This report summarizes the discussions and recommendations from the NSF Workshop on Algorithm-Hardware Co-design for Medical Applications, held on September 26-27, 2024, in Pittsburgh, PA. The workshop assembled an interdisciplinary cohort of researchers, clinicians, and industry leaders to examine foundational challenges and develop a strategic roadmap for algorithm-hardware co-design in medical computing. The workshop focuses on four thematic areas: (1) teleoperations, telehealth, and surgical operations; (2) wearable and implantable medicine, including implantable living pharmacies; (3) home ICU, hospital systems, and elderly care; and (4) medical sensing, imaging, and reconstruction. This report calls for a fundamental shift in how next-generation medical technologies are conceived, designed, validated, and translated into practice. The report recommends that NSF sustain investment in shared standardized data infrastructures and compute infrastructures, develop clinic workflow-aware systems and human-AI collaboration frameworks, promote scalable validation ecosystems grounded in objective, continuous measures, and physics-informed, and enable safe, accountable, and resilient platforms, including virtual-physical healthcare ecosystems, to de-risk translational pathways. The workshop information can be found on the website: https://sites.google.com/view/nsfworkshop.

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