Unpacking the Latest Trends in Healthcare Investment

Updated on November 1, 2024

“Follow the money” may sound like a bit of a cliché, but in many cases, it also happens to be true.

And when it comes to the healthcare industry, following the money is critical. Investment is, ultimately, an indication of confidence — making it an ideal way to determine which technologies, sectors and ideas are set to make noise in the industry in the coming years. 

That’s especially true in healthcare, which was a particularly hot investment area in the first half of 2024. In fact, a recent survey of financial backers found that 40% of respondents rated healthcare as one of the top three investment opportunities in 2024. 

It’s clear that money is moving quickly, and those who are able to follow the trends will have a unique advantage as our industry continues to evolve. With that in mind, here are three areas of healthcare that are set to drastically change thanks to increased investment.

Technology adoption

There’s no surprise in the fact that AI now dominates the headlines about big-money healthcare investments. A global survey from McKinsey recently found that a whopping 65% of respondents said their organizations were using generative AI on a regular basis — that’s close to double the percentage from the company’s previous survey.

For better or worse, AI is becoming inevitable. So it’s no surprise that its applications in healthcare are consistently recognized as a place where investment is growing — and will continue to grow as the technology improves. In 2023, 21% of all healthcare-based venture capital investments went toward AI companies. 

Cost savings from AI is one of its most attractive benefits. As early as 2020, experts were predicting that AI would soon help save $150 billion a year in costs — and that was before the innovations we’ve seen since the pandemic. 

Some specific use cases include helping providers with administrative tasks, freeing up headcount, streamlining the claims process and helping physicians with time-consuming tasks that keep them away from patients. There’s also a great deal of interest in companies using AI to optimize work schedules and analyze data at a faster rate, both of which can directly translate to lower costs. 

There are other exciting technologies on the horizon, too, like the use of generative AI to interpret scans and help with surgeries. But it’s also worth noting that not all of these opportunities are growing at the same rate.

For example, investment in AI-based tools that help with clinical decisions has so far yielded only modest returns, a sign that certain technologies still have a way to go before they are beneficial to most providers. 

Patient experience

All healthcare professionals are intimately aware of how the COVID-19 pandemic has transformed patient experiences — and the current investment trends make it clear that many of these transformations aren’t going away. 

Innovations in telehealth is one area that is expected to continue growing. An analysis from Grandview Research estimates that the telehealth industry will grow at a compound annual growth rate of nearly 23% through 2030. 

Patient preferences certainly play a role here, but the analysis highlighted physician shortages — an ongoing problem — as another reason investors are especially bullish on remote healthcare.

Much like AI, telehealth is becoming increasingly accepted, and often expected. A recent survey found that 67% of respondents said they consider healthcare access a problem in their area, while 89% of those who’d had a telehealth visit said they were satisfied with the experience. 

Those watching the space can expect to see innovations in not only the technology itself, but also the ways in which it’s used to optimize costs and resources — plus, there will be plenty of attention on how providers can successfully secure data while navigating a relatively new patient landscape. 

The outpatient experience in general is expected to transform — whether it’s virtual or in-office. An analysis of healthcare investments in 2023 found that outpatient care was one of the biggest sources of deals throughout the year. 

It’s an easy-to-understand trend, driven by both patients’ needs and providers’ bottom lines. Outpatient sites are becoming more widespread and common, often filling non-hospital spaces in order to meet patients where they live. Plus, physician offices and ambulatory surgery centers are expected to deliver major profit growth in the coming years, which seems to point toward their continued growth and expansion. 

Providers and investors alike can expect the patient experience will continue to shift away from hospitals and closer to the patients themselves — whether it’s an outpatient facility close to home or a telehealth call with no travel time required.

Care delivery

There are countless ways that care delivery will change in the coming years, and it’s likely to be an area where AI will yet again play a role. Plus, as care delivery naturally intersects with patient experiences, it’s a safe bet that changing expectations will continue to impact where, when and how people receive their care. 

Investment trends, however, paint a more specific story — namely, by pointing toward a few areas that are slated to play much bigger roles in the healthcare of the future. 

The first area is elder care. In terms of average age, America’s population has never been older, and the country’s over-65 population is expected to increase by around 22 million over the next 30 years, reaching a total of 84 million people. 

So it’s no surprise that elder care is expected to become a trillion-dollar industry by 2029, growing by a compound annual growth rate of nearly 6% over the next half-decade. 

The takeaway for providers and investors alike is that the elder care space is one of the most important areas to monitor — as it’s likely to evolve at an even faster rate than some of the other booming patient care sectors. 

Mental health services, too, are set to become a bigger part of care delivery. It’s a trend that began during the pandemic but has yet to slow down, with 43% of Americans saying they feel more anxious than they did during the previous year. At the same time, around 20% of American adults are believed to be living with some kind of mental illness. 

Investors have responded quickly to these realities, with funding for mental health startups growing steadily since 2020. Through 2026, these investments are expected to grow at a compound growth rate of over 9% — a notably high yield that reflects just how crucial mental health services will be for both patients and providers in the coming years. 

author joseph muscente
Joseph Muscente

Joseph is a Content Marketing Analyst at LendingTree where he works to empower people to make their best financial decisions. He earned his B.A. from Penn State University.