The company reported a quarterly loss as it prepares to be acquired and transformed by the private equity firm.
Better-than-expected fiscal results in the third quarter couldn’t keep Walgreens from swinging to a loss for the period.
Strong retail pharmacy and international growth helped buoy earnings, but continued weakness in front-of-store sales kept investor sentiment in check as the company inches closer to being taken private by Sycamore Partners.
Sales for the quarter reached $39 billion, up 7.2% year-over-year and ahead of analysts’ expectations. That momentum was largely powered by its U.S. retail pharmacy business, which saw revenue grow 7.8% to $30.7 billion, while the company’s international segment also achieved nearly 8% growth to $6.2 billion.
Still, profitability didn’t follow as Walgreens reported a net loss of $175 million, a fall off from the $344 million surplus experienced in the same period last year.
The U.S. healthcare segment, which includes the company’s investments in VillageMD and other clinical services, saw sales slip by $23 million to $2.1 billion, highlighting Walgreens challenges in delivering direct care. The company previously announced the closure of underperforming VillageMD clinics, which suffered a 6.5% dip in sales in the third quarter.
“Third quarter results reflect continued improvement in our U.S. Healthcare segment and benefits from our cost savings initiatives, while we continued to see weakness in our U.S. front-end sales,” Walgreens CEO Tim Wentworth said in a statement. “We remain focused on our turnaround plan, which will require time, disciplined focus and a balanced approach to manage future cash needs with investments necessary to navigate an evolving pharmacy and retail environment.”
Walgreens’ third-quarter performance comes ahead of its $10 billion sale to private equity firm Sycamore Partners, expected to close by the end of 2025. The looming transaction has created uncertainty over the company’s long-term strategy and was cited by Walgreens as a reason for suspending full-year guidance.
The upcoming privatization offers the company an opportunity for a strategic reset and will key to watch as Walgreens charts its next act.
With state conditions in place to preserve services and community benefits, the deal marks a new era for one of Ohio’s largest health systems.
Ohio Attorney General Dave Yost has approved General Catalyst’s acquisition of Summa Health, paving the way for the venture capital firm’s expansion into hospital ownership—if the deal meets 10 conditions.
Yost’s review focused on ensuring the transaction met legal requirements for a conversion from a nonprofit health system to a for-profit organization. As part of the approval, General Catalyst and Summa must agree to a set of conditions intended to preserve access to care and protect community interests.
Those conditions are headlined by the purchase price needing to increase by $15 million in cash and another $15 million in equity required for the surviving nonprofit foundation, according to a letter sent to General Catalyst and Summa Health.
General Catalyst’s Health Assurance Transformation Corporation (HATCo) subsidiary signed a definitive agreement in November to acquire the Ohio-based hospital operator for $485 million, allowing Summa to pay off its $850 million in existing debt.
In addition to setting aside funds for the nonprofit foundation, Yost wants the foundation to agree not to sell its $15 million equity interest for three years after closing the deal. Further, the charitable purpose of the foundation receiving the funds must be consistent with Summa’s original charitable purpose and most of the foundation’s board members will have no affiliation with Summa.
Other conditions set by Yost include that the attorney general will retain enforcement authority over HATCo’s obligations to Summa for 10 years, HATCo must submit an annual compliance report to the attorney general for the same period, and it must notify the attorney general of any transactions that could raise antitrust concerns during that time.
“My role in this process is to protect Ohio’s charities,” Yost said in the news release. “After a comprehensive review by the Charitable Law Section of my office, we’re confident that the agreement includes enforceable commitments that will secure Summa’s nonprofit mission, protect patient care, and ensure continued investment in the greater Akron community.
“With proper safeguards in place, this has the potential to strengthen health care in northeastern Ohio for years to come.”
A Summa spokesperson said in a statement that the health system and General Catalyst will work to satisfy Yost’s conditions.
“This is a significant milestone and follows the recent approval we received from the Ohio Department of Insurance,” the spokesperson said. “With these two crucial regulatory approvals now received, we look forward to continuing to focus on completing all of the remaining details necessary to finalize the transaction, including the legal work required to meet the conditions developed by the attorney general’s office and the receipt of all other regulatory approvals.”
The deal has been closely monitored across the industry. While private equity involvement in hospitals has drawn scrutiny for aggressive cost-cutting and staffing decisions, General Catalyst is aiming to establish a model that combines mission-aligned goals with capital-driven transformation.
Still, critics argue that any for-profit shift comes with inherent risks, particularly in underserved communities. A coalition called Summa Is Not for Sale has pushed back against the deal, claiming it will negatively impact the health system’s patients and workers.
While the coalition continues to believe that the sale price for Summa is well short of its true value, member Jeff Barge said in a statement that the attorney general’s conditions improve upon the deal’s transparency and community benefits.
Health services M&A remains steady to start 2025 amid concerns around valuation and regulatory scrutiny.
Mounting economic and regulatory pressures haven’t deterred health services dealmaking, which remains robust thanks to the sector’s durability and evolving investor confidence.
Growth in subsectors like behavioral health in the first quarter of the year highlights the resilience of health services, according to PwC’s U.S. Deals 2025 midyear report.
The analysis tracked the sector’s M&A activity through May 15, 2025, and found that the market announced 445 transactions, pushing the last 12-month (LTM) total to 1,265 deals, down 7% compared to 2024. The disclosed value of the deals was about $64 billion, down 8% from 2024 but marking a 2% increase from 2023.
Though only megadeal was announced in that period, the $17.9 billion price tag for the Walgreens Boots Alliance acquisition by Sycamore represented around 28% of all disclosed value.
“Other services,” consisting of contract research organizations, ambulatory surgical centers, home infusion, and medical office buildings, led all subsectors with 454 LTM deals and more than $31 billion in value.
Physician groups had the second-highest deal volume with 413, accounting for $11.3 billion in disclosed value, while hospitals had the third-highest value at $8.7 billion on 52 deals.
In hospital dealmaking, General Catalyst’s purchase of Summa Health could be a precursor to venture capital interest in acute care, PwC noted.
After cooling post-pandemic, the behavioral health space is rekindling investor enthusiasm. In the first quarter, deal flow spiked over 35% year-over-year, with autism-related deals doubling to their highest quarterly levels since 2020.
Across seven tracked public subsectors, including home health, labs, skilled nursing, ambulatory care, managed care, and acute systems, EBITDA multiples have compressed since May 2024. Managed care valuations are about 19% below last year, under pressure from rising medical loss ratios and political uncertainty around M&A pricing.
Strategies for dealmakers
Embrace deal flexibility and innovation, deploying non-traditional structures to close deals in an environment with high interest rates.
Target subsector specialization, from behavioral health to outpatient care, that aligns with regulatory trends and investor appetite.
Strengthen regulatory readiness, with strong antitrust strategies and engagement around site-neutral payment reforms.
Monitor capital sources, including venture capital for acute systems and private equity for stand-alone care assets.
Despite uncertainty, PwC offered a cautiously optimistic outlook. With private equity reserves still flush and activity holding firm, health services are poised for sustained activity in the second half of 2025.
VUMC joining a growing number of health systems making tough cuts to stay financially viable.
Vanderbilt University Medical Center (VUMC) will lay off up to 650 employees as part of a broader effort to reduce expenses by $300 million, the organization announced.
The job cuts come in response to significant changes in federal funding and reimbursement, particularly reductions in support for research and patient care programs. The layoffs represent about 2% of VUMC’s workforce and will primarily affect nonclinical roles in research, administration, and support areas.
The layoffs follow an earlier round of budget reductions implemented this spring to slash $250 million, which included hiring freezes and other cost-saving measures. Jeff Balser, president and CEO of VUMC, previously warned that deeper cuts could be necessary if federal funding levels continued to fall.
The latest round of cuts is needed to offset sharp declines in federal research support and other reimbursement reductions, according to the Nashville-based health system. VUMC leaders pointed to proposed cuts in NIH funding and changes to Medicaid and other programs as key drivers behind the decision.
Clinical positions are expected to be largely unaffected by the layoffs. VUMC is moving forward with its patient care expansion plans, including the opening of the new Jim Ayers Tower later this year.
As one of the largest academic medical centers in the Southeast, VUMC has nearly 40,000 employees and sees more than 3.5 million patient visits each year. The cuts underscore the mounting pressure academic medical centers face as they try to balance financial sustainability with their research and clinical missions.
Several health systems across the country have made similar decisions due to financial strain.
PeaceHealth recently stated it would cut 1% of its 16,000-member workforce and freeze nonclinical hiring for the rest of the year “after months of discernment, financial analysis and a thorough review of the dynamic healthcare market.”
Elsewhere, Mass General Brigham announced that it would undertake the largest layoffs in its history to make up ground on a $250 million budget gap and Providence paused nonclinical hiring as a result of low reimbursement and increased expenses.
With many hospitals and health systems already operating under financial duress, federal funding cuts represent a severe blow to organizations’ sustainability.
Executives are rethinking strategies to navigate in an increasingly uncertain landscape, a new report reveals.
As macroeconomic and policy shifts continue to rattle industries across the country, healthcare decision-makers are recognizing the need for strategic change to keep up.
Economic and regulatory policies are particularly affecting leaders in health industries in comparison to executives in other sectors, according to a PwC's May Pulse Survey, highlighting the pressures facing healthcare organizations everywhere.
Whether it's providers trying to manage rising labor costs, pharma and medtech working to overcome supply chain challenges, or payers dealing with drug pricing, healthcare has been significantly impacted by the ebbs and flows taking place in Washington.
While nearly half (48%) of the 678 executives across six industries surveyed by PwC cited U.S. economic policy as a top-three reason to rethink their short-term strategies, that was the case for 61% of healthcare leaders.
Healthcare executives also gave more weight to other factors driving short-term strategy shifts in comparison to other industries, including AI and data regulations (56% to 44%), U.S. trade policy (44% to 41%), U.S. federal government spending and budget policy (37% to 35%), and corporate tax policy (34% to 33%).
The factors that resonated less with healthcare leaders than other sectors were U.S. antitrust and competition environment (24% to 31%) and climate policy (22% to 31%), with U.S. immigration policy's impact seen as even (22% for both).
In terms of most pressing concerns, health industries executives called attention to cyberattacks (90%), the uncertain macroeconomic environment (90%), margin pressure affecting earnings (85%), the complex regulatory environment (80%), and access to skilled labor (80%).
Healthcare flagged cyberattacks as a moderate or serious risk more than any other industry, reflecting how vulnerable healthcare organizations have been to recent cyber incidents that have slowed operations and led to revenue loss.
Unsurprisingly, access to skilled labor is keeping healthcare leaders up at night as workforce challenges continue to plague the industry.
"Providers face shortages as they care for an aging population with increasingly complex needs," PwC analysts wrote. "Pharma requires specialized expertise in biomanufacturing, cell therapies and regulatory compliance. While technology can improve the productivity of existing staff, mitigating some of the labor crunch, it comes with its own set of commitments like investing in change management and training. The AI wave is also driving increased demand for talent proficient in AI, machine learning and data analytics."
Healthcare executives have little choice but to adjust to combat the economic and policy volatility, which includes revising financial forecasts and budgets, implementing cost reductions, assessing tariff impacts, renegotiating supplier prices, and even reshoring manufacturing operations, according to the survey.
"To steer business through all this uncertainty, HI leaders have to stay nimble," PwC analysts wrote. "This means focusing on customers, making processes more efficient, significantly lowering cost structures and doubling down on the fundamentals of quality, compliance and cyber protection."
The move to divide the business into six divisions comes after the company experienced a string of executive exits.
Amazon is making another significant pivot with its healthcare business, signaling a strategic reset.
In the wake of uninspiring results and a run of departures by high-level executives, the tech giant has restructured Amazon Health Services into six new units with the aim of being nimbler and more streamlined.
As a result, Amazon is integrating operations and narrowing its focus to offerings with clearer pathways to growth, namely One Medical and its pharmacy services.
Neil Lindsay, senior vice president of Amazon Health Services, shared with CNBC¸ which first reported the restructuring, that the decision improves the company's ability to serve and reach as many patients as possible.
"Our leadership team has been focused on simplifying our structure to move faster and continue to innovate effectively," Lindsay told the network. "One of the problems we're trying to solve is the fragmented experience for patients and customers that's common in healthcare."
The company has placed Amazon executives and leaders from One Medical at the helm of the six divisions:
One Medical Clinical Care Delivery, led by Dr. Andrew Diamond
One Medical Clinical Operations and Performance, led by Suzanne Hansen
AHS Strategic Growth and Network Development, led by John Singerling
AHS Store, Tech and Marketing, led by Prakash Bulusu
AHS Compliance, led by Kim Otte
AHS Pharmacy Services, led by John Love
"If we can make one thing a little bit easier for a lot of people, we'll save them a lot of time, a lot of money, and some lives," Lindsay told CNBC. "And if we stack these changes up over time, it'll feel like a reinvention."
Amazon's foray into healthcare has been ambitious, marked by a series of acquisitions and course corrections. Its $3.9 billion acquisition of primary care provider One Medical in 2023 was a major step in expanding its clinical footprint. The launch of Amazon Clinic, a virtual care platform, and Amazon Pharmacy, built on the 2018 PillPack acquisition, were similarly bold plays to vertically integrate healthcare delivery.
However, not all bets have panned out. The joint venture Haven, formed with JPMorgan Chase and Berkshire Hathaway, was dissolved in 2021. Internal projects like Amazon Care were also shuttered after failing to meet the company's standards for scale and impact.
Amazon is continuing to invest in One Medical and its pharmacy business though. One Medical is working to open new offices in New Jersey, New York, and Ohio, whereas Amazon's pharmacy offerings have experienced growth, allowing it to plan for pharmacy openings in 20 new cities this year.
Additionally, Amazon has seen executives in its healthcare business exit the company in recent months. One Medical CEO Trent Green left in April and followed the departure of Dr. Vin Gupta, who vacated his role as CMO of Amazon Pharmacy in February.
Meanwhile, Aaron Martin, Amazon's vice president of healthcare, and Dr. Sunita Mishra, Amazon's CMO, also internally announced their exits in May, according to CNBC.
It's unclear if Amazon's healthcare recalibration will provide it with the traction it's been seeking, but it could be an indictor for fellow disruptors and competitors of where consumer expectations and the industry are heading.
Prioritizing safety helps protect staff from harm and demonstrates leadership’s commitment to their well-being.
Workplace violence unfortunately remains a major concern for hospital CEOs, who recognize that employee safety is vital to maintaining a sustainable workforce.
At the recent HealthLeaders CEO Exchange, hospital and health system decision-makers shared strategies they’ve deployed at their organizations to mitigate violence against staff and patients.
Here are three approaches that were discussed at the Exchange.
Are you a CEO or executive leader interested in attending an upcoming event? To inquire about attending the HealthLeaders Exchange event, email us at exchange@healthleadersmedia.com.
The HealthLeaders Exchange is an executive community for sharing ideas, solutions, and insights. Please join the community at our LinkedIn page.
Hospitals showed resilience over the first four months of the year, even as cost pressures persisted.
Hospitals are continuing to build on early-year momentum, reflecting encouraging trends in performance.
Increased demand for care and improved patient throughput at hospitals in April resulted in a gain in operating margins, according to Kaufman Hall's latest National Hospital Flash Report, which analyzes data from 1,300 hospitals.
The median year-to-date operating margin for hospitals through April, inclusive of all allocations for the cost of shared services that they receive from their health system, stood at 3.3%, up from 3.1% in March and marking a 6% improvement compared to the same period last year. The monthly margin ticked slightly up from March's 2.9% to April's 3%.
"Hospital performance from January to April outpaced the first four months of 2024, largely driven by patient volume and hospital efficiency," says Erik Swanson, managing director and group leader of data and analytics at Kaufman Hall. "Operating room minutes, ED visits, and inpatient revenue are trending upward, demonstrating a strong demand for services. A decline in average length of stay indicates that hospitals are triaging, treating, and discharging patients efficiently and appropriately."
April saw a bump in patient volumes, continuing a shift that's been key to hospitals' financial resiliency in 2025. Discharges per day rose 3% year-over-year, while adjusted discharges per day climbed 5%. On a year-to-date basis, emergency department visits increased 3% compared to the same period in 2024, and operating room minutes per day were up a modest 1%.
One of the most notable improvements came in length of stay, which declined by 3% year-over-year. That reduction is helping hospitals treat more patients more efficiently—critical amid ongoing workforce and capacity challenges.
In terms of revenue, net operating revenue per calendar day jumped 6% in April compared to last year, with outpatient revenue per calendar day leading the way with a 10% rise and inpatient revenue per calendar day also climbing 5%.
Expenses, however, remain a challenge. Total costs per day increased 7% year-over-year, with significant growth in supply (9%), drug (7%), and purchased services (8%) costs. Labor costs also grew by 6%, despite many systems focusing on right-sizing their workforces.
Hospitals also saw a 5% increase in bad debt and charity care compared to last April, adding to the financial pressures.
Though hospitals are finding ways to adapt and volume boosts are helping, the margin for error remains thin.
The suddenly-struggling company is hoping to regain internal and external confidence during a tumultuous stretch.
Amid mounting financial pressures and continued backlash, UnitedHealth Group is eyeing a significant move out of international markets as it works to reestablish its core U.S. business.
The health insurance giant has four nonbinding bids for Banmedica, its subsidiary operating in Colombia and Chile, for roughly $1 billion, according to a report by Reuters, which cited two people with direct knowledge of the matter.
The bids are from Washington, D.C.-based private equity firm Acon Investments, Sao Paulo-based private equity firm Patria Investments, Texas nonprofit health firm Christus Health, and Lima-based healthcare and insurance provider Auna, the report stated. Binding proposals are expected by July.
This latest potential step in UnitedHealth’s international unwind reflects the broader recalibration at the company, which has faced a confluence of challenges over the past year. Since the murder of UnitedHealthcare CEO Brian Thompson in December, UnitedHealth has seen shares plummet while it’s made headlines for all the wrong reasons.
Around the time CEO Andrew Witty stepped down from the role for personal reasons in May, TheWall Street Journalreported that UnitedHealth is under investigation by the Department of Justice for possible criminal Medicare fraud.
Following the news and the release of a disappointing earnings report, new CEO Stephen Hemsley acknowledged UnitedHealth’s recent struggles at the company’s annual shareholder meeting earlier this month.
“We are well aware we have not fulfilled your expectations or our own,” Hemsley said. “We apologize for that performance and we are humbly determined to earn back your trust and your confidence.”
By divesting Banmedica, bought for $2.8 billion in 2018, UnitedHealth is expected to refocus its efforts in the U.S. market as it attempts to steady itself.
The company recorded a loss of $1.2 billion last year from its operations in Banmedica, which serves more than 2.1 million consumers through its health insurance programs and has around four million patient visits annually across its network of 13 hospitals and 143 medical centers, Reuters reported.
UnitedHealth also suffered a $7.1 billion loss in 2024 from the sale of its Brazilian health insurance business, Amil. That divestiture in 2023 was followed by the company’s exit from Peru in March.
Stepping back from markets where scale and long-term strategic synergy are lacking can allow UnitedHealth to send a message to its stakeholders that stabilization and focus on core businesses will be the priority to weather the current turbulence.
Executives outlined strategies to address intensifying demands at the recent HealthLeaders CEO Exchange.
As the landscape in healthcare continues to shift and evolve, it's on hospital CEOs to meet the moment by proactively attacking challenges head-on.
With pressure mounting from workforce shortages, cybersecurity threats, and rising violence in care settings, leaders know that it's crucial to identify and implement the right solutions.
Here are four strategic imperatives executives at last week's HealthLeaders CEO Exchange discussed to solve for some of the major concerns currently facing decision-makers.
Invest in your people
Every organization wants to strengthen its workforce and while there are several ways to tackle staffing issues, CEOs at the Exchange highlighted that a people-focused approach should be at the forefront.
Reigniting joy and purpose for healthcare workers is key, especially with aftereffects of the pandemic still being felt. Fostering a positive culture to create more enthusiasm, especially by celebrating high performers and supporting career growth, can go a long way.
Technology should be used to support clinical workers, not add to their burden. Organizations are adopting tools like ambient documentation and AI-driven radiology, but success depends on involving frontline staff in testing and selecting solutions that work for them.
Reinforce workplace safety
The unfortunate reality for the healthcare workplace is that it's impossible to prevent violence completely.
However, the growing threat of violence is prompting organizations to take layered, often discreet approaches to staff and patient safety. Monthly workplace violence committees, active shooter drills, and panic buttons embedded in employee badges are part of wider strategies Exchange members are utilizing.
Though some hospitals employ armed guards, most security measures are designed to be non-intrusive. Enhancements in waiting areas, psychiatric support, and facial recognition tools help mitigate potential incidents, while staff de-escalation and support initiatives aim to address daily aggression.
Prepare cybersecurity response
Executives at the Exchange agreed that cybersecurity is no longer just an IT concern, but a core leadership priority.
Though prevention is still necessary, the focus for organizations is shifting to rapid response, with cyberattacks all but inevitable. In the wake of an attack, it's vital that hospitals can recover as quickly as possible to keep operations running, including having a communication plan ready to go. By staying in a hybrid environment that includes both data centers and the cloud for data storage, leaders won't be overcommitted one way or the other and can balance speed with control.
In terms of prevention, email remains the top entry point for cyberattacks, which is why health systems should be educating staff through phishing simulations. The rise of AI-driven attacks is also putting more emphasis on social psychology, with bad actors gaining access through impersonation like never before. To combat this, one leader suggested that their peers ask off-the-wall questions to verify identities during conversations.
Embrace change
Finally, CEOs recognize that resilience is vital right now with change becoming the norm in healthcare.
Organizations are investing in regular leadership gatherings and enterprise-wide training to empower teams through volatility. Frontline management resiliency training, trust-building, and open dialogue with regional leaders are seen as essential for maintaining stability and morale in an increasingly dynamic environment.
Ultimately, the next seismic event will eventually occur, whether it's at the scale of a pandemic or provider-specific like site-neutral payment policy. How leaders weather those storms will determine long-term success.
Are you a CEO or executive leader interested in attending an upcoming event? To inquire about attending the HealthLeaders Exchange event, email us at exchange@healthleadersmedia.com.
The HealthLeaders Exchange is an executive community for sharing ideas, solutions, and insights. Please join the community at our LinkedIn page.
