Grading My 2024 Healthcare and Health Tech Predictions
As I return from vacation this week, here’s an updated version of my 2024 Predictions Post, originally published December 2023. I've added reflections below based strictly on developments that unfolded during 2024 — what I got right, what I missed, and what’s still playing out.
Big Retail + Big Bets = Big Pressure
Background
Retail giants like Amazon, CVS, and Walmart made primary care their focus, betting that value-based care and Medicare Advantage would drive profitability.
Prediction
Big bets on primary care were risky and wouldn’t payoff. Also, Amazon might try to overcome verticalization challenges by acquiring a specialty platform, particularly in musculoskeletal (MSK) care.
Verdict — Mostly Accurate
Amazon expanded Amazon Clinic (its online offering) but also laid off hundreds of employees in its Pharmacy and One Medical units. No specialty platform acquisition occurred.
Walmart Health is no more. The company closed all 51 of its health centers in mid-2024, citing unsustainable financials.
CVS Health struggled in 2024. Leadership turnover continued with the departure of CEO Karen Lynch. The company was reportedly seeking private equity funding for Oak Street Health clinic expansion.
Insight
Primary care alone has proven insufficient to drive margins without broader specialty integration — and Big Retail’s healthcare strategies faced significant headwinds by the end of 2024.
Traditional Healthcare Makes a Comeback
Background
Despite pandemic-era struggles, traditional healthcare's stability and job security remained major advantages. I noted that dissatisfaction among trainees and burnout concerns wouldn't easily displace the system's resilience.
Prediction
Traditional healthcare would rebuild its strength and healthcare startup companies that build provider-integrated models would be the ones to survive and thrive.
Verdict — Accurate
Healthcare was a leading sector for job growth through the end of 2024.
Hospital and health system operating margins largely stabilized in 2024 after years of volatility.
HCA Healthcare raised its 2024 profit forecast as patient volumes increased, and Tenet Healthcare posted record ambulatory revenue.
Emergency department visits and surgical volumes rebounded through 2024, supporting financial recovery.
The Bessemer Venture Partners State of Health Tech 2024 report suggested that provider-integrated models — not employer-only or DTC models — were scaling fastest and attracting the strongest investment.
Insight
Traditional healthcare regained financial and operational stability more quickly than expected, although challenges in rural hospitals and frontline workforce sustainability persist. Investors began to appreciate the importance of traditional healthcare integration.
Big Tech, Small Impact
Background
There was widespread optimism that Big Tech companies — Apple, Google, and Microsoft — would radically transform healthcare. Many predicted large-scale disruption through wearables, AI, consumer health platforms, and even care delivery.
Prediction
Big Tech’s splashy ambitions would shrink to more focused, incremental efforts. I argued that companies would prioritize smaller, consumer-facing wins over trying to overhaul the system.
Verdict — Mostly Accurate
Microsoft deepened its position with Epic integrations via Azure and Nuance’s DAX Copilot and partnered with several health systems to roll out ambient AI documentation.
Google expanded healthcare efforts with Med-PaLM 2, Health Connect APIs, Med-Gemini models, and health-related AI search improvements.
Apple introduced FDA-cleared sleep apnea detection for WatchOS 11, turned AirPods into hearing aids, and announced an AI-powered "Health Coach" app (Project “Mulberry” — rumored to launch next year).
Insight
Big Tech’s healthcare plays became more tactical, on-brand, and focused on core competencies rather than transformational — emphasizing navigation tools, AI integrations, and wearables over system-wide change.
It's Not You (Digital Health), It's Me (Venture Capital)
Background
Following the pandemic boom, digital health funding cooled rapidly. Market correction forced investors to demand clear paths to profitability, stronger business models, and measurable outcomes.
Prediction
Capital markets would stay frozen in 2024 with “dicey” IPOs and failure of widespread M&A activity. Venture capital would focus on lean, high-traction startups demonstrating real revenue growth and product-market fit.
Verdict — Partially Accurate
Global digital health funding rebounded to $25.1 billion (+5.5% YOY)
Early-stage companies comprised 63% of labeled deals
Mega-rounds ($100M+) reemerged but were concentrated in a few AI-driven companies, especially in drug discovery.
Late-stage funding pulled back for a third consecutive year, with declining deal count and smaller check sizes
A few health tech IPOs occurred (Waystar, Nuvo, and TempusAI among them) — but at lower valuations
Digital health mergers and acquisitions dropped, following a broader trend in overall healthcare M&A activity (volume down 20%, total deal value down 29%)
Insight
Despite a modest funding rebound in 2024, digital health investment skewed heavily toward early-stage and AI-driven companies, while late-stage funding, IPO valuations, and M&A activity continued to show signs of caution and contraction.
Quick Hitters
General Catalyst will not buy a health system: Wrong — GC (through HATCo) acquired Summa Health in Ohio for $485M in 2024, eliminating $850M in debt and launching a bold transformation initiative.
Mark Cuban will expand beyond pharma: Partial credit — Cuban signaled broader ambitions, but concrete expansions beyond Cost Plus Drugs had not materialized by end of 2024. (Only missed by a few days — this prediction looks better in 2025).
Direct care models gaining momentum: Confirmed — employer-sponsored and direct primary care models continued expanding throughout 2024.
Medicare Advantage struggles: Partial credit — despite 7% annual growth, headwinds (reimbursement pressures, regulatory scrutiny, and hospital contract exits) dampened 2024.
Personal positive vibes: Confirmed — most notably, deepened my relationship with Commons Clinic as Senior Clinical Fellow and Editor-in-Chief of The Surgeon’s Record.
Verdict — Mostly Accurate
Scorecard
Big Retail: Mostly accurate (0.75/1 pt) — correctly predicted primary care struggles; Amazon specialty care acquisition did not materialize.
Traditional Healthcare: Accurate (1/1 pt) — correctly anticipated rebound in jobs, financials, and operational strength.
Big Tech: Mostly accurate (0.75/1 pt) — recognized shift away from systemic disruption to tactical moves and artificial intelligence focus; thanks to AI, activity was perhaps more substantial than expected.
Venture Capital: Partially Accurate (0.5/1 pt) — IPOs and M&A underwhelmed, but early (not late) stage companies got most of the funding.
Quick Hitters: Mostly Accurate (0.75/1 pt) — missed GC’s health system acquisition but did better with trends on direct care, Medicare Advantage, and Cuban’s limited expansion.
Overall Rating: 3.75/5
Final Thoughts
It’s been fascinating to watch things unfold — retail healthcare struggles, VC recalibration, specialty care expansion, and AI transformation.
Even bold moves like General Catalyst’s Summa Health acquisition are a reminder that healthcare innovation requires capital, patience, and a deep understanding of frontline realities. The gaps between ambition and execution remain wide — but crossing them will define the next era of healthcare transformation.
One thing remains clear: healthcare innovation is a marathon, not a sprint.
Ben Schwartz, MD, MBA
Editor-in-Chief, The Surgeon’s Record
Commons Clinic Senior Clinical Fellow
Pretty good predictions! Though if we normalize for the long sales cycles in healthcare, I'd argue that ambient listening tech and AI made as big of a splash as it could have.
I didn't yet follow you in 2023 but am following now, I found this recap both honest and interesting as well as just a helpful recap of important digital health activity in 2024. Thanks, Mike Telem, Kemtai.