Nonprofit hospital mergers expand across the Midwest

Nonprofit health systems in the Midwest have announced a run of large regional mergers since late September 2026. HealthPartners and Essentia Health planned to combine into a 22-hospital system with 45,000 employees and more than $12 billion in revenue, aiming to close Jan. 1, 2027. Two weeks later, Rush and Endeavor Health announced plans on Oct. 14 to create a 12-hospital, 46,000-employee system with nearly $11 billion in annual revenue, targeting early 2027. These deals follow Sanford Health's completed acquisition of North Memorial Health in September and Sutter Health's March announcement of a $26 billion merger with Allina Health.

Minnesota deals

The HealthPartners-Essentia agreement would be the third large hospital combination proposed in Minnesota this year, according to Healthcare Dive. HealthPartners would acquire Essentia, and the combined system would keep the HealthPartners name and its CEO Andrea Walsh, while Essentia CEO David Herman would become president of the combined clinical care group operations. Essentia contributes 14 hospitals and 80 clinics; HealthPartners operates eight hospitals plus an insurance plan with 1.6 million medical and dental members. Financial terms were not disclosed. The organizations expect the deal to close Jan. 1, 2027, subject to regulatory approval.

Illinois deal

Rush and Endeavor's proposed merger, announced Oct. 14, pairs Rush's three hospitals and academic strengths with Endeavor's nine hospitals in northeast Illinois. Endeavor plans a $1 billion investment: $500 million for academics and research, $300 million for community impact, and $200 million for care quality and innovation. The combined system would use the Rush name, and its 20-member board would have equal representation from both organizations, led by a chair from Rush. Endeavor CEO J.P. Gallagher would serve as president and CEO; Rush CEO Omar Lateef would become CEO emeritus and strategic advisor.

Financial pressure and regulatory scrutiny

The mergers come as hospitals face tight operating margins. Kaufman Hall's third-quarter report counted 16 announced hospital transactions with sellers' combined annual revenue of $8.2 billion, and the average seller size rose to $586 million from $401 million a year earlier. The quarter included two mega-mergers: Erlanger Health with Prisma Health, and HealthPartners with Essentia. Kaufman Hall data show roughly 43% of hospitals are losing money, compared with about 33% before the pandemic, and its August operating margin index fell to 1.8% from 3.8% in July. Yet Rush and Endeavor reported positive net income: Endeavor had $663.3 million in 2025 and Rush had $293.9 million for the year ended June 30, 2026.

Minnesota Attorney General Keith Ellison's office has scheduled public meetings and said it will conduct a thorough review of the HealthPartners-Essentia deal for legal compliance and the public interest. His office cannot approve or deny the merger, but it can sue to block a deal if it finds antitrust law violations or public-interest harm. The Minnesota Nurses Association has called for full financial transparency and expressed deep concern about what the three consecutive consolidation announcements could mean for patients and communities. The Sutter-Allina deal has drawn pushback from California stakeholders who say Sutter has a history of raising prices in its home state. A 2024 study by economists at Yale, Harvard and other institutions found that mergers likely to reduce competition raised prices by about 5% on average, with larger increases in lower-income and rural areas. What these specific deals will mean for prices and services is not yet known.