A new report by MarketsandMarkets recently estimated the healthcare IT outsourcing market value will be $50.4 billion by 2018. What is driving this significant growth in the healthcare marketplace? The global market is forecast to grow at a compound annual growth rate (CAGR) of 7.6%, to reach $50.4 billion by 2018 from $35 billion in 2013. Many industry observers are suggesting that the growth is fueled by outsourcing’s ability to provide an efficient solution for mitigating rising healthcare costs and for helping to meet the growing demand for quality care.
Over the past few years, the trend of healthcare IT outsourcing solutions has grown significantly among large organizations and has also attracted mid-sized companies. In some cases, the entire information management system is outsourced, while in others, only key application services, such as implementation of electronic health records (EHR), revenue cycle management and billing functions are outsourced.
Outsourcing organizations are able to operate multiple delivery centers around the globe. They provide an in-depth understanding of the healthcare industry which enables them to provide innovative end-to-end business process outsourcing solutions to their clients. They assist their clients by leveraging this specialized industry expertise and offering comprehensive services through highly skilled professionals, and proprietary workflow engines.
Factors propelling the growth of the market are the rising pressure to curb healthcare costs across the globe and the growing need to manage cash flow in back-office administration and IT management systems of healthcare provider, payers, and life science companies. Other factors that are likely driving this rise in demand for outsourcing include: lack of in-house IT expertise, rise in the demand for integrating new solutions and growing pressures on healthcare providers to meet Meaningful Use criteria, new ICD-10 conversion guidelines for coding and the rise in an aging population.
The various markets for this report have been segmented by application and by industry. The applications market for healthcare are classified as: healthcare provider, healthcare IT outsourcing company, healthcare payer, IT outsourcing – life sciences, healthcare IT outsourcing – operational and IT outsourcing – infrastructure. The healthcare market is further segmented facilities: hospitals, diagnostic laboratories, clinics, biotechnology, pharmaceuticals, clinical research organizations, and health insurance companies.
Most Frequently Outsourced Applications:
Electronic Health Records
Revenue Cycle Management System
Laboratory Information and Management System
Pharmacy Information and Management System
The health insurance industry, healthcare systems industry, and pharmaceutical industry are driving the IT outsourcing market. These industries follow the healthcare IT outsourcing model to enhance their focus on core business, reduce operational and maintenance costs, increase access to IT skilled and trained staff (further reducing hiring and training costs), share risk, and quickly implement new technologies.
North America accounts for the largest share — 72% – of the global healthcare IT outsourcing market and is expected to reach $36 billion by 2018 from $25 billion in 2013. Asia-Pacific and the rest of the world are expected to register CAGRs of 8.1% and 7.8% (2013 to 2018) respectively, followed by North America (7.6%), and Europe (7.2%).