One major trend that investors are watching is the shift towards outpatient care. In the United States, use of hospital beds has reduced by half over the past 50 years despite population growth. Europe too is seeing increased use of outpatient settings across a broad range of specialties. In France, outpatient surgical procedures have grown from 47% of all surgeries in 2013 to 64% in 2024. Cataract surgery, for example, has moved almost completely out of hospital settings on both sides of the Atlantic.

One US study showed that 10% of operations currently taking place in hospitals could be shifted to outpatient settings without having any impact on clinical outcomes. Many patients are keen to avoid hospital stays, so the move to alternative spaces could open up fresh investment opportunities.

The outpatient sector is attractive to investors for several reasons, including market tailwinds, the potential for operational and financial efficiencies, policy support, and technological innovation.

“The data shows that private equity has become a significant player in outpatient care both in the US and in Europe. There are a lot of opportunities in Europe now for private equity to step in and help deliver more affordable and efficient care in outpatient settings.” – Holger Ebersberger, partner, McDermott Will & Schulte.

Addressing skilled labour shortages

Staffing shortages continue to challenge the European healthcare sector, with 21 out of 28 European countries reporting a shortage of doctors in the last few years and 16 reporting a shortage of nurses. Data from the European Labor Authority estimates that the EU healthcare workforce is short 1.2 million doctors, nurses, and midwives.

As staffing shortages create myriad issues for healthcare providers, private equity firms have been focused on delivering solutions. Investors are particularly interested in opportunities that make use of emerging technologies, such as artificial intelligence (AI) and robotisation, to make systems more efficient.

AI use cases are beginning to emerge across the healthcare ecosystem. Several HPE Europe 2025 panellists pointed to recent investments that are already delivering value in diagnostics, medical imaging analysis, bed optimisation, and fall prevention. Moving forward, investors expect advances in personalised medicine, powered by AI and robotics, to offer significant value.

HPE Europe attendees identified talent and workforce challenges as one of the biggest difficulties facing healthcare investors in Europe today. In a poll, 72% of respondents stated that regulatory and reimbursement barriers were the biggest challenge to investments across Europe in 2025. Staffing ranked second with 18%.

Opportunities for future dealmaking

Investments in healthcare services businesses in Europe have slowed over recent years following a period of intense capital deployment in the wake of the COVID-19 pandemic. Some of those past transactions received elevated valuations but did not generate the returns expected. Since then, regulatory scrutiny of private capital in healthcare, reimbursement challenges, and an ongoing bid-ask spread issue have caused the buyer universe to decrease.

Today, with interest rates coming down and a clear ongoing need for affordable care in an outpatient setting, private equity buyers are showing signs of cautious interest again.

Some of the most attractive healthcare services investment hotspots today are in emerging niches such as mental health, women’s health, AI-enabled care, and home care, according to 49% of HPE Europe attendees. Specialist clinics in areas such as ophthalmology, fertility, orthopaedics, and dermatology are also garnering interest, according to 29% of respondents.

Investment bankers and other dealmakers expect more transactional activity in healthcare in 2026 than has been evident in 2025. Large listed healthcare businesses likely will prune their portfolios, creating carve-out opportunities for investors capable of such transactions.

The European market likely will also see more sponsor exits in the small to mid-cap space, more cross-border expansion of regional platforms, and heightened investor focus on domestic businesses rather than entities with global supply chains.

“There are now interesting investment prospects coming up in outpatient care and healthcare services, with a backlog of exits waiting to transact. Investors see ways to do things better and a swathe of value-creation opportunities driven by technology, which we expect to lead to more activity in 2026.” – Jason Zemmel, partner, McDermott Will & Schulte.