2026 Healthcare M&A: What’s Changed, What’s Working, And Where Deals Are Moving
Key Takeaways
- Healthcare M&A activity is rebounding in 2026, but with higher execution standards. Capital is returning to the market, particularly in the middle market, but investors are prioritizing proven operating models, durable reimbursement, and realistic paths to margin improvement over growth narratives alone.
- Platform builds, PPM roll-ups, and bolt-on strategies are driving deal flow. Buyers are leaning into staged acquisitions, earn-outs, rollover equity, and other mechanisms to bridge valuation gaps and manage physician retention and integration risk.
- Technology, especially AI, is now a core diligence focus, not a side story. Buyers expect measurable ROI, strong data governance, and regulatory-ready compliance, with increased scrutiny of AI-enabled tools, reimbursement exposure, and antitrust risk playing a role in both deal terms and post-close strategies.
As 2026 gets underway, healthcare dealmaking is finally starting to feel “normal” again. Capital is back in the market, but it is more disciplined and a lot less patient. At this year’s J.P. Morgan (“JPM”) Healthcare Conference, the message was consistent: money is moving, but only toward models that can prove they work in real operating environments, not just in theory.
Investors are gravitating toward clinically credible platforms, creative deal structures, and teams using technology (including AI) to drive measurable performance, whether that’s margin improvement, better throughput, or stronger payor leverage. For physician practice management (“PPM”) platforms and bolt-on strategies, the appetite is real, but the underwriting is tighter and the diligence is deeper.
Market Check: Early 2026
Healthcare services and life sciences M&A carried real momentum out of 2025. Most advisors expect both volume and value to continue climbing this year — especially in the middle market. Stabilizing rates and a healthier equity market are helping platform builds and bolt-ons get done, even if the largest “headline” deals remain selective and slow to close.
Cost pressure is still the underlying driver. Rising labor costs, reimbursement headwinds (particularly in Medicaid-exposed specialties), and payor pressure are pushing providers and sponsors toward scale. That is showing up in continued consolidation of specialty physician groups and PPM roll-ups in targeted verticals where density and contracting leverage actually move the needle. In short: buyers want real cash flow, a believable path to margin improvement, and some insulation from reimbursement whiplash.
Signals From the 2026 JPM Healthcare Conference
The conversation at JPM this year was less about splashy megamergers and more about targeted partnerships and disciplined growth. Pharma and large strategics zeroed in on later-stage or well-validated assets, particularly in oncology, obesity and cardiometabolic care, and neurodegenerative disease. Structurally, there was a clear preference for licensing deals, options, and other staged partnerships over full buyouts.
On the services side, health systems, payors, and PPM platforms were focused on tightening operations in a tough reimbursement environment, using technology more thoughtfully, and leaning into home-based and outpatient models. Executives were refreshingly specific about what is actually moving the needle, including better revenue cycle tools, automation in clinical workflows, smarter referral management, and technology that improves throughput in ASCs and specialty practices. AI came up a lot, but mostly in a “show me the ROI” context rather than as hype.
Five Deal Themes to Watch in 2026
- Selective but active buying. Strategics and private equity sponsors are still buying, but the filter is tighter: clinical relevance, reimbursement durability, and operational scalability all matter more than growth at any cost. True “A-tier” assets — scaled physician platforms, ASC networks, and high-performing PPM platforms — are still commanding strong valuations. Buyers are pushing harder for downside protection (escrows, holdbacks, earn-outs), especially in platform deals with heavy physician concentration risk.
- Platform builds and bolt-ons are back. The platform-and-bolt-on playbook is back, especially in specialties where density matters (cardiology, GI, derm, MSK, behavioral health, women’s health). Buyers are more willing to move quickly on tuck-ins that expand geography, payer mix, or subspecialty coverage. Expect continued pressure on sellers to get comfortable with post-closing physician employment agreements, non-competes (to the extent still enforceable), and retention mechanics tied to real integration outcomes.
- More creative structures to bridge valuation gaps. Valuation expectations haven’t fully reset on the sell side, so structures require more creativity. Earn-outs tied to Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) normalization, milestone-based payments, rollover equity, and option-to-acquire structures are increasingly common — especially in growth platforms and PPM deals where physician retention and post-close performance are critical. These tools are becoming less “deal friction” and more standard operating procedure.
- Tech (and AI) as value drivers. Technology is now part of the core diligence thesis in many deals, from revenue cycle and risk adjustment tools to clinical analytics, MedTech, and digital front doors. AI is absolutely in the mix, but buyers are asking harder questions:
- Does it actually improve margins?
- How is data sourced, governed, and protected?
- What’s the regulatory and compliance exposure?
Black-box models and loose data practices are getting flagged early in diligence, particularly for PPM platforms that rely on centralized analytics, scheduling, or payor optimization tools.
- Regulatory and political scrutiny is not going away. Even with a generally more deregulatory tone in Washington, private equity-backed roll-ups, multi-state platform builds, and cross-border transactions are still drawing scrutiny. Antitrust review of provider consolidation remains a live issue in certain markets and specialties. For tech-enabled and AI-heavy platforms, regulators and counterparties are taking a much closer look at how data is used, how consent is handled, how systems are secured, and how the algorithms actually work. The bar for clean compliance documentation is higher than it was even a year ago.
The 2026 Opportunity for Dealmakers
2026 is shaping up to be a strong year to do deals, but not an easy one. Activity is picking up, lenders are more open for business, and sellers are coming back to market. At the same time, buyers are far less forgiving of loose stories and half-baked growth plans. The deals getting done are the ones with a clear operating angle, not just a financial one.
In the middle market, platform builds, PPM roll-ups, and smart bolt-on strategies are leading the charge. Buyers are spending more time underwriting integration, physician alignment, and post-close execution than they are debating headline multiples. The question we hear most often is no longer, “Can we buy this asset,” but, “Can we actually run it better once we own it?”
For strategics and private equity sponsors focused on physician platforms, the opportunity is real, but so is the bar. The best-positioned teams are showing a clear plan for scaling operations, navigating reimbursement pressure, retaining physicians, and using technology (including AI) in ways that actually improve performance. In this market, winning deals are less about paying the highest price and more about having the most credible plan for what happens on day one — and day 100 — after closing.
- Matthew M. Brohm
Partner
