H2 2025
March 2, 2026
State of healthcare M&A: Key insights from the second half of 2025
The following report developed by Baker Tilly Capital, LLC provides an update on the healthcare mergers and acquisitions (M&A) market in the second half of 2025. The report includes an overview of the market performance, M&A activity, transactions by segment and buyer and U.S. middle market M&A activity.
Download the full report to explore detailed market analysis and deal breakdowns.
Here are some key takeaways from the report:
Public market performance
The BT Capital Healthcare Index indicated mixed performance in the healthcare market during H2 2025, dipping at first but stabilizing toward the end of the half. The S&P 500, in contrast, rose demonstrating the uncertainty that continues to shape the healthcare sector. The passage of The One Big Beautiful Bill Act (OBBBA) created the largest shift in Medicaid funding in a decade by reducing enhanced subsidies and adding new eligibility requirements, which increased long‑term financial pressure on managed care organizations.
The Rural Health Transformation Program provides some funding for technology‑focused rural health initiatives, but it replaces only part of the expected losses, leaving many rural providers at risk. At the same time, inflation driven by labor shortages, drug spending and higher energy costs continued to compress margins. Healthcare operators responded by accelerating technology investments and reshaping portfolios, including through M&A, to improve efficiency and focus on stronger‑performing assets.
