AI-powered, digital-first healthcare models could account for \$1 trillion in spending by 2035, according to PwC.
Rising demand for healthcare and a rapidly aging population could push U.S. healthcare spending to \$8.6 trillion by 2035, exceeding 20% of the projected total U.S. gross domestic product.
With annual spending already surpassing \$5 trillion and costs increasing at unsustainable rates, healthcare leaders must reconsider traditional assumptions about how care is delivered, financed, and experienced, according to PwC analysts in a recent report.
The healthcare industry is poised for a major transformation, with artificial intelligence-driven, consumer-focused services promising to simplify care models, reduce costs, and improve quality, according to analysts.
Healthcare leaders are well aware of the current system’s challenges—it’s costly, fragmented, and often frustrating for both patients and providers. Rising expenses, disjointed care, administrative burdens, and shifting demographics are all straining the system.
Within the next decade, the number of Americans over 65 will surpass those under 18, increasing demand for chronic and geriatric care while the pool of healthier young workers to support it shrinks. Nearly 45% of physicians report burnout symptoms, and a doctor shortage is expected in the coming years.
PwC analysts predict that over the next ten years, $1 trillion in annual healthcare spending could transition away from fragmented, facility-dependent models toward a digital-first, personalized system driven by empowered “super consumers.” This shift could significantly improve costs, care quality, and reduce burnout.
They are hopeful that by 2035, healthcare will be proactive, automated, personalized, and supported by robotics. However, they emphasize that healthcare leaders must reallocate resources from outdated expenses like administrative overhead and infrastructure-heavy models toward next-generation solutions such as AI-enabled patient intake and in-home care, the report states.
Technological and AI advancements are key drivers of this transformation. According to PwC, AI-powered workflows can ease administrative burdens and reduce clinician burnout, while virtual-first platforms can make care more accessible and centered around the home.
Wearables, sensors, and ambient technologies enable continuous health monitoring, facilitating earlier interventions and remote care delivery. Drone technology will enhance last-mile delivery, providing faster access to care, especially in remote and underserved regions. Advances in genomics, digital twins, and adaptive AI will enable more precise treatments, shifting healthcare from reactive to proactive, predictive, and personalized care.
The report emphasizes that healthcare organizations must invest in unified platforms that integrate triage, diagnostics, navigation, and reimbursement.
“Traditional players must commit to structural reinvention, moving away from legacy systems toward intelligent platforms, hybrid workforces, and outcome-focused strategies,” PwC analysts stated.
Looking ahead to 2035, if healthcare providers make the right investments, PwC envisions caregivers benefiting from personalized, connected in-home care hubs. The use of robots will expand to perform services that augment and assist doctors, nurses, and home care providers. Physicians will act as data orchestrators, leveraging AI to assess risk, tailor treatments, and concentrate on clinical judgment rather than administrative tasks. Meanwhile, hospitals and physical care sites will evolve from destinations into “high-speed care nodes” designed for brief, precise interventions seamlessly integrated with virtual-first systems.
“As hospitals evolve into modular hubs focused on the most critical cases, the majority of care will move into the home, supported by wearables, implantables, and virtual command centers that coordinate treatment remotely. AI, robotics, and drones will transform the workforce by automating routine tasks, freeing clinicians to concentrate on complex interventions,” PwC analysts explained.
They argue that payers, providers, pharma, and health tech companies can gain a competitive edge by embracing this shift, but it demands a new approach. This strategy involves putting consumers first, creating care models that are “virtual by design,” investing in data intelligence, and leveraging strategic partnerships.
“Digital-native care frameworks, automated patient intake, fully virtual specialty clinics, and AI-enhanced diagnosis and treatment will become standard,” the analysts noted.
Healthcare organizations must prepare for disruption.
“If you fail to anticipate new entrants, you risk being outmaneuvered,” they warned. “Adapt swiftly as innovations, policies, and platforms reshape the landscape and compete for redistributed funding. Embed disruption and adaptability by building agile teams that evolve with innovation, launching early pilot programs, establishing technology and regulatory units to track changes, and creating sandboxes for real-world technology testing.”
PwC painted a vision of what healthcare might look like by 2035:
Payers: With medical cost trends approaching double digits, payers will face increasing pressure to do more with less. While AI and other technologies can help, they won’t be a cure-all. Payers will need to develop capabilities to deliver medical value and actively manage population health risks, either directly, through expanded ownership, or indirectly via networks and supply chains focused on controlling costs and improving affordability. The report also highlights that payers will increasingly act as data hubs.
Going forward, health plans will need to automate many current processes to “invest in new capabilities and take on a larger role as stewards of their members’ healthcare dollars,” the report noted.
Providers: Health systems, hospitals, and medical practices will shift toward AI-enabled, human-centered models that offer affordable, personalized care. Care delivery will become decentralized, tailored to patient acuity, more specialized, and increasingly autonomous. Emerging revenue models will reduce dependence on traditional fee-for-service structures. As digital natives age, they will prefer AI-powered care models that emphasize affordability, convenience, and efficiency. Younger generations will prioritize care that is immediate, low-cost, and accessible via their devices.
Medtech: The medtech sector is expected to evolve from standalone hardware toward intelligent infrastructure, according to PwC analysts. The next competitive edge will come from brain-computer interfaces, remote monitoring, robotics, and neuromodulation, with software and connectivity driving differentiation. Medtech companies will strive to become seamless care connectors by integrating diagnostics and therapeutics into one adaptive system.
“The ultimate challenge for the future of healthcare will be whether a major industry outsider—unburdened by legacy systems but backed by capital—has the vision, insight, and determination to disrupt the industry,” the analysts concluded.
