By Jackie Kimmell, Senior Analyst

We're more than six months into 2018, and global merger and acquisition (M&A) activity isn't slowing. After a record start—more than $2.5 trillion in mergers were announced during the first half of 2018—the year's activity is on pace to surpass $5 trillion, topping 2015 as the largest total on record.

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And, of course, M&A in the health care sector is a huge component of the increase. It's also likely to continue growing. According to HealthLeaders's survey on the topic, 71% of health leaders believe their organizations' merger, acquisition and partnership (MAP) activity will increase in the next three years, and 68% say their organizations are already actively exploring potential deals.

To provide a sense of the scale of the change, here are the four biggest health care mergers and acquisitions pending right now:

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1. Cigna acquires Express Scripts
   • Deal size: Cigna pays $67B in cash and stock
   • Timeline: Deal was announced on March 8, 2018 and is expected to close by December 31, 2018
2. CVS acquires Aetna
   • Deal size: CVS pays $69B in cash and stock
   • Timeline: Deal was announced December 3, 2017. The DOJ requested more information in February 2018
3. Walmart in talks with Humana
   • Deal size: Unknown, but Walmart has a market cap of $258.8B and Humana has a market cap of $39.7B
   • Timeline: First rumors of the deal were reported on March 29, 2018
4. Optum acquires DaVita
   • Deal size: UHG pays $4.9B in cash
   • Timeline: Deal was announced December 6, 2017 and the FTC requested a second round of additional information on March 12, 2018

What do these deals say about the state of health care M&A today?

Health care M&A activity is hardly new. What is new, however, is the new-in-kind combinations of players involved. The variety in the stakeholders involved (pharmacy benefit managers, major payers, commercial companies, medical groups, and so on) indicate a trend towards vertical integration of diverse stakeholders once thought to be in "separate parts" of the sector.

When these diverse stakeholders combine, they can have remarkable synergies—aligned incentives, large complementary data sets and combined assets—which have the potential to greatly disrupt market dynamics.

As a result, hospital leaders can't just "wait and see" what deals come next, says Advisory Board's Emily Zuehlke Heuser. Rather, it's critical to anticipate possible activity, forecast potential impacts to your business, and create a plan to prepare.

To learn more about what your organization can do to be ready for future M&A, register for tomorrow's webconference on "Vertical Integration: How Mega-Mergers Could Impact Your Organization" this Wednesday, August 29^th from 3-3:30 pm ET.

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Can't make it? Make sure you download our resource on Vertical Integration: Preparing for New Competition, which walks you through how to approach scenario planning for future market activity and offers suggested strategies for how to minimize or magnify their impacts.

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