Podcast Summary: Dealmaking Outlook for Healthcare and Private Equity in 2026

Podcast: Becker Business
Host: Scott Becker
Guest: Amber Walsh, Executive Committee Member, McGuireWoods LLP
Date: January 9, 2026
Episode Focus: Trends and expectations for healthcare and private equity dealmaking, with special attention to hospitals, health systems, and regulatory considerations as 2026 begins.

Episode Overview

This episode delves into the evolving landscape of healthcare dealmaking, exploring both private equity activity and traditional hospital M&A trends moving into 2026. Amber Walsh, a leading healthcare attorney with McGuireWoods, joins host Scott Becker to review how deal volume, market drivers, and regulatory environments are shaping opportunities and challenges for investors and health systems alike.

Key Discussion Points & Insights

1. Overview of Private Equity and Healthcare Deals

• 2025 Recap & 2026 Outlook:
  • Private equity deal activity saw a late-2025 uptick after a slow start, aligning with expectations of gradual improvement.
  • The "J.P. Morgan Healthcare Conference" (early January 2026) is seen as a significant kickoff event for annual dealmaking ([01:18]).
  • PE fundraising remains challenging, but optimism persists for increased deal flow this year, both in PE and in traditional hospital transactions.

"The end of the year started to tilt up as everyone expected... looking forward to next week to hear all the buzz that comes out of J.P. Morgan...every year is a great private equity deal making kickoff..."
— Amber Walsh [01:26]

2. Hospital & Health System M&A: Change in Pace and Drivers

• Slower Growth and Recent Acceleration:

  • Hospital M&A lagged behind PE deals in recent years, but is expected to rebound and "be more robust in 2026, despite headwinds" ([01:57]).
  • Current enthusiasm centers on deals occurring "despite the headwinds" and with "a little bit of a different focus," signaling adaptation and strategic shifts in approach.

• Deal Types & Notable Activity:

  • Both large system-to-system mergers (e.g., Nuvance-Northwell, 28 hospitals) and ongoing acquisitions (e.g., HCA acquiring rural/community hospitals) were seen in late 2025 ([03:59]).
  • Academic medical centers, facing regulatory and funding pressures, are increasingly seeking M&A as a solution.

• Strategic Rationale:

  • Struggling hospitals (often smaller, rural, or academic) are seeking "dance partners."
  • Larger systems pursue scale and strategic expansion, leveraging M&A for operational efficiency, market presence, and risk-sharing.

"Academic medical centers... many are particularly struggling. They are very subject to regulatory changes and, of course, NIH and other grant funding hits...I think [they're] ripe for a merger of some type."
— Amber Walsh [04:24]

3. Persistent Headwinds and Their Impact

• Noted Challenges:

  • Increased numbers of underinsured patients (due to ACA subsidy changes, Medicaid cuts).
  • Rising wage, benefit, and supply costs.
  • Regulatory uncertainties and shifting financial realities.

• Market Reaction:

  • After a pause and adjustment in 2025, a "recognition that this may be the new norm" has emerged—participants are adapting strategies and showing "enthusiasm for actually being able to take the plunge and do deals in 2026" ([06:14]-[07:41]).

4. Comparison: Private Equity vs. Health System Deal Drivers

• Private Equity: Operates under clear fund timelines and investor expectations for deal velocity and exits.
• Health Systems: Motivated less by external investors, more by internal strategic necessities:
  • Cost pressures
  • Spreading the cost of investments (e.g., AI technology) across broader networks
  • Achieving scale for necessary capital investments, clinical capability, and competitive posture against payers

"In the private equity world you are answering to investors...In the health system, it's not answering to separate investors. Some are publicly traded...But it is a little bit different."
— Amber Walsh [08:37]

• M&A enables systems to:
  • Extend new technology and infrastructure investments to new locations ("spreading out" AI adoption)
  • Optimize hub-and-spoke models for care delivery
  • Gain access to different markets/patient populations and acuity levels

5. Other Key Market Factors & Looking Ahead

• Scale as a Necessity: To manage costs, invest in talent/technology, and operate efficiently, health systems must grow.
• Workforce Shortages: Especially in specialties like orthopedics and cardiovascular, consolidations aid in service provision.
• Negotiations with Payers: M&A improves leverage in contracting.
• Regulatory Environment:
  • New state healthcare transaction laws and AG reviews created initial "chilling effects" on deals.
  • In practice, these reviews have not been “as onerous as people feared” ([12:31]), but ongoing monitoring is warranted.

Notable Quotes & Memorable Moments

• On Adapting to “New Norms”:

  "There's a bit of a pause, there's a bit of a readjustment, but then a recognition that, okay, this may be the new norm. We still need to transact to execute on our strategy."
  — Amber Walsh [06:44]

• On Health System Drivers:

  "By far [health systems are] out-invested in the rest of the healthcare community and the economy at large outside of healthcare in AI. So you make these investments...then you need to spread out that investment and extend it to additional sites of service. M&A can help you achieve that."
  — Amber Walsh [09:10]

• On the Year Ahead:

  "Certainly where we sit right now... we're expecting more movement in...both markets, both private equity-backed and more of the traditional hospitals and health systems."
  — Amber Walsh [12:54]

Timestamps for Key Segments

• Introduction & PE Environment: [00:30] – [01:56]
• Hospital M&A: Recent Trends and Outlook: [01:57] – [03:58]
• Deal Drivers and Market Split: [03:59] – [07:41]
• Comparing PE and Health System Motives: [07:42] – [11:09]
• Role of Scale, Talent, and Strategy: [11:10] – [12:31]
• Regulatory Environment & Closing Outlook: [12:31] – [13:44]

Conclusion

Amber Walsh and Scott Becker provide a nuanced forecast for healthcare dealmaking in 2026, highlighting a resurgence in both private equity-led transactions and hospital health system mergers. While persistent financial and regulatory headwinds remain, strategic adaptation and a clearer view of the "new normal" are fostering renewed optimism for deal activity. Both speakers emphasize the importance of scale, strategic alignment, and continued vigilance regarding regulatory developments in shaping the year’s activity.