6 predictions from one venture capital firm for the future of healthcare in 2026
The year 2026 is likely to see significant changes in the healthcare industry, particularly around digital health, artificial intelligence and cost challenges.
That's according to three venture capitalists from healthcare venture capital firm LRVHealth. They shared several predictions for 2026 with MedCity News:
1. Digital Health IPO: After a long slowdown, the digital health IPO market began to thaw last year, with Hinge Health and Omada leading the way. However, LRVHealth managing partner Keith Figlioli finds that significant growth is unlikely in 2026. The digital health IPO market is likely to be relatively flat year over year.
“An area where we will see more action next year is digital health M&A,” he said. “There was some activity last year, but not as much as people expected, and blockbuster deals were few and far between. The dam is about to break. Abbott's acquisition of Exact Sciences and GE's acquisition of Intelerad – both just happened in November – may be a sign of more and bigger deals to come.”
2. AI reality check: Figglioli said people will begin to realize how difficult it will be to fully “realize all the dreams and promises of artificial intelligence in health care.” Artificial intelligence will continue to see significant adoption in healthcare, but overly ambitious efforts will give way to more realistic approaches.
“Many AI pilots will progress and we will continue to see more AI in production environments, but we won’t see the true impact of AI just yet,” Figlioli said. “In healthcare, it will take many years for most organizations to even calculate a baseline ROI and for job replacement projections to be realized.”
3. Infusion strategy: Josh Flum, managing partner at LRVHealth, said as pressure increases at the point of care, the health system will take a more “comprehensive, community-based approach” to infusion strategies. Payers are shifting infusion therapy away from hospital outpatient departments and into lower-cost facilities. At the same time, freestanding outpatient infusion centers offer patients lower costs and greater convenience, he said.
“Against this backdrop, many systems are at risk of losing patients and revenue if they do not adapt,” Flume said. “In response, health systems will more urgently evaluate how stronger outpatient services fit into their broader infusion portfolios, weighing whether to build or partner to expand community-based services.”
4. 340B plan: Flum said administration of the 340B program will become more complex for participating healthcare organizations. The program allows hospitals that treat large numbers of low-income and uninsured patients to purchase outpatient prescription drugs at a discount.
“Documentation requirements and administrative burdens continue to expand, and many teams responsible for oversight are already overwhelmed and under-resourced,” he said. “The rollout of the rebate pilot, which shifts the portion of 340B savings from upfront discounts to post-ruling rebates, will further complicate the program. We will see covered entities increasingly look for tools that allow them to gain clarity into their program and be able to manage and optimize the program as complexity increases.”
5. Cost control: Ellen Herlacher, partner at LRVHealth, said cost control will drive health care innovation in 2026. In the past, rising health care costs were passed on to payers and consumers primarily through higher premiums and out-of-pocket costs, but this approach is becoming increasingly unfeasible. As government spending restrictions tighten and employers shift 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 the location of care, expanding the workforce through top-performing innovation and automation, and avoiding high-cost, preventable episodes of care. Most importantly, there will be greater scrutiny of cost structures no matter what.”
6. Federal funding cuts: Amid federal funding cuts and Medicaid changes, patient engagement will be more important than ever, Herlacher said. The Medicaid population will shrink to members with greater health needs and higher complexity of care.
“This includes people who are difficult to navigate or have a general distrust of the health care system, which will make new elements — such as work requirements and redetermination of eligibility every six months — particularly challenging,” she said. “States and regulators must find new ways to reach these individuals and build trust to ensure they receive the care they need.”
Photo: rudall30, Getty Images
