In 2025, hospitals focused on outpatient growth, cost containment, AI-driven efficiency, and patient affordability strategies to stabilize margins amid rising labor and supply costs. Hospital closures in both urban and rural settings increased from previous years. Mergers and acquisitions had a major impact in 2025, reshaping provider networks, payer strategies, and the competitive landscape. The year was marked by consolidation across hospitals, physician groups, insurers, and tech-enabled health companies. Healthcare investment grew in health tech, AI, and specialty care, while hospital investments were mixed, driven by restructuring and distressed acquisitions. We saw a rebound in healthcare IPOs, with activity across biotech, medtech, and digital health. Several notable companies went public, reflecting renewed investor confidence in health innovation despite regulatory and financial pressures. What will the business of healthcare look like in 2026? We asked our experts and here what they had to say.
And check out all our prediction posts looking to 2026.
Dr. Kathryn Boger, Chief Clinical Officer and Co-Founder, InStride Health
LinkedIn: Kathryn Boger, Ph.D., ABPP
In 2026, Measurement-based care (MBC) will finally get its moment in behavioral healthcare. It won’t arrive with a splashy headline, but through a quiet, steady shift as patients and families come to expect it as the norm. Payers will take a sharper interest in understanding outcomes, and more clinicians will use real-time data to guide decision-making.
George Boghos, CEO, Imagine Pediatrics
LinkedIn: George Boghos
In 2026, value-based care will show that doing right by children and families is also good business. When medical, behavioral, and social care models are integrated and personalized around each child, especially vulnerable populations, we see improved outcomes, better experiences for patients and providers, and reduced costs of care. The organizations that invest in these integrated, tech-enabled, personalized models in a scalable way will see sustainable results and healthier patient populations overall.
Fawad Butt, CEO and Co-founder, Penguin Ai
LinkedIn: Fawad Butt
The next wave of health IT investment may be smaller but smarter. The capital will flow toward healthcare-native AI platforms that deliver rapid, defensible ROI in a shorter timeframe. Consolidation will continue, but the real winners will be companies that deliver measurable efficiency through intelligent and governed AI.
Dr. Tim Church, Chief Medical Officer, Wondr Health
LinkedIn: Tim Church, MD, MPH, PhD
Direct-to-Consumer and Employer Models Will Expand
Lilly and Novo are reducing reliance on PBMs so patients can buy weight loss medications directly from the manufacturer. We’ll see more of this, both in direct-to-consumer and direct-to-employer models. More middlemen will be cut out of the process. There will likely be struggles with rollout though. Demand may outpace available experienced providers and organizations will need to balance access with cost. To access most-favored-nation pricing, we need easier pathways for employers, not just individual consumers. Right now, the only clear pathways are direct-to-consumer. Employers need ways to pay at the favored-nation price instead of marked-up PBM prices. That’s a major issue that should be solved in 2026.
Jeff Collins, CEO, WanAware
LinkedIn: Jeff Collins
Healthcare leaders know that technology is both an enabler and a liability. In a world of leaner margins, unpredictable policy shifts, and divestiture-heavy M&A, asset visibility will define whether integrations succeed or stumble. Ghost assets, the devices, systems, and technologies that are absent from official inventories but remain active in hospital networks, are a technical nuisance but they also undermine compliance, consume budgets, and jeopardize patient safety. For hospital executives, compliance officers, and IT leaders alike, closing the visibility gap is no longer optional. It is the foundation of resilient, integrated, and compliant healthcare systems.
Andy De, Chief Marketing Officer, Lightbeam Health Solutions
LinkedIn: Andy De
The adverse impact of rising health insurance premiums and the loss of Medicare and Medicaid patients, which has already led to a number of rural and community hospitals shutting their doors, combined with reduced healthcare IT spend, will drive increased M&A across healthcare organizations as well as enterprise SaaS vendors in 2026. AI startups will continue to see disproportionate VC investment, but pragmatism will begin to outweigh FOMO, with growing demand for Agentic AI platforms and AI agents that address real-world problems, reduce fatigue and burnout for physicians, nurses, and care teams, and deliver robust value, ROI, and payback on these investments.
Amee Devani, CEO and Co-Founder, WellBeam
LinkedIn: Amee Devani
As we look ahead across the healthcare landscape, the next phase of transformation will be defined by purposeful capital deployment and smart consolidation. What we’re seeing today reflects a market that’s selective but opportunistic. The future will favor companies that solve tangible operational and clinical challenges, as health systems and post acute partners alike demand interoperability, automation, and cost efficiencies. Capital won’t flow everywhere, but high quality, data driven platforms that can demonstrate ROI and workflow impact will continue to attract investors.
The winners will be those that deliver scalable interoperability, verified outcomes, and integration into core clinical workflows. Vendors focused on narrow point solutions without real clinical or operational impact will struggle. Meanwhile, companies that enable data liquidity, reduce manual burden, and support value based care models will be increasingly viable and highly sought after in both public and private markets.
Joe Dore, President, USBenefits Insurance Services, LLC
LinkedIn: Joseph Dore
As we end 2025 and look toward 2026, it seems like a mixed bag of possibilities. Some of the factors making it difficult to predict what lies ahead include increased investor interest, the One Big Beautiful Bill Act, pending Affordable Care Act resolution, and mixed messages around rate increases in stop-loss insurance.
It’s probably safe to say that the insurance industry consensus is that the cost of healthcare is outpacing the premiums collected, and recent federal legislation will likely add additional pressure, especially through cost shifting. Adding further complexity is the ROI from the capital markets, which continues to grow at an incredible pace.
Despite these challenges, the winners will be those that navigate ahead of the storm by employing strong risk management practices and embracing AI, effective use of data, and innovative claims cost-containment strategies in pursuit of better outcomes. The future belongs to those who strategize and view transactions as assets rather than disposable, inexpensive commodities.
Todd Doze, CEO, Janus Health
LinkedIn: Todd Doze
In 2026, AI and automation will evolve from basic efficiency tools to advanced systems that forecast risk, inform decisions, and optimize financial performance. Powered by operational intelligence, these technologies will help providers minimize denials, simplify prior authorizations, and ensure accuracy long before claims are filed. The outcome is a smarter, more resilient revenue cycle where intelligent automation enhances, rather than replaces, human expertise.
John Elliott, Vice President, Head of Sales & Growth, MDClone
LinkedIn: John Elliott
The future of healthcare business and finance will favor health IT vendors that deliver measurable value, not just new technology. As health systems face tighter margins and rising workforce pressures, solutions that demonstrate rapid ROI, reduce operational friction, and unlock smarter use of data will remain viable. Vendors unable to prove impact or integrate seamlessly into existing clinical and operational workflows will quickly be weeded out.
Bob Farrell, CEO, mPulse
LinkedIn: Bob Farrell
The IPO landscape (or lack of) in 2026: In the first half of 2025, we saw several major digital health IPOs from organizations like Omada Health and Hinge Health, and the industry predicted this as the potential re-awakening of the digital health market. However, as we head into 2026, I don’t think we will see a massive uptick of IPO deals. Rather, 2026 will be fueled by digital health M&A deals. As companies prove proof of value and operational efficiency, we’ll see a consolidation of point solutions companies in favor of those leading with comprehensive platforms.
Dana Finnegan, Senior Director of Market Strategy, MDaudit
LinkedIn: Dana Finnegan
Increased financial pressures, regulatory demands, and the push for digital transformation will continue to accelerate hospital and health system consolidation in 2026. And, as we saw in our 2025 Benchmark Report, this is all taking place at a time when payer scrutiny is intensifying and denial rates are climbing. Leadership tasked with navigating this complex ecosystem will need to rethink revenue integrity as a strategic function, integrating compliance, billing, and revenue cycle management across newly merged entities.
Organizations will lean on AI, automation, and human oversight to safeguard revenue and provide the visibility necessary in newly expanded operations. Expect expanded deployment of pre-bill revenue integrity solutions, predictive analytics, and autonomous coding to streamline operations and scale effectively. These will include predictive analytics and workflows to reduce preventable denials, continuous risk monitoring tools to reduce audit response times, and automation and centralized audit tracking to tighten oversight of at-risk revenue.
Mindy Fortson, Chief Operating Officer, Experian Health
LinkedIn: Mindy Fortson
In the new year, regulatory pressures, like the sweeping provisions in the One Big Beautiful Bill Act, will intensify for providers. According to our new OBBBA survey, most providers aren’t ready for the changes, with nearly half saying their eligibility and billing processes will require upgrading. With an influx of self-pay patients expected, providers must prepare for delays or rejections of reimbursements and other operational headaches that impact the overall patient experience. To overcome these challenges, providers must pivot from reactive problem-solving to proactive workflow optimizations with advanced technology.
Eric Grunden, Chief Client Officer, Intelerad
LinkedIn: Eric Grunden
By 2026, the business of health IT will be defined less by feature innovation and more by operational trust. As financial pressure continues across healthcare, providers will increasingly prioritize vendors who can operate reliably at scale, reduce complexity, and protect mission-critical workflows without disruption. From a client perspective, viable health IT companies will be those that are deeply embedded into clinical and operational environments and can clearly demonstrate impact on productivity, uptime, and financial performance. Technologies positioned as “nice to have,” lightly integrated, or difficult to support will face growing scrutiny as health systems continue to streamline their vendor ecosystems and standardize platforms.
This shift is also transforming expectations for customer experience. The standard is moving from reactive problem-solving to proactive, embedded partnership models. Vendors will be expected to anticipate issues, prevent disruption, and bring senior-level expertise into the relationship before challenges escalate. This is no longer a service enhancement, it is a business requirement, as downtime and inefficiency now carry direct revenue and patient care consequences. Success will be measured not only by traditional KPIs like CSAT and resolution time but also by deeper indicators, such as client retention under financial pressure, platform standardization, and sustained operational outcomes. In this next phase, vendors will win by acting as true operational partners, not just technology suppliers.
Houda Hachad, Vice President of Clinical Operations, Aranscia
LinkedIn: Houda Hachad
Looking ahead, markets tied to oncology workflows, diagnostics integration, PGx, and specialty coordination will remain strong because they align with precision care and rising payer pressure for better outcomes. By contrast, vendors relying on standalone tools without true workflow integration will struggle, and telehealth visit platforms that lack deeper clinical or operational connections won’t see much growth. The landscape will increasingly reward platforms that help health systems operate with leaner teams and stronger data foundations. Solutions built to relieve workforce strain and cut administrative waste are well positioned to see continued adoption.
Kari Hall, Chief Strategy Officer, PointClickCare
LinkedIn: Kari M. Hall
In 2026, healthcare consolidation will continue, but with a sharper focus on partnerships that drive sustainable value rather than rapid expansion. Investors and operators will look for business models that combine operational efficiency with measurable impact on outcomes. Venture capital will increasingly flow toward solutions that utilize AI to strengthen care coordination, data integration, and workforce enablement. As a result, the most viable health IT vendors will be those that can demonstrate both clinical and financial return, supported by scalable, evidence-based technology.
Luke Hansen, MD, MHS, Chief Medical Officer, Arcadia
LinkedIn: Luke Hansen
Healthcare consolidation will continue to shape the industry in 2026, but the intense momentum behind practice acquisitions is beginning to taper. As that pace slows, the real work of transforming what are often patchwork integrations into a true delivery fabric begins. Health systems that succeed in achieving operational, clinical, and data integration will gain significant ground.
At the same time, as federal payment policies shift, including Medicaid and ACA subsidy eligibility changes, site-neutral payments, and new price transparency rules, health systems should expect meaningful financial turbulence in 2026. Most people focus on how providers rely on higher commercial rates to offset lower Medicare and Medicaid reimbursement, but an equally important dynamic happens inside health systems: profitable service lines have long subsidized essential but lower-margin areas of care. When new rules erode those margins, the whole internal financing model becomes unstable, leading to significant revenue swings and challenging decisions about where and how care is delivered.
Patty Hayward, General Manager of Healthcare and Life Sciences, Talkdesk
LinkedIn: Patty Hayward
In 2026, the organizations that win financially will be the ones that understand the contact center isn’t a cost burden: it’s a value engine waiting to be modernized. AI will reduce service friction, reclaim leakage, accelerate throughput, and scale access without proportional labor. The leaders who pair automation with intentional experience design will achieve more than cost control, they’ll gain competitive differentiation in loyalty, productivity, and value-based performance.
Travis Jackson, Partner, McDermott Will & Schulte
LinkedIn: Travis Jackson
The federal, state and consumer focus on cost containment and reduction will drive transaction trends among providers, facilitate the more rapid adoption of technology (including AI) in administrative and patient-care functions, and lead to reductions in force and continued labor unrest. With a slowing economy and uncertain federal healthcare policy, I think we are likely to see a significant uptick in insolvencies among healthcare providers, particularly in states that over-regulate healthcare transactions, like California.
Melvin Lai, Senior Venture Associate, Silicon Foundry
LinkedIn: Melvin Lai
Investment may increasingly shift toward fueling new human insight and the systems that preserve it. While most industries face data exhaustion, health tech remains uniquely advantaged, sitting on a vast, still-untapped trove of medical records, clinical notes, and real-world evidence. As AI models in other domains begin to plateau from recycled training data, healthcare has the rare opportunity to keep improving by responsibly unlocking, structuring, and digitizing the knowledge already within its walls.
As we move into 2026, healthcare is poised for a major upswing in M&A activity. Valuations remain compressed, but the deeper catalyst is strategic: health companies are increasingly using acquisitions to leapfrog the slow, costly process of selling into health systems. In a sector where partnerships and integrations often take years, M&A has become the fastest path to scale, data access, and workflow integration.
Dave Lamar, Chief Growth Officer, MediQuant
LinkedIn: Dave Lamar
In 2026, we’ll see healthcare’s financial landscape increasingly shaped by the industry’s long-ignored burden of technical debt, especially as M&A activity accelerates. With operating margins staying thin, hospitals will continue to pursue consolidation as a survival strategy, but every acquisition will surface thousands of redundant, outdated, or unsupported applications that drain budgets and stall innovation. Health systems will no longer be able to treat archiving as an afterthought. Instead, proactive legacy system retirement and enterprise-wide archiving strategies will become core financial levers. Leaders will recognize that eliminating redundant applications, stabilizing data retention practices, and freeing data trapped in old systems is one of the fastest ways to reclaim wasted spend, strengthen security posture, and redirect capital toward modernization.
At the same time, 2026 will mark a shift in how organizations view data long-term: not just as a compliance requirement, but as a financial asset. As AI adoption grows, health systems will rediscover the business value of historical clinical, operational, and financial data, prompting more disciplined retention strategies and faster migration of legacy systems into unified archives. Expect CFOs and CIOs to jointly prioritize archiving competencies, often turning to specialized partners to accelerate consolidation timelines during M&A. The result will be a new competitive divide: organizations that aggressively tackle technical debt will create leaner cost structures, reduce cybersecurity exposure, and unlock data needed for AI-driven insight. Those that don’t will struggle under the weight of aging technology, sprawling system inventories, and an inability to innovate at the speed the market now demands.
Arielle Lawrence, CEO, The Asclepian Group
LinkedIn: Arielle Lawrence
We anticipate continued consolidation and disciplined investment as organizations pursue scale and integrated capabilities to improve patient and provider outcomes. In recent years, consolidation has been an effective tool in creating operational resilience and care impact in an otherwise fragmented system.
Venture capital is flowing, but with a sharper focus: fewer deals, larger commitments, and a clear preference for businesses that can demonstrate clinical evidence, regulatory traction, and operational ROI. AI-powered platforms dominate these investments, particularly those that enhance workflows, diagnostics, and drug discovery.
Theresa Meadows, CIO in Residence, symplr
LinkedIn: Theresa Meadows
CIOs in healthcare will finally confront the unstainable weight of bloated tech stacks and shift their focus toward disciplined application consolidation and platform strategies that drive value. After years of adding band-aids and tools to solve short-term immediate issues, the fragmentation is fueling clinician burnout, shadow IT, and rising cybersecurity risk. Our research found that up to 75% of IT leaders in healthcare want to consolidate their point solutions into a platform-based approach. The hospitals and health systems that will be successful will be the ones that lean into application consolidation early to drive improved outcomes. Collaboration between the clinicians, IT executives, and operational leaders to streamline technology, improve workflows and provide value will be crucial.
Greg Miller, VP of Business Development and Marketing, Carta Healthcare
LinkedIn: Greg Miller
The business side of healthcare is entering a period of sharper focus and consolidation. We’re likely to see fewer, larger acquisitions as systems look for scale and stability, while venture capital shifts toward proven health IT solutions that can demonstrate ROI and operational impact. Vendor markets will continue to tighten and those offering real cost savings and measurable efficiency gains will thrive, while niche players without clear value will struggle to stay viable.
Laxmi Patel, Chief Strategy Officer, Savista
LinkedIn: Laxmi Patel
Medicare Churn will Spike Bad Debt
Tightened Medicaid rules (redeterminations, work requirements under H.R.1) will disenroll many patients midyear with some states already seeing ~20% coverage loss. This will sharply increase uncompensated care, forcing stricter eligibility checks and patient-assistance programs.
Cost Will Outpace Reimbursement
Rising costs (+11% operating expense inflations in 2025) collide with shrinking Medicare payments, will continue to squeeze margins. Even with 2.5% Medicare boost in 2026 is neutralized by sequestration and other cuts. By 2026 providers must run very lean RCM operations to survive.
Rachel Podczervinski, MS, RHIA, Executive Vice President, Harris Data Integrity Solutions
LinkedIn: Rachel Podczervinski
All signs point to continued consolidation in healthcare as provider organizations alike seek the economies of scale and cost-cutting opportunities that come from strategic mergers and acquisitions. We also expect to see an uptick in EHR, EMPI, and other health IT system migrations in response to both M&A activities, technological advances, and the evolving financial and regulatory environment.
Because M&A activity and data migrations inherently increase the risk of disrupting the integrity of patient data as organizations merge disparate systems, health information professionals should play a central role in navigating the complexities of ensuring information seamlessly follows the patient across the post-merger continuum of care. Strategic planning and best practices that align people, processes, and technology can mitigate these risks and help navigate the intricacies of pre- and post-merger MPI management with confidence and effectiveness.
Clay Ritchey, CEO, Verato
LinkedIn: Clay Ritchey
The health IT market will continue to consolidate as buyers simplify their technology stacks. Stand-alone tools may be phased out as health systems and payers turn to platforms that connect member, patient, provider, and partner data within a single ecosystem. Successful vendors will need to prove they can interoperate across systems of record, engagement and insight requiring accurate identity intelligence to unify data across an ever increasingly complex data ecosystem. Procurement decisions will center on real-world interoperability, strong security, and the ability to use trusted identity to power AI and all strategic data initiatives safely across the enterprise.
David B. Snow, Jr., Chairman & CEO, Cedar Gate Technologies
LinkedIn: David Snow
Financial pressures, including rising labor costs, changes to CMS reimbursement rates, Medicaid budget cuts and MA profit margin pressures, and growing inflation and supply chain costs, continue to build for healthcare organizations, with competing priorities for the limited budgets available. When software is viewed as a cost center, it becomes challenging for organizations to advocate for purchasing new and innovative tech that can transform care delivery and operational efficiency. In 2026 (and beyond), software tools will need built-in capabilities to demonstrate a clear return on investment through:
- Reduced total cost of care
- Improved care quality and patient outcomes
- Performance improvement and optimization in value-based care models
- Contract modeling to anticipate VBC program performance (without the need to engage with a large actuarial consulting team)
- Quality modeling to forecast performance on VBC quality metrics, tied to analytics that can reveal opportunities for improvement
- Point solution impact tracking to measure the success of various point solution programs, and identify ROI where applicable
Jim Szyperski, CEO, Acuity Behavioral Health
LinkedIn: Jim Szyperski
Behavioral healthcare needs a lot less “cloud” and a great deal more “rain” as an industry. That means straight talk and far less ‘biological speculation” (BS). The industry continues to suffer unilaterally, from the patients to the nursing staff and clinicians to the hospitals trying to make ends meet. Time is not an industry friend, and action must be the word for the day and year, for everyone affected or engaged in behavioral healthcare. This requires trading in the siloed approaches and the variation for industry consensus and standardization that is necessary to survive. That begins with truthful, if painful industry conversations, and action. Straight talk required, or as a famous musician once wrote, “let us not talk falsely now, the hour is getting late”.
Erik Terjesen, Managing Director, Silicon Foundry
LinkedIn: Erik Terjesen
Big Pharma will continue to “buy, rather than build” innovation, aggressively pursuing M&A and in-licensing deals, particularly for biotechs with late-stage or near-commercial assets, to counter major upcoming patent losses.
Stephen Vaccaro, President, HHAeXchange
LinkedIn: Stephen Vaccaro
Provider service lines will begin to blur, integrating personal care with clinical services
Homecare providers are starting to expand beyond traditional personal care to meet shifting state regulations and the evolving needs of clients with complex conditions. In some states, like Indiana, for example, personal care providers will soon be required to obtain Medicare certification, a change aimed at ensuring that services for dual-eligible members are billed appropriately. Because Medicare should cover clinical services for dual-eligible individuals, states want to limit unnecessary spending within Medicaid. As homecare agencies undergo Medicare certification, many realize they can expand their service offerings. This shift is driving a trend toward blended service lines, where homecare agencies layer in home health, clinical oversight, remote patient monitoring, and wellness programs. By integrating clinical services, providers can support more comprehensive care plans, improve outcomes for clients with higher needs, and diversify revenue streams. The integrated care models also offer payers a clearer path to coordinated, whole-person care, which reduces avoidable utilization and strengthens care continuity. These changes are also being shaped by policy factors like the companionship exemption, which could exempt some homecare workers from federal overtime and minimum wage rules, and may influence how growing agencies structure teams and service models. As the line between personal care and clinical care blur, agencies will look to platforms that support both sides of the ecosystem and enable them to manage this new hybrid model with confidence and operational visibility.
Mike Valli, Chief Commercial Officer, symplr
LinkedIn: Mike Valli
In 2026, finance teams will not be siloed, but a part of a unified healthcare team. Finance teams will better integrate across businesses to support organizations as a connected team with clinical, IT, and leadership perspectives to help solve industry challenges. With financial pressures now the top challenge across teams, collaboration is required to build the path forward and break healthcare’s crisis culture. We can better amplify each other’s successes and experienced perspectives to ensure we’re driving outcomes for patients, providers and the bottom line.
Mark Van Sumeren, Board Observer and Chair, Healthcare and Life Sciences, LogicSource
LinkedIn: Mark Van Sumeren
In the year ahead, financial sustainability will hinge on more intentional discipline around non-clinical spend, an area Gartner’s Healthcare Supply Chain analyst group identifies as the top priority for 2026. Amid ongoing economic uncertainty, these categories hold significant potential to reduce costs and build resilience.
Health systems can no longer treat non-clinical expenses as the inevitable cost of doing business; they must view them as strategic opportunities for efficiency and draw from benchmarks outside of healthcare. With cross-industry insights and the support of capable partners, non-clinical spend can unlock meaningful savings and strengthen long-term financial stability. The organizations that thrive will be those that combine clinical excellence with operational rigor and reinvest savings into innovation.