The 2026 J.P. Morgan Healthcare Conference reinforced a familiar but increasingly disciplined theme among healthcare investors: selective optimism. While expectations for a broad M&A rebound remain measured, private equity sponsors are nonetheless ready to deploy capital in 2026, with a sharper focus on operational quality, scalability, and risk management.
Looking across the conference and our own conversations with investors and strategics, several themes consistently emerged: particularly around AI adoption, regulatory scrutiny, and tech-enabled healthcare services. These trends reinforce an important shift for healthcare investors: cybersecurity and compliance diligence are no longer secondary considerations; they are now central to underwriting risk and protecting value.
>Why Cybersecurity is Core to Value Creation
Selectivity Is Elevating the Importance of Risk Visibility
As a broader range of assets come to market, investors are spending more time evaluating risks that can derail a deal or surface post-close. In healthcare, cyber and compliance gaps often fall outside of other diligence workstreams, yet they can carry immediate and material consequences.
Undiscovered cyber risk can lead to:
- Regulatory exposure under HIPAA, GDPR, state privacy and protected class laws
- Operational disruption from ransomware or third-party incidents
- Business risk from customer data privacy and cybersecurity obligations
- Reputational damage affecting patients, providers, and payers
For this reason, investors are increasingly prioritizing cybersecurity and compliance diligence earlier in the transaction process to better understand risk and inform post-close value creation planning.
AI Adoption Expands the Risk Surface
At the same time, the conversation around AI is clearly maturing. Rather than focusing on theoretical upside, investors are now zeroing in on operational ROI, particularly in revenue cycle management, analytics, and tech-enabled services.
This evolution introduces a new layer of diligence complexity. AI-enabled platforms often depend on large volumes of sensitive data and increasingly complex vendor ecosystems, frequently layered onto legacy environments that were not designed with modern security controls in mind. Without appropriate safeguards, innovation can introduce hidden or unintended risk.
As a result, healthcare investors are using cyber diligence to more closely evaluate data protection and access controls, governance over AI-driven processes, and third-party and vendor risk exposure.
Regulatory Risk Has Become More Targeted
While broad regulatory uncertainty felt less prominent this year, it has not disappeared. Instead, scrutiny has become more targeted. Conference discussions highlighted a growing focus on utilization management, payment integrity, and fraud prevention, particularly in Medicaid-heavy or operationally complex business models.
In practice, cyber risk and compliance risk are closely intertwined. Weak technical controls, informal processes, or limited monitoring can quickly escalate into audit findings or enforcement actions, especially as platforms scale through add-on acquisitions.
From Diligence to Value Creation
Importantly, cybersecurity and compliance diligence is no longer viewed solely as downside protection. Investors increasingly recognize that understanding cyber maturity early:
- Enables smoother post-close action and integration
- Inform and prioritize remediation efforts aligned with growth strategy
- Support scalability without introducing unnecessary risk.
In this way, diligence becomes a foundation for both risk management and value creation, rather than a standalone exercise.
How Clearwater Supports Healthcare PE Diligence
Clearwater Security partners with healthcare private equity investors to deliver focused, practical cybersecurity and compliance diligence tailored to healthcare operating models. By identifying material risks early and translating them into actionable insights, Clearwater helps investors avoid post-close surprises and build more resilient healthcare platforms.
As JPM 2026 made clear, healthcare investors are moving forward with greater precision. In that environment, cybersecurity and compliance diligence are essential tools for protecting and creating value.
Have questions? Contact us.
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