Because if you zoom out from the recent GLP-1 drama and look at what Hims has actually been doing for the past 18 months, a very different picture emerges. One that Wall Street, fixated on the compounding soap opera, seems to have largely missed.

The Acquisition Pattern Nobody’s Talking About

Here’s Hims’ M&A history since mid-2024, laid out in sequence:

Zava — a European telehealth platform operating in Germany, the UK, France, and Ireland. Gives Hims immediate regulatory relationships and licensed infrastructure across four European markets.

Livewell — a Canadian digital health and weight-loss platform. Establishes a DTC presence in Canada with existing subscribers and local operational know-how.

YourBio Health — a Boston-based company that pioneered capillary whole-blood sampling technology. This one’s easy to overlook, but it’s the most telling: it’s pure infrastructure, a diagnostics capability that plugs into any consumer health offering regardless of geography or therapeutic category.

Eucalyptus — a Sydney-based house of consumer health brands (Pilot, Juniper, Kin, Software) operating across Australia, the UK, Germany, Canada, and Japan. $450M+ ARR. Triple-digit growth. Nearly two million consultations facilitated.

Look at those four deals together. Each one adds a distinct layer: European market access, North American presence, diagnostic infrastructure, Asia-Pacific and expanded European footprint. This is not a company making opportunistic acquisitions. This is a deliberate platform assembly.

The company most worth comparing this to isn’t another telehealth player. It’s IAC.

The IAC Playbook, Applied to Consumer Health

If you’re not familiar: IAC is Barry Diller’s holding company — three decades of acquiring consumer-facing digital businesses (Match, Vimeo, Dotdash), building shared infrastructure underneath them, and eventually spinning them out as independent public companies. The model is built on one insight: certain capabilities (technology, distribution, capital allocation) are more valuable at the platform level, while consumer brands stay distinct and market-specific. You don’t merge everything into one brand. You run a portfolio.

Hims is running this playbook in consumer health, globally.

The asset Hims has spent eight years building isn’t the brand. It’s the infrastructure underneath it: the telehealth platform, pharmacy fulfillment, subscriber acquisition engine, personalization stack. That stuff is expensive and slow to build from scratch. But once you have it, plugging a new consumer health brand into the platform in a new market becomes dramatically cheaper than building one from the ground up.

Eucalyptus is proof that model works internationally. Founded in 2019, it built the same thesis — distinct local brands on top of shared operational infrastructure — across five markets simultaneously. When Hims acquires Eucalyptus, it isn’t buying $450M in ARR. It’s buying the proof of concept, plus the local regulatory expertise that would take years to replicate. Eucalyptus is the first Australian telehealth company accredited by the Australian Council on Healthcare Standards. That doesn’t get rebuilt overnight.

What the Portfolio Actually Looks Like

Post-close (expected mid-2026), Hims will operate a multi-brand consumer health portfolio across six markets:

• US — the core: men’s and women’s health, mental health, weight loss, skincare. $2.35B revenue in 2025, 2.5M subscribers.

• UK — Juniper (Eucalyptus’s biggest brand) plus Zava, consolidated in what became Eucalyptus’s single largest market by 2025.

• Germany — Zava plus Eucalyptus means combined infrastructure in one of the hardest regulatory environments in digital health. The DiGAV framework for digital health apps alone is a Byzantine legal maze that takes years to navigate. Hims now has operators who already have.

• Australia — category leadership in digital health, clean regulatory standing after Eucalyptus transitioned cleanly off compounded GLP-1s when Australia banned them in October 2024 — ahead of the US.

• Canada — Livewell plus Eucalyptus, two-pillar DTC presence.

• Japan — create a Juniper beachhead in the world’s third-largest healthcare market, notoriously underpenetrated by digital health and slowly opening up.

Different brands, different markets, different regulatory environments — with one single platform underneath. That is, by definition, a holding company structure.

The Deal Structure Reinforces the Thesis

Hims is paying ~$240M in cash at close on a $1.15B deal. The rest is deferred payments over 18 months plus earnouts through 2029, payable in cash or stock at Hims’ discretion.

This is textbook holding company deal structuring: minimize upfront capital, align seller incentives with integration success, preserve the balance sheet for the next acquisition. With $318M in Adjusted EBITDA in 2025, Hims services the deferrals from operating cash flow without stress.

The talent move is equally telling. Tim Doyle, Eucalyptus’s co-founder, pockets ~$160M and becomes SVP International, overseeing all non-US operations. That’s not an acqui-hire — the term for when you buy a company mostly to absorb its team. That’s installing a proven international operator at the platform level. There’s a meaningful difference.

Why the Market Is Missing This

Holding company theses are slow burns. IAC wasn’t legible as one until well into its second decade. Right now, Hims trades as a wounded telehealth startup — and the Novo lawsuit, DOJ referral, and SEC investigation are real overhangs that aren’t going away soon.

But there’s a growing mismatch between what the market is pricing and what the company is actually building. Dudum used the GLP-1 boom to generate the cash and scale needed to fund a different long-term vision. He’s now deploying it while the stock is cheap and international targets are willing to sell. Whether that was always the plan or just smart opportunism is unknowable — but the outcome looks the same either way.

Two risks are worth flagging, however.

1. The GLP-1 mirror problem: Juniper, Eucalyptus’s biggest revenue driver, is fundamentally a GLP-1 business. The diversification here is geographic and regulatory, not therapeutic. If Novo Nordisk eventually plays hardball internationally the way it has in the US, that thesis gets stressed.

2. Execution bandwidth: running a multi-brand, multi-market holding company while fighting a legal war at home demands management depth Hims hasn’t yet proven it has.

The Story Everyone's Missing

Dudum’s stated target is $6.5B in revenue and $1.3B in Adjusted EBITDA by 2030. That number was never achievable from the US alone. The acquisition cadence, the deal structures, the operator-as-executive moves — they all point toward a company building for an end state the market isn’t currently pricing.

The GLP-1 drama will resolve one way or another. What’s left when it does is either a wounded US telehealth player — or the foundation of a global consumer health conglomerate that assembled itself while everyone was looking the other way.

I believe the evidence, right now, points toward the latter.

Merge & Monitor covers M&A, technology/industry trends and corporate strategy in the healthcare space at mergeandmonitor.com. Nothing here is investment advice.

While this move may certainly help expand access to mental healthcare as advertised in various press releases, I see the real genius of the deal as a move to own the end-to-end flow of mental health dollars from an employer's mental health budget to a therapist's bank account. In one motion, Spring Health has captured both scale and control.

Alma Isn't a Billing Company—It's Infrastructure

Many providers perceive Alma as a platform that helps therapists with billing and tedious insurance paperwork. While technically true, this does then miss the forest for the trees. When a therapist joins Alma, they’re not outsourcing admin. They’re plugging into years of credentialing infrastructure and payer relationships that would be impossible to replicate solo. This creates a symbiotic growth loop that augments with each net-new provider joining the platform— more clinicians make the Alma network more valuable to payers, and more payer contracts likewise make Alma more valuable to clinicians.

The mental health market is almost entirely solo practitioners. Research shows that administrative burdens play as important a role as reimbursement in influencing clinicians’ decisions to accept insurance. The majority of mental health professionals operate solo or in small practices, which means they navigate byzantine credentialing systems, claim denials, and insurance bureaucracy entirely on their own.

Eventually, companies like Alma and Headway began aggregating these systems. Now, Spring Health owns a large chunk of that aggregation layer.

Here's why this matters: mental health billing is intentionally complex. Insurance companies benefit from that complexity because it keeps providers out of network, which keeps their costs down. Alma solved this not by making billing easier, but by being the only player willing to absorb the complexity at scale. Alma’s moat isn't in its software (there are plenty of mental health EHRs out there). It's the institutional knowledge and relationships that took years to build.

Now Add the Other Side

Spring Health already had the demand side locked up. They sell to HR departments at big companies, the people who actually choose mental health benefits for the roughly 160 million Americans on employer plans. Their compound annual growth rate exceeding 80% over the past three years tells you they’re winning those deals consistently.

So now Spring has:

• The employers (who buy benefits)

• The providers (who deliver care)

• The technology (that connects them)

See how the structure forms?

An employer can’t easily switch away once their employees are already seeing therapists through Spring Health’s network. The switching costs just went from mildly annoying to actually disruptive to care. Furthermore, Spring Health can now go to any enterprise and make a pitch no competitor can match: we control both the tech and the provider network.

This is like the Amazon-Whole Foods playbook. Amazon didn’t just buy Whole Foods just for grocery revenue; they pursued the acquisition because controlling physical retail locations changed their leverage with other stakeholders in the supply chain. Similarly, Spring Health didn’t buy Alma for their billing revenue. They bought it because controlling provider infrastructure changes the game.

Everyone Else Is Now Playing Defense

Every other mental health startup just got boxed in. You’re either competing on employer distribution (good luck outgrowing Spring Health’s 80% CAGR), vying for provider share (Alma’s already one of the biggest), or remaining a feature instead of a platform. All those meditation apps, AI therapy bots, virtual care startups? They’re selling point solutions into a market that increasingly wants integrated infrastructure. It’s hard to justify a standalone contract when Spring Health offers the full stack.

For insurance companies, this is genuinely uncomfortable. They can compete by building comparable capabilities (expensive, slow, probably won’t work) or partner with Spring Health and accept margin compression. Neither option is great. But doing nothing while Spring Health signs their employer clients isn’t an option either.

So I’d expect M&A in the space to accelerate. Any remaining provider network companies just became hot acquisition targets as the market consolidates fast toward end-to-end, integrated players.

The Infrastructure Play

At the end of the day, Spring Health isn’t trying to be the best mental health platform. They’re trying to be the unavoidable one.

Success post-acquisition means locking in enough employer contracts and provider relationships that the symbiotic network effects become self-reinforcing. Every new employer brings more patient volume, which attracts more providers, which makes the platform more attractive to employers. It’ll be a classic two-sided marketplace dynamic, except that switching costs in the healthcare space are more brutal while alternatives are scarce. If Spring executes, they will become what Epic is to hospital EMRs or what Optum is to pharmacy benefits: the default platform that’s too embedded to displace.

The obvious risk is integration. Alma built a provider-first business. Spring Health built an employer-first business. Different economics, different cultures, different sales cycles. Both CEOs will remain in their roles, with April Koh continuing as CEO of Spring Health and Harry Ritter leading Alma within Spring Health. Keeping both brands operating while extracting synergies may become operationally messy.

But if it works? They’ve built something rare: a two-sided platform with network effects on supply and demand, vertically integrated infrastructure that competitors can’t easily copy, and direct relationships with the actual buyers. In any market where dollars flow from buyers to providers, whoever controls the infrastructure between them gets to extract value. Spring Health just bought both sides of that equation.

Tuesday morning: $80 billion in market value evaporates. Humana’s stock fell by 20%. UnitedHealth down 19%. CVS down 13%.

Wall Street wasn't reacting to the proposed 0.09% rate increase. Wall Street was reacting to a business model potentially breaking in real time.

For context, Medicare Advantage is the private insurance alternative to traditional Medicare, where the government pays private insurers a fixed amount per member to provide Medicare benefits. More than half of Medicare beneficiaries—roughly 35 million people—choose these private plans, often attracted by extra benefits like dental, vision, and gym memberships that traditional Medicare doesn't cover.

Here's how the money worked: the Centers for Medicare and Medicaid Services (CMS) pays plans more for sicker members using "risk adjustment". Think about it like this— insurers get paid more for managing sicker patients because sick patients cost more to treat. The more diagnosed conditions a member has, the higher the payment. So payers built sophisticated programs to thoroughly document every health condition via home health visits, comprehensive assessments, and chart reviews. CMS designed the system to reward complete health documentation, and payers became very good at it.

Monday’s proposal changes everything, so that diagnoses will now only count if they’re linked to actual medical treatment. For example, let’s say a nurse visits your home, reviews your chart notes, and documents that you have diabetes. Under the old rules, that documentation alone meant more money for the insurer. Under the new rules, it only counts if the insurer then actually coordinated treatment for that diabetes—such as scheduling doctor visits, prescribing medications, and tracking outcomes.

The market just repriced the entire industry.

Why Wall Street Has Panicked

It’s easy to get lost when trying to understand why Wall Street has been roiled over this proposed rate increase. But in short, it is because two things hit simultaneously:

The revenue assumption broke: Wall Street analysts expected 4-6% rate increases for 2027 based on historical patterns and rising medical costs (CMS projects medical costs will grow 4.97% in 2027). Under the current proposal, every financial model built on consistent rate growth just became obsolete.

The incentive structure reversed: This is the more important piece of the puzzle that gets overlooked. As mentioned above, CMS designed their risk adjustment policies to pay more for sicker, more complex members, and rewarded comprehensive and thorough health documentation. So payers spent years developing systems for complete diagnosis capture through chart reviews, home health visits and even sophisticated analytics. Now CMS is proposing to exclude diagnoses from health assessments unless they're linked to a specific medical encounter with treatment. By upending how payers typically coordinated care to align with CMS’ incentives, this is poised to reduce industry revenue by $7 billion in 2027 (meaning that Medicare saves $7 billion).

The market reaction makes even more sense when you realize how much of Medicare Advantage economics were built on assumptions that were just eviscerated. Humana gets roughly half its revenue from Medicare Advantage. UnitedHealth is the largest Medicare insurer by membership. CVS was counting on Aetna’s Medicare business for its turnaround story. All three just watched their 2027 revenue models collapse.

Insurance companies are already running on thin margins. For example, companies like Humana are currently spending ~92 cents of every premium dollar on medical care, leaving 8 cents for everything else including profit. When your revenue assumptions drop by several percentage points while costs keep rising, the math gets brutal fast.

No Good Short-Term Options

Insurance payers have until April 6th to plan for 2027, as that is when the CMS will finalize its Medicare Advantage rate increase. Every short-term option hurts.

Benefit cuts: The most likely response. Meal delivery programs already dropped from 65% of plans to 57%. Over-the-counter allowances fell from 73% to 66%. Now expect cuts to the high-visibility benefits that seniors actually notice—dental, vision, and even gym memberships.

Market exits: If a county isn't profitable, why stay? Rural markets with higher costs and lower margins are particularly vulnerable. This isn't just a business decision—it's a direct threat to healthcare access in underserved areas where seniors may be left with few or no plan options.

Tighter utilization management: Expect insurers to deny more claims and require stricter approval before care can begin. When you can't grow revenue, you control what you pay out. Providers will feel this squeeze as much as seniors do.

For some companies, like Humana, the timing could not be worse. Just two months ago, Humana was sure about continued Medicare Advantage growth in 2026 and maintaining generous benefits in its plans while competitors cut. On their November earnings call, executives said they felt "good about what we are seeing so far" in open enrollment, with new sales at the high end of expectations. They were betting they could grow membership while doubling pre-tax margins. Now they have to choose: stick with existing benefits and watch margins collapse, or cut mid-course and kill the growth they were banking on.

The Long Game: Integrated Players Win

The short-term pain is unavoidable. But the long-term strategic implications are what really matter, and I believe that they fundamentally reshape the competitive landscape of Medicare Advantage.

The ultimate winners will likely be integrated healthcare systems such as Kaiser Permanente that own both insurance and care delivery. Why does this matter? Because when you own the hospitals, clinics, and doctors providing the care, you can actually demonstrate the treatment interventions that CMS now requires—not just document that someone is sick, but show that you're actively managing their health. These systems have deep value-based care relationships with providers and invested in care management infrastructure rather than primarily documentation infrastructure.

Those that are more exposed are payers that were heavily reliant on Medicare Advantage enrollment. Humana, for example, falls squarely in this bucket—roughly half their revenue comes from Medicare Advantage, and they lack the integrated delivery scale of a Kaiser. They're a pure-play Medical Advantage insurer trying to build clinical integration (for example, with their CenterWell division), but it is not yet enough to offset the pressure on the core Medicare business. Even UnitedHealth, despite owning Optum and having the largest provider network through Optum Health, faces questions about how much of their historical advantage came from superior coding capabilities versus actual care delivery. If the competitive advantage shifts fully to demonstrated clinical interventions, their massive administrative scale matters less than whether Optum can actually show better health outcomes.

The plans most at risk are smaller, regional Medicare Advantage insurers that built their entire business model around efficient administration and coding optimization without investing in provider relationships or care delivery. They have neither the scale to compete on administrative efficiency alone nor the clinical integration to compete on outcomes.

CMS is also signaling bigger changes ahead. They're exploring risk adjustment models based on what care patients actually receive (such as utilization patterns, lab results, and prescriptions) rather than just diagnosis codes. It's essentially a further shift toward value-based care: providers get reimbursed for outcomes and interventions, not documentation. That would complete the transformation and fundamentally redraw the competitive landscape.

The M&A implications are becoming clear: Plans need to acquire care delivery capabilities, not just enrollment scale. Humana’s CFO said in November that they see “significant opportunities to acquire attractive small to mid-sized provider businesses”—which looks remarkably prescient now. Provider groups with strong value-based care track records just became much more strategically valuable. Care management technology that drives documented interventions becomes a critical capability. Pure administrative capabilities and coding infrastructure are becoming legacy assets that don’t generate the returns they used to.

Some plans anticipated this shift and invested in clinical integration years ago. Others optimized for the incentive structure as it existed, which was entirely rational at the time. But only one of those strategies positions well for where Medicare Advantage is heading.

The final rates come out in April, and there will certainly be lobbying and potential adjustments before then. But the strategic direction is increasingly clear: CMS is moving toward encounter-based risk adjustment, and the competitive advantages that matter in Medicare Advantage are fundamentally shifting. The question facing every payer isn't whether they optimized correctly for the past—it's whether they built capabilities that still matter for the future.

The Problem Nobody Was Solving

For decades, post-acute care ran on phone calls, faxes, and guesswork. Hospitals discharged patients to nursing homes based on whoever had an available bed. Nobody tracked outcomes. Nobody measured readmissions. Facilities got paid per day regardless of results.

Then two things changed. First, as of February 2026, 55.4% of Medicare beneficiaries are enrolled in Medicare Advantage, with 30 states now exceeding 50% penetration. Medicare Advantage plans get paid a fixed amount per patient. Every hospital readmission and preventable complication costs them money, and the recent changes in penetration meant that the Centers for Medicare & Medicaid Services (CMS) wanted to stem the bleeding.

So what did CMS do? They started penalizing hospitals for readmissions. For example, if a patient gets discharged to a nursing facility, develops an infection, and ends up back in the ER within 30 days, the hospital eats the penalty.

These developments have cascaded into a coordination crisis. Hospitals now need to know which nursing homes can handle which patients, while nursing homes need real-time access to patient records so they don’t accept patients they can’t manage. Home health agencies need medication lists without manual data entry, and Medicare Advantage plans need to track outcomes across every setting to avoid paying for preventable complications.

Hardly anyone invested in the infrastructure to solve this because nobody needed it until CMS flipped the incentives. But PointClickCare did.

An Unbeatable Network Effect Moat

PointClickCare's core product is an EHR for post-acute facilities. However, its real asset is the network it has cultivated over decades. By connecting 30,000+ facilities—84% of them in the United States—and processing data on millions of patients moving between hospitals, nursing homes, and home health agencies, PointClickCare has created something competitors can’t copy by just building better software. The company's 2,800+ hospital integrations and partnerships with every major US health plan position it squarely in markets where Medicare Advantage penetration and CMS readmission penalties create the strongest forcing function.

Their acquisition strategy makes this vision even more explicit. In 2020, PointClickCare acquired Collective Medical, a platform that sends real-time alerts when patients show up in emergency departments. If a nursing home patient goes to the ER at 2am, the facility gets an alert immediately instead of finding out days later through a fax. That's not just simple EHR functionality; this is the connective tissue that makes value-based care actually work. In 2022, the company snagged Audacious Inquiry, which builds networks for secure data transmissions across healthcare systems. In 2023, it snapped up Patient Pattern, which has tools to help providers proactively manage high-needs patients through early preventative intervention.

By integrating these various platforms, PointClickCare’s value proposition increases tenfold for every new facility that joins. Every hospital integration makes the network stickier for post-acute providers who need real-time patient data. New market entrants can build an EHR, but they can't build the network effect of already connecting the majority of post-acute facilities to the hospitals that discharge to them.

Why Competitors Can’t Catch Up

MatrixCare serves 15,000+ providers in the post-acute care space. Epic is a legacy giant dominating acute care EHRs. Netsmart and WellSky compete in specific post-acute verticals. On paper, these competitors look like credible alternatives.

However, these companies are solving a different problem by selling plain-vanilla EHR software (relatively speaking) to post-acute facilities. PointClickCare controls the data infrastructure between hospitals, post-acute providers, Medicare Advantage plans, and CMS reporting systems. MatrixCare can manage a nursing home's internal workflows, but it can't tell that nursing home in real-time when their patient is admitted into a hospital ER across town, pull that patient's latest medication list from the hospital's system, and automatically flag the case for the Medicare Advantage plan's care coordinator. Replicating this organically means building relationships with 2,800+ hospitals and 30,000+ post-acute facilities simultaneously while PointClickCare's network effects compound every quarter.

When CMS expands value-based purchasing mandates in 2027-2028, facilities already integrated into PointClickCare’s hospital network can prove outcomes immediately. Competitors will spend years playing catch-up on infrastructure PointClickCare already built in 2023.

The Only Question That Matters

Here’s what people miss about PointClickCare: this isn’t a story about whether they win. They’ve already won. The question is whether they stay independent long enough to extract full value.

I don’t think they will.

The natural path is an IPO at $8-10 billion in 2026-2027, then compounding to $25+ billion by 2030 as Medicare Advantage penetration crosses 60% and value-based care mandates make their infrastructure non-optional. However, this scenario assumes strategic buyers wait on the sidelines while PointClickCare’s leverage increases every quarter.

But they won’t. Epic has spent two decades failing to build post-acute presence while watching PointClickCare connect the one part of the care continuum they don’t control. Oracle burned billions on Cerner and is still losing to Epic; they need a strategic pivot or they’re finished in the healthcare IT race. UnitedHealth and CVS both own extensive provider networks—including surgery centers, physician practices, and home health agencies—but don't own the post-acute care coordination data that determines whether their Medicare Advantage beneficiaries avoid costly readmissions.

For any of these buyers, PointClickCare is worth more as an acquisition than as a vendor relationship. When 60% of Medicare beneficiaries are in Medicare Advantage plans and CMS penalizes readmissions across the continuum, these companies need to either own the infrastructure or pay someone else for access to data that determines their profitability. This strategic urgency compounds faster than PointClickCare’s ability to reach full public market valuation.

My bet: PointClickCare is acquired by mid-2027 for $12-18 billion. Once Medicare Advantage penetration hits 58-60% and the 2027 CMS value-based purchasing expansion becomes concrete policy, the gap between PointClickCare’s strategic value to buyers and its public market valuation creates irresistible M&A logic. In healthcare IT, when the government mandates coordination and penalizes the lack of it, the buyer with the most to lose will move first.

PointClickCare built the only scalable solution to a government-mandated problem. By 2028, post-acute care coordination will be table stakes for every health system in America. The question isn't whether this infrastructure matters—it's who ends up owning it.

The Wrong Bet and the Right One

Between 2021 and 2022, venture capital poured billions into behavioral health with a specific thesis: software platforms would aggregate a fragmented provider supply, streamline credentialing, and own the provider-patient matching layer. Headway raised $125M. Alma raised $130M. Cerebral hit a $4.8B valuation. Investors bet that whoever built the largest therapist marketplace would win.

That thesis failed. Cerebral imploded under regulatory scrutiny. The remaining marketplace platforms—Alma, Headway, Rula, Grow Therapy, Sondermind—are all still independent, competing for the same providers with nearly identical offerings. None have merged. Meanwhile, the payers who control reimbursement started building or backing their own networks. Optum owns Refresh Mental Health and backs Alma. HCSC (a Blue Cross Blue Shield licensee) backs Headway. The supposed platform advantage evaporated when the parties with pricing power decided to compete directly.

Private equity saw something different. Not a winner-takes-all software play, but a classic roll-up opportunity where independent operators were leaving massive margin on the table. The pandemic created the conditions: telehealth permanently expanded addressable markets, labor costs stabilized, and commercial payers increased their willingness to reimburse. But the fundamental fragmentation remained, and small practices couldn’t capture the economics that scale unlocked.

Why PE Can’t Stay Away

Three factors make behavioral health uniquely attractive for consolidation.

1. The market is massively fragmented with no dominant players. Over 14,000 behavioral health facilities operate in the U.S., most generating under $2M annually. Even after years of deal activity, the largest platforms represent single-digit market share. The fragmentation extends to the tech stack: SimplePractice competes with dozens of behavioral health EHRs, while 20+ AI documentation startups fight for the same therapists. This is the classic roll-up setup: extreme fragmentation at both the service and infrastructure layers, low barriers to acquisition, and decades of runway before hitting concentration concerns.
   

2. Post-pandemic reimbursement improvements stuck. Telehealth went from 1% of behavioral health visits in 2019 to over 30% by 2022, and it stayed there. Medicare made telehealth for behavioral health permanent. Commercial payers followed. Mental health parity enforcement increased. Reimbursement rates improved and remained stable, even as other pandemic-era tailwinds faded. Buyers can underwrite to sustained rate environments rather than temporary spikes. For commercial-heavy platforms, the math is even better. Commercial insurance typically pays 20-40% more than Medicare and significantly more than Medicaid.

3. Effective revenue cycle management (RCM) creates immediate margin expansion. This is where the magic really happens. Billing for behavioral health is operationally complex: different CPT codes by license level, authorization requirements that vary by payer and state, and Medicaid carve-outs that require specialized knowledge. An independent practice doing $500K in revenue typically runs at 15-20% EBITDA margins, either handling billing internally with no expertise or paying third-party services 6-8% of collections.

   
   PE-backed platforms fix RCM through centralization. They build dedicated billing teams that negotiate better rates, implement automated eligibility verification and claim scrubbing, and reduce days in accounts receivable (cash collection) from 45+ days to under 30 days. The same $500K practice now runs at 25-30% margins under platform ownership. When buyers underwrite these deals, they’re paying for 500-1000 basis points of margin expansion through operational fixes that independents can’t afford to implement.

Why This Accelerates in 2026

Hold periods on deals closed in 2020-2021 are ending, which means sponsors need exits. The path to exit requires demonstrating scaled operations with better margins. That means more bolt-on acquisitions: a trend that began in the immediate post-pandemic era and will only grow this year.

The valuation environment reflects buyer appetite. Outpatient mental health platforms with strong clinical governance and diversified payer relationships commanded the strongest valuations in 2025, typically in the 10-13x EBITDA range for quality assets. Addiction treatment saw 8-11x EBITDA multiples for in-network platforms with medication-assisted treatment capabilities. Every behavioral health subsector is seeing consolidation, and the platforms that solved RCM at scale are commanding premium multiples.

Meanwhile, the VC-backed therapy marketplaces face pressure. For example, when Alma partnered with Upheal in mid-2024 to offer AI clinical documentation as a differentiator, Upheal was a scrappy Czech startup. By early 2025, Upheal had raised a $10M Series A and was selling directly to other behavioral health platforms. Payers now have no incentive to credential five competing marketplaces offering identical services.

What This Means

The VC thesis bet that software would aggregate a fragmented market and capture value at the platform layer. PE’s thesis is that value sits in fixing broken operations at the practice layer, then rolling up enough practices to amortize infrastructure costs across a large base. The second thesis is proving correct because it solves the actual problem: independent practices can’t afford the billing and credentialing systems that drive profitability.

The pandemic created the conditions—telehealth permanence, reimbursement expansion, and persistent supply-demand imbalance. But the fragmentation won’t resolve itself. Small practices get acquired by platforms that offer better margins through better operations. The businesses that solved RCM at scale are the ones making acquisitions and commanding the largest valuations. The consolidation thesis isn’t speculative. It’s executing in real-time, and the runway extends for years.

I'm starting this blog to change that.

A bit about me: I spent ~2.5 years at Alma as a Product Marketing Manager, helping scale a mental health platform during one of the biggest growth periods in behavioral health. Currently, I work at a speech therapy startup leading strategy and operations for their revenue cycle management—the operational backbone that makes healthcare actually run. I started my career in Abbott Nutrition's Leadership Development Program, where I learned how large healthcare organizations make strategic decisions.

What I’ll cover: Healthcare services M&A (especially behavioral health), tech trends that actually matter, how AI unlocks value, value-based care economics, and where consumerization is changing delivery.

What makes this different: I focus on the ‘so what?’ from an operator’s perspective. No jargon for jargon’s sake. Accessible to finance and non-finance folks alike.

Coming up: why behavioral health remains a private equity magnet, how AI is being deployed in clinical workflows, and how the GLP-1 boom is reshaping consumer healthcare delivery

Let’s get into it.