Perspectives

2025 was a year of recalibration for healthcare. After a period of rapid expansion and capital-driven growth, the market has shifted toward discipline. Employers, payers, and providers have refocused on cost reduction, access, and measurable impact. We have seen digital health adoption continue to grow for solutions that can demonstrate measurable value or cost savings, AI move from promise to practice, and consolidation accelerate as organizations pursue scale and efficiency.

As we enter 2026, the question is now which models can endure and empower consumers with proven approaches. Digital-first access will become the default entry point to care. Evidence, transparency, and accountability will be table stakes. And consumers, facing rising costs, will increasingly shape how we access, navigate, and experience care.

7wire’s 2026 predictions reflect this transition and outline the forces we believe will define the next phase of connected, consumer-driven healthcare.

#1 Digital Becomes the Primary Entrypoint into Care  – Increasingly, care will begin in digital and virtual environments before moving to personalized and proactive in-person care when clinically necessary.

Telehealth use remains durable post-pandemic, underscoring that mobile and digital channels have become a lasting first touchpoint for many consumers. In Mercer’s employer study for 2025, 70% of employers indicated that AI-powered tools could address first line questions and provide navigation to their employees. 73% of health plans are piloting or assessing AI-driven member engagement. Crunchbase’s latest market data reinforces the momentum, with AI-enabled health tech companies capturing $10.7 billion in funding in the first 10 months of 2025. Together, these trends suggest that the future is arriving, with an empowered, patient-facing experience in which consumers can have their benefits interpreted, needs anticipated, and be routed to the most appropriate option before ever speaking with a clinician.

As such, we expect 2026 to be a defining year where “AI + virtual first” becomes a default point for a growing share of consumers.

Transcarent, a 7wire portfolio company, is already bringing this vision to life through its new WayFinding platform. WayFinding delivers a generative AI experience that provides benefits navigation, clinical guidance, and care access in real time.

Similarly, Counsel Health is merging conversational AI with real-time physician support. Users start with an AI assistant that collects history and provides early direction, and a human clinician joins the same thread when needed, dramatically simplifying the hybrid care experience. These offerings reflect a broader shift toward AI as the front door to care, orchestrating guidance and routing so consumers can reach the right support with far less friction.

#2 Medicaid Reform and Uncertainty Will Push States to Adopt Digital Health to Serve Members in the Face of Shrinking Budgets – Medicaid regulatory changes will lead to more rural and urban care closures, forcing health systems to embrace virtual care delivery options and payers to invest in innovative ways to reach their members.

Medicaid has entered another period of instability as federal and state budget pressures are expected to result in 11.8 million Americans potentially losing Medicaid coverage and a reduction in Medicaid spending on rural hospitals by $50 billion dollars over the next decade. At the same time, urban providers are facing a parallel crisis: growing levels of unreimbursed care, labor shortages, and rate pressure are forcing health systems to close service lines, consolidate locations, or exit Medicaid participation altogether.

While rural hospitals remain acutely vulnerable with 182 rural hospitals closed or downsized since 2010, and another 432 considered “vulnerable to closure”, urban health centers that face significant growth in unreimbursed care will also struggle and may close departments to save costs. Local budget pressures are prompting rate cuts and benefit design changes, as seen in recent conflicts over reimbursement reductions and temporary reversals in states like North Carolina. The result is a widening set of access deserts that affect Medicaid members regardless of geography.

At the same time, the broader Medicaid population is becoming increasingly digitally connected, creating the conditions for virtual care to serve as a scalable access point. Research from BCG shows that 96% of Medicaid respondents have smartphones, making mobile-first care a viable modality for populations historically left behind in traditional care delivery. This digital readiness, combined with staffing shortages, rising enrollment churn, and growing access deserts, will push states and Medicaid managed care organizations to adopt virtual and tech-enabled care models that can reach members consistently, proactively, and at a lower cost. In 2026, we expect virtual to become a core access channel for rural and urban-based Medicaid members. As these users engage with these digital channels, they will generate proof points around the value of these solutions and catalyze broader adoption beyond just Medicaid.

GroundGame.Health, a 7wire portfolio company, is operating as connective tissue between Medicaid plans, community-based organizations, and members with personalized and culturally tailored engagement to identify social needs and close care gaps. GroundGame’s new partnership with Socially Determined aims to apply granular social risk data across a 155K member population, illustrating how digital outreach can be scaled in high-risk and vulnerable populations. Greater Good Health is addressing the other side of the equation with a nurse-led primary care model that partners with health plans to open clinics to support underserved members and seniors in value-based, outcomes-focused care. Both models illustrate how tech-enabled teams can serve as a trusted partner for rural and urban at-risk consumers while still preserving human and community-based relationships.

#3 Ushering in the Evidence Era – Increasingly, Digital Health Companies Will Need to Have Independent, Actuarial Studies Showing ROI to Succeed  – Employers and health plans will not work with digital health companies without proven outcomes. Demonstrated ROI needs to take place in shorter time frames (<1 year), and companies need to provide more than just incremental impact.

Over the last few years, we have seen a decisive shift from “promise-heavy” to “proof required” with employers and health plans considering digital health solutions. The Peterson Health Technology Institute’s 2025 State of Digital Health Purchasing survey found that more than 97% of purchasers are looking for solutions that improve the member experience and engender better clinical outcomes while reducing costs. The same survey found that purchasers now favor shorter 1–2 year contracts and more robust performance-based arrangements. We expect this to rise in the next year with 53% of employers and 76% of health plans interested in performance-based contracts for future digital health purchasing.

In particular, employers are more likely to look for proven approaches with commercial healthcare costs rising 9 to 10% annually from 2024 to 2026. In McKinsey’s 2024 Employer Benefits Study, most employers shared that they require a minimum of 2:1 or 3:1 in financial ROI for each solution that they purchase. Digital health companies can strengthen their value propositions to employers and health plans by relying on evidence-based outcomes that are independently verified by third-party actuarial firms.

WellTheory, a 7wire portfolio company, is demonstrating this evidence-based approach. The company has built an enterprise virtual platform for autoimmune care that pairs dietitians and health coaches with applied AI to personalize interventions across nutrition, sleep, stress, and lifestyle. Earlier this year, they validated their approach with Accorded, an independent actuarial intelligence company, showing that WellTheory’s model resulted in 81% of members reporting improved digestive symptoms. WellTheory’s approach also offers financial benefits to employers with an average savings of $5,181 per employee. Their trajectory illustrates what we expect to see more broadly in 2026: digital health companies that produce rigorous, externally validated proof will earn the confidence of employers and health plans, while those that cannot will struggle to compete.

#4 2026 Will Usher in PBM Transparency, but Questions About What’s Hidden Will Remain – Employer pressure for new models of pharmacy benefits will rise, yet shadow revenue streams and contract complexity will blur the picture.

2026 is shaping up to be a pivotal year in the pharmacy benefit manager landscape as employers intensify their demands for cost transparency and contractual clarity. Years of opaque pricing models have pushed sentiment to a tipping point. Today, 55 percent of surveyed employers report they are considering switching PBMs, even though most remain tied to one of the three dominant incumbents: CVS Caremark, Express Scripts under Cigna and Evernorth, or OptumRx.

These incumbents, whose vertically integrated specialty pharmacy economics are increasingly difficult for employers to audit, are facing growing pressure to justify their models. At the same time, our portfolio company Transcarent is offering a transparent PBM model, connecting with multiple other transparent PBMs including Prescryptive, Judi Health (Formerly Capital Rx), SmithRX, along with a number of other  transparent PBM challengers who are positioning themselves as credible alternatives by offering clearer pricing and closer alignment of incentives with plan sponsors. Platforms like Transcarent are reshaping the pharmacy experience by decoupling member navigation, clinical support decision, and pharmacy access from the PBM itself. This gives employers new leverage to influence utilization and to steer members to lower-cost options.

Even as more PBMs position themselves as transparent, many remain difficult to evaluate. Some provide partial data access or simplified pricing files that appear open but omit key information, while others advertise pass-through or no-spread arrangements yet still retain rebates or embed undisclosed fees. Specialty pharmacy margins, GPO fees, data monetization, and clinical program charges often fall outside formal disclosure, making true transparency elusive unless employers have the sophistication to interrogate contracts and enforce audit rights.

Against this backdrop, 2026 is still likely to bring a visible shift in how PBMs present their operating approaches. Cigna’s recent move toward a rebate-free benefit signals that incumbents may adjust their models as economic scrutiny intensifies, but expert reactions illustrate how complex the picture remains. 2026 may introduce new transparency models, but it will also reveal how much remains hidden beneath them. Employers will increasingly see through cosmetic changes and push PBMs to prove, not just claim, that their incentives are aligned. The organizations that thrive will be those willing to disclose their full economic architecture and compete on measurable affordability.

#5 Aging Demographics Including Those with Neurodegenerative Conditions Continue to Represent a Significant Pain Point for Payers and Providers, Leading to Deeper Penetration of Digital Health Solutions – Driven by an aging population and a supply-demand imbalance due to a shrinking clinical workforce, digital health companies will need to fill in the gap with AI, virtual care, and home-based technologies to deliver scalable, lower-cost support for seniors and their caregivers.

The senior population continues to grow and the number of Americans >65 is projected to increase by 42% from 58M in 2022 to 82M by 2050. This represents an increase of 17% to 23% of the total population. People over the age of 55 account for over half of total health spending, even though they make up only 31% of the US population.

Furthermore, within this population, dementia is becoming an increasingly significant concern, with 6.9M Americans aged 65 and older living with Alzheimer’s in 2024, a number that is projected to nearly double by 2050. Direct and indirect costs, including medical care, long-term services, and support, already total hundreds of billions annually, and millions of Americans provide unpaid care to relatives with dementia.

CMS’s GUIDE program is an important step toward reimbursed dementia care with approximately 330 organizations participating, but providers in early pilots have struggled with complex patient eligibility and onboarding issues. There are additional concerns that current reimbursement levels for dementia may not fully reflect the intensity of services required, especially given that more than 70% of dementia patients have multiple co-occurring chronic conditions. As a result, digital health companies will play a central role in 2026 by scaling dementia services through virtual care teams, home-based technology, and AI that extends specialists and supports caregivers.

There are a few organizations already improving the aging experience: Homethrive , a 7wire portfolio company, is a technology-enabled platform and program that helps caregivers support seniors to live independently at home. Within neurodegeneration, Sunday Health is pioneering a proactive model focused on mild cognitive impairment and early-stage dementia, offering preventive, diagnostic, and ongoing cognitive care aimed at intervening before crises occur. NewDays, an innovative cognitive treatment company, is pushing further into AI-enabled therapy using a generative AI “personal therapist” for people with mild dementia. These approaches highlight how the market is starting to move upstream from late-stage dementia into earlier identification, behavior change, and caregiver support. As our population ages, new solutions are rapidly emerging to address critical gaps in care and support.

#6 M&A Continues to be the Dominant Path to Scale for Digital Health Companies – Firms seeking to accelerate AI capability and improve operational performance are turning to acquisitions, often picking up companies that have strong assets but that have struggled to scale on their own.

While a small handful of digital health companies have reached the public markets this year, including Hinge Health and Omada Health, these remain outliers in an environment increasingly defined by consolidation. Few digital health organizations appear to possess the operational maturity required for IPO readiness. Multi-quarter predictability, free cash flow generation, and durable revenue growth were prerequisites, according to Hinge’s CEO. Most of the sector continues to fall short of these fundamentals, underscoring why public exits remain rare.

With these isolated IPO milestones, acquisitions continue to dominate as the primary exit path for digital health companies. The digital health M&A market has seen 166 acquisitions so far through Q3, which is up 37% YoY and exceeds all of 2024’s activity. The pattern is increasingly clear: unless a company achieves category-leading scale and enterprise penetration, a private equity or strategic buyer is often the most viable growth path. Private equity firms have reentered the market in force, with nearly $15B dollars in healthtech deals recorded in 2025 year to date compared to $2B in 2024, a 595 percent increase.

Strategics are also doubling down as buyers. Transcarent’s merger with Accolade at ~$621M created one of the most comprehensive health and care platforms, serving over 20 million members and 1.7K employer and health plan clients. EVERSANA’s merger with Waltz Health exemplifies how established healthcare platforms are absorbing younger digital companies to expand AI capabilities, modernize patient engagement tools, and strengthen their competitive positioning. These buyers are using M&A to fill capability gaps and move faster than internal build cycles would allow.

As 2026 approaches, consolidation will remain the primary route for most digital health companies to assemble comprehensive, AI-enabled platforms that meet enterprise buyer expectations. Companies able to demonstrate profitability at scale, defensibility, and measurable clinical impact will define the small minority positioned for independent paths.

#7 Long-Standing Consumer Frustrations Create Openings for Consumer-Facing Solutions to Gain Ground – Digital health companies respond by building ecosystems consumers trust more than the traditional system.

Consumer confidence in traditional health institutions continues to erode, creating space for new models of care organized around personalization, prevention, and community. Recent national polling shows trust in the US healthcare system remains near historic lows, driven by concerns about access, cost, and inconsistent quality. For example, the 2025 Edelman Trust Barometer highlights statistically significant declining trust in healthcare businesses across sectors since 2023.

Against this backdrop, longevity and health-optimization services are moving from niche wellness solutions to mainstream primary care. Examples of this shift include our portfolio company, Parsley Health, which uses a holistic approach to medicine. Clinics and digital platforms offering continuous biomarker monitoring, metabolic optimization, and hormone management have seen rapid consumer uptake. Companies such as Function Health and Lifeforce report strong demand from individuals seeking greater control, transparency, and proactive insight than they feel they receive in traditional care settings.

As trust fragments, digital health companies are increasingly positioning themselves not as point solutions but as trusted health communities built around identity, values, and longitudinal engagement. This shift mirrors broader consumer behavior, where people turn to affinity-based brands when institutional confidence falters. It also accelerates care fragmentation. Patients now spread their health journeys across primary care, virtual specialty programs, metabolic clinics, and longevity services, often without coordination or data sharing.

In 2026, digital health companies will lean further into this role. Rather than replacing primary care, many will complement or compete with it by offering continuous monitoring, personalized coaching, and AI-enabled interpretation that consumers view as more responsive and aligned with their goals.

The strategic implication is clear. The winners will be those able to convert declining institutional trust into durable consumer relationships grounded in transparency, personalization, and credible clinical oversight.

Taken together, these seven predictions reflect a healthcare system moving from experimentation to execution. In 2026, the companies that succeed will be those that can operate with discipline, integrate across fragmented systems, and deliver measurable value at scale. We’re excited to continue to work with and support founders who are committed to revolutionizing our healthcare system and continuing our mission to empower a growing number of Informed, Connected Health Consumers.