The last few months have been a relentless storm of reimbursement and market changes. Far from finding calm, October has seen new challenges that have that power to impact healthcare M&A and deal activity.
With substantial economic and regulatory pressures, healthcare M&A activity in October declined, but remained steady overall. According to data captured in the LevinPro HC database on November 3, preliminary numbers indicate that there was a 17% drop in deal volume from September (195 transactions) to October 2025 (162 transactions). It is worth noting that September 2025’s high deal activity is more of an outlier; October’s activity was more consistent with the monthly volume we’ve seen throughout the year. Through October, a total of 1,739 transactions have been announced since the start of the year.
At the center of the federal government shutdown is the expiration of the Affordable Care Act’s tax credits at the end of the year. If no agreement can be reached and no further temporary suspensions are implemented, premium costs will rise significantly.
Additionally, due to the government shutdown, some hospitals were forced to withdraw the Acute Hospital Care at Home initiative, which had paid hospitals to care for patients from their homes remotely. The program reimbursed medical centers for this advanced care, which in turn frees up hospital beds for other patients. Providers are now having to choose between suspending this program or continuing at the risk of not being reimbursed (unless Congress retroactively approves). Without federal funding, Medicare patients would be responsible for out-of-pocket costs.
Additionally, on September 30, the Medicare telehealth waivers established during the COVID-19 pandemic expired, meaning providers can no longer be reimbursed for telehealth visits. With the eligibility of telehealth decreased, there’s the chance that investor interest will shift away from the telehealth space as it is no longer accessible to patients and lacks the same profitability as before due to uncertainty around utilization and adoption.
Furthermore, CMS ruled on October 31 that, starting in 2026, physician reimbursement will be raised between 3-4% higher than what they were in 2025. This is meant to streamline payments and prevent unnecessary spending.
Disclosed spending totaled more than $57.91 billion across 29 transactions, representing a notable increase from the $6.5 billion announced across 31 deals in October 2024. The largest purchase in price in October 2025 was Blackstone and TPG’s acquisition of Hologic for $18.3 billion. Hologic is a manufacturer of diagnostic products, medical imaging systems and surgical products, primarily for women’s health. Novartis also spent $12 billion to acquire Avidity Biosciences, a biopharmaceutical company focused on developing a new class of therapeutics that enable RNA delivery to muscle.
The most active sector in October was Physician Medical Groups (PMG), with 36 transactions, bringing the PMG total to 407 deals for the year. October 2025 marked a 20% decrease from September 2025 with 45 PMG deals, as well as a 25% drop from October 2024 with 48 PMG acquisitions.
With a total of 15 transactions, dental dominated the PMG sector. SALT Dental Partners, backed by private equity firm Latticework Capital Partners, announced three deals, marking the most active dental buyer for the month.
Other PMG specialties that saw activity in the month were dermatology (three deals), pediatrics (three deals) and orthopaedics (two deals). Epiphany Dermatology, a portfolio company of Leonard Green & Partners, also struck two deals in October. It acquired Big Sky Dermatology in Bozeman, Montana and Modly Dermatology in Reisterstown, Maryland.
The second most active sector was Medical Outpatient Buildings (MOB) for a total of 25 acquisitions. The largest purchase price in the MOB space was Welltower’s divestment of 296 facilities for $7.2 billion. The buyers were Remedy Medical Partners and Kayne Anderson Real Estate, which have completed a multitude of joint ventures in 2025.
Welltower says that the transaction will total $7.2 billion and will be completed in tranches through mid-2026, with the first tranche selling for $2 billion.
Three REIT acquirers reported MOB acquisitions in October: Flagship Healthcare Properties, Four Corners Property Trust and LaSalle Investment Management reported one deal each.
Additionally, eHealth announced 14 deals; Laboratories, MRI and Dialysis saw nine deals; and there were 20 Other Services acquisitions.
Private equity (PE) firms, including portfolio companies, accounted for 26% of the buyers in October 2025 with 42 transactions. This is down from 34% in the same time frame of 2024.
In October, PE was primarily drawn to the PMG space, which accounted for 43% of the PE-backed deals for the month. PE also announced three eHealth deals, three Laboratory Acquisitions, MRI & Dialysis acquisitions and two Home Health & Hospice transactions.
Health systems reported 11 transactions, with the acquisition of four hospitals. Other sectors that enticed health systems throughout the month were PMG and health clinics. The largest purchase price for a health system acquisition was The Vanderbilt University Medical Center’s acquisition of Tennova Healthcare – Clarksville, a 270-bed short-term acute care hospital in Clarksville, Tennessee, for $750 million.
Despite the dip in deal volume for October, deal volume is still substantial and shows promise of continued activity.
