Is health tech entering its consolidation era?

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A few years ago, health tech seemed to have a startup for everything.

One company handled scheduling. Another handled patient messaging. Another did remote monitoring. Another did clinical documentation. Another helped with prior authorization. Another sat on top of the EHR and promised to finally make the EHR tolerable.

The result was an explosion of innovation. But it was also an explosion of logins and mental load on clinicians and patients as to where they needed to login for what.

In fact, nearly two years ago to the day, I wrote about this problem and the fact that numerous partnerships were beginning to emerge that helped clinicians and patients manage some of the confusion (you can check that out here).

Now, I think we may be entering the next phase of the health tech market: consolidation.

And I don't necessarily mean traditional mergers and acquisitions.

Sometimes consolidation looks like one company buying another. But increasingly, it can also look like the biggest platforms becoming the place where more and more healthcare technology lives.

The latest example came this month when OpenAI announced that healthcare organizations can now connect ChatGPT for Healthcare directly to Epic.

Authorized clinicians can bring patient information such as notes, labs, medications, and specialist documentation into ChatGPT and use AI to synthesize that information. In some implementations, clinicians can access those capabilities directly within the Epic workflow instead of leaving the patient chart.

That is a big deal when you consider the scale involved. More than 325 million patients currently have an electronic health record in Epic.

It's worth making an important distinction here. Epic didn't acquire OpenAI. OpenAI didn't acquire Epic.

In fact, Epic specifically describes itself as a company that doesn't grow through acquisitions. (By the way if you have nearly 4 hours of time on your hands, you can listen in depth about Epic’s business model — ironically on the Acquired podcast).

This is an integration that might actually trigger a ripple effect for other companies building AI functionality that integrates with EHRs. Because when a capability becomes native—or nearly native—to a platform a health system already uses, every standalone vendor solving the same problem has to answer a much harder question: why buy us too?

Think about what happened with your smartphone.

At one point, you needed separate devices for your camera, GPS, music player, calculator, voice recorder, flashlight, and phone.

Eventually, one platform absorbed most of those functions.

Health tech may be moving through its own version of that transition. Instead of a health system buying ten different point solutions, it may increasingly ask:

Can our existing platform already do this?

Epic, for example, is already building AI capabilities for clinicians, patients, and operational workflows. It says more than 85% of its customers are now using some form of Epic AI.

And we're seeing signs of consolidation elsewhere too.

Healthcare IT and digital health represented the largest healthcare M&A segment by disclosed value during the first half of 2026, according to KPMG, as buyers increasingly focused on AI-enabled productivity, interoperability, virtual care, data platforms, and workflow efficiency.

In other words: healthcare still wants innovation. But it might need fewer vendors delivering it than are out there today.

There is an obvious upside here. If you've ever worked in healthcare, you know that one of the industry's biggest problems isn't a lack of technology.

It's that none of the technology seems to talk to each other.

A clinician might have an EHR, secure messaging platform, scheduling system, clinical reference tool, dictation software, patient communication tool, prior authorization portal, and several other systems open during a single shift.

So imagine the alternative.

Instead of opening another application to use AI, the AI already understands the patient's chart.

Instead of copying information from one system into another, it is available where you're already working.

Instead of spending ten minutes scrolling through three years of notes before an appointment, you ask:

"What has changed with this patient since I last saw them?"

And get an organized summary.

That's exactly the type of workflow OpenAI and Epic are beginning to enable.

Done well, consolidation could mean:

For clinicians who have be sold the promise that every new piece of technology will "save time" while somehow adding three more clicks, that would be a welcome change.

The problem with consolidation is that convenience and competition don't always move in the same direction.

Once a few platforms become the primary gateway to clinicians and patients, those platforms gain enormous influence over what gets built, what gets purchased, and what actually reaches the point of care.

A new health tech startup may no longer need to convince a hospital that its product is better.

Because even if it is, health systems may be less willing to buy an independent solution—even if it's slightly better—when something that's "good enough" is already included in a platform they're paying millions of dollars for.

That could make healthcare technology simpler, but it can also make it harder for new companies to compete.

And that's worth watching, because smaller health tech companies have historically been where we've seen some of the most creative solutions to very specific healthcare problems. And if you’re considering joining an early-stage health tech company, this isn’t just an investor question—it’s a career question. How defensible is the thing that company is building? Would your job feel safe there? Is the value prop strong enough to compete in this market?

For patients, a more consolidated ecosystem could create a noticeably better experience.

Your medical history could follow you more easily. Your clinician could spend less of an appointment reconstructing what happened during your last six appointments. Your health information could become easier to understand.

But patients should also be asking another question:

Who controls the infrastructure underneath my healthcare experience?

As health data, AI, communication, scheduling, clinical decision support, and patient engagement become increasingly connected, enormous amounts of sensitive information may flow through a relatively small number of companies.

And consolidation can create another, more immediate risk: the tools patients already depend on may not always survive it.

A patient might build a routine around a specific app, virtual care service, chronic disease platform, fertility tool, mental health service, or medication support program—only to have that company acquired, folded into another product, change its business model, or shut down entirely.

When that happens, patients aren't just losing an app. They may lose access to years of personal data, a care team they trust, a routine they've learned to depend on, or a service that filled a gap their traditional healthcare system wasn't meeting.

This shift also changes what it takes to build a successful health tech company.

For years, founders could build a point solution around one painful healthcare workflow. Increasingly, that's probably not enough. And we certainly know that companies that are building in the “AI for EHRs” space have been immediately threatened by the Epic/Open AI connection.

The companies that survive the next phase may need at least one or more of the following:

A moat.
They solve a problem so uniquely well that others can't easily reproduce it.

Distribution.
They own a relationship with clinicians, patients, employers, payers, or health systems that others can't easily access.

Deep integration.
Instead of competing with Epic, OpenAI, Microsoft, or another major platform, they become incredibly valuable inside those ecosystems.

The future of health tech isn't necessarily five giant companies building absolutely everything.

It may be a few main ecosystems with hundreds of specialized companies building on top of them.

Probably both. Maybe it’s not so much about thinking of it as good vs bad, but a normal correction in an industry.

Healthcare does need fewer fragmented systems. Clinicians need technology that works inside their workflow instead of creating another one. Patients deserve healthcare experiences where their information follows them and where technology actually makes the system easier to navigate.

But consolidation also changes the questions we should be asking about the market.

Instead of only asking, “Is this a good product?” it may become increasingly important to ask:

Those are useful questions whether you’re evaluating a company, considering a job, following the industry, or just trying to understand where health tech is headed.

The OpenAI + Epic integration isn’t proof that we’ve entered a full-blown consolidation era. But it is another reminder that the market is maturing and the next phase of health tech may be less about how many new tools get created and more about which ones earn a durable place in the ecosystems healthcare already depends on.

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Until next time,

Lauren

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