Technology Spending on Core Administration in Healthcare Market to Expand at a Modest CAGR of 5.7% by 2024

The field of core administration solutions for the healthcare industry is highly fragmented owing to the presence of a large number of established players offering hardware, software, and services, says Transparency Market Research in a recent report. Considering the vast growth opportunities in developing regions such as India, Brazil, and China, players are focusing on diversification opportunities across these countries through mergers, acquisitions, and consolidation practices. To encash the vast growth opportunities in the core administration segment in the healthcare industry, owing to various government norms like Obamacare or Affordable Care Act (ACA), competitors are also focusing on extensive product development to offer differentiated services.

According to Transparency Market Research, the global technology spending on core administration in healthcare market sector will exhibit a 5.7% CAGR over the period between 2016 and 2024, rising from US$25,900 mn in 2015 to US$42,317 mn by 2024.

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Of the key end users of core administration solutions in the healthcare industry, the payers segment accounted for over 88% of the overall market in 2015 and is expected to remain the key driver of technology spending on core administration in the healthcare industry throughout the forecast period. Geographically, North America dominated, accounted for over 50% of the overall funds spent on enabling technologically advanced core administration solutions in the healthcare industry in 2015. The trend is expected to remain strong over the forecast period as well.

Rising Demand for Value-based Reimbursement Modules to Drive adoption of IT Solutions in Healthcare

Rising convergence of a variety of digital platforms for managing and processing the ever-expanding healthcare data, continuously changing healthcare reimbursement reforms and regulations, and digitally empowered consumers are collectively making the healthcare administration space increasingly complex. While at one point cost competition is at the peak in the healthcare industry, payers (insurance agencies) are pressing healthcare providers to switch from a volume-based (payment for service) to a value-based reimbursement module (payment for value).

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By requiring that healthcare providers deliver services at lowest costs to patients, value-based reimbursement modules entail more financial risks for providers and critically necessitate the effective management of core administrative processes to cut costs. The situation demands a robust IT infrastructure and an integrated platform wherein the payers can streamline workflows for provider contracting and engagement. In the next few years, the increased need for such platforms will emerge as one of the key drivers of technology spending on core administration in the healthcare sector.

Outdated Technology and Applications Discourage Technological Advancements in Healthcare IT Infrastructure

However, the overall global spending on technology for core administration in the healthcare sector is expected to be negatively impacted due to factors such as the presence of outdated technology and applications across several data collection and delivery nodes, continuously changing healthcare reforms, and ever-changing ways of financial transactions.

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The inability of healthcare professionals in using complex or time-consuming features in technologically advanced digital healthcare applications is another key factor deterring the adoption of IT solutions for managing core administrative processes in the healthcare sector. The use of IT solutions by health professionals is growing at a steady pace globally, but it is not uniform. A substantial gap exists between the numbers of providers, which is relatively small presently, the number of consumers who actively use the Internet for any purpose, which is on rise at a rapid pace, and the much larger group of patients and healthcare providers that has not used it or cannot use it.

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Technology Spending on Core Administration in Healthcare Market, Research Report

The technology spending on core administration in healthcare market is fairly fragmented with the presence of numerous established players offering software, hardware, and services, according to a research report by Transparency Market Research (TMR). Prominent companies operating in this market are Plexis Healthcare Systems, HealthEdge Software, Inc., DST Systems, Inc., ikaSystems Corporation, Health Solutions Plus, Inc., and TriZetto Corporation. Companies intending to consolidate their shares are pursuing diversification opportunities in developing markets such as India, Brazil, and China, notes TMR. Leading players are capitalizing on the abundant growth opportunities emerging across the core administration segment in the healthcare industry in developed and developing regions. In addition, numerous comprehensive healthcare reforms initiated by governments of various countries, such as the Affordable Care Act (ACA) in the U.S., have led many players to focus on developing an extensive product portfolio to gain a competitive edge over others.

According to TMR’s estimation, the global technology spending on core administration in the healthcare market sector is anticipated to expand at 5.7% CAGR during 2016 – 2024. The market was valued at US$25,900 mn in 2015 and is estimated to attain US$42,317 mn by 2024.

This 221 page report gives readers a comprehensive overview of the technology spending on core administration in healthcare market. Browse through 42 data tables and 113 figures to unlock the hidden opportunities in this market: http://www.transparencymarketresearch.com/technology-spending-administration-healthcare-market.html

Need for Patient-Centric Measures to Stimulate Technology Spending

On the basis of geography, the global technology spending on core administration in healthcare market is segmented into North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa. Of these, North America dominates the market and is expected to lead along the forecast period. The growth is attributed to the substantial funds devoted toward making core administration in the healthcare industry technology-rich; over 50% of the funds spent on enabling technologies for core administration in the healthcare sector was contributed by North America in 2015. The paucity of resources in the healthcare sector to undertake patient-centric measures, coupled with the absence of skilled healthcare staff for administrative processes, has made it imperative for policymakers in the region to encourage technology spending.

Based on end users, the global technology spending on core administration in healthcare market is segmented into payers and providers; the payers, majorly consisting of insurance providers and the government agencies, accounted for a major market share in 2015. Over the forecast period, the end-use market is anticipated to remain the most lucrative and is expected to rise at 5.9% CAGR from 2016 to 2024. Insurance providers are increasingly adopting value-based reimbursement (VBR) models, which has transformed payer-provider relationship; shifting from volume-based to value-based has resulted in streamlining workflows for provider contracting and engagement. As a result, healthcare providers are impelled to cut down their core administrative costs in order to provide quality care at an affordable cost. This has stimulated technology spending on core administrative processes in the healthcare sector.

Boosting Healthcare IT Infrastructure Spending Imperative for Quality Care

The rising convergence of various digital platforms across a variety of delivery nodes, the impending need for managing the growing volumes of healthcare data, and a constantly changing healthcare reimbursement scenario have led to the demand for technology spending in healthcare. In addition, the growth in the healthcare sector is crippled due to the absence of automated technologies and lack of technological expertise among healthcare professionals.

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With the advancement in healthcare IT infrastructure, the adoption of IT solutions by providers has increased; however, the pace is not uniform across various regions. The significant lack of awareness for automated IT technologies among patients and healthcare providers, especially small-sized players, has negatively impacted the market. This has affected the quality of care and catapulted the cost of healthcare delivery. Hence, to bridge the gap between quality healthcare and affordable cost of delivery, the players in the healthcare industry are increasingly focused on augmenting technology spending on core administrative processes and reap significant benefits.

The study presented here is based on a report by Transparency Market Research (TMR) titled “Technology Spending on Core Administration in Healthcare Market (Solution - In-house (Hardware, Software, and Services) and Outsource; Deployment - Cloud-based and On-premise; End User - Payers (Insurance Companies and Government) and Providers (Hospitals)) - Global Industry, Size, Share, Growth, Trends and Forecast 2016 - 2024"