US Healthcare Market Research Report: Strategic Intelligence for 2026

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1. The Big Insight

The US healthcare market is splitting into two parallel economies—and most players are straddling the wrong one.

One economy is consolidating around data-rich, AI-enabled platforms that own longitudinal patient information and can underwrite risk. The other remains fragmented, labor-intensive, and margin-compressed. The decisive variable is not technology adoption per se—it's data ownership. Health AI startups are reaching $100-200M ARR in under 5 years versus 10+ for traditional healthcare software (Report 8), while private equity deal activity simultaneously collapsed to a 5-year low of 590 transactions in 2025 (Report 6). These aren't contradictory signals. They reveal that capital is migrating from leveraged scale plays to data moat plays. The winners in 2026-2030 won't be the biggest—they'll be the ones who control the most actionable patient data across the care continuum.

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2. Market Overview: Segment-by-Segment Landscape

Total Market

The US healthcare market reached approximately $4.8 trillion in 2024 and is projected at $5.15 trillion in 2026, growing at 5-6% CAGR through 2030 (Report 1). CMS projects that spending will exceed 20% of GDP by 2030 (Report 1). Per capita spending is on track from $16,570 in 2024 to $24,200 by 2033 (Report 1).

Health Tech / Digital Health

Healthcare analytics alone stood at $15.85 billion in 2024, growing at a blistering 24.9% CAGR toward $59.68 billion by 2030 (Report 1). The broader health services technology (HST) sector is projected to exceed $110 billion in EBITDA by 2029, with 8% annual revenue growth and 9% EBITDA growth (Report 1 supplement). AI in healthcare specifically represented $39 billion globally in 2025 (49% North America), with projections to $504 billion by 2032 (Report 1 supplement). Health AI startups captured 54% of all digital health funding in 2025, up from 37% in 2024 (Report 3 supplement).

Telehealth

US telemedicine hit $41.54 billion in 2025, projected to reach $188.05 billion by 2035 (Report 2 supplement). Over 90% of virtual visit users express willingness to repeat (Report 7). The segment is consolidating into a Hims/Ro duopoly in DTC and a Teladoc/Amwell duopoly in enterprise (Report 2).

Pharmaceutical

McKinsey projects US gross drug expenditure growing 8% annually to $990 billion by 2029, rising from ~10% to 12-13% of total healthcare spending (Report 1 supplement). GLP-1 drugs alone represent a $73.86 billion global market in 2026, expanding to $315 billion by 2035 at 17.5% CAGR (Report 5). Hospital specialty pharmacy is the fastest pharma subsegment at 21% annual growth (Report 1 supplement).

Medical Devices

Estimated at ~$290-340 billion in 2024, representing ~6-7% of total NHE, growing at 4-5% annually (Report 1). However, GLP-1s threaten a 20-30% market contraction in glucose monitors specifically, as the drugs normalize blood sugar in 70-80% of type 2 diabetics without insulin (Report 5).

Health Insurance

Group insurance is the standout story: EBITDA tripling from $9 billion in 2024 to $27 billion by 2029 (Report 1 supplement). Overall payer EBITDA grows 6% annually to $114 billion by 2029. PwC projects 8.5% medical cost growth for group markets in 2026 (Report 1, Report 7). Medicare Advantage penetration peaked at ~50-54% but is contracting to 48% in 2026—the first decline in nearly two decades (Report 4).

Healthcare Services

Adult healthcare services generated ~$7.2 trillion (broad global adult care measure) in 2024, with cumulative growth of $7.59 trillion projected 2026-2030 at 9.1% CAGR (Report 1). Home healthcare specifically is growing at 9.8% CAGR from $162.3 billion in 2024 to $284.3 billion by 2030 (Report 1 supplement). McKinsey forecasts ambulatory infusion at 9% annual growth (Report 1 supplement).

Segment	~2024 Size	Growth Rate	Key Dynamic
Total Market	$4.8T	5-6% CAGR	GDP share rising past 20%
Health Tech/Analytics	$15.9B (analytics)	24.9% CAGR	AI capturing 54% of VC
Telehealth	~$41.5B (2025)	~15-20% CAGR	DTC duopoly forming
Pharma	~$480B	8% annual	GLP-1 driven
Medical Devices	~$300B	4-5% CAGR	GLP-1 headwinds
Health Insurance	~$1.2-1.5T premiums	6-8.5%	Group surging, MA contracting
Home Health	$162B	9.8% CAGR	Post-acute shift

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3. Competitive Intelligence: Top Players by Segment

Health Tech / Digital Health

The top 25 players control 29% of HST market share and are consolidating through M&A (Report 1 supplement). UnitedHealth Group's strategic ownership model dominates, with integrated payer-provider data creating structural advantages that pure software plays cannot replicate (Report 2).

Telehealth Competitive Map

Company	~2025 Revenue	Model	Strategic Edge	Vulnerability
Teladoc	~$2.6B	Enterprise B2B	90M+ members, Fortune 500 contracts, positive cash flow	Forward P/S 0.5x signals market doubt; stock -22.5% YoY (Report 2 supplement)
Hims & Hers	~$1.5B (+50% YoY)	DTC subscription	CAC under $50 via social; 70% repeat rate; GLP-1 expansion	Regulatory risk on compounding; stock -37.4% in 3 months (Report 2)
Amwell	~$1.1B	White-label SaaS	150+ health system contracts; FHIR-compliant	No recent catalysts; squeezed between duopolies (Report 2 supplement)
Ro	~$1.2B (est.)	Closed-loop chronic care	Owns consult-to-adherence funnel; 2-day delivery	Private; faces Hims pricing wars (Report 2)
Hinge Health	~$250M ARR (+72% YoY)	Virtual MSK, employer B2B	26% FCF margins; outcome-based pricing; 60% surgery reduction	Niche limits TAM (Report 2)
Omada Health	~$300M (est.)	Digital therapeutics	CMS reimbursement; 1M+ member data; 3x ROI for payers	2-year regulatory lead could erode (Report 2)

Critical competitive dynamic: Hims & Hers is emerging as the DTC winner through vertical integration into compounding pharmacy and branded drug exclusives (KYZATREX partnership), while Teladoc holds the enterprise moat via high switching costs (Report 2 supplement). The middle—Amwell, LifeMD—is getting crushed. LifeMD trades at 0.7x EV/Sales versus Hims at 3.6x, reflecting market judgment on scale viability (Report 2 supplement).

Pharmaceutical: The GLP-1 Duopoly

Eli Lilly's tirzepatide (Mounjaro + Zepbound) is projected at $45+ billion combined global revenue in 2026, versus Novo Nordisk's semaglutide (Ozempic + Wegovy) at ~$39.5 billion (Report 5). Lilly is winning on efficacy (20% vs. 15% body weight reduction) and tolerability (fewer GI side effects), while Novo maintains diabetes dominance. Together they control 90%+ of the GLP-1 market (Report 5 supplement).

Disruption incoming: Pfizer's PF-08653944 delivered positive Phase 2b results in February 2026 for a monthly injection (versus weekly), potentially cutting administration costs by 75% (Report 5 supplement). Novo's CagriSema (25%+ weight loss in trials) nears FDA decision in 2026 (Report 5 supplement). Oral GLP-1 formulations are the fastest-growing route at >25% CAGR (Report 5 supplement).

Health Insurance: The MA Contraction

UnitedHealthcare and Humana control 46% of MA enrollment nationally but are retreating—UnitedHealthcare exited 225 counties, Humana 198 (Report 4). Meanwhile, Centene expanded into 63 net new counties, capturing share in vacated markets (Report 4). The strategic implication: concentration is increasing even as the pie shrinks. Average out-of-pocket maximums rose 7% to $6,153 while insurers prioritize profitability over growth (Report 4).

Humana's VBC program achieved 23.2% medical cost savings ($8 billion versus traditional Medicare), while Elevance Health routes two-thirds of medical spend through value-based arrangements (Report 4 supplement). These quantified returns make VBC the margin story, not just the policy story.

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4. Key Trend Analysis

Trend 1: AI in Healthcare — The "Behind-the-Scenes" Pivot

The headline AI story has shifted from flashy diagnostics to unsexy but profitable workflow automation. Report 3 shows RadNet's AI boosted radiologist accuracy from 84-89% to 93%, but the real money is in administrative automation: revenue cycle management, prior authorizations, and documentation via generative AI replacing traditional middleware (Report 3).

CMS is launching clinical AI payment codes in 2026 for AI-assisted preventive care and remote patient monitoring, creating the first direct reimbursement pathway for AI applications (Report 3 supplement). This is the unlock: without payment codes, AI was a cost center. With them, it becomes billable.

Who wins: Health systems with existing data infrastructure; payer-integrated platforms. Who loses: Pure-play AI startups without enterprise pilots—20% of health executives are negative on 2026 outlook from policy uncertainty (Report 1 supplement).

Trend 2: Value-Based Care — Participation Growing, Execution Fragile

The numbers look strong: 45.2% of hospitals, health systems, and plans participate in VBC/shared-risk arrangements (Report 4 supplement). Over 60% of organizations increased VBC participation in 2025 (Report 4 supplement). ACOs now cover 13.7 million Medicare beneficiaries with 817,000 participating providers (Report 4 supplement).

But dig beneath the surface: the top four obstacles—financial risk (87%), provider resistance (80%), data interoperability (75%), and regulatory complexity (69%)—have not materially shifted despite years of adoption (Report 4 supplement). Only one in four physician practice leaders expected to increase VBC participation (Report 4 supplement).

The most surprising finding: Medicaid is now the fastest-scaling VBC market, driven by necessity rather than choice, as state budget constraints force managed care plans toward accountability models (Report 4 supplement). CMMI's 2026 strategy creates a two-tier market: organizations with measurement infrastructure advance; unprepared ones face exclusion (Report 4 supplement).

Trend 3: Consumerization — Fixed Copays Replace Deductible Confusion

Payers are replacing deductibles with fixed copays paired with AI navigation that turns every health plan into a "shoppable" platform (Report 7). Every major health plan and ACO will deploy conversational AI agents in 2026 (Report 7 supplement). Major PBMs (OptumRx, CVS Caremark) launched cost-plus pricing models in response to DTC disruptors (Report 7 supplement).

The structural shift: patients are bypassing insurance entirely for cash-pay options in pharmacy and primary care (Report 7 supplement). This creates a two-tier marketplace where insured and cash-pay channels compete—an opening for DTC companies like Hims & Hers.

Trend 4: GLP-1 Cascade Effects — Healthcare's Biggest Demand Shock

GLP-1s aren't just a pharma story. With 12% of US adults now on GLP-1s and $40 billion in US patient spend (Report 5), the cascade is reshaping:

• Medical devices: CGM demand facing 20-30% contraction (Report 5)
• Weight loss programs: 70% dropout among GLP-1 users (Report 5)
• Cardiovascular care: 20% reduction in major adverse CV events threatens the $100 billion CV drug market (Report 5)
• Insurance: Full obesity coverage could add 50 million eligible patients, raising premiums 5-10% (Report 5)

The coming disruption: oral GLP-1s eliminate injection barriers (which cause 20% dropout), and monthly injectables (Pfizer) eliminate convenience objections (Report 5 supplement). DTC channels are the fastest-growing distribution route at >25% CAGR through 2035 (Report 5 supplement).

Trend 5: Regulatory Evolution — Stasis as Strategy

No major FDA/CMS overhauls occurred in late 2025-early 2026 (Report 8 supplement). This isn't neutral—it's actively advantageous for incumbents. The unchanged IDE/PMA requirements lock 75% of medtech startups into 7-10 year failure paths requiring $100M+ pre-market (Report 8 supplement). Meanwhile, CMS's new AI payment codes selectively benefit workflow-native AI over novel clinical AI, favoring established health systems over startups (Report 3 supplement).

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5. Investment and M&A Landscape

The PE Paradox

Healthcare services M&A hit 1,793 deals in 2025 (7% increase, 3-year high), but PE deal activity collapsed to 590 transactions—a 5-year low, down 29% from 2021 (Report 6 supplement). PE's share dropped from 37% to 33% (Report 6 supplement). The recovery is driven entirely by strategic acquirers and distressed transactions.

Where Capital Is Flowing

Sub-Segment	Signal	Evidence
AI Health Startups	Explosive	54% of digital health VC in 2025, up from 37% (Report 3)
Pharma Megadeals	Surging	11 deals >$5B in 2025; 46% value growth despite 5% volume drop (Report 6)
Home Health/Hospice	Double-digit M&A growth	PE targets tech-enabled agencies for MA payer mix (Report 6, supplement)
Behavioral Health	Accelerating	Double-digit YoY M&A growth (Report 6 supplement)
Physician Services	Dominant	29% of all 1,793 deals; dental roll-ups leading (Report 6 supplement)

Distress as the Hidden Theme

43% of hospital M&A in 2025 involved a distressed organization (Report 6 supplement). Steward Health Care's bankruptcy triggered multi-site divestitures. Hospital beds acquired fell 26% YoY; hospitals acquired dropped 32% (Report 6 supplement). This is survival-driven consolidation, not strategic growth.

The VC-to-PE Handover

VCs poured into AI scribes in 2025 (Abridge, Ambience—hundreds of millions each), but 2026 shifts to PE acquisition of these assets for margin enhancement on legacy platforms (Report 6). The IPO window remains nearly shut—only Virta Health eyes readiness; PE-backed Zelis/Ensemble are in banker talks (Report 6).

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6. Opportunity Assessment: Best Entry Points for New Players

Opportunity 1: AI-Powered Administrative Automation for Payers

Bull case: Payers face intense provider pressure to adopt AI admin stacks (Report 3). Prior authorization, revenue cycle, and documentation are high-pain, high-volume, measurable-ROI targets. CMS AI payment codes create reimbursement pathways (Report 3 supplement). Health AI startups scale to $100-200M ARR in under 5 years (Report 8 supplement).

Bear case: Top 25 HST players control 29% market share and are acquiring aggressively (Report 1 supplement). Startups face 18-24 month enterprise sales cycles (Report 8). 20% of executives are negative on 2026 outlook from policy uncertainty (Report 1 supplement).

Verdict: Highest risk-adjusted opportunity. Build for PE acquisition, not IPO.

Opportunity 2: GLP-1 Adherence and Maintenance Ecosystem

Bull case: $73.86 billion market in 2026 growing to $315 billion by 2035 (Report 5). 50% of GLP-1 users regain weight after 12 months without support (Report 5). DTC distribution is fastest-growing channel at >25% CAGR (Report 5 supplement). The switch to orals creates a massive new compliance challenge.

Bear case: Novo/Lilly duopoly controls 90%+ (Report 5 supplement). Compounding pharmacy faces FDA scrutiny (Report 2). Insurance coverage for obesity remains restricted at ~50% of plans (Report 5).

Verdict: The maintenance/coaching layer around GLP-1s—not the drug itself—is the entry point. Hims & Hers is proving this model at $1.5B revenue with 50% YoY growth (Report 2).

Opportunity 3: Hybrid Care Models (Virtual + Physical)

Bull case: Failure rates ~40% below HealthTech average (Report 8 supplement). 25% YoY growth driven by policy tailwinds (Report 8 supplement). Hybrid companies acquired at 8x multiples versus pure digital's much lower exits (Report 8 supplement). 90%+ virtual visit return intent (Report 7).

Bear case: Capital-intensive to build physical presence. Incumbent health systems are hybridizing their own models (Report 7). Requires both tech and clinical operational competence.

Verdict: The contrarian winner. While everyone chases pure-play digital (98% failure rate), hybrid models blend VC-scale tech with fee-for-service billing, dodging full clinical validation requirements (Report 8 supplement).

Opportunity 4: Medicaid Value-Based Care Infrastructure

Bull case: Medicaid is now the fastest-scaling VBC market, driven by fiscal necessity (Report 4 supplement). States are pairing supplemental payments with accountability expectations. CMMI's "readiness year" creates demand for measurement infrastructure that most Medicaid providers lack (Report 4 supplement).

Bear case: Medicaid reimbursement rates are the lowest in healthcare. Provider resistance remains at 80% (Report 4 supplement). State-by-state regulatory variation multiplies complexity.

Verdict: Underserved and underfunded—exactly where new entrants can build without competing against UnitedHealth. The infrastructure play (analytics, risk stratification, quality measurement) has better economics than direct care delivery.

Opportunity 5: Home Health Technology Platforms

Bull case: $162B market growing at 9.8% CAGR to $284B by 2030 (Report 1 supplement). Double-digit M&A growth in 2025 (Report 6 supplement). PE actively acquiring tech-enabled home health agencies (Report 6). Medicare Advantage shift driving post-acute care home.

Bear case: CMS reimbursement cuts erode service margins (Report 1 supplement). Labor shortages constrain scaling. PE consolidation may leave limited independent targets.

Verdict: Equipment and remote monitoring technology (not services) is the entry point, as services margins erode under CMS pressure while equipment grows fastest (Report 1 supplement).

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7. Research Methodology Guide: How to Conduct Healthcare Market Research

Primary Federal Data Sources

Source	What It Provides	Access
CMS (cms.gov)	National Health Expenditure data, Medicare Advantage enrollment, MSSP ACO performance, reimbursement rates	Public datasets; NHE projections updated annually
FDA (fda.gov)	510(k)/PMA approvals, drug pipeline, clinical trial requirements, enforcement actions	MAUDE database for device adverse events; Orange Book for drug patents
NIH/PubMed	Clinical evidence, RCTs, health outcomes data, epidemiological trends	PubMed Central for open-access; ClinicalTrials.gov for pipeline intelligence
CDC	Disease prevalence, chronic condition data, utilization patterns	NHANES, BRFSS surveys

Industry and Market Intelligence

• MedPAC (medpac.gov): Annual reports on Medicare payment adequacy and MA market dynamics—essential for understanding payer economics (used in Report 4)
• KFF (kff.org): Medicare Advantage plan-level data including county coverage, benefits, premiums (cited in Report 4)
• IQVIA: Prescription drug sales data, GLP-1 market tracking, therapeutic area analysis
• Bessemer/BVP Atlas: Health AI investment benchmarks and ARR data (cited in Reports 2, 3, 8)
• Levin Associates: Healthcare services M&A deal tracking and volume analytics (cited in Report 6)

Methodological Best Practices

1. Triangulate market sizing claims. Report 1 shows how estimates vary: SNS Insider pegs 2024 at $3.56T, CMS implies ~$4.8T, MarketDataForecast projects $5.15T for 2026. Each uses different scope definitions. Always verify whether figures include long-term care, dental, vision, and OTC spending.

2. Distinguish EBITDA from revenue projections. McKinsey's HST projections (Report 1 supplement) are EBITDA-based ($110B by 2029), while revenue-based estimates from other sources look dramatically different. Conflating these is a common analytical error.

3. Validate growth claims against CMS NHE actuarial projections. Any segment claiming >15% CAGR should be checked against total healthcare spending growth of 5-6% (Report 1). Either the segment is gaining massive share, or the estimate is inflated.

4. Track reimbursement code creation. New CPT/HCPCS codes are the leading indicator for market creation in healthcare. CMS's planned AI payment codes (Report 3 supplement) are more predictive of market size than any analyst projection.

5. Use failure rate data as a reality check. Report 8 provides segment-specific failure rates (digital health: 98%, medtech: 75%, biotech: 90% trial attrition). Any business case that doesn't address these structural odds is incomplete.

6. Monitor M&A multiples as valuation anchors. Home medical equipment transactions commanded 11x+ EBITDA in Q4 2024 (Report 6 supplement); hybrid care companies at 8x (Report 8 supplement). These real transaction multiples are more reliable than DCF models in fragmented healthcare.

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8. Strategic Recommendations

For health-tech founders: Stop building for IPOs. PE acquisitions are the realistic exit. Structure your product for bolt-on integration with legacy platforms—not standalone disruption. The VC-to-PE handover (Report 6) means your acquirer is a PE-backed platform, not a strategic buyer. Build accordingly: prove 20-30% efficiency gains on a measurable process, not visionary transformation.

For pharma strategists: The GLP-1 cascade will restructure your portfolio whether you're in the class or not. If you sell cardiovascular drugs, glucose monitors, or weight-loss adjacent products, model a 15-25% demand erosion scenario within 3-5 years (Reports 5). The offensive play: bundle your existing therapies as combo regimens with GLP-1s (e.g., GLP-1 + SGLT2 for cardiorenal), since multi-mechanism approaches will be the next efficacy frontier.

For healthcare consultants: The biggest advisory opportunity in 2026 is helping organizations pass CMMI's "readiness year" for scaled VBC models (Report 4 supplement). The two-tier market—prepared vs. excluded—creates urgent demand for measurement infrastructure, risk stratification analytics, and downside risk modeling. Medicaid is the underserved client base where competition is lowest.

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9. Watch Out For

• The MA contraction's second-order effects. 2.6 million enrollees face plan terminations; 1.3 million face consolidations (Report 4). These displaced patients will flood traditional Medicare and employer plans, creating unpredictable utilization spikes that could distort 2026-2027 cost trends for providers who assumed stable payer mix.

• GLP-1 compounding crackdown. Hims & Hers' 50% revenue growth is partly built on compounded GLP-1 access (Report 2). FDA scrutiny on compounding pharmacies is intensifying. If enforcement tightens, DTC telehealth models face sudden margin collapse—and the 37.4% stock decline in 3 months may be pricing this in (Report 2 supplement).

• AI hype masking poor unit economics. While AI startups reach $100-200M ARR fast, only 20% sustain growth past that mark due to compute costs (Report 8 supplement). The 54% VC share going to health AI (Report 3 supplement) may be creating a bubble in clinical AI where reimbursement hasn't caught up.

• Distressed hospital contagion. 43% of hospital M&A involves distressed organizations (Report 6 supplement). If margin pressure continues, the number of financially vulnerable independent hospitals could spike, creating potential access crises in suburban and rural markets that force emergency policy responses.

• VBC's execution gap. Growth in VBC participation masks the fact that the top barriers (financial risk 87%, provider resistance 80%) haven't improved (Report 4 supplement). Organizations are committing to value-based arrangements faster than they're solving the underlying challenges. A wave of failed VBC contracts could trigger reputational backlash against the model itself.

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10. Questions to Explore

1. What happens to GLP-1 demand if oral formulations achieve true parity with injectables? Current projections assume gradual oral adoption, but if oral bioavailability exceeds 80% (Report 5 supplement) and pricing converges, the addressable population could double overnight—are supply chains modeled for this?

2. How will CMS AI payment codes actually be structured? Report 3 predicts them, but the specifics—billing methodology, eligible providers, documentation requirements—will determine whether AI economics work at scale or remain margin-negative for most adopters.

3. What is the true retention rate for value-based care arrangements? Reports track participation growth (Report 4 supplement), but no data surfaced on contract renewal rates or provider exit rates from VBC programs. If churn is high, the growth narrative overstates adoption durability.

4. Will Pfizer's monthly GLP-1 injectable actually reach market? Positive Phase 2b data (Report 5 supplement) is encouraging, but the transition from Phase 2 to Phase 3 historically eliminates most candidates. The competitive implications of a monthly option are enormous—but premature to model.

5. Where does the $1T+ in PE dry powder ultimately deploy? PE healthcare deal count collapsed 29% (Report 6 supplement) while dry powder accumulated. When deployment accelerates—likely with rate cuts—the speed and scale of consolidation could dramatically reshape competitive dynamics in fragmented segments like home health, behavioral health, and physician services within 12-18 months.