As projections indicate that the market for digital health initial public offerings is stationary in 2026 following a temporary increase in 2025, there are direct consequences for any medical practice that enters a multi year telehealth agreement this year. In this environment, the continued existence of a company is as significant as the equality of its software functions. For an organization with 2 – 50 practitioners, the practical conclusion is that the financial firmness of a corporation, the specific language in agreements regarding the movement of data and the technical structure of software installation – specifically single tenant versus multi tenant models – are as important as the capabilities of a platform when people assess virtual care companies.
What the lack of initial public offerings in 2026 indicates about digital health investment
Due to reports from MedCity News, the number of digital health companies that go public is expected to remain low in 2026, even though Hinge Health besides Omada Health completed this process in 2025. To many purchasers, this information appears to be an unimportant description of the market but it is not.
By having a stationary period for public offerings, three specific results occur
- There is pressure on the remaining cash of companies in late stages. If a company intended to go public in 2026, it must now extend its available funds through bridge rounds of investment or the termination of employees. And this creates a situation where companies pursue larger agreements and sometimes ignore customers in the middle of the market.
- There is an increased desire for corporate mergers – companies in the middle stages of growth become targets for acquisition by larger health technology platforms or private investment firms. With those changes, there are often unannounced modifications to products for current users.
- Gaps in funding change the quality of products – companies in Series B or C funding stages face lower financial valuations, which makes the hiring of engineers difficult and causes work on new functions to be slow. As a result the platform that a practice chooses today is likely to stop its development plan for 12 – 18 months.
And while the factors exist, they do not mean that the digital health sector is in a poor state. It is simply true that the long term survival of a corporation is a concern for purchasers in 2026 in a way that it was not three years ago.
Which risks from companies affect small practices most significantly?
In many cases “how to evaluate a telehealth vendor” is focused on software functions – but the 2026 economic environment makes three specific risk situations more important than the equality of features
Situation 1 – The change in strategy
If a company decides that small practices are no longer a high priority, it continues basic maintenance while it keeps new functions only for large enterprise clients. For the user the time it takes to receive a response from support becomes longer and prices gradually increase. To a clinic with five providers that agreed to a contract two years ago, the platform is suddenly at a level that is no longer supported.
Situation 2 – The acquisition of the company
When a company is bought, the new owner either moves the platform into its own set of tools, which forces users to change systems or it keeps the platform active only until a set end date. In either case the agreement that you signed is controlled by a corporation that you did not choose.
Situation 3 – The unannounced stop in development
If the number of engineers at a company decreases, the repair of software errors still occurs but there are no new integrations, updates for government rules or improvements for the ease of use. As patients and providers see those issues, the practice is forced to perform work to manage the changes without having a budget for it.
And all three of those situations are more frequent than the complete failure of a company. On the basis of public signals regarding funding, the events are predictable.
Which parts of a contract are most important when the stability of a company is not certain?
By nature purchasers try to lower the price but often fail to read the sections that protect them when the status of a company changes. For the purchaser, the following items are as important as the monthly cost
- The ability to move data – it is necessary to state the format, the frequency and the timeline for exporting data. With “We will provide a CSV”, the protection is not sufficient. If there is a termination of the agreement, you should demand scheduled data exports and an export that is available on request within 14 days.
- The protection of source code or the continuation of operations. For platforms that are essential to daily work, a source code escrow or a promise of continued operation for 90 – 180 days is necessary to make a transition easier if a company stops its service.
- The requirement to notify users of a change in ownership – if a clause requires a company to tell you about a change in control within 30 days and gives you a way to end the agreement, you have choices without the high cost of a legal case.
- The financial penalties for poor service – when service level agreements for uptime only offer credits that are worth less than the monthly cost, they are not effective. To improve this you should require significant financial penalties and a very specific description of what is considered a loss of service.
How different types of software installation react when a company is in distress
On this point the technical way that software is installed becomes a hidden risk.
| Behavior under vendor distress | Multi tenant SaaS | Single tenant deployment |
|---|---|---|
| Effort to migrate if vendor exits | High – data is in a shared database | Lower – the instance is separate |
| Effect of a feature freeze | This is the same for all customers | This is the same for all customers but custom code is unchanged |
| Control over data residency | The vendor chooses the location | The user chooses the location via configuration |
| Continuity if an acquirer changes platforms | Transition is mandatory for everyone | It is possible to discuss a longer period of parallel operation |
| Complexity of compliance audits during transition | High – logs and infrastructure are shared | Lower – the environment is for one user only |
Single-tenant architecture is not better by its nature and the costs to operate it are higher – but if a vendor experiences instability, the available options for exit are more numerous. For practices that evaluate white label telehealth platforms, the trade off is a frequent point of comparison. As an example Healee provides a dedicated single tenant deployment for each client – this is the same platform that supports a marketplace with over 1M patients – this structure keeps the data and infrastructure boundaries distinct if the situation changes.
What is in a due diligence checklist for 2-50 practitioners?
There are practical questions to ask a virtual care vendor in 2026 before you sign a contract for multiple years
On corporate stability:
- When was the last time you raised funds, what was the amount and what is the duration of your cash reserves?
- Have layoffs occurred in the last 12 months and which departments did they affect?
- Are the current investors in favor of your continued work in this specific market?
On product direction:
- What portion of engineering work is for the market segment of my practice?
- Which customers stopped using the service in the last 12 months and what were the reasons?
- Which features are no longer available or are scheduled for removal in the last 18 months?
On contractual protection:
- How does the data export process work regarding format, frequency and time?
- Is a clause for notice-of-control in the contract?
- What are the remedies for SLA failures when they are a percentage of the paid fees?
On architecture:
- Is the deployment for one user or shared among many?
- If it is shared, what are the technical guarantees for data isolation?
- If it is dedicated, who manages the underlying hardware and software infrastructure?
On operational fit:
- How much time is necessary for a standard deployment?
- Which modifications are part of the base price and which are extra costs?
- What is the sequence of upgrades over the next 24 months?
By asking those questions for one hour, you can lower the potential for problems during a 3-year contract.
The practical meaning of the factors
In the 2026 healthcare outlook, reports indicate there is more pressure on reimbursements – this situation makes vendor stability more important because vendors with limited funding are in a market where Medicaid besides ACA changes create financial stress. For practices that choose platforms with clear history, fair contracts and isolated deployments, there is less time spent on vendor management and more time for the care of patients.
To evaluate options now, a structured comparison is a useful step. And you can lower the list of vendors to two or three candidates. Run the checklist for due diligence against each vendor and ask for a walkthrough of the deployment process. If a single tenant architecture, a fast deployment and a platform used by 200 clinics and for 5M appointments are important for your practice, request a demo of a white label telehealth platform with those characteristics.
Sources:
- VC Predictions 2026 – MedCity News, 2025
- 2026 Healthcare Outlook – A Year of Unprecedented Disruption – MedCity News, 2026