But first let’s define the baseline for “coming back.”

You see, the pandemic shaped dealmaking well past the point when the world began to return to normal. First, there was the huge surge in activity toward the end of 2020 and through 2021 as buyers emerged from hibernation. Then, there was the natural post-surge falloff in 2022, followed by further retrenchment in response to soaring inflation and the increase in interest rates to get it – inflation – under control.

By our estimation then, the impact of COVID didn’t completely play itself out until the end of 2024. So, recent deal volumes should arguably be compared to pre-pandemic activity. And based upon annualized first half data collected and analyzed by The Braff Group, health care services transaction volume is poised to finally eclipse pre-pandemic numbers.

While post-2023 market conditions (when activity began to tick upward) haven’t been all sunshine and roses – stubbornly high interest rates, inflation remaining above the Fed’s target of 2.0%, unrest in Eastern Europe and the Middle East, and economic uncertainty – buyer activity has nevertheless risen steadily.

Notably, this is despite the fallout from Medicaid cuts introduced in July 2025 (One Big Beautiful Bill) and the January 1 expiration of ACA insurance subsidies, without which recent gains would almost assuredly be higher.

Sector Drill Down

Home Health and Hospice

From an M&A perspective, the second quarter of 2026 has set the table for a strong period of dealmaking in home health and hospice over the next 12 months.  

As has become its custom, CMS recommended a bump in hospice payment rates and issued a final rule calling for an increase of 2.3%, making the sector the envy of buyers that have grown accustomed to annual cuts in other sectors.

Moreover, after a devastating proposed rule issued by CMS last year that initially floated a Medicare home health cut of 6.4% (the final rule was a somewhat more palatable cut of 1.3%), the proposed rule issued in July for 2027 recommended an increase of 2.4%. 

The upshot is that many industry insiders believe that CMS may have concluded that it has finally battered home health enough, paving the way for greater payment predictability. Add to this the 6-month moratorium on new provider numbers (which many believe will be extended in November and may possibly last through the remainder of the Trump administration), it’s no surprise that aggregate home health and hospice activity is trending up after 4 consecutive years of declines and could very well spike – both in volume and valuation – through 2027.

Behavioral Health Care

It’s been a mixed bag for behavioral health. At the current pace the sector is poised to eclipse last year’s tally by 3.4%. But this comes as a function of big swings — both positive and negative — in two sub-segments.

At the current pace, substance use disorder deal volume is trending down 28%, predominately on the falloff of transactions in outpatient services and MAT. While we suspect there are many factors at play — notably the volume of attractive acquisition candidates — we suspect that buyers are taking a wait-and-see approach to assess the impact on beneficiary eligibility given the aforementioned changes in Medicaid that begin in 2027. The thinking could be that patients that tap into outpatient treatment and MAT programs may — and we emphasize may — be more exposed to losing coverage due to work requirements than patients in more acute residential settings.     

While SUD deal volume is down, activity in autism services is trending up. In fact, at the current pace, dealmaking in ASD is up 58% vs. 2025 and 30% vs. the previous record tally in 2019. This one is a bit more difficult to explain. While the Medicaid policy exposure is likely low due to federally mandated Early and Periodic Screening, Diagnostic, and Treatment guidelines (EPSDT), rapid increases in spending and high-profile allegations of Medicaid fraud have put the segment, among others, under the glare of scrutiny. Buyers may be betting on the fact that such a vulnerable population will give regulators pause in enacting swift and draconian reimbursement changes. 

Other Notables

At the current pace, home medical equipment deal volume is up 63.6% over 2025 and could post its highest numbers since 2022. Home infusion/specialtyRx is on pace to top last year’s tally by 32% and its highest output over the past 10 years. Moreover, health care staffing transaction volume is trending up 17.3% over the prior year. We note that all three sectors are largely immune from Medicaid coverage and ACA subsidy exposure which, as alluded to above, likely cut into the growth in other sectors we cover.

Outsourced Pharma Services¹

Aggregate outsourced pharma services deal volume is on pace to hit 200 transactions, 40% greater than 2025 and 18% more than the previous record set in 2024. While clinical services and supply chain are both up a healthy 25.3% and 14.8% respectively, the biggest mover is commercialization services which is trending up 113% over 2025 and 16.3% over the previous high mark notched in 2024. After a shaky 2025 characterized by regulatory and trade uncertainty, the gains in OPS across the board are largely due to an influx of new capital and investments in research and development.

See The Braff Report: 2026 Clinical Services Mid-Year Update and Outlook for a deeper dive in this sector.

¹The Braff Group began covering Outsourced Pharma Services (OPS) in 2025.  Since our transaction data begins in 2021, we report on OPS separately from the other health care services sectors above

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