California’s two largest nonprofit health systems are positioning themselves for major expansion and strategic growth this year, with newly appointed leaders focused on mergers, acquisitions and national partnerships.
Oakland-based Kaiser Permanente named Jim Marcotte vice president of mergers and acquisitions and partnership development strategy implementation. Mr. Marcotte previously served as executive director of financial planning and analysis for Kaiser and brings additional experience from Sierra Health Services, where he held senior finance roles.
Sacramento-based Sutter Health tapped Scott Nordlund as executive vice president of corporate development and partnerships. Mr. Nordlund will lead Sutter’s national M&A and joint venture strategy outside of California. He most recently served as executive vice president and chief strategy and growth officer at Phoenix-based Banner Health.
The moves come amid heightened dealmaking activity across the industry, with health systems increasingly looking beyond traditional inpatient services for growth opportunities, according to a report from Kaufman Hall.
The firm expects a rise in non-acute and capability-based partnerships in 2026 — such as joint ventures, ASC acquisitions and lab collaborations — as systems diversify to improve access, expand assets and strengthen margins. At the same time, financially distressed hospitals are expected to remain a dominant force in M&A as for-profit systems continue divesting non-core assets.
In 2025, 45.6% of hospital transactions involved a divestiture, with for-profit operators acting as sellers in 11 deals and buyers in just one, according to Kaufman Hall. Analysts also noted that state regulators may take a more permissive stance on transactions this year, particularly when closures are on the line.
Kaiser and Sutter’s latest M&A leadership appointments suggest both systems are adapting to this environment by bolstering their development arms and eyeing opportunities beyond their home markets.