KPMG report highlights AI-driven shifts in healthcare investment priorities

Sixty percent of life sciences respondents and 54% of healthcare respondents showed strong appetite for dealmaking in KPMG’s latest healthcare and life sciences outlook. The report puts three forces at the center of client demand: AI-enabled transformation, disciplined capital allocation and heavier regulatory pressure. Clients are no longer buying broad transformation promises; they want proof, controls and measurable outcomes.

AI, capital discipline and regulation are the three signals to watch

The report is subtitled “Proof over promise: Disciplined transformation in an AI-enabled, value-based market.” Clients are still investing, but they are asking whether AI can lower cost, improve productivity and support clinical or commercial decisions without creating control gaps or compliance risk. In client meetings, the most important clues will be whether executives are talking about pilot projects or workflow redesign, and whether they are prepared to fund governance, data quality and model oversight alongside the technology itself.

Capital allocation is the second signal. Matt Maiers wrote in a LinkedIn post on the outlook that M&A appetite remains strong. That does not mean a return to indiscriminate spending; it means buyers are still active, but they want cleaner diligence, faster integration and a clearer path to value. For KPMG deal, tax and operating-model teams, the practical question is which assets still command capital and which subsegments now need restructuring before they can attract it.

Regulation is the third pressure point, and it is woven through the report’s tax and tariff outlooks as well as its sector chapters. Healthcare and life sciences clients are dealing with pricing pressure, value-based care, reporting requirements and cross-border complexity at the same time they are trying to modernize. The employees who stand out will be the ones who can connect those issues, not treat them as separate workstreams.

The market is split into subsegments, not one generic sector

The report moves from an executive summary into separate healthcare and life sciences overviews, then into chapters on hospitals and health systems, healthcare services, healthcare payers, biopharma, healthcare IT, life sciences tools and diagnostics, medical devices, biopharma services and new frontiers in HCLS digital. Each subsegment has its own economics, its own investment logic and its own regulatory exposure.

Hospitals and health systems are operating under different capital constraints than biotech or medical devices. Payers are facing a shifting landscape of reimbursement, care management and margin pressure. Healthcare IT and HCLS digital sit closer to the AI story, but even there the questions are not just about adoption: they are about interoperability, data governance, workflow integration and whether the investment can be measured in outcomes.

Where the work lands inside KPMG

The strongest advisory opportunities are spread across the full suite of services. The emphasis on disciplined transformation points directly to transaction support, revenue recognition and reporting help, tax structuring, operating-model redesign and technology and risk advisory. Those are not separate lanes in practice. A client pursuing a digital health acquisition may need deal support, tax review, diligence on revenue recognition and a plan for integrating systems and controls all at once.

That is also why the outlook has career implications inside the firm. Consultants and auditors who understand value-based care economics, digital health business models and biotech commercialization can be more useful than generalists who know the sector only at a high level. In a market where clients are selective about spending, the people who can speak both business and science have a better shot at staying on the critical path, especially when the work spans audit committees, finance teams and operating executives.

KPMG’s Global tech report 2026: Life Sciences is based on a global survey of 124 life sciences technology leaders in large and mid-sized pharmaceutical, biotechnology and medical device companies, product distributors and contract research organizations.

What to listen for in client conversations

The most useful client calls over the next year will be the ones where executives are trying to turn a strategic slogan into a budget line. Listen for whether they are asking for implementation help, controls or a way to justify the spend, because that is where KPMG’s cross-functional teams can add the most value.

• Whether AI is being treated as a standalone pilot or as a redesign of workflows, controls and reporting.

• Whether a client is still chasing growth across the whole sector or concentrating capital on specific subsegments such as payers, HCLS digital or biopharma services.

• Whether management can show the economics of value-based care, not just the narrative around it.

• Whether tax and tariff exposure is changing sourcing, device strategy or cross-border operating structures.

• Whether payer economics, margin pressure or reimbursement changes are forcing a reset in 2026 planning.

• Whether leaders want faster deal execution or more rigorous diligence before they move capital.

Why this looks different from KPMG’s recent outlooks

The 2026 edition fits into a clear progression. KPMG’s 2025 Healthcare & Life Sciences Investment Outlook was titled “Smart optimism to smart diligence: Seeing over the horizon of a new deal market,” while the 2023 version used the line “Sustained turbulence in a post-pandemic market.” A 2020 healthcare and life sciences outlook was framed around “Opportunities and challenges in an evolving market.” The language has shifted from turbulence to optimism to diligence, which mirrors a market that is still active but far more selective about where capital goes.

Goodwin hosted its 7th Annual Symposium with KPMG on January 14, 2026, during the 44th Annual J.P. Morgan Healthcare Conference week, when healthcare dealmakers and investors usually set the tone for the year. KPMG’s companion article, “M&A Appetite Remains Robust Among Healthcare and Life Sciences Investors: KPMG Survey,” sits in that same deal-season context and focuses on transactions as well as operating performance.