Clinical Insourcing M&A Landscape in 2026

The UK clinical insourcing market has moved beyond its post-COVID expansion phase, creating a more selective environment for providers, investors and acquirers

Clinical insourcing remains an important part of NHS capacity management in 2026. At June 2026, there were still 7.27 million incomplete referral to treatment pathways in England, with only 65.8% within 18 weeks. Significant workforce shortages also persist in particular specialties, creating an ongoing requirement for external clinical capacity.

The market is no longer, however, a straightforward waiting list growth story. The exceptional conditions that followed COVID have moderated, NHS Trusts face greater pressure to control expenditure and the number of providers competing for work has increased considerably.

The result is not the disappearance of demand, but a more selective market in which provider performance has diverged. For owners and investors, understanding what creates a defensible position is becoming much more important than simple exposure to the sector.

From post-COVID expansion to a more selective market

Before COVID, clinical insourcing had grown steadily but remained relatively concentrated, with Medinet and 18 Week Support among the most established providers.

The model allowed NHS Trusts to make better use of existing facilities, generally during evenings and weekends, by bringing in complete external clinical teams to deliver additional activity. Unlike agency staffing, the provider assumed responsibility for delivering a managed clinical service. Unlike outsourcing, patients generally continued to be treated within NHS facilities.

COVID severely disrupted elective care, but the resulting increase in waiting lists subsequently created significant pent up demand. Established providers expanded rapidly, new operators entered the market and investor interest accelerated.

A number of the newer entrants came from healthcare recruitment and staffing backgrounds. Securing a place on one of the national insourcing frameworks provided access to the market and, during the strongest period of demand, many of these businesses grew quickly.

That environment began to change from 2024 onwards. NHS Trusts became more cautious about external expenditure, while increased framework participation created substantially more competition. There are now 69 suppliers listed on the NHS Shared Business Services clinical insourcing framework.

Framework inclusion remains important, but it is no longer a meaningful point of differentiation in itself. Providers must still demonstrate that they can recruit the right clinicians, mobilise reliably, satisfy governance requirements and deliver activity at a price that represents clear value for money.

A more selective market is creating different outcomes

The changing market conditions are not affecting every provider in the same way.

The latest accounts of leading platforms show materially different trajectories. Some providers have maintained or increased their scale, supported in part by acquisitions and broader service offerings. Others have reported lower clinical activity as NHS budget constraints have affected the availability of work. This is consistent with a market normalising after a period of exceptional post-COVID expansion, rather than one experiencing either uniform growth or decline.

It would also be too simplistic to conclude that generalists are struggling while specialists are succeeding. Broad based providers can remain resilient, while specialist positioning does not automatically create a defensible business.

The more relevant distinction is between businesses with a genuinely differentiated clinical services proposition and those whose offering is closer to commoditised capacity or staffing provision.

Providers with scarce clinical capability, strong governance, established clinician networks and a track record of repeat delivery should be better placed to maintain their position. Diagnostic services may be particularly attractive where workforce shortages are acute. The Royal College of Radiologists estimated a 29% UK clinical-radiology workforce shortfall in 2024, while demand for CT and MRI grew materially faster than the radiologist workforce.

The ability to provide clinicians in itself is unlikely to be sufficient. Buyers and NHS customers will increasingly want evidence that the provider can manage the complete service, deliver consistently across different locations and develop relationships that produce repeat work over time.

M&A strategies are moving beyond core clinical insourcing in 2026

Private equity investment initially focused on building scale within the core market. Summit Partners invested in 18 Week Support in 2022, followed by Fremman Capital’s investment in Medinet in 2023, which allowed an exit for Volpi Capital.

Subsequent transactions demonstrate a broader strategic direction. Medinet acquired Remedy Healthcare Solutions in 2023, adding both clinical insourcing and staffed modular solutions. It then acquired HealthHarmonie in 2024, expanding into community-based gynaecology, dermatology and ophthalmology.

18 Week Support followed a similar direction through its acquisition of Medical Clinics, including Sussex Community Dermatology, in 2025. The business combined NHS community dermatology with self-pay and insured services.

These transactions reflect a move beyond conventional hospital-based insourcing. Community services allow providers to support a wider part of the patient pathway and develop deeper relationships with NHS Trusts and ICBs. Once a provider has established its own clinical infrastructure, there may also be opportunities to introduce self-pay and private medical insurance funded services, although this remains an emerging strategy rather than an established model across the market.

AXA Health’s acquisition of HBSUK in 2024 provides a different example of this convergence. Alongside its insourcing activities, HBSUK had developed Virtual Lucy, a technology platform already used by AXA within its insurance pathways. The acquisition therefore reflected the value of combining clinical delivery, technology and privately funded pathways, rather than a straightforward acquisition of insourcing capacity.

Despite the more challenging market conditions, private equity appetite has not disappeared. Bay Tree Private Equity’s backing of the management buyout of Medicare Insourcing Services in April 2026 provides a recent example of capital being available for the right business. Medicare’s diagnostic-led model, advanced practitioner workforce and established NHS relationships offered clear differentiation from more general elective capacity providers. The transaction suggests that investor interest is becoming more selective, rather than retreating from the sector altogether.

We also expect to see further consolidation among smaller providers. The acquisition of Elite Teams by 1 Clinical in August 2026 provides a recent example. There may also be opportunities for stronger operators to acquire specialist capabilities, clinician relationships or NHS customer relationships from providers that have found the more difficult market conditions challenging.

What this means for owners and investors

Clinical insourcing can produce strong growth and attractive margins, but the quality of that performance requires careful examination.

Many individual contracts are relatively short term. Buyers must therefore distinguish between contractually recurring revenue and customer relationships that have produced repeat work over several years. Trust by Trust trading history, contract extensions, re-awards and pipeline conversion may be more informative than the remaining term of the current contracts alone.

Clinical workforce quality will be equally important. A large clinician database has limited value if only a small proportion of those clinicians are active, available and qualified in the specialties and regions where demand exists. Buyers will want to understand clinician utilisation, concentration, retention, compliance and the extent to which the workforce represents genuinely scarce capacity.

Customer concentration, framework dependency, specialty level margins, clinical governance and mobilisation performance will also receive considerable scrutiny. Providers able to demonstrate strong performance across these areas should be better placed to attract investment than businesses relying primarily on continued waiting list growth.

Over the next few years, M&A activity is likely to follow three broad themes. The first is consolidation among smaller operators. The second is capability led acquisition, particularly in diagnostics, scarce specialties and community services. The third is the continued development of broader patient pathways spanning hospital, community and, selectively, privately funded care.

Clinical insourcing remains an investable market, but the exceptional post-COVID growth phase has ended. Future value is more likely to accrue to providers with differentiated clinical capabilities, proven delivery credentials and a credible strategy for expanding across specialties, settings and funding channels.

For owners, operating in a market with substantial underlying demand will not by itself be enough. The businesses likely to attract the strongest buyer interest will be those able to demonstrate why their clinical capability, customer relationships and delivery model would be difficult for another provider to replicate.

About Eclipse

Eclipse Corporate Finance is a specialist healthcare M&A advisory firm with particular experience across clinical insourcing. We advised the shareholders of Remedy Healthcare Solutions and HealthHarmonie on their sales to Medinet, and Medicare Insourcing Services on its investment from Bay Tree Private Equity.

We would be pleased to speak in confidence with owners considering how current market conditions may affect the strategic options for their business. Further details of our experience and how we support clinical services businesses can be found on our clinical services M&A page.