Macro Trends and Market Landscape
Market Size & Growth
The global healthcare market is projected to exceed $12 trillion by 2028, with an annual growth rate of approximately 6-7%. Key segments driving this growth include digital health, valued at $300 billion in 2023 and expected to grow at a CAGR of 16%, and precision medicine, forecasted to surpass $100 billion by 2026. Startups at the intersection of technology and healthcare delivery are positioned to capitalize on this growth as traditional players struggle to meet evolving demands efficiently.
Macro Drivers
Transition from Fee-for-Service to Value-Based Care
The U.S. healthcare system is undergoing a structural transformation, transitioning from fee-for-service models toward value-based care. This paradigm shift rewards providers for improved patient outcomes, cost efficiency, and care coordination. As of 2023, over 60% of healthcare payments were tied to value-based arrangements, with CMS targeting all Medicare beneficiaries to be in such models by 2030. This evolution is catalyzing demand for technologies that support performance tracking, outcomes measurement, and care navigation.
Acceleration of Digital Transformation
Technological innovation is fundamentally reshaping healthcare delivery. Artificial intelligence, machine learning, and automation are enabling faster diagnostics, streamlined administrative processes, and personalized treatment protocols. Telehealth, which saw a 38x increase in adoption from pre-pandemic levels, is now a cornerstone of hybrid care models4. Moreover, AI is projected to generate up to $1 trillion in annual value across the healthcare ecosystem by reducing administrative burden and enhancing clinical decision-making.
Rise of Patient-Centered, Digital-First Models
Patients, especially digitally native generations, increasingly demand healthcare that is personalized, accessible, and transparent. Millennials and Gen Z—who now represent the largest consumer segments—expect digital-first experiences akin to those in fintech or e-commerce. Platforms offering remote monitoring, virtual consultations, and on-demand access to medical information are rapidly gaining traction, empowering patients to self-manage their care while reducing the strain on traditional health systems.
Aging Population and Chronic Disease Burden
The global population aged 60 and over is expected to double by 2050, reaching 2.1 billion people. Concurrently, chronic diseases such as diabetes, cardiovascular conditions, and obesity continue to drive 75% of total healthcare expenditures in the U.S. This demographic and epidemiological shift presents opportunities for scalable solutions in remote care, chronic disease management, and preventative health technologies.
Policy and Regulatory Tailwinds
Government incentives and evolving regulatory frameworks are facilitating the rapid adoption of health tech. In the U.S., permanent reimbursement models for telehealth and alternative payment models (APMs) are expanding access and sustainability. Internationally, regions like the EU are pioneering AI oversight and certification processes to support safe deployment 10. These regulatory shifts are lowering barriers for market entry, accelerating the commercialization path for innovative startups, and driving capital inflows into the sector.
Download our investment thesis here.