The U.S. hospital system has had a stress-filled year, to say the least. By mid-December 2020, the nation’s death toll from the coronavirus topped 300,000 and daily hospitalizations closed in on 11,000. Front-line healthcare workers began receiving the PfizerBioNtech vaccine and Dr. Anthony Fauci, the nation’s top infectious disease expert, told MSNBC in an interview that the timeline for a return to normalcy stretched well into 2021.

Not surprisingly, the hospital merger and acquisition landscape shifted, but it didn’t buckle. Overall, deals for hospitals are down 26% through mid-December (73 vs. 99 in 2019). For U.S. hospitals, deal volume dropped 16% (66 U.S. deals vs. 79 U.S. deals in 2019).

The number of U.S. hospitals that changed hands in 2020 is close to the number that traded in 2019, with 117 hospitals in 2020 compared with 127 for all of 2019. So far this year, we’ve seen an average of approximately 1.8 hospitals per deal, a little higher than the average of 1.6 per deal in 2019.

Dollar volume was also down considerably, as you probably guessed. Buyers spent just $3.2 billion on the 73 total hospital deals that are on the books in 2020 so far. That’s a whopping 79% below last year’s nearly $15. 3 billion.

The largest publicly announced price paid for a U.S. hospital in 2020 was $1.5 billion. The target was the not-for-profit New Hanover Regional Medical Center (677 beds) in Wilmington, North Carolina. Back in 2019, New Hanover’s board voted to look for a larger health system to partner with, while it was still financially sound. Bidding got heated in June 2020, as Duke Health (based in Durham, North Carolina) submitted a proposal to purchase the hospital for $1.4 billion and invest another $1.9 billion in capital improvements in the next five years. Shortly afterward, Atrium Health (based in Charlotte) committed to spending $3.1 billion to enter into a 40-year, long-term operating lease and make capital improvements and contributions to the community foundation. Atrium later made a second proposal for $2 billion to buy the hospital and add $1.1 billion in capital improvements. (In October, Atrium merged with Wake Forest Baptist Health, including Wake Forest School of Medicine.)

In the end, the board chose Novant Health (based in Winston-Salem), a not-for-profit system with 15 medical centers and 343 clinic locations. The deal was a $1.5 billion asset purchase agreement, with an additional $3 billion investment promised to increase New Hanover’s services in the area.

Only two real estate investment trusts (REITs) bought a hospital in 2020, and both transactions were announced in the first half of the year. Iron Stone Real Estate Partners acquired the real estate assets of Philadelphia’s St. Christopher’s Hospital for Children (188 beds) for $65 million in January. In May, the newly formed East Ohio Hospital LLC paid an undisclosed sum for East Ohio Regional Hospital (140 beds). In 2019, four REITs announced six deals and acquired 27 U.S. hospitals for a total of nearly $1.8 billion.

There are still two weeks to go in 2020, and a lot more data to parse out. We’re putting it all together in the 2021 Health Care Services Acquisition Report, scheduled for publication in March 2021. We’ll include data and analysis on this year’s transactions with a special focus on the hospital, behavioral health care, home health & hospice and physician medical group sectors. In the meantime, here’s to getting through the rest of 2020. Happy New Year!