As the healthcare industry descends on San Francisco for the 44th Annual J.P. Morgan Healthcare Conference, the mood is distinctively different from years past. The era of "growth at all costs" has firmly receded, replaced by a disciplined flight to quality. For 2026, the market isn't just looking for scale—it is looking for precision.
At TripleTree, we see a market that is moving past the broad strokes of general consolidation and toward highly specific, performance-driven businesses. Whether it is artificial intelligence (AI) that doesn't just "chat" but actually works to scrub claims, or specialized care models that carve out high-cost niches like cardiology and nephrology, experienced investors are hunting for demonstrable ROI.
Heading into 2026, we are tracking four precise themes that will define the next wave of healthcare M&A.
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Theme 1: Generative AI in Administrative Functions |
While Generative AI has dominated headlines in 2025, the looming question remains how AI will fundamentally reshape industries. This challenge is particularly acute in healthcare, where investor focus and capital are increasingly directed toward leveraging AI to drive administrative efficiency across the Payer and Provider landscape. This focus, driven by the need for margin expansion, will lead to payer transformation (specifically in payment integrity and risk adjustment), provider transformation (mostly seen in the RCM industry), and the overall optimization of the human-led AI deployment. Ultimately, deploying AI strategically allows clinicians to re-focus on their core mission, patient care.
Payer Transformation
Payment integrity and risk adjustment are ripe for AI disruption as functions shift from reactive to proactive. As automated submissions and data extractions have streamlined prior authorizations, AI has the ability to have a similar impact on proactive data analysis. AI is able to deliver holistic member data analysis, in turn driving more accuracy in forecasting high-acuity and high-cost events. This allows companies to, at the least, prepare, and at the best, mitigate readmissions, disease progression, and avoidable emergency room visits.
Payment integrity functions stand to benefit from real-time claims scrubbing, fundamentally changing a task that was traditionally manual and post-payment. AI autonomously summarizes unstructured, complex medical records in seconds. This streamlines the human portion of the interaction, and reduces fraud, waste, and abuse by up to 50% according to a report published by ZS Associates. Additionally, payers stand to make leaps within risk adjustment accuracy through intelligent chart review and retrieval. Similar to the advancements made in payment integrity, AI drives the ability to autonomously scan incoming clinical data to identify codes that are over-coded or unsupported by clinical documentation, reducing compliance risk and ensuring correct reimbursement. The focus on autonomous agents will drive efficiencies and accuracies within the payer workflow, proactively managing risk and delivering immediate, measurable improvements across medical loss ratio, payment integrity, and risk adjustment.
Provider Transformation
The revenue cycle management (RCM) space has seen significant consolidation and aggregation in recent years. More recently, the focus has shifted from merely building scale to capturing efficiencies, with AI emerging as the main driver. In this competitive RCM ecosystem, the need to differentiate offerings for customers and deliver strong returns for investors makes AI the forefront solution for maximizing ROI for all stakeholders. AI spans and reduces administrative burden across all aspects of the RCM workflow, from activities focused on patient access and eligibility to managing claims submission, payment, and denial resolution.
AI has the functionality to automate charge capture and proactively validate coding compliance, drastically reducing the initial claim denial rate and improving the provider's bottom-line. Further, AI, using natural language processing (NLP), can analyze historical denial patterns and clinical context to flag a given claim's probability of denial before submission. This allows for targeted human intervention to front-run the solution (e.g., correct a prior authorization error) before the costly appeals process begins. For claims that are still denied, the appeals process is streamlined as AI synthesizes relevant denial letters, clinical charts, and contract terms to auto-generate an appeal letter, turning a time-consuming manual task into an automated function. In the near-term, providers will experience strong margin uplift and reduced monotonous tasks across the entire claims workflow, from initial submission to denial appeals.
Human-Led AI
While the narrative focuses on agentic AI driving efficiencies, a major investment angle is the optimization of the human-led AI workflow. The highest-value administrative AI platforms aren't simply replacing tasks, rather they are acting as a "co-pilot," synthesizing complex documentation into a concise, validated summary. This enables human experts, such as certified coders or clinical auditors, to handle a significantly increased volume of cases by focusing solely on high-judgment edge cases identified by the AI. The necessity of this loop is paramount for compliance. AI models are increasingly being subjected to clinical trials or rigorous, real-world data validation protocols to prove accuracy and demonstrate reduction in false positives / negatives before enterprise-wide deployment. This partnership, where AI handles the scale and humans provide the validation, is the necessary architecture for compliance and maximum ROI in 2026.
Ultimately, AI will help transform healthcare professionals from data-gatherers into high-level oversight experts, where AI-driven workflows will handle mundane tasks and administrative complexities. This will optimize the healthcare professional’s time for providing judgment and validation while rendering decisions that ensure compliance, speed, and the patients' best interest remain at the forefront.
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Theme 2: The "Unbundling" of the Employer Benefit Stack |
Employers have reached a financial breaking point with traditional "bundled" health plan solutions. With the average health benefit cost per employee projected to surpass $18,500 in 2026 according to a survey conducted by Mercer (which would result in a 6.5% increase, outpacing both inflation and wage growth), the "one-stop-shop" model is losing ground to vendors that specialize. To regain financial control, employers are actively "unbundling" their benefits stack, replacing large, inflexible health insurance carriers with specialized point solutions that offer greater transparency and a tighter control on costs.
Direct Contracting
The market is witnessing a surge in Direct Primary Care (DPC) and Advanced Primary Care models, where large, self-insured employers bypass legacy provider network contracts entirely to contract directly with providers. By partnering with DPC platforms like CareATC, Marathon Health, and Premise Health, employers secure dedicated, membership-based access for their workforce. Some employers are contracting with health systems directly for hospital care in regions where they have a significant number of employees. Other employers are turning to vendors like Centivo and Imagine360 which are contracting with preferred health systems in certain geographies at rates that are often lower than the traditional broad networks offered by large carriers. Direct contracting is no longer a fringe movement; recent industry surveys conducted by Brighton Health Plan Solutions indicate that 41% of large employers are actively considering or expanding direct contracting arrangements in 2026. This trend reflects a decisive pivot away from volume-based transactional care toward models that incentivize prevention and hold providers accountable for population health outcomes. Crucially, these models often involve providers taking on financial risk through capitation or bundled payments, transforming a variable expense into a predictable, fixed cost for the employer. This mechanism directly aligns provider incentives with achieving lower utilization and better health outcomes, leveraging the data from their specialized platforms to validate the investment.
Upstream Control
The market is valuing "upstream" solutions, specifically clinical navigation and specialized third-party administrators, that guide employees to high-quality providers before the cost is incurred, rather than just adjudicating the claim afterward. These platforms are highly focused on controlling high-cost downstream utilization, such as steering patients away from unnecessary ER visits, reducing inappropriate specialist referrals, and ensuring members choose high-performing providers for expensive procedures like orthopedic or cardiovascular surgeries. The investment case for these "front door" solutions is solidifying. A leading navigation platform, Quantum Health, is now demonstrating a 3.3x ROI in the first year, climbing to a 5.3x ROI by year three as member engagement matures. Unlike generalist carrier communication, these specialized navigators leverage highly personalized data and predictive analytics to engage members at the moment of highest financial impact, ensuring the right intervention is applied precisely when the member needs to make a critical care decision. By intercepting the patient journey before a surgery is scheduled or a referral is made, clinical navigation can reduce claims costs by an average of 5.9% and effectively strip out waste that traditional carriers often let slide.
Behavioral Health
Employers are aggressively carving out behavioral health from standard medical plans, seeking next-generation solutions that solve the dual crisis of access and engagement. Traditional carrier Employee Assistance Programs (EAPs) have historically suffered from abysmal engagement rates (averaging 2-5%) and "ghost networks" where providers are technically listed but unavailable. In contrast, specialized digital-first platforms are shattering these benchmarks, demonstrating utilization rates 10x higher than traditional models. These specialized platforms do not take the approach of one-size-fits-all. Rather, they offer a spectrum of distinct modalities, including asynchronous and synchronous virtual therapy, integrated mental health coaching, and full-stack tele-psychiatry, empowering employers to precisely match the intensity and type of care to the specific employee need. With mental health issues now affecting nearly 25% of Americans according to Mental Health America and driving significant indirect costs (e.g., absenteeism), the indirect cost impact—which also includes presenteeism, higher short-term disability claims, and increased employee churn—is often 3x to 5x greater than the direct medical cost of treatment. Employers are willing to pay a premium for specialized platforms that can prove a $4 return for every $1 invested in improved productivity and retention.
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Theme 3: High-Acuity Specialty Care (Delivery & Risk) |
For the last decade, investment theses focused on low-acuity front doors (e.g., urgent care, primary care). More recently, the pendulum has been swinging toward high-acuity specialization, a trend that will continue in 2026. The most attractive assets are no longer generalist clinics, but platforms capable of managing complex, chronic conditions outside the expensive inpatient hospital setting. Critical care is decoupling from the hospital campus, driven by a market that rewards precision over breadth.
Site of Care Shifts
Structural shifts in clinical delivery are driving volume out of the traditional hospital tower and into specialized, lower-cost settings. Advances in surgical technology and anesthesia now allow complex interventions to occur safely in outpatient facilities and the proliferation of ambulatory infusion centers has enabled an increasing number of high-cost infusion therapies to leave the hospital and shift to alternate site settings in the community. This decentralization reduces reliance on acute care infrastructure, aligning with payer mandates for cost efficiency and patient preferences for accessibility and convenience.
Driven by favorable Centers for Medicare & Medicaid Services reimbursement shifts, lucrative procedures in orthopedics and cardiovascular medicine are rapidly migrating; industry forecasts suggest a 25% increase of outpatient cardiac procedures performed in ambulatory surgery centers by 2035. Investors are buying the infrastructure that allows these procedures to be performed at a fraction of the hospital cost, typically 40% less compared to the same procedure in a hospital setting according to UnitedHealth Group. Simultaneously, investors are building and consolidating highly fragmented, high-touch verticals like behavioral health and infusion services. The targeted strategy aims to build scaled platforms that can meet the specialized demand that generalist systems cannot handle.
Controlling the Cost of Chronic Conditions
Payers and consolidators have realized that the burden of delivering specialty care on Primary Care Physicians (PCPs) is rapidly increasing, further straining and driving burnout and decreasing quality outcomes. In order to properly provide treatment for these cases, PCPs are learning they cannot handle the costs of the patients alone and are actively combining to drive efficiencies in processes and deliver enhanced care. Investors have noticed this trend and the opportunity that remains, driving aggressive consolidation in specialty practices in the highest-cost verticals, such as cardiology, nephrology, and oncology.
By moving these specialties from fee-for-service (FFS) to outcome-driven value-based care (VBC) models, platforms can align incentives to reduce total spend rather than simply increasing volume. Recent data indicates that applying VBC levers to specialty care, such as reducing unnecessary hospitalizations and standardizing drug regimens, can unlock $100B in annual savings according to a report by McKinsey. Buyers are acquiring these practices not just for their revenue, but for their ability to actively manage the downstream utilization of high-acuity patients, capturing the savings margin that traditional FFS models leave on the table.
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Theme 4: Rise of Transparent PBM & Clinical Pharmacies |
As drug costs continue to be emphasized in the public eye, key pressures continue to rise for more transparent cost structures and constituent participation in addition to providing value at the point of dispensing.
Transparent PBMs
For decades, Pharmacy Benefit Managers (PBMs) operated as a “black box” with opaque pricing structures with less focus on the end patient. This approach has been flipped on its head as disruptive new technologies focused on transparency and navigation emerged, regulatory scrutiny intensified, and public perception soured. The industry is in the midst of a massive pivot, which investors, patients, and legislators are watching intently. On January 1, 2026, the California Senate Bill 41 went into effect, slashing the PBMs ability to profit on spread pricing and rebates. As the 4th largest economy in the world, California is often seen as a bellwether in legislation. Ramifications have already begun to appear as large-scale PBMs such as CVS Caremark, Cigna, and OptumRx have announced strategic pivots to cost-plus or transparent pricing models.
This is one of many examples of the legislative pressures traditional PBMs face today. Patients and regulators are looking to change the revenue center for the PBMs, transitioning from the “black box” to a “glass house”, offering simplistic, cost-plus or fixed-fee transaction costs to reduce the ambiguity in the space and ultimately pass the savings back to the patients. The landscape is rapidly changing, with antiquated systems built on predated infrastructure showing the lack of ability to evolve with it. Investors have noticed the trend and have shifted their focus to PBMs with transparent models built with the mindset of fixed fee and/or cost plus pricing, with the technological chops to pivot quickly.
Clinical Pharmacies
Currently, the United States faces a PCP shortage, potentially reaching 45,000 providers by 2034 according to the Association of American Medical Colleges. In tandem, pharmacies are continuing to evolve into a central role within the healthcare ecosystem, serving as a key patient touchpoint at the point of dispensing. Due to the increasing shortage and connectivity of the patient, expect to see a continuation of focus from investors in turning the pharmacy into a clinical care touchpoint rather than just a site for dispensing.
Pharmacists represent a strong provider base with high capacity, a notable geographic footprint, and the education to broaden their aperture. This provides payers and pharma with consumer connectivity to enhance their adherence and education, evidenced by the reintroduction of Comprehensive Medication Reviews into the STAR ratings (beginning in 2027). Further, both the patient and pharmacist stand to benefit from these advancements. For the patient, they are able to receive vaccinations and testing in a multitude of environments, increasing patient access to care, while also enhancing their understanding of the medication they are being prescribed to further drive adherence and strong medication outcomes. Pharmacists can then focus on value-driven work and practice at the top of their license, leading to reduced burnout and fatigue while unlocking new revenue opportunities for a sector that has recently encountered headwinds.
Key investments are being made within the pharmacy technology vertical to drive efficiencies within the prescribing workflow to reduce the mundane tasks a pharmacist faces each day, thus opening their availability to perform clinical work. For example, large retailers have recently invested in pill counting technology that utilizes AI to count the number of pills within seconds and pharmacy management systems have begun to integrate medication therapy management and other clinical opportunities directly into the pharmacist workflow. As technology investments continue to occur across national retailers and independents alike, pharmacies will continue to adopt clinical capabilities.
Conclusion
In summary, our view at TripleTree is that 2026 will not be defined by who can aggregate the most volume, but by those who can manage it with the most precision. The winners in this next cycle—whether they are payment integrity platforms, specialized PBMs, or high-acuity outpatient groups—will be the ones who can prove they are effectively stripping waste and improving outcomes in the last mile of care.
We look forward to discussing these themes and the opportunities they create with many of you in San Francisco.
