Opinion: 2025 was a year of correction – 2026 will be the year of construction

By Sarah Matt, MD, MBA

If 2024 was defined by unbridled enthusiasm for Generative AI, 2025 has been a year of necessary and sober recalibration.

Over the last twelve months, the healthcare industry moved past the initial excitement to face a more complex reality.

We learned that applying advanced AI to legacy systems does not instantly transform them into autonomous organizations.

The narrative for 2025 began with a focus on “AI Everywhere” but evolved into a serious conversation about infrastructure, governance, and safety.

We realised that advanced algorithms require a stable foundation.

As we approach 2026, the data suggests that many healthcare organisations are still building the structural capacity to support future innovations.

They face challenges with data governance, fragmented systems, and cybersecurity that made 2025 a learning experience rather than a victory lap.

Here is my retrospective on a year of strategic resets and my predictions for how we move forward in 2026.

2025 Review: The Strategic Reset

Three key realisations defined the last year.

These insights have provided a clear diagnostic of where the system needs to improve before we can truly scale innovation.

1. Cybersecurity Became a Clinical Priority

While the industry discussed Large Language Models and generative video, the vulnerabilities in our back-end systems became impossible to ignore.

The first half of 2025 was defined less by algorithmic breakthroughs and more by the urgent need for data security.

We saw this clearly with the Episource breach in early 2025, where a compromise in risk adjustment software exposed 5.4 million records.

This was followed by the Yale New Haven Health incident, impacting 5.5 million patients and resulting in an $18 million settlement this fall.

These events demonstrated that data governance is still maturing.

We learned that you cannot build predictive models on insecure foundations. 2025 taught us that safety must precede sophistication.

2. The Challenge of Scalability

The current market skepticism regarding AI is supported by data.

According to the McKinsey & Company report “The State of AI in 2025,” while nearly 88 per cent of organisations reported using AI in at least one function, fewer than 10 per cent successfully scaled agentic systems to an enterprise level.

We invested heavily in pilot programs that struggled to integrate into daily workflows. We treated AI as an add on rather than a core systemic change.

The lesson of 2025 is that AI requires a complete workflow redesign rather than just a software update.

The technology works, but our operational processes were not ready to receive it.

3. Policy Accelerated Change

While hospitals navigated technical hurdles, regulators moved forward with aggressive mandates.

The Centers for Medicare & Medicaid Services (CMS) finalized the Transforming Episode Accountability Model (TEAM). This mandatory bundled payment model launches on January 1, 2026.

This serves as a significant signal for the industry. TEAM enforces financial accountability for 30-day episodes of care.

It clarifies that efficiency is now a regulatory requirement rather than just an operational goal.

2026 Predictions: The Year of Infrastructure

If 2025 was about exploration, 2026 will be about remediation and strengthening our core systems.

The technology is moving faster than ever, and our focus must shift to keeping up.

Prediction 1: We Finally Fix the “Plumbing”

2026 will be a year dedicated to data hygiene.

Leadership teams are likely to prioritise foundational investments over experimental tools.

Budgets in 2026 will likely flow toward Data Fabric and Governance Platforms.

These are the essential systems that allow AI to function effectively.

We can expect a pause in consumer facing AI applications in favor of “middleware” technologies.

These are the tools that connect the EHR, ERP, and CRM systems.

Integration will become the primary criteria for procurement. If a tool cannot speak to the existing electronic health record seamlessly, it will not be purchased.

Prediction 2: AI “Agents” Support the Workforce

The scepticism regarding simple chatbots is valid as they often lack the ability to execute tasks.

2026 will likely see the rise of Agentic AI. These are autonomous agents capable of planning and verifying tasks across three key areas.

• Front End: Agents that go beyond answering calls to assist with scheduling, insurance verification, and intake forms.
• Back End: Agents that support administrative teams by reviewing payer contracts and clinical notes to assist with claims.
• Clinical: Agents that draft notes, order labs based on established protocols, and prepare discharge summaries for physician review.

Prediction 3: Policy Drives Innovation via the “Bread and Butter”

We will not adopt technology simply because it is impressive. We will adopt it because the CMS TEAM model creates a financial imperative to do so.

It is crucial to understand that TEAM is not targeting obscure or rare conditions.

It targets five specific surgical categories: Lower Extremity Joint Replacement, Surgical Hip and Femur Fracture Treatment, Spinal Fusion, Coronary Artery Bypass Graft (CABG), and Major Bowel Surgery.

While this is a “select” list of procedures, these are the bread-and-butter cases that hospitals depend on for revenue.

High volume orthopedic and cardiac lines are the financial engines of most health systems. Under TEAM, hospitals are responsible for the cost of care for 30-days post discharge. If a patient is readmitted, the hospital pays the price.

This policy shift changes the ROI calculation for technology.

Remote Patient Monitoring (RPM) and predictive analytics are no longer optional.

They are essential tools to prevent readmissions and protect margins on the most critical service lines in the hospital. In 2026, the regulatory tail will wag the technology dog.

The Bottom Line

We enter 2026 with a pragmatic perspective.

The hype has settled, and the focus has shifted to infrastructure.

This is not a retreat. It is a maturing of the market.

We are moving from the “Pilot Era” to the “Infrastructure Era.”

We have the tools and the mandate.

Now we must build the foundation to support them.

Let’s get to work.

About the Author

Dr Sarah Matt is the author of “The Borderless Healthcare Revolution,” available December 2025 from Wiley.

She is a general surgeon turned technology strategist, the founder of Vital Werks, and an Associate Clinical Professor at SUNY Upstate Medical University.