The healthcare and senior living industries find themselves at a pivotal crossroads in early 2026, facing seismic shifts shaped by the aftermath of the COVID-19 pandemic, technological innovation, and mounting demographic pressures. At the heart of these changes are evolving business models, the rapid integration of artificial intelligence, and renewed urgency to address affordability and access for an aging population. Recent insights from industry leaders and the 44th annual J.P. Morgan Healthcare Conference in San Francisco paint a picture of challenge and opportunity—one that demands agility, innovation, and a willingness to rethink long-held assumptions.
According to a February 3rd interview published by Clark Nuber PS, Dave Eskenazy, a senior executive in the senior living sector, described how the pandemic fundamentally altered the landscape. "Absolutely. When I was with Aegis Living, we focused on creating environments that didn’t look or feel like nursing homes. We avoided using the word 'nurses' and didn’t want staff to dress like nurses; we wanted a hospitality-driven atmosphere. Our goal was always quality of living. The pandemic shifted that perspective. Now, it’s not only acceptable but also important to highlight that we provide both hospitality and healthcare. We don’t need to hide the nurse’s station anymore; we can present it as an amenity. Many people want reassurance that healthcare needs are covered, and it’s okay, maybe even necessary, to emphasize that."
This shift to healthcare-centric design is more than cosmetic. The pandemic exposed vulnerabilities in traditional, investment-driven business models—especially those tied to five- or seven-year mortgage cycles. Eskenazy likened it to a storm revealing leaks in a house: "In senior housing, many buildings are owned by investment funds with five- or seven-year cycles. When a downturn hits, those funds can get stuck in those investments, especially if they need to refinance in a very different economic environment." With interest rates rising and lending conditions tightening, the industry faces a new set of financial pressures, forcing both caution and creativity.
Meanwhile, the J.P. Morgan Healthcare Conference, held just before February 6, 2026, underscored how technology is rapidly transforming healthcare delivery and operations. "We’re set for an active year ahead—biopharma innovation, medtech and life science breakthroughs, and AI transforming healthcare services," one conference summary noted. Artificial intelligence and automation tools are being rolled out to relieve administrative burdens and accelerate drug development. Notably, Nvidia and Eli Lilly announced a landmark partnership to establish an AI drug discovery lab—an effort to unite pharmaceutical research and computer science talent under one roof. Government officials at the conference emphasized the need for greater data integration and digital-first solutions, particularly for Medicare enrollees, hoping to usher in a new era of accessible, tech-enabled care.
But even as technology promises to revolutionize care, both sectors are wrestling with affordability and access. In senior living, the cost of building new communities has soared, with Eskenazy noting, "In many markets, it costs over $500,000 per unit to build a new community, so we have no choice but to charge a lot. Congregate living is only getting more expensive." He pointed out that while home values have generally kept pace with the annual costs of senior living, that trend may not last. "Home prices are stabilizing, while the cost of senior living keeps rising. At the same time, technology like Amazon, AI, and smartphones makes it easier for people to stay at home and get what they need delivered. Everything is at your fingertips now, so living at home is more practical for many."
Eskenazy’s observations echo a broader industry trend: seniors are staying in their homes longer, enabled by advances in technology and remote services. This, in turn, is putting pressure on occupancy rates and the economic viability of traditional senior living models. New construction has slowed—a mixed blessing that allows for recovery in occupancy but does little to improve affordability. "Even if development picks up soon, it will be years before new buildings open, so for now, we’re in a relatively stable position," Eskenazy said. The industry’s core mission, however, remains unchanged: creating safe, engaging, and supportive communities for seniors.
On the broader healthcare front, the J.P. Morgan conference highlighted a surge in optimism around biopharma and medtech, with AI poised to accelerate everything from drug discovery to patient management. Alexei Gogolev, a senior analyst at J.P. Morgan, remarked, "This year's conference was characterized by extensive discussion regarding new AI entrants and the evolving competitive landscape. While recent headlines have highlighted the potential for disruption, companies in our coverage flag that their models are trained on billions of proprietary clinical and administrative data, enabling more accurate, context-aware AI solutions that are deeply embedded in the healthcare workflows."
The conference also spotlighted the expected ramp-up of mergers and acquisitions (M&A) in biotech and pharma, driven by patent expirations and a more favorable regulatory environment. The so-called "patent cliff"—when key patents for blockbuster drugs expire—has put pressure on large pharmaceutical companies to replenish their pipelines through strategic acquisitions. In 2025, deals were struck between the Trump administration and nine pharmaceutical companies to lower Medicaid drug costs, further intensifying the push for innovation and cost containment.
One area of particular focus is the development and expanded access to GLP-1 drugs, which are now recognized as strategic investments in combating obesity and related chronic diseases. With the Trump administration brokering deals for lower GLP-1 prices for Medicare and Medicaid recipients, and a GLP-1 pill on the horizon, demand is expected to grow. As a result, competition among manufacturers is set to intensify, with potential benefits for both public health and healthcare spending.
Globally, the Asia-Pacific region is experiencing a boom in healthcare IPOs and M&A activity, with 25 new sector IPOs debuting on the Hong Kong index in 2025 and raising more than $30 billion. David Lau, Co-head of China Investment Banking at J.P. Morgan, observed, "Many of the new healthcare startups funded globally had an AI or digital health component. Investors are prioritizing scalable, tech-enabled solutions that can deliver both clinical and economic value."
Despite these advances, the sector faces persistent challenges. Nursing and provider shortages, high turnover, and disparities in care—especially for rural populations—continue to test the resilience of healthcare systems. The political landscape remains unsettled, with ongoing debates over ACA subsidies, the Trump administration’s healthcare proposals, and the future of Medicaid and Medicare coverage. Health systems are bracing for further change, prioritizing adaptability and long-term relationships in an increasingly competitive, globalized environment.
Looking ahead, industry leaders like Eskenazy advocate for innovation, purposeful design, and policy reform to tackle the affordability crisis and ensure that seniors and patients alike receive the care they need. "I hope we see some tax relief, maybe allowing people to use retirement funds for elder care without penalties to keep seniors off government programs. The government will have to address this, but I don’t have a simple answer. It’s going to be a tough problem that will require a combination of solutions."
The coming year will test the healthcare and senior living sectors’ ability to adapt, but also offers a window for transformative change—if leaders can harness technology, rethink financial models, and stay true to their mission of supporting society’s most vulnerable members.