The wave of large mergers and acquisitions (M&A) among hospitals and health systems shows no sign of abating. The 13 transactions (in three, the acquirer was a for-profit) reached a historic high of $19.2 billion in total transacted revenue, according to ‘Kaufman Hall’s Quarterly Mergers and Acquisitions Report.’ This more than doubles the total transacted revenue for hospitals and health systems of $8.5 billion in Q2 2021 (with the same number of transactions).

In today’s marketplace, provider organizations are moving to a post-pandemic world that we call the “next normal.” In the last two years, we’ve survived three major crises—public health, economic, and political. This has been a perfect storm of events that is already re-making the health and human service industry in ways that we can anticipate, but don’t know for sure.

While most executive teams and boards like to be on the acquiring side of a merger and acquisition (M&A) transaction, the process of being acquired can be very powerful for some organizations. I am not referring to an organization that needs to be acquired because it isn’t going to survive on its own. (Those desperate searches for an acquirer where an organization’s finances are crumbling usually leave it in control of very little, if anything, in the acquisition process.)

How often are mergers and acquisitions (M&A) successful? While the numbers say not often—studies show the failure rate is between 70% and 90% of the time (see The Big Idea: The New M&A Playbook)—that hasn’t stopped the rapid pace of industry consolidation. In recent months, we have some big industry changes that call into question the ability for small, specialty organizations to survive without taking a serious look at either M&A or other forms of provider organization collaboration.