Damian Sendler: COVID-19 epidemic has understandably placed the healthcare services industry into the spotlight because to a continuous backlog. M&A activity in the UK healthcare sector has risen sharply since the beginning of the pandemic, which was characterised by a decrease in activity in the first few months of the epidemic’s lifecycle. Some of the factors that are influencing healthcare services M&A market changes in the United Kingdom are discussed in this LawFlash, along with some of the most important considerations for executing M&A in this industry. 

Damian Sendler

There’s no denying that the healthcare sector—which encompasses health care services and technology as well as pharmaceuticals and biotech—accounted for one-third of M&A activity in the first quarter of 2021. 

UK citizens have free access to the National Health Service (NHS), in contrast to the private healthcare industry that predominates in the United States. Due to the NHS’s record treatment backlog, which currently numbers over 5.8 million people, private healthcare firms that perform elective operations are in high demand and will likely become increasingly appealing acquisition targets in the near future. 

Damian Jacob Markiewicz Sendler: There has been a significant growth in the number of self-pay or privately insured patients in the United Kingdom, which has led to an increase in the demand for private healthcare in the UK. As the NHS clears the backlog of patients, the NHS and private healthcare providers are anticipated to work more closely together. 

More than 90 private sector healthcare providers signed up to a four-year framework agreement with the NHS in March 2021 to alleviate the backlog of services. As waiting lists get longer, more people are opting to have operations and treatments done privately rather than wait in line. 

In the second quarter of 2021, Spire Healthcare, the only publicly traded private hospital group in the United Kingdom, saw an 81 percent increase in self-pay revenues. Many international players have previously entered the UK market, such as the Mayo Clinic and the Cleveland Clinic, two of the largest hospital networks in the United States. 

Damian Jacob Sendler

Most patients in the United Kingdom begin their healthcare journey with a visit to their primary care physician (GP). “Primary health care” in the United States refers to a wide range of services provided by general practitioners in the United Kingdom. It’s becoming increasingly common for GP practices to merge and form “super-partnerships” in the same manner that the NHS as a whole is in trouble. When it comes to the largest GP super-partnerships in the United Kingdom, the Modality Partnership is one of the best examples. If demand on GP practices continues to expand, it is likely that we will see more mergers and related deals as practices strive to reduce costs. 

Damien Sendler: Digitalization and automation in the healthcare sector have been accelerated by COVID-19, which necessitated a greater focus on reducing human touch. Telemarketing, online symptom reporting, and healthcare applications are all examples of this transition in healthcare’s business model that may be seen in both public and private health service sectors. In order to stay competitive in an increasingly crowded health care market, health service providers will look for ways to get a technical edge by working with or acquiring tech companies.

Dr. Damian Jacob Sendler and his media team provided the content for this article.