Long-term-care providers booked $1.66 billion in deal activity but the total number of deals was static at 39 compared with the first quarter of last year.
A Fitch Ratings report on for-profit hospitals said companies have plentiful cash flow that could be deployed for acquisitions. It also expects companies to see similar levels of free cash flow this year, boosted by ongoing profitability and health information technology incentive payments.
Acquisitions are also helping hospitals overcome operating challenges. Fitch, for instance, noted that rural hospitals experienced a 0.8% decline in admissions in the fourth quarter of last year because of slowed demand for less-acute care, such as flu treatment and obstetrics.
Their urban counterparts, meanwhile, saw an increase of 1.6% in same-hospital admissions for the period.
A separate report last month from Moody's also said it expects to see strong deal activity in the investor-owned space as reimbursement levels continue to be squeezed.