How Data and AI will Continue to Change Healthcare

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Given its rapid growth over the last few years, healthcare remains a shining light in the economy. Healthcare technology has been a focal point of the COVID-19 pandemic. This is especially true as pharmaceutical companies race to create better vaccines and testing protocols.

As investors in healthcare technology, we believe these changes will continue to drive the evolution of the healthcare industry and the tech startups that thrive within it.

Healthcare has seen a significant increase in data, AI (machine learning) and AI applications over the past few years. Let’s take a look at their impact for 2026 and beyond.

Why The Growth Of Data Is So Impactful

Although there is an increase in data collection about patients, privacy concerns remain. As telehealth becomes more common, this trend continues to grow. Telemedicine is becoming more popular as doctors increasingly use two-way technology to deliver healthcare remotely.

The rise in telehealth popularity means both consumers and providers have greater access to data. Analyzing this data is complex and requires advanced technology, yet it also presents significant opportunities.

After analyzing clinical data, doctors can create more tailored patient care. Radiologists can use the right tools to analyze patient data and make better diagnoses. Advanced data analysis also speeds up drug development.

Healthcare tech organizations are more visible than ever in 2026 because the pandemic has made innovative data-driven solutions a top priority. For example, Tempus is advancing precision medicine through the practical application of AI in healthcare.

The innovation startup has built a vast collection of clinical and molecular data to help healthcare providers deliver precise treatments. In May, the company announced its expansion into infectious diseases, beginning with COVID-19.

23andMe, one of our portfolio companies, focuses on genetic testing and brings data analysis directly to consumers. The company is leading a COVID-19 study to help scientists identify genetic links to the disease.

The company’s goal is to understand how genetic differences may explain why symptoms range from mild to severe and to empower the scientific community to address this public health crisis.

The Rise Of Artificial Intelligence And Machine Learning

In 2026, we expect to see significant growth and rapid demand for artificial intelligence and machine learning (a key segment of AI) in healthcare. Even before the pandemic, the market value of health AI was estimated to reach $6.6 billion by this year, according to a 2017 report by Accenture.

Hospitals have recently taken advantage of AI and ML to improve diagnoses, enhance patient outcomes and increase revenue. By using AI technology to refine disease predictions, they can better anticipate serious conditions, including cancer.

Hospitals can also use AI to predict the risk of osteoporosis and anticipate which patients may develop cardiovascular disease.

As COVID-19 disrupted the world, AI became even more important as a tool for developing predictive models for case spread across the country. Predictive tools began tracking the virus and assessing the likelihood of severe symptoms. Machine learning has helped immunologists make new discoveries and develop COVID-19 vaccines.

Artificial intelligence startups are growing for the benefit of patients. For example, Lark, one of our portfolio companies whose platform has served about 2 million patients, uses conversational AI to support those living with or at risk of chronic disease. Babylon Health is a digital startup that uses AI to provide accessible health services through telehealth.

There is little doubt that AI and machine learning will grow in importance in treatment protocols and clinical research.

We believe data scientists will become increasingly important members of the clinical community as it seeks to leverage data to improve patient outcomes.

Also read: Top 6 Tips to Stay Focused on Your Financial Goals

The Healthcare Tech Investment Outlook

Although 2020 was a massive year for investment in the healthcare industry, we expect there will still be ample investment opportunities for investors in 2026.

We recommend investors conduct thorough due diligence to identify companies whose offerings will enable success beyond the short-term COVID-19 environment. For example, while the pandemic has forced many people to adopt telehealth solutions, it does not mean the majority will continue this behavior once they can return to in-office appointments.

Some companies may overstate the extent of broader market trends to make their business opportunity appear more compelling, perhaps to justify a higher valuation.

A wide variety of financing options are available for mid-to-late-stage companies through private equity (seed to growth), special purpose acquisition vehicles (SPACs), direct listings, acquisition offers and more.

Given this landscape and the fact that healthcare is one of the sectors with the strongest investor appetite, most top companies will likely already have secured funding or will be in discussions for opportunities that may include generous valuations based on their recent track record.

Therefore, investors could start looking for earlier-stage companies with strong teams that target markets with long-term structural tailwinds and growth potential.

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