The global healthcare IT outsourcing market is growing at a compound annual growth rate of 12% and may reach a value of $68 billion in 2020, according to the latest study by Everest Group.
Changing regulatory laws, consumerization and convergence of care financing and delivery are the factors driving the market. Changing regulatory laws in particular are forcing healthcare payers to alter their operating models and rethink technology initiatives.
The report finds mid-sized providers leading market activity and increasingly looking to service providers for cost-effective ways to respond to regulatory demands.
Technology firms are finding more demand for their services as healthcare players increasingly attempt to shift from business-to-business to business-to-consumer marketing and service models.
“The duress they face is driven by a fundamental market shift in which individual consumers exhibit increased ownership of health outcomes,” the report noted.
Most of the IT outsourcing contracts signed in the recent past are related to addressing remediation, claims processing and the modernization of legacy systems.
“Two significant forces are fundamentally altering health plan business models. First, the healthcare industry is grappling with the uncertainty of reform mandates such as the PPACA (Obamacare) and the transition to ICD-10,” said Jimit Arora, vice president at Everest Group.
“Secondly, as consumers assume greater ownership, control and responsibility for their health outcomes, payers need to revisit their customer acquisition strategies. They are looking to digital enablers of real-time consumerization — big data, analytics, cloud, and social media — to transform their marketing and customer service approaches to consumer-centric models.”
One of the largest IT services providers to the healthcare sector is Cognizant. Reports say nearly 25% of its revenue comes from healthcare sector.