Is the Digital Health Market growing now?

Why is digital health growth so hard to read right now?

Digital health is sending two opposite signals at the same time.

On the positive side, the market is clearly not frozen anymore.

U.S. digital health startups raised $4.0 billion across 110 deals in Q1 2026, which was $1.0 billion more than in Q1 2025 and the strongest first quarter since the pandemic peak. The AI layer is even hotter: OpenEvidence raised $250 million in January 2026 at a reported $12 billion valuation, Doximity said nearly half of its 800,000 active prescribers used its clinical AI in Q4 FY2026, and Abridge, Nabla, Ambience, and other ambient AI companies keep winning health-system deployments. Public names also show pockets of real demand: Hinge Health grew Q1 2026 revenue 47%, Omada grew revenue 42%, and Talkspace grew payer revenue 28.3%.

But the negative side is just as concrete.

Global Q1 2026 digital health venture funding was down 6.6% year over year, while deal count fell nearly 49%. That means capital is concentrating, not spreading. Telehealth use in primary care is not accelerating; Epic Research found it stabilized around 6–7% of primary-care visits after declining from 2022. Teladoc’s Q1 2026 revenue slipped, BetterHelp revenue declined, Amwell’s Q1 revenue fell 18%, and GoodRx’s prescription transactions revenue dropped 24%. Even the stronger consumer platforms are not risk-free: Hims & Hers grew revenue only 4% in Q1 2026 while dealing with GLP-1 margin and regulatory pressure.

So the right answer cannot come from one headline. Digital health is growing in some submarkets and compressing in others.

If you want more recent data on this point, please see our latest digital health market report.

What are analysts saying about digital health growth now?

Analysts still expect digital health to grow, but their numbers describe different markets.

Grand View Research estimates the global digital health market at $347.4 billion in 2025 and forecasts $1.83 trillion by 2033, implying 23.4% CAGR from 2026 to 2033.

Fortune Business Insights is even larger, putting the market at $491.6 billion in 2026 and $2.35 trillion by 2034, with 21.6% CAGR.

Mordor Intelligence is lower but still strongly positive, forecasting growth from $406.0 billion in 2026 to $884.4 billion by 2031, or 16.9% CAGR.

Statista is much more conservative, projecting $177.8 billion in 2026 revenue and 5.4% CAGR through 2030.

The spread is actually not a small modeling difference. It comes from what each firm includes. Some definitions include healthcare analytics, mHealth, remote monitoring, health IT, connected devices, telehealth, software, services, and hardware.

Others are narrower and closer to consumer digital care, online consultations, digital treatment, and fitness or wellness apps. That is why the same “digital health” label can produce a 2026 market size below $200 billion or close to $500 billion.

Still, the analyst consensus is useful. It says the market is expected to expand, not contract. But forecasts are a lagging and smoothed layer of evidence.

They do not tell us whether buyers are signing contracts this quarter, whether telehealth visits are rising, whether venture deals are broadening, or whether public companies are beating guidance.

So we should use analyst forecasts as context, then rely more heavily on fresh operating signals. And this is what we will do now.

Are digital health startups actually raising money again?

Digital health funding is back, but the comeback is actually concentrated in fewer winners.

The strongest positive signal is the U.S. funding rebound.

Rock Health reported $14.2 billion in U.S. digital health venture funding in 2025, up 35% from 2024 and the highest total since 2022. Then Q1 2026 brought $4.0 billion across 110 U.S. deals, ahead of $3.0 billion across 122 deals one year earlier. Average deal size reached $36.7 million, the highest quarterly average since Q4 2021.

But when we look beyond the headline, the market looks less broad.

Galen Growth counted $7.1 billion of global digital health venture funding in Q1 2026, down 6.6% year over year, with only 216 deals versus 420 a year earlier. North America absorbed most of the capital, while Europe and Asia-Pacific looked much cooler. That means the market is not reopening evenly. It is rewarding companies that already have scale, AI leverage, enterprise distribution, or a clear reimbursement path.

At the end of the day, this is not a 2021-style funding boom. Investors are putting more money into fewer companies.

Is healthcare AI now carrying the whole digital health market?

Yes, actually, healthcare AI is carrying the strongest part of digital health right now.

The funding evidence is unusually dense.

OpenEvidence raised $250 million in January 2026 and said its medical search engine was used daily by more than 40% of U.S. physicians across more than 10,000 hospitals and medical centers. Abridge raised $300 million in June 2025, four months after a $250 million round, and said it worked with more than 150 enterprise health systems. Ambience Healthcare raised $243 million in July 2025 to scale AI documentation, coding, and clinical documentation integrity. Nabla raised $70 million in June 2025 and said it was used by 130+ healthcare organizations and 85,000 clinicians.

The usage signal is even more important than the money.

Doximity said in May 2026 that more than 800,000 active prescribers used its workflow tools in Q4 FY2026, nearly half used its clinical AI, and prompts per user nearly doubled from January to April. Cleveland Clinic’s ambient AI rollout also shows the move from pilot to deployment: after testing products in 2024, it selected Ambience, rolled it out in 2025, and reportedly saw thousands of clinicians adopt it voluntarily.

So it looks like healthcare AI is not just another digital health feature but actually the part of the market with the clearest buyer pain. It makes sense: it attacks documentation, coding, clinical search, and administrative overload.

If you want more recent data on this point, please see our latest digital health market report.

Are people using telehealth more now, or has it plateaued?

Telehealth is durable, but it is no longer a fast-growing usage story.

Epic Research found that telehealth accounted for just over 8% of primary-care encounters in July 2022 and just under 6% by October 2025. Since 2023, primary-care telehealth has stayed around 6–7% of visits.

That is not collapse, but it is also not current expansion. It shows that telehealth found a post-pandemic floor.

Specialty data explains why the market still matters. AHA cited Epic data showing mental health at 28.2% telemedicine utilization in December 2025, far above endocrinology at 11.4%, obstetrics at 9.4%, and urgent care at 2.3%. FAIR Health’s tracker also continues to show monthly commercial telehealth usage, with mental health consistently representing a large share of telehealth claims.

So we should not say telehealth is dying. It has become a normal care channel in the use cases where it works. But if the question is whether virtual visits are accelerating right now, the fresh evidence says no.

Are public digital health companies proving real demand now?

Public digital health results show demand, but only in specific business models.

The strongest numbers come from companies with payer, employer, or chronic-care distribution.

Hinge Health reported $182 million in Q1 2026 revenue, up 47% year over year, and raised its full-year revenue outlook to about $801 million at the midpoint. Omada reported Q1 2026 revenue up 42%, with total members above one million and access through all three major PBMs. Talkspace reported Q1 2026 revenue of $61.7 million, up 18.2%, with payer revenue up 28.3% and completed payer sessions up 31.2%.

But other public signals are weaker.

GoodRx reported Q1 2026 revenue down 4%, with prescription transactions revenue down 24% because of lower monthly active consumers, pharmacy store closures, and weaker unit economics. Teladoc’s Q1 2026 revenue slipped 2%, with BetterHelp revenue down 9% and paying users down 9%. Amwell’s Q1 2026 revenue fell 18%, including a 23% decline in subscription revenue.

Are employers and insurers still paying for digital health?

These days, employers and insurers are still paying, but they are buying proof instead of promises.

Hinge Health is the cleanest signal. It serves large employers and health plans in digital MSK, and its 47% Q1 2026 revenue growth suggests buyers are still funding digital care when the product claims to lower costs and improve outcomes. Omada gives a second signal: it passed one million members and now has expanded channels across the three largest PBMs. Talkspace gives a third: payer revenue grew 28.3%, while completed payer sessions grew 31.2%, showing that covered mental-health demand is still expanding.

The more subtle signal is vendor consolidation. Employers and insurers are not trying to add endless point solutions. They want broader platforms, integrated pathways, measurable ROI, and easier procurement. That helps companies like Hinge, Omada, Talkspace, Spring Health, and Sword, while making life harder for small single-condition apps without strong evidence.

So we can conclude that payer and employer spending is not disappearing but it is becoming more disciplined.

If you want more recent data on this point, please see our latest digital health market report.

Are digital health IPOs really reopening now?

The IPO window has cracked open, but it is still selective.

Hinge Health and Omada Health going public in 2025 mattered because digital health had gone through a long exit drought after the 2021 boom. Their IPOs showed that public investors would look again at digital health companies with scale, recurring revenue, and a route to profitability. Hinge then reinforced that signal with strong Q1 2026 revenue growth and raised guidance.

But the IPO signal should not be overread. Two IPOs do not make a fully open market. Public investors are still punishing weak guidance, low margins, and unclear category positioning. Doximity’s May 2026 selloff after softer FY2027 guidance shows that even profitable digital platforms can be punished if growth expectations cool.

All things considered, the IPO market is healthier than it was, but still not forgiving.

Are big companies buying digital health assets again?

Strategic M&A is clearly active again, and it says the digital health market is maturing.

Hims & Hers announced a $1.15 billion agreement to acquire Eucalyptus in February 2026 and completed the acquisition in June 2026, expanding across Australia, Canada, Germany, Japan, and the UK.

Universal Health Services agreed in March 2026 to acquire Talkspace for about $835 million, giving a traditional behavioral-health operator a national virtual-care network.

Sword Health acquired Kaia Health in January 2026 in a $285 million deal that expanded its MSK and pulmonary-care reach into Germany and broader U.S. populations.

Spring Health also agreed to acquire Alma, combining employer mental health, payer access, and therapist-network infrastructure.

These deals are not random. They point to four consolidation themes: consumer health platforms going global, behavioral health moving closer to payers and providers, MSK platforms consolidating, and mental-health access networks becoming more valuable. That is usually what happens after a venture boom: the weaker middle gets squeezed, while scaled players buy distribution, geography, or provider networks.

Are digital therapeutics finally taking off now?

Digital therapeutics are improving, but they are not leading the current market.

The policy signal is better than it was. CMS created Medicare reimbursement codes for certain digital mental health treatment devices starting in 2025, and APA highlighted this as a new reimbursement pathway. That matters because digital therapeutics were previously stuck in a gap: clinically validated products could still fail commercially if no one paid for them.

But commercial proof remains thin. The category still carries the memory of Pear Therapeutics’ bankruptcy and Akili’s struggle to turn regulatory approval into durable demand. Recent reimbursement progress mostly applies to narrower behavioral-health use cases, not to a broad DTx market. Providers also need workflow integration, prescribing habits, patient adherence, and revenue-cycle support before these products become routine.

So it looks like DTx is no longer blocked at the policy level, but it is not yet breaking out at the demand level.

Are patients now adopting more digital health tools?

Patients are digitally engaged, but consumer adoption is not enough by itself.

Rock Health’s 2025 consumer survey found that 57% of U.S. adults owned at least one wearable or connected device, with 46% owning a wearable. That is a large installed base, and it supports demand for monitoring, wellness, fitness, cardiometabolic health, and medication-support products. Consumer platforms such as Hims & Hers also still show scale, with nearly 2.6 million subscribers in Q1 2026.

But growth is no longer just about downloading an app or buying a wearable. First-time wearable adoption has slowed, and the value of the data depends on whether it connects into clinical, coaching, payer, or pharmacy workflows. A device sitting on a wrist is not yet a reimbursed health intervention.

Finally, the consumer AI layer is rising but trust is uneven. People are using AI for health information, symptom questions, diet, exercise, and emotional support, but most still place more trust in clinicians.

The next growth step is therefore not “more apps” but rather turning consumer engagement into clinically useful, reimbursed, and trusted care pathways.

Is chronic care becoming the new center of digital health?

Yes, actually chronic care is becoming one of the strongest current growth zones in digital health.

Omada is the clearest proof point. In Q1 2026, it reported 42% revenue growth, 51% member growth, and more than one million total members. It also expanded channels across all three major PBMs, which matters because chronic-care distribution often depends on employers, payers, and pharmacy-benefit infrastructure rather than pure consumer acquisition.

Policy is also moving in the same direction. CMS’s 2026 changes around remote patient monitoring and remote therapeutic monitoring created more flexible reimbursement pathways, including shorter monitoring windows and refined billing options. That does not guarantee adoption, but it lowers friction for providers who want to run remote-care programs without forcing every patient into the same 16-day monitoring pattern.

The reason this angle matters now is simple: healthcare cost pressure is concentrated in chronic diseases, obesity, diabetes, cardiovascular risk, MSK pain, and behavioral health.

Digital health companies that manage these populations between visits are much easier for payers to justify than generic wellness apps.

If you want more recent data on this point, please see our latest digital health market report.

Is GLP-1 demand now creating a new digital health category?

GLP-1 demand is creating a real digital health infrastructure layer around obesity care.

The first signal is consumer demand. Hims & Hers, Eucalyptus, Ro, GoodRx, Omada, and other digital health players are all being pulled toward obesity, metabolic health, medication access, coaching, and adherence. Hims & Hers reported nearly 2.6 million subscribers in Q1 2026 and raised full-year revenue guidance, while Eucalyptus brought international obesity and consumer-health demand into the platform.

The second signal is channel redesign. GoodRx’s Q1 2026 prescription transaction revenue fell, but Pharma Manufacturer Solutions revenue grew strongly, helped by Pharma Direct and manufacturer-sponsored pricing. That suggests medication access is moving from simple discount cards toward direct manufacturer, employer, and patient-affordability programs. Omada’s PBM expansion and Lilly Employer Connect relationship point in the same direction: GLP-1 care needs wraparound support, not just prescription routing.

The risk is equally important. Hims & Hers’ Q1 2026 revenue growth slowed to 4%, gross margins compressed, and the company faced pressure as the market shifted from compounded GLP-1 products toward branded access. In other words, GLP-1 is a demand tailwind but also a margin and regulatory stress test.

At the end of the day, GLP-1 is creating digital health demand, but the winners will be the companies that control access, coaching, adherence, labs, pharmacy relationships, and clinical oversight. Selling the drug is not enough.

Are hospitals adopting digital health because staff are overloaded?

Yes, kind of. Hospitals are indeed adopting the digital health tools that directly reduce administrative pressure.

Ambient AI is the clearest example. Abridge, Ambience, Nabla, Doximity, and OpenEvidence are not growing because hospitals want “digital transformation” slides. They are growing because clinicians spend too much time documenting, searching, coding, and navigating EHR workflows. That makes the ROI more tangible.

Recent deployment signals are stronger than usual. Cleveland Clinic reportedly moved from a 2024 pilot of multiple ambient AI products to a 2025 Ambience rollout, with thousands of clinicians adopting it voluntarily. Doximity’s clinical AI usage among prescribers also shows that physician workflow tools can scale when they are already embedded in daily work. Abridge’s 150+ health-system footprint and Nabla’s 130+ organization footprint show that the category is moving beyond isolated pilots.

The constraint is governance. Health systems still need privacy controls, bias testing, clinician review, EHR integration, medico-legal clarity, and procurement discipline. So growth is real, but it is enterprise growth: slower than consumer software, more durable if implemented well.

Are regulations helping digital health these days?

Regulation is keeping the market open, but making the winning requirements tougher.

Telehealth policy is a near-term support. HHS says Medicare patients can receive non-behavioral telehealth services at home through December 31, 2027. CMS’s February 2026 FAQ also confirms that, through that date, Medicare beneficiaries can receive telehealth services anywhere in the United States and territories. DEA and HHS extended controlled-substance telemedicine prescribing flexibilities through December 31, 2026, preventing an abrupt cliff for virtual behavioral health and medication-management models.

Remote monitoring and DTx also have better policy scaffolding than before. CMS’s 2026 remote-care changes make RPM and RTM more flexible, while Medicare’s digital mental health treatment codes create a pathway for certain prescription digital behavioral therapies.

But AI regulation is moving in the opposite direction: more structure, more documentation, more lifecycle management, more validation, and more post-market monitoring. That is necessary for trust, but it raises the cost of competing.

If you want more recent data on this point, please see our latest digital health market report.

Are investors becoming more excited about digital health now?

Investors are excited again, but only about a narrower version of digital health.

Rock Health’s 2025 and Q1 2026 data show more dollars, larger average rounds, and strong AI participation. AI-enabled digital health companies captured 54% of U.S. digital health funding in 2025, and Q1 2026 average deal size reached the highest level since late 2021. OpenEvidence, Abridge, Ambience, Nabla, and other AI workflow companies show that investors are willing to write large checks when the use case is obvious and the buyer is credible.

But Galen Growth’s Q1 2026 deal-count decline shows that investor enthusiasm is not broad. There are fewer deals globally, more concentration, and a stronger preference for late-stage or category-defining companies. That is a very different signal from the old market, where many patient apps, wellness tools, and virtual-care point solutions could raise on narrative.

So it looks like investor interest is returning, but with adult supervision. The market is funding AI workflow, access infrastructure, chronic care, behavioral health networks, and scaled platforms.

Are digital health customers pulling back anywhere now?

Customer pullback is visible in the older and weaker parts of digital health.

GoodRx is a strong example because the problem is not abstract. Its Q1 2026 prescription transactions revenue fell 24%, driven by lower monthly active consumers, retail pharmacy changes, lower volume in an integrated savings program, and weaker unit economics. That shows how exposed some digital health models are to channel changes they do not fully control.

Teladoc and Amwell show another pressure point. Teladoc’s Q1 2026 revenue slipped 2%, with BetterHelp revenue down 9% and paying users down 9%. Amwell’s Q1 2026 revenue fell 18%, including a 23% decline in subscription revenue tied to churn. These are not signs of exploding virtual-care demand. They show that buyers and consumers are becoming more selective.

Doximity adds a different warning. Usage of clinical AI is growing, but its softer FY2027 revenue outlook disappointed investors. That matters because even companies with strong product engagement can face slower monetization if pharma marketing budgets or customer commitments weaken.

Finally, everything considered together, pullback is real but not universal. The market is not rejecting digital health but rather weak channels, weak ROI, and weak revenue quality.

Are new digital health products getting more useful now?

Digital health product innovation is getting more practical and closer to workflow.

The strongest change is that new products are less about standalone apps and more about embedded work. Ambient AI tools draft notes. Clinical AI tools answer physician questions. RPM tools triage data. Chronic-care platforms manage patients between visits. Medication-access platforms connect patients, employers, manufacturers, and pharmacies.

Recent signals support that shift. Doximity’s clinical AI prompts per user nearly doubled from January to April 2026. Nabla is expanding from scribing into coding and agentic EHR commands. Ambience is positioning around documentation, coding, and clinical documentation integrity, not just transcription. Abridge describes its category as care intelligence rather than simple note-taking. RPM research is also moving toward AI triage because raw monitoring data can overwhelm clinical staff.

So the product frontier is moving from “digital front door” to “digital operating layer.” That is a healthier form of innovation because it plugs into cost, labor, documentation, access, and reimbursement. It is less flashy, but more commercially relevant.

So, is the digital health market growing right now?

Yes, digital health is growing right now, but the growth is concentrated and uneven.

The strongest current evidence comes from six places: U.S. funding is up, healthcare AI adoption is accelerating, chronic-care platforms are scaling, payer-covered behavioral health is still expanding, MSK and metabolic-health platforms are growing, and strategic M&A has restarted. Those are real, recent, measurable signals.

But the weak signals are too important to ignore. Telehealth usage has plateaued. Global deal count is down. GoodRx, Teladoc, and Amwell show pressure in legacy digital health models. Digital therapeutics still has reimbursement and commercialization friction. Consumer health platforms tied to GLP-1 demand face margin, regulatory, and product-mix risk.

So the final answer is: digital health is growing now, but not as one broad market.

It is growing through specific, measurable use cases: AI clinical workflow, chronic-condition management, covered behavioral health, digital MSK, RPM, medication-access infrastructure, and GLP-1 care support. The generic “digital health app” market is not what is expanding. The market is expanding where digital tools become infrastructure inside healthcare delivery.

Question	Verdict	Comment
Are startups raising money again?	Mixed	U.S. dollars are up, but global deal count is sharply down.
Is healthcare AI carrying growth?	Yes	Funding, physician usage, and health-system deployments are all accelerating.
Are telehealth visits rising now?	No	Primary-care telehealth has stabilized around 6–7%, not reaccelerated.
Are public companies proving demand?	Mixed	Hinge, Omada, and Talkspace grow; GoodRx, Teladoc, and Amwell show pressure.
Are employers and insurers still buying?	Yes	They still fund MSK, chronic care, and behavioral health with measurable ROI.
Are digital health IPOs reopening?	Mixed	Hinge and Omada reopened the window, but public investors remain selective.
Are big companies buying assets again?	Yes	Hims, UHS, Sword, and Spring Health deals show consolidation.
Are digital therapeutics taking off?	Mixed	Reimbursement is improving, but broad commercial adoption remains weak.
Are patients adopting more tools?	Mixed	Wearables and consumer platforms are large, but app adoption alone is not enough.
Is chronic care now central?	Yes	Omada growth, PBM channels, and RPM policy support the shift.
Is GLP-1 creating a category?	Yes	Obesity care is driving medication access, coaching, and adherence infrastructure.
Are hospitals adopting from overload?	Yes	Ambient AI and clinical workflow tools solve urgent documentation pressure.
Are regulations helping digital health?	Mixed	Telehealth and RPM policy help, while AI compliance raises the bar.
Are investors excited again?	Mixed	Capital is back, but concentrated in fewer stronger companies.
Are customers pulling back anywhere?	Yes	Legacy telehealth, prescription transactions, and weak channels show pressure.
Are products getting more useful?	Yes	Innovation is shifting from apps to embedded workflow infrastructure.

Who is the author of this content?

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