NHS woes fuel private healthcare boom, with lawyers reaping the rewards
Private healthcare in the UK is experiencing unprecedented growth as NHS waiting lists soar and public services struggle to keep up. This surge in demand is also fueling a flurry of legal activity, keeping lawyers busy.
Deals lawyers in the UK are generally the busiest and most important practices for most law firms; however, with the London Stock Exchange sinking to 23rd in IPO venue rankings, there has been a shift in the trend of lawyers’ workloads towards highly concentrated areas.
This all comes as NHS waiting lists for elective treatments in England stand at over 7.4m people. The lingering problems from the Covid-19 pandemic, along with mismanagement over the years, have contributed to the rapid decline in the public sector health services.
Not surprisingly, over the last few years, private healthcare in the UK has become increasingly accessible and popular. The insurance market has experienced a surge in activity, with individuals purchasing healthcare policies and businesses implementing health plans for their employees.
Recent industry data reveal a staggering 23 per cent year-on-year increase in demand for private healthcare services, along with data showing that hospital admissions through private insurance continue to rise.
Given that Health Secretary Wes Streeting called on the private sector to help tackle long waiting lists for treatment, the door for private money has certainly opened up.
Surge of private equity and M&As
After the overall UK M&A market had been characterised by lower deal volumes, the market is bracing for a major surge in M&A activity in 2025, as deals roar back to life. However, the healthcare industry has proven to be a busy sector.
The UK healthcare industry sector saw private equity involvement reach its highest level in 2024, with 57 per cent of deals in 2023, according to PwC data, significantly higher than the average for all industries. The Big Four data broke it down, showing that PE interest in healthcare was up nearly 20 per cent since 2018.
The decline of the public health sector in the UK is providing lawyers, especially those in top firms, with fulfilling work in complex, highly regulated transactions. The firms that have an overlap of M&A, private equity, and healthcare and life sciences practices are enjoying this booming part of the UK market.
Patrick Scott, private equity partner at Clifford Chance, explained that private equity investors are “looking to invest behind established and start-up healthcare enterprises to help them scale, invest in technological and AI advancements, and ultimately help them meet the needs of their patients”.
IVF, AI, and care homes
A significant portion of deal activity over the last year has been “add-on” acquisitions, where existing private equity-backed companies buy smaller firms to consolidate and expand their service offerings.
However, it is not just the struggles of the NHS that has driven interest, as Scott noted, “the sector is supported by strong structural tailwinds, including an ageing population with more complex health needs.”
This can be seen in the deals over the last year, which included Mysa Care (backed by Downing) acquiring a supported living provider, the Partnership of Care, which operates 41 care homes.
While other healthcare issues, such as fertility, have seen a surge of interest from the private sector, with a focus on in vitro fertilisation (IVF) clinics.
Back in November, PE-backed pan-European group FutureLife acquired the Bristol Centre for Reproductive Medicine (BCRM) to expand its UK footprint. The deal was FutureLife’s broader strategy to become a leading provider of IVF and genetics services across Europe.
Scott explained that the sector expects healthcare investment to remain strong, and as a result, “we will therefore continue to see significant M&A activity in healthcare services such as hospitals; technology, robotics and AI; IVF; and pharma.”
Eyes on the Law is a weekly column by Maria Ward-Brennan focused on the legal sector.