Health IT outsourcing demands rise
The global healthcare IT outsourcing market is forecast to grow at a compound annual growth rate of 7.6 percent, to reach $50.4 billion by 2018 from $35 billion in 2013, according to a new RnR Market Research report.
The health insurance industry, healthcare systems industry, and pharmaceutical industry are driving the outsourcing market. These industries are looking to the 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, according to the report: Healthcare IT Outsourcing Market – By Application [Provider (EHR, RCM, LIMS) Payer (CRM, Claims Management, Fraud Detection, Billing) Life Science (ERP, CTMS, CDMS) Operational (SCM, BPM) & Infrastructure (IMS, Cloud Computing)] & Industry – Global Forecast To 2018.
Outsourcing of healthcare IT solutions has emerged as a way to mitigate rising healthcare costs and to meet the growing demand for quality care, the researchers concluded. Over the years, the trend of outsourcing healthcare IT solutions has grown significantly among large organizations and has also attracted mid-sized organizations. In some cases, the entire information management system is outsourced, while in others, only key application services such as implementation of EMR, CRM and billing systems are outsourced.
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The report segments the healthcare IT outsourcing market by application and by industry. The application market is further classified as provider IT outsourcing, payer IT outsourcing, life science IT outsourcing, operational IT outsourcing, and infrastructure IT outsourcing, while the market by industry is segmented as healthcare – which includes hospitals, diagnostic laboratories and clinics – biotechnology, pharmaceutical, clinical research organizations and health insurance.
The research showed that 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 the life science segment. Lack of in-house IT expertise, rise in demand for integrating solutions, growing pressure on healthcare providers to meet the government's meaningful use criteria, new ICD-10 conversion guidelines for coding, rise in aging population and growing medical tourism in Asia are also likely to drive the outsourcing market, officials say.
[See also: Health IT worker shortage looms.]
However, factors such as the fragmented nature of the healthcare system and healthcare IT outsourcing market, requirement for high investment in outsourcing IT solutions, growing concern for data security and cultural and language barriers restrain the growth of the market.
North America accounts for the largest share, 72 percent, of the global healthcare IT outsourcing market and is expected to reach $36 billion by 2018 from $25 billion in 2013. Asia-Pacific and rest of the world are expected to register CAGRs of 8.1 percent and 7.8 percent (2013 to 2018) respectively, followed by North America at 7.6 percent and Europe at 7.2 percent.
Major players in the market are Accenture (Ireland), Accretive Health, Inc. (U.S.), Allscripts Healthcare Solutions, Inc. (U.S.), Anthelio Healthcare Solutions (U.S.), Cognizant Technology Solutions (U.S.), Dell, Inc. (U.S.), HCL Technologies (India), Hewlett-Packard Company (U.S.), IBM (U.S.), Infosys Limited (India), McKesson Corporation (U.S.), Siemens Healthcare (Germany), Tata Consultancy Services Ltd. (India), Wipro Ltd. (India), Xerox Corporation (U.S.), Epic System (U.S.), and Computer Sciences Corporation (U.S.).