California passed a law last year aimed at controlling rising healthcare costs that gave the state the ability to scrutinize healthcare deals of a certain size involving California companies. What impact can it have?

M&A activity in the healthcare sector continued to decline in the second quarter of 2023, with the number of deals reaching its lowest point in three years. However, a new report predicted that M&A activity could increase in the second half of this year due to healthcare companies’ continually shrinking valuations and their divestitures of non-core assets.

M&A activity among hospitals and health systems increased in Q2 of 2023 — there were 20 deals in Q2 compared to 15 deals in Q1, according to a new report. This surge brought Q2’s M&A activity levels in line with those observed before the pandemic. Q2’s 20 deal marks the highest number of announced transactions for hospitals and health systems since Q1 of 2020.

Last week, New Mexico-based Presbyterian Healthcare Services and Midwest-based UnityPoint Health signed a letter of intent to merge. One consultant thinks these kinds of announcements will continue in the coming years, but a significant chunk of these intended mergers will end up being called off due to health systems realizing they’re not ready to make the sacrifices needed to reap the benefits of a megamerger.

Leaders should be proactive about investing in IT to avoid costly issues in the future. Examine existing technology for potential risks and redundancies, assess system performance, and establish forward-looking goals and benchmarks.

Large corporations don’t hold all the bargaining power in the world of medtech M&A these days, says a corporate venture capitalist with Boston Scientific.