Signing the deal is often the easy part of a hospital merger. The harder work comes afterwards – when IT teams inherit duplicate systems, clinicians wrestle with fragmented patient data, and executives realize integration costs don’t end with the contract.
In this blog, BridgeHead’s Cassie Silletti, Customer Success Advocate for North America, explores the healthcare M&A landscape in the US and highlights one of its least discussed but most critical challenges: consolidating systems, retiring legacy applications, and ensuring clinicians retain access to essential patient data.
The healthcare M&A landscape
Hospital mergers and acquisitions (M&A) continue to reshape the US healthcare market. From academic medical centers expanding into community hospitals, to financially distressed providers seeking lifelines, consolidation is a defining trend.
In 2022 there were 53 announced hospital deals. That rose to 65 in 2023 and 72 in 2024 – a 36% increase in just two years (Chief Healthcare Executive). While early 2025 was quieter – with five hospital M&A transactions in Q1 and eight in Q2, a total of 13 for the first half of the year (American Health Law Association; Chief Healthcare Executive) – analysts are clear: the underlying forces behind consolidation haven’t disappeared. Financial pressures, competitive demands, and strategic expansion mean that M&A is not going away anytime soon.
Why hospitals merge
The drivers behind consolidation are varied, but five stand out:
1) Financial pressure: Many hospitals are still recovering from pandemic-era shocks. Staff shortages, rising wage bills, and thin operating margins have left roughly a quarter of US hospitals in financial distress. In 2024, more than 30% of all M&A transactions involved distressed providers (Chief Healthcare Executive)
2) Strategic growth: Stronger systems are expanding into new markets and services – from outpatient care and telehealth to specialty services. Academic medical centers are also partnering with smaller hospitals to manage capacity
3) Geography: US States, such as Texas and Florida, with fast-growing populations, have become hotspots for consolidation, while some systems are scaling back in shrinking markets
4) Transformation: The shift toward value-based care and technology-enabled services is driving hospitals to scale faster. M&A offers a quicker route than building capabilities from scratch
5) Regulation: Although regulators are scrutinizing deals, especially where competition could be reduced, consolidation continues through partnerships, divestitures, and creative structures. In 2024, more than 60% of hospital transactions were divestitures (Chief Healthcare Executive).
Together, these factors ensure that while deal volume may rise or fall in any given quarter, M&A remains a defining force in US healthcare.
The hidden fallout: data chaos in M&A
Every merger brings promises of efficiency and scale. But behind the scenes, hospitals inherit a tangle of applications and infrastructure. It’s rarely discussed outside of IT departments, yet it can make or break the success of a merger.
When health systems come together, they often bring multiple EHR platforms, imaging systems (PACS, RIS, VNA), and a host of departmental or specialist applications. Some are current, many are outdated, but almost all hold data that must be retained for clinical, legal, or regulatory reasons.
Here’s what that looks like in practice:
- Duplicate applications: Running side-by-side systems is costly and confusing
- Cybersecurity risks: Unsupported legacy applications create vulnerabilities that grow over time
- Compliance headaches: Responding to legal mandates or subject access requests often means manual searches across outdated systems
- Operational drag: IT teams devote disproportionate time and resources to maintaining systems that add little value
- Clinical frustration: Clinicians may need to log into multiple systems to view a patient’s history, impeding efficiencies in care delivery.
This application sprawl can take years to untangle, delaying the benefits that mergers are supposed to deliver.
Why data strategy belongs on the Board agenda
It’s natural for executives to focus on financial, strategic, or clinical integration when planning a merger. But ignoring the data challenge is a costly mistake.
Every merger forces a decision: what do we do with the data from systems we no longer want to run?
That leaves hospitals with three choices – none of them easy:
- Keep paying to maintain legacy systems – expensive and risky
- Attempt piecemeal migrations into active systems – complex, costly, and incomplete
- Or retire applications while consolidating and preserving data in a way that remains accessible and usable.
The last option is increasingly recognized as the only sustainable path. It not only reduces costs and risks; it also supports secondary uses of data – analytics, population health management, clinical research, and AI initiatives that depend on large, high-quality datasets.
How BridgeHead’s HealthStore® helps
BridgeHead’s Clinical Data Repository (CDR), HealthStore®, is purpose-built to help hospitals address the IT fallout of mergers. Trusted by hospitals worldwide, it provides a proven way to retire legacy systems while keeping data accessible and secure. With HealthStore, organizations can:
Retire their legacy applications: Hospitals can decommission their redundant, duplicate, inherited systems, confident that data remains preserved, accessible, and compliant
Consolidate their data: HealthStore ingests and manages images (MRIs, CTs, X-rays), documents (consent forms, discharge summaries), and discrete clinical information (labs, allergies, medications) using open standards (FHIR, HL7, DICOM) – aggregating data from disparate sources in one central, interoperable repository
Ensure clinical access: Data managed in HealthStore can be made available through the EHR in ‘patient context’, offering clinicians easy access to a complete, longitudinal record – improving both care and efficiency
Save money: HealthStore helps hospitals reduce licensing fees, support costs, infrastructure costs, and more in the running of outdated systems. It also frees IT staff from maintaining applications that no longer serve the organization’s future. These combined savings can run into millions of dollars annually for larger health systems
Reduce cybersecurity risks: Retiring unsupported applications reduces the hospital’s attack surface and removes common entry points from unscrupulous bad actors.
The result: hospitals accelerate the value realization of M&A by turning integration headaches into opportunities for transformation.
A typical post-merger scenario (in brief)
Imagine a health system acquiring two smaller hospitals in neighboring states. Each runs a different EHR plus various departmental systems. Shutting them off isn’t an option – compliance demands access. But keeping them running indefinitely is expensive and risky.
By moving data into HealthStore, the health system can retire dozens of applications and infrastructure, cut maintenance costs, and provide clinicians with easy access to legacy patient records directly through the consolidated EHR interface.
Why this matters now
The drivers of M&A in US healthcare – financial distress, competitive pressure, strategic growth – aren’t going away. Deal volumes may fluctuate, but consolidation will remain a defining force. The question is whether hospitals address the IT and data fallout proactively. Those that delay risk higher costs, greater cybersecurity exposure, and slower realization of merger benefits.
Ultimately, the success of a merger isn’t measured by the size of the balance sheet. Organizations that make data strategy a priority and act early – consolidating, securing, and enabling access to inherited data – will be the ones that capture the full value of their mergers. If you’re interested in exploring how BridgeHead might support you on your M&A journey, you can reach me on cassie.silletti@bridgeheadsoftware.com or on LinkedIn.
With 25+ years’ experience in health IT, entrepreneurial ventures, and other industry sectors, Cassie Silletti has built a reputation for transforming organizations – becoming a trusted advisor to CIOs, clinicians, CFOs, and Boards.
As BridgeHead’s Customer Success Advocate for North America, Cassie works with customers to ensure they are taking full advantage of their investments in BridgeHead’s HealthStore® Clinical Data Repository and RAPid™ Data Protection solutions. She is passionate about helping healthcare providers turn complex data challenges into strategies that strengthen compliance, reduce risk, unlock revenue, and improve patient care.
Interested in learning how BridgeHead’s Clinical Data Repository, HealthStore®, can support your M&A activity?…
