TTA has an open invitation to industry leaders to contribute to our Perspectives non-promotional opinion and thought leadership area. Today’s topic concerns the disconnect between what gets funded–patient-facing tech–versus the more complex infrastructure technology that healthcare organizations need to “keep the lights on”. The author, Ramkumar Pichandi, is the founder and CEO of Rytsense Technologies, where he leads the development of agentic AI and intelligent automation solutions for healthcare revenue cycle management. He is passionate about practical AI adoption that delivers real business outcomes rather than experimental technology–and he throws down the gauntlet here.
Digital health capital has a blind spot. It rewards what patients can see and touch, such as the app, the AI assistant, or the sleek intake screen, far more than it rewards the financial machinery that determines whether a company survives long enough to keep serving them. Carbon Health is the clearest recent illustration. In February 2026, the hybrid primary care company filed for Chapter 11 bankruptcy after raising more than $600 million over a decade and building roughly 90 clinics across eight states that together treated well over 800,000 patients a year. Nobody was complaining about the care. What forced the filing was a cost structure built for a larger company in a friendlier capital environment, and a balance sheet that no longer matched the business underneath it, according to court filings and reporting on the case. Patients experienced a functioning clinic right up until the day the financial layer underneath it gave out.
Carbon Health is not an outlier so much as the latest entry in a pattern that has repeated through several funding cycles now. Olive AI raised close to $900 million on the promise of automating revenue cycle work, then shut down in 2023 after its technology failed to deliver the savings it had promised hospitals. Pear Therapeutics and Babylon Health, two of the most recognized digital health brands of the pandemic era, went through bankruptcy the same year. The products differed. The failure mode did not: each company built something patients or providers could see and use, while the financial machinery underneath it stayed thin, brittle, or simply unbuilt.
This is worth naming plainly because the funding data suggests the pattern is still being set up, not corrected. Digital health investment is recovering in 2026, and AI is the reason why. U.S. digital health startups raised $7.4 billion across 244 deals in the first half of 2026, up from $6.4 billion a year earlier, according to Rock Health. Mental health platforms and GLP-1/weight-management startups remain the two most heavily funded clinical categories, and nearly 60 percent of all digital health investment in the first quarter came from a dozen mega-deals of $100 million or more, mostly consumer-facing. Capital is concentrating into fewer, larger bets, and visible keeps meaning patient-facing.
Meanwhile, the category that actually keeps healthcare companies solvent is losing ground with investors even as demand for it grows. Research from Galen Growth tracking healthcare buying behavior found that infrastructure’s share of health-system partnerships has climbed steadily, from under 19 percent of deals in the first half of 2022 to nearly 23 percent in the first half of 2026. Hospitals increasingly want the unglamorous layer underneath documentation, claims, scheduling, and care coordination, not another point solution. Yet over the same stretch, infrastructure’s share of venture financing dollars actually fell, and the number of infrastructure deals dropped by roughly 62 percent even as average deal size for the survivors doubled. Buyer demand for durable financial plumbing is rising, and the number of companies funded to build it is shrinking. That is not an absence of demand. It is a mismatch between what health systems need and what investors will write checks for.
The gap shows up most clearly in revenue cycle work, which is where a healthcare company’s survival is actually decided. Experian Health’s State of Claims research found that 41 percent of providers now report denial rates above 10 percent, up from 30 percent in 2022, and hospitals collectively spend close to $20 billion a year just overturning claims that were denied incorrectly. None of that shows up in a product demo. A denial queue does not make for a good conference stage moment the way a patient-facing app or an AI scribe does. It just quietly determines, months later, whether a company can make payroll.
That asymmetry is not really about technology. It is about what is easy to show and easy to fund. A patient portal or an AI assistant can be demonstrated in a five-minute pitch and photographed for a press release. A well-run eligibility check or a denial-prevention workflow is judged by what does not happen: the claim that does not bounce, the appeal that never has to be filed. Investors and journalists are simply better equipped to evaluate the former than the latter, and capital tends to follow what can be judged quickly. The cost of that bias never stays confined to the layer that was underfunded. It falls on the whole company, patient-facing product included, the way it did at Carbon Health.
None of this argues for less investment in patient experience or clinical AI; both remain genuinely important, and the returning capital in 2026 reflects real progress on that front. It argues for a more honest accounting of what digital health actually needs to survive its own growth. Until the layer that keeps the lights on gets judged by the same standard as the layer patients see, the industry should expect more companies that patients loved right up until the day they were gone.
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