Podcast Summary: Becker’s Healthcare Podcast

Episode: Healthcare M&A, Market Shifts, and Policy Trends to Watch in 2026
Host: Laura Dyrda
Guest: Alan Condon, Editor in Chief
Date: January 7, 2026

Episode Overview

In this episode, Laura Dyrda and Alan Condon discuss the latest developments in healthcare mergers and acquisitions (M&A), shifting market dynamics among major health systems, and key federal policy updates such as the Rural Health Transformation Fund. The discussion spotlights stories and trends that will shape 2026, pointing to how providers are adjusting to a complex and rapidly changing landscape.

Key Discussion Points and Insights

1. Major M&A Deals Beginning 2026

[01:37–05:37]

• Mercy Health's Acquisition in Illinois:

  • Mercy Health (Rockford, IL) acquired a 100-bed independent hospital (FHN) in Freeport, IL on January 1.
  • The deal progressed rapidly, especially compared to typical M&A timeframes.
  • Significant Leadership Turnover: Following the acquisition, four key FHN C-suite members (CEO, CFO, Chief HR Director, Chief Nursing Officer/COO) departed. New leaders are yet to be named.
  • Mercy Health now operates seven hospitals in Illinois and Wisconsin.

  “Significant changes at the hospital as it joins Mercy Health and just a quick background there. Mercy Health now operates seven hospitals in Illinois and Wisconsin.”
  — Alan Condon, [03:15]

• Hartford Healthcare’s Connecticut Acquisitions:

  • Resulting from the bankruptcy of Prospect Medical Holdings, Hartford Healthcare acquired two Prospect hospitals (240 and 109 beds) on January 1, 2026.
  • The acquisition was complex, involving regulatory oversight to keep hospitals open and services functioning.
  • Hartford Healthcare agreed to limit cost growth and preserve competition in Connecticut.
  • The system now includes nine acute care hospitals.

  “…agreed with the Connecticut Attorney General to an agreement to limit cost growth at those hospitals, working to preserve competition as the state really looks to avoid any potential similar challenges as to what they faced with those hospitals under the private equity for profit based health system…”
  — Alan Condon, [04:55]

2. M&A Outlook for Early 2026

[05:37–07:10]

• Alan Condon expects continued M&A activity:

  • Hospital mergers, strategic partnerships, and cross-market deals will likely ramp up in early 2026.
  • Key Drivers:
    • Expiry of ACA subsidies (December 31, 2025)
    • Uncertainties around a potential House vote to reinstate subsidies
    • Difficult reimbursement environment
    • Looming Medicaid code changes (late 2026)
    • Rural, independent, and safety-net hospitals at particular risk and seeking system partners
  • The environment may force more hospitals into alliances or acquisitions, especially those struggling with reimbursement and regulatory pressures.

  “Arguably one of the most difficult reimbursement environments we’ve seen across the board… challenging environment for independent hospitals, safety net hospitals, those community hospitals in particular, along with the rural facilities.”
  — Alan Condon, [06:41]

3. Competitive Market Dynamics: HCA, Tenet, and the Nonprofit vs. For-Profit Turf Wars

[07:10–10:42]

• HCA Healthcare’s Expansion:

  • HCA is targeting expansion—mainly outpatient sites—in Tennessee, North Carolina, and Virginia.
  • Both HCA and Tenet ended 2025 with record stock prices.
  • HCA faces significant pushback from established nonprofit competitors:
    • Tennessee: Vitruvian Health opposes HCA’s freestanding emergency room in their markets.
    • Virginia: Bon Secours Mercy Health resists HCA’s investments, particularly a proposed $21M ambulatory surgery center.
    • North Carolina (Asheville): Ongoing certificate-of-need battles with AdventHealth, both sides challenging each other’s expansion bids.
  • These battles highlight intensifying turf wars and regulatory skirmishes as systems vie for market share and patient access.

  “Intensifying turf wars and some of these key, key markets probably underscore a broader industry trend as we see health systems expanding across state lines… becoming what looks like kind of flashpoints for debates around market cost share, market control, competition and indeed patient access as well.”
  — Alan Condon, [09:55]

4. The Rural Health Transformation Fund

[10:42–14:25]

• $50 Billion Federal Initiative (2026–2031):

  • CMS announced state-by-state funding allocations on Dec 29, 2025.
  • States are currently determining how funds are distributed to institutions.
  • State updates:
    • New York: Still negotiating with CMS, most hospitals in holding pattern but being kept informed.
    • South Carolina: State Medicaid (with grant experience) will administer funds; allocation strategies are being developed, with hope for maternal and OB care support.
    • Oregon: Active applications and needs assessments underway.
    • Illinois: Critical Access Network will oversee part of the funds, leveraging existing infrastructure.
  • Funds are not strictly earmarked for hospitals or health systems—other rural providers and programs may benefit. Leaders are encouraged to advocate for community-focused allocation.

  “Several folks reminded me that these funds didn’t necessarily have to go to hospitals and health systems. And so it’s important for executives and leaders to stay in touch with their legislators and their state associations and those who are making these decisions so that they can advocate for these funds to be used in ways that are most beneficial to the rural communities and patients that they were dedicated to.”
  — Laura Dyrda, [13:28]

Memorable Quotes

• On M&A Activity and Hospital Leadership Transitions

  "Four really key top members of FHN C Suite have left the hospital as the hospital joins Mercy Health and new leaders have yet to be announced to come in at the moment."
  — Alan Condon, [02:45]

• On Market Competition and Regulatory Battles

  "Ongoing turf war... as HCA looks to invest more money in urgent care centers, freestanding emergency rooms and potentially a $21 million ambulatory surgery center really which has signaled a little bit of concern for Bon Secours Mercy Health..."
  — Alan Condon, [08:43]

• On Managing Rural Health Transformation Funding

  "...the Illinois Critical Access Network would be able to administer a portion of those funds because, again, the association had experience administering grants and funding and so already had infrastructure in place to be able to take applications and decide what would make the most sense."
  — Laura Dyrda, [12:14]

Notable Timestamps

• 01:37–05:37: Overview of key M&A deals (Mercy Health, Hartford Healthcare CT, leadership transitions, regulatory agreements)
• 05:37–07:10: Outlook for Q1–Q2 2026 M&A velocity, reimbursement and policy environment
• 07:10–10:42: HCA Healthcare’s expansions, turf wars, regulatory pushback in Tennessee, Virginia, North Carolina
• 10:42–14:25: Rural Health Transformation Fund: policy background, state administration, allocation challenges, advocacy for rural communities

Tone and Language

The discussion is pragmatic and analytical, sharing insights from recent industry news and direct conversations with healthcare leaders. Both Laura and Alan maintain a professional yet conversational tone, reflecting urgency and thoughtful consideration of challenges faced throughout U.S. healthcare in 2026.

For listeners/industry professionals:
This episode provides a comprehensive snapshot of early 2026’s healthcare landscape—a must-listen for anyone following hospital strategy, regulatory policy, or rural health funding.