Weekly Health Tech Reads 1/18/26

“Rule of 50” companies: One of the most notable things about the private track presentations at JPMorgan was that it was filled with under-the-radar companies that have built solid businesses more in the private equity mold. A number of companies mentioned they were “Rule of 50,” a modified version of the Rule of 40 benchmark. These companies were seeing combined revenue growth and adjusted EBITDA growth of more than 50%, demonstrating the elusive combination of revenue and profitability growth that has proven a challenge for so many companies over the past few years. I heard others remark that this set of company presentations felt quite different from previous years — the high-flying venture-backed businesses were largely gone, replaced with companies that have not received as much attention but have built durable, growing businesses. Take PointClickCare as a good example of this dynamic. PointClickCare was a bootstrapped business founded 30 years ago before receiving a growth equity investment in 2011. They’re currently generating $900 million of revenue at a 40% EBITDA margin and have been growing at an 18% CAGR since 2020. It was impressive to hear the story behind that growth. While the venture community has seemingly grown disillusioned with returns in healthcare over the past few years, the companies presenting at JPMorgan provided an excellent counterpoint.

Revenue cycle management as the new risk adjustment. Revenue cycle management is overheating. Both Smarter Technologies and Ensemble described how hospital leaders are experiencing point-solution fatigue and are no longer taking calls from the mass of early-stage startups attempting to apply AI to solve this market. Ensemble also described how health systems are viewing RCM as a strategic capability and that they’re looking to partner with scaled platforms to ensure they capture all appropriate dollars. Conceptually, it this seems very similar to the risk adjustment narrative from a decade ago, just on the opposite side of the negotiating table. Everyone wants to capture the appropriate amount of revenue for the work they do, which seems reasonable. The question is how you define appropriate and who gets to decide when there’s disagreement in that. It’s worth noting that Medicare Director Chris Klomp mentioned during Tuesday’s keynote that risk adjustment should not be a strategic advantage for any payor; it should level the playing field to help account for the relative health of a population across payors. It seems like a similar concept would apply to RCM — at a conceptual level, it is not clear to me why any health system should need to view RCM as a strategic capability. So while it seems like a new pot of money has been discovered in the RCM market, it strikes me that this phenomenon will be temporary as the market follows a similar story arc to risk adjustment.

Thoreau’s potential to automate healthcare transactions. It still seems far too early to say what Thoreau is or isnt given the lack of information out there on it. That said, there is palpable excitement and interest in the opportunity it has to automate the transaction layer in healthcare. Datavant, Machinify, and Smarter Technologies all presented at JPMorgan, with each highlighting strong momentum in their respective businesses in 2025. It’ll be worth keeping an eye on how all of the assets come together here, as Thoreau has a pretty clear opportunity to build a massive platform in healthcare.

AI’s current use falls flat: AI was a topic that came up in every presentation. While every company could articulate how it was using AI, I didn’t walk away from the presentations overly impressed — it certainly seems like companies are seeing margin expansion by leveraging AI in the ways you’d expect, but it’s not like anyone really stood out in terms of how they’re implementing AI. The one company presentation that did stand out was OpenEvidence, which was less a company presentation and more a musing from CEO Daniel Nadler on the future of medical superintelligence. It was a compelling narrative about what sounds like a digital twin to an interdisciplinary group of specialists at a place like Mayo Clinic. It’s a fascinating concept to noodle on, and while I suspect the technology will get there over time, I actually think that OpenEvdience will need more business model innovation than anything to get there — I’m not particularly bullish on a company that sells ads to pharma as its core business model becoming the Mayo Clinic of the AI-era.

Value-based care: Don’t throw out the baby with the bathwater. That was the sentiment expressed by Medicare Director Chris Klomp on Tuesday. It sounds like the administration still very much supports VBC, but also recognizes that the way we’ve implemented it today isn’t working. Klomp mentioned there is zero interest in more fee-for-service medicine. In the private company track, it was clear that the tide has gone out on VBC, but it also seems that a group of companies is starting to reach meaningful scale here. It was notable to hear in a few different presentations that companies referenced Humana and Aetna as key partners driving growth in value-based contracts, and in particular, ThymeCare is seeing massive growth from those two payors in the oncology market. It grew from 10k lives in 2024 to 85k lives in 2025. I was particularly impressed by the turnaround at Duly Health and Care, which mentioned among other things that it has a “very profitable” value-based business today. It does seem that there is reason to be optimistic here.

The outlook from CMS leadership. CMS leadership presented to JP Morgan on Tuesday and shared a clear picture of what’s ahead across various markets. It was noted that this was the first time so many CMS leaders came to JP Morgan to present, and it's clear the entrepreneurial and investor community appreciates the opportunity to engage deeply. Dr Oz and other CMS officials provided a number of updates across the ACA, Medicare Advantage, Medicaid, and more. If one thing is clear, it’s that the activity we’ve seen over recent months is just getting started as federal officials take a big swing at making healthcare in this country more sustainable. One thing that seems clear in all of this change — consultants with expertise in navigating federal policies appear set for a banner year as organizations seek to understand and maximize opportunities in programs such as AHEAD, LEAD, and the Rural Transformation Project.