The healthcare industry could undergo significant changes in 2026, particularly regarding digital health, AI and cost challenges.
That’s according to three VCs from LRVHealth, a healthcare venture capital firm. They shared several predictions for 2026 with MedCity News:
1. Digital health IPOs: After a prolonged slowdown, the digital health IPO market began to thaw last year, with Hinge Health and Omada at the forefront. However, Keith Figlioli, managing partner at LRVHealth, finds it unlikely that there will be much of an increase in 2026. The digital health IPO market will likely be relatively flat year-over-year.
“The place where we’ll see more action next year is digital health M&A,” he said. “There was some activity last year, but not as much as people anticipated, and blockbuster deals were few and far between. That dam is about to break. Abbott’s acquisition of Exact Sciences and GE’s acquisition of Intelerad – which both just occurred in November – could signal more larger deals ahead.”
2. AI reality check: People will start to realize how difficult it will be to fully “deliver on all the dreams and promises of AI in healthcare,” Figlioli said. There will continue to be significant usage of AI in healthcare, but overly ambitious efforts will give way to more realistic approaches.
“Many AI pilots will advance and we’ll continue to see more AI in production environments, but we still won’t see the true impact of AI for a while,” Figlioli stated. “In healthcare, it will be many years before most organizations can calculate even baseline ROI and before predictions of job replacements come to fruition.”
3. Infusion strategies: As site-of-care pressures increase, health systems will take a more “holistic, community-anchored approach” to their infusion strategies, according to Josh Flum, managing partner at LRVHealth. Payers are pushing infusion treatments out of hospital outpatient departments and into lower-cost settings. Meanwhile, freestanding ambulatory infusion centers provide lower costs and more convenient access for patients, he said.
“Against this backdrop, many systems risk patient leakage and revenue loss if they do not adapt,” Flum stated. “In response, health systems will more urgently evaluate how a stronger ambulatory presence fits into their broader infusion portfolio, weighing whether to build or partner to expand community-based access.”
4. 340B program: Management of the 340B program will become more complex for participating healthcare organizations, Flum said. The program allows hospitals that treat a large population of low-income and uninsured patients to buy outpatient prescription drugs at a discount.
“Documentation requirements and administrative burdens continue to expand, and many teams responsible for oversight are already overstretched and under-resourced,” he said. “The introduction of the rebate pilot, which shifts portions of 340B savings from up-front discounts to post-adjudicated rebates, will further complicate the program. We will see covered entities increasingly look for tools that give them a clear view of their program and the ability to manage and optimize it as complexity grows.”
5. Cost containment: Cost containment will drive healthcare innovation in 2026, according to Ellen Herlacher, partner at LRVHealth. In the past, rising healthcare costs were largely passed on to payers and consumers through higher premiums and copays, but that approach is becoming less viable. With tighter government spending limits and employers turning to alternative benefit models, the system can no longer rely on higher prices to offset costs.
“With less money coming into the system, providers are going to have to do more with less,” she said. “This means optimizing site of care, stretching a workforce through top-of-licensure innovations and automation, and avoiding high-cost, preventable episodes of care. The bottom line is that there will be a higher degree of scrutiny on cost structure no matter what.”
6. Federal funding cuts: Patient engagement will be more important than ever amid federal funding cuts and changes to the Medicaid program, Herlacher said. The Medicaid population will narrow to members with greater health needs and higher care complexity.
“This includes people who have difficulty navigating, or have a general distrust of the healthcare system, which will make new elements – like work requirements and redetermination for eligibility every six months – especially challenging,” she stated. “States and MCOs will have to figure out new ways to reach these people and build trust to ensure they get the care they need.”
Photo: rudall30, Getty Images
