You are not bullish enough on US healthcare

What happened

On 20 January 2026, congressional negotiators bundled a set of healthcare policy changes into an FY2026 Health & Human Services (HHS) funding package.

Headline funding is roughly $116.6bn for HHS. Public-health groups highlighted that the package includes Medicare coverage pathway language for multi-cancer early detection (MCED) in the year-end health policy bundle.

Impact on our Investment Case

The situation today

Right now, most demand for MCED test comes from people paying out of pocket, which limits how many tests get done, makes it expensive to attract customers, and weakens the overall business model.

The goal of the bill's wording is to create a straightforward reimbursement system: get FDA approval, prove clinical benefits, and have Medicare decide coverage is right. That's the key "coverage trigger" needed to shift MCED from an optional, self-paid product to a standard, budgeted healthcare item. Bonus: the bill is open to yearly testing.

The prize: what kind of dollars are we talking about?

In our Healthcare: From Underdog to Front Runner framing, Diagnostics & Monitoring is already a $250bn market growing around ~6% CAGR to 2030.

We estimated that adding one annual MCED test for 40+ in the U.S. at $500 could create ~$50bn of recurring revenue (and ~$65bn if Europe follows), lifting the segment’s growth profile dramatically (toward ~14% CAGR in that base case). Even if we reduce the population size to Medicare-like criteria (65+), the US market would still add a sizeable $30.5bn and Europe $49bn.

That $500 assumption is intentionally conservative relative to today’s commercial reality: GRAIL’s Galleri list price is $949.

MCED reimbursement is a discount-rate event as much as a total addressable market event. When a category shifts from self-pay to a statutory Medicare pathway, three things typically happen to the listed winners:

1. Volume visibility improves. Forecasts stop being “marketing-driven” and become “coverage-driven.”
2. Custome Acquisition Costs (CAC) compresses. A reimbursed benefit changes physician behavior and patient friction.
3. Operating leverage shows up. High fixed-cost lab infrastructure benefits disproportionately from throughput.

Put differently: MCED does not need to instantly deliver the full $50bn+ outcome to matter for stocks. It only needs to move investors from “this might never scale” to "the question is pace.” That transition is where multiple expansion and funding-cost reduction occur.

Winners: who benefits most, and why

The obvious first-order winners remain the MCED test makers:

• GRAIL INC.: GRAIL’s advantage is the sheer weight of real-world and trial infrastructure behind Galleri. The UK NHS-Galleri trial is one of the most closely watched catalysts, with final results expected from 2026 and above 140,000 patients enrolled (may take longer), and it is explicitly framed around whether annual screening reduces late-stage cancer incidence versus standard care.
  
• Guardant Health: Guardant matters because it has already navigated FDA and Medicare dynamics in blood-based screening (colorectal), and it is pushing forward in multi-cancer detection. In a world where CMS “appropriateness” still matters, players with established screening credibility and payer muscle tend to de-risk faster.
• Exact Science: Exact brings scaled screening commercialization experience (Cologuard heritage) and is building into multi-cancer detection. When MCED becomes a covered benefit, distribution capability and physician channel access become as important as assay performance.
• Natera Inc: the adjacent flywheel. Even if you separate MCED from treatment monitoring, reimbursement momentum in genetic-guided decisions supports the broader thesis that “diagnostics as a decision tool” becomes billable and sticky. This is the same prevention/data setup we’ve built Bionics around with Natera as a leader in genetic cancer treatment monitoring.

Second-order winners: The second-order winners are the picks-and-shovels of scaled screening aka sequencing & consumables.

Notably, Illumina, which doesn’t need to “win MCED” to benefit; they benefit if MCED becomes repeatable throughput rather than episodic self-pay volume. And the policy backdrop supports that setup: appropriations summaries show NIH funding staying robust at $48.7bn and CDC around $9.2bn, reducing “science whiplash” and lowering the probability of an R&D winter that would otherwise pressure tools, services, and early innovation throughput. 

Third are the funnel beneficiaries. If MCED volumes scale, positive cases must be resolved. That creates demand for oncology drugs, but mostly for confirmatory diagnostics and imaging pathways. The whole diagnostics space benefits from it.

On top of all this, given the current state of the MedTech market, a rerating doesn't need much: current MedTech multiples are trading in line with the S&P500; a rare event over the past decade, last time it happened was in 2017. Not only this, but MedTech is relatively inexpensive, even compared to the broader healthcare sector itself, and is close to its 10-year lows.

Our Takeaway

For Atonra Bionics, we've said 2026 puts prevention and data in the spotlight. We're overweight in Diagnostics & Monitoring (60% vs. peers' 10-30%). Key 2026 events lean toward policy and coverage in diagnostics/prevention, with MCED progress at the core. 

The FY26 package is the kind of “boring Washington plumbing” that can create very non-boring equity outcomes because it moves MCED from optional self-pay toward reimbursed routine screening. This strengthens our playbook from "From Underdog to Front Runner," using MCED's growth as a tailwind for diagnostics and building big, recurring revenue.