Healthcare IT market set to grow bigger, pegged at USD 104.5 billion by 2020

The global healthcare IT market is anticipated to reach USD 104.5 billion by 2020

the global healthcare payer services market for the forecast period of 2015 to 2020. This market is expected to reach USD 21.1 Billion by 2020 from USD 11.8 Billion in 2015 at a CAGR of 12.2% during the forecast period.

The global healthcare payer services market is segmented on the basis of service type, application, end user and region.Based on service type, the healthcare payer services (outsourcing) market is segmented into BPO services, ITO services, and KPO services. In 2015, BPO services are estimated to account for the major share of the healthcare payer services market.Based on application, the market is segmented into claims management services, member management services, provider management services, integrated front office services & back office operations, billing & accounts management services, analytics & fraud management services, and HR services. In 2015, the claims management services segment is estimated to account for the major share of the healthcare payer services market.On the basis of region, the market is divided into North America, Europe, Asia-Pacific, and the Rest of the World (RoW). In 2015, North America is expected to account for the largest share of the healthcare payer services market, followed by Europe and Asia-Pacific. North American market is slated to grow at the highest CAGR during the forecast period and serve as a revenue pocket for companies offering the healthcare payer services.

Cognizant Technology Solutions (U.S.), Accenture plc (Ireland), Concentrix Corporation (U.S.), ExlService Holdings, Inc. (U.S.), Xerox Corporation (U.S.), (Ireland), Genpact Limited (U.S.), Hewlett-Packard (U.S.), Hexaware Technologies Limited (India), FirstSource Solutions Limited (India). HCL Technologies Ltd. (India), Teleperformance Group (France), Hinduja Global Solutions Ltd. (India), SourceHOV (India), Sutherland Global Services (U.S.), and Wipro Limited (India) are some of the key players involved in providing healthcare payer outsourcing services worldwide.

Healthcare IT market set to grow bigger, pegged at USD 104.5 billion by 2020 pic.twitter.com/qyqlSAiggK

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business process outsourcing solutions to healthcare organisations, has set its eye on the Indian healthcare sector.

  • Omega Healthcare Management Services
  • e-care India
  • Medusind Solution
  • Nissi Billing
  • Vee Technologies
  • GeBBS Healthcare Solutions

Healthcare IT Market

Cognizant Technology Solutions (U.S.), Accenture plc (Ireland), Concentrix Corporation (U.S.), ExlService Holdings, Inc. (U.S.), Xerox Corporation (U.S.), (Ireland), Genpact Limited (U.S.), Hewlett-Packard (U.S.), Hexaware Technologies Limited (India), FirstSource Solutions Limited (India). HCL Technologies Ltd. (India), Teleperformance Group (France), Hinduja Global Solutions Ltd. (India), SourceHOV (India), Sutherland Global Services (U.S.), and Wipro Limited (India)

Increasing geriatric population prone to chronic diseases resulting into high patient base is triggering the demand for sophisticated healthcare facilities. Furthermore, increasing number of patients requiring home healthcare acts as an effective growth driver for this market.According to a report published by the U.S. Centers for Disease Control and Prevention (CDC) in 2011, the number of patients needing home healthcare was nearly 4.7 million in the U.S. and is on a constant rise, which is further expected to fuel the healthcare IT market demand.

Electronic Health Records (EHR) is expected to register an upward shift to reach up to USD 26.72 billion in 2020. Growth is primarily driven by the rising demand for integrated information system in the field of healthcare IT. Faster accessibility and low maintenance cost are the two most significant factors contributing towards the rising demand of these EHR systems.In 2013, North America market was valued at around USD 20.0 billion owing to the factors such as favorable government initiatives pertaining to the introduction of technologically advanced healthcare IT facilities, sophisticated healthcare infrastructure, and increasing patient awareness levels coupled with relatively higher healthcare expenditures in the region.On the other hand, Asia Pacific healthcare IT market is expected to reach at over USD 19.6 billion by registering lucrative growth rate in 2020. Growth is attributed to the rising healthcare expenditure, larger untapped opportunities, and growing disposable income level.Prominent players operating in this industry include Athenahealth Inc., GE Healthcare, Agfa Healthcare, Philips Healthcare, E-MDS Inc., Carestream Health McKesson Corporation, Carestream Health eClinicalworks, and Hewlett-Packard.Grand View Research has segmented the global healthcare IT market on the basis of application and region:

Healthcare IT Application Outlook (Market Revenue in USD Million, 2012  2020

    1. Electronic Health Records
    2. Computerized Provider Order Entry Systems
    3. Electronic Prescribing Systems
    4. PACS
    5. Lab Information Systems
    6. Clinical Information Systems
    7. Telemedicine and Telehealth
    8. Others

    Healthcare IT Regional Outlook (Market Revenue in USD Million, 2012  2020)

      1. North America
      2. Europe
      3. Asia Pacific
      4. Rest of the World

      Healthcare has become one of India’s largest sectors – both in terms of revenue and employment. Healthcare comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The Indian healthcare sector is growing at a brisk pace due to its strengthening coverage, services and increasing expenditure by public as well private players.

      Indian healthcare delivery system is categorised into two major components – public and private. The Government, i.e. public healthcare system comprises limited secondary and tertiary care institutions in key cities and focuses on providing basic healthcare facilities in the form of primary healthcare centers (PHCs) in rural areas. The private sector provides majority of secondary, tertiary and quaternary care institutions with a major concentration in metros, tier I and tier II cities.

      India’s competitive advantage lies in its large pool of well-trained medical professionals. India is also cost competitive compared to its peers in Asia and Western countries. The cost of surgery in India is about one-tenth of that in the US or Western Europe.

      Market Size

      The overall Indian healthcare market today is worth US$ 100 billion and is expected to grow to US$ 280 billion by 2020, a compound annual growth rate (CAGR) of 22.9 per cent. Healthcare delivery, which includes hospitals, nursing homes and diagnostics centers, and pharmaceuticals, constitutes 65 per cent of the overall market.

      There is a significant scope for enhancing healthcare services considering that healthcare spending as a percentage of GDP is rising. Rural India, which accounts for over 70 per cent of the population, is set to emerge as a potential demand source.

      India requires 600,000 to 700,000 additional beds over the next five to six years, indicative of an investment opportunity of US$ 25-30 billion. Given this demand for capital, the number of transactions in the healthcare space is expected to witness an increase in near future. The average investment size by private equity funds in healthcare chains has already increased to US$ 20-30 million from US$ 5-15 million#.

      The Indian medical tourism industry is pegged at US$ 3 billion per annum, with tourist arrivals estimated at 230,000. The Indian medical tourism industry is expected to reach US$ 6 billion by 2018, with the number of people arriving in the country for medical treatment set to double over the next four years.

      Investments

      The hospital and diagnostic centers attracted Foreign Direct Investment (FDI) worth US$ 3.14 billion between April 2000 and June 2015, according to data released by the Department of Industrial Policy and Promotion (DIPP).

      Some of the major investments in the Indian healthcare industry are as follows:

      • Mylan Inc signed a deal to acquire the female health care businesses of Famy Care Limited, a specialty women’s health care company, for US$ 750 million in cash and additional contingent payments of up to US$ 50 million.
      • Apollo Hospitals Enterprise (AHEL) plans to add another 2,000 beds over the next two financial years, at a cost of around Rs 1,500 crore (US$ 225.28 million).
      • Malaysia-based IHH Healthcare Berhad has agreed to buy 73.4 per cent stake in Global Hospitals Group, India’s fourth-largest healthcare network, for Rs 1,284 crore US$ 192.84 million.
      • Temasek Holdings Pte Limited acquired the entire 17.74 per cent stake of Punj Lloyd Limited in Global Health Private Limited, which owns and operates the Medanta Super Specialty Hospital in Gurgaon.
      • CDC, a UK based development finance institution, invested US$ 48 million in Narayana Hrudayalaya, a multi-speciality healthcare provider. With this investment, Narayana Health will expand affordable treatment in eastern, central and western India.
      • Apollo Health and Lifestyle Limited (AHLL), a wholly-owned subsidiary of Apollo Hospitals Enterprise, acquired Nova Specialty Hospitals at an estimated cost of Rs 135-145 crore (US$ 20.3-21.8 million).
      • IHH Healthcare Berhad acquired a controlling 51 per cent equity stake in Hyderabad-based Continental Hospitals Limited for about approximately US$ 45.4 million.
      • Sanofi-Synthelabo (India) Limited invested Rs 90 crore (US$ 13.52 million) in Apollo Sugar Clinics Limited (ASCL), a unit of its subsidiary Apollo Health and Lifestyle Limited.
      • AHEL entered into a definitive agreement worth US$ 9 million to acquire 51 per cent in Assam Hospitals Limited (AHL), which runs a 220-bed hospital in Guwahati.
      • Carlyle Group acquired a stake in Metropolis Healthcare Limited, an operator of pathology laboratories in India, for an undisclosed sum.

      Government Initiatives

      India’s universal health plan that aims to offer guaranteed benefits to a sixth of the world’s population will cost an estimated Rs 1.6 trillion (US$ 24.03 billion) over the next four years.

      Some of the major initiatives taken by the Government of India to promote Indian healthcare industry are as follows:

      • The Competition Commission of India (CCI) in its meeting has approved the proposed merger between Sun Pharma and Ranbaxy, subject to the parties inter alia carrying out the divestiture of their products relating to seven relevant markets for formulations.
      • India and Sweden celebrated five years of Memorandum of Understanding (MoU). The cooperation in healthcare between India and Sweden will help in filling gaps in research and innovative technology to aid provisioning of quality healthcare.
      • Mr J P Nadda, Union Minister for Health & Family Welfare, Government of India has launched the National Deworming initiative aimed to protect more than 24 crore children in the ages of 1-19 years from intestinal worms, on the eve of the National Deworming Day.
      • Under the National Health Assurance Mission, Prime Minister Mr Narendra Modi’s government would provide all citizens with free drugs and diagnostic treatment, as well as insurance cover to treat serious ailments.
      • All the government hospitals in Andhra Pradesh would get a facelift with a cost of Rs 45 crore (US$ 6.76 million), besides the establishment of 1,000 generic medical shops across the State in the next few months.
      • Mission Indradhanush launched by Mr JP Nadda aims to immunise children against seven vaccine preventable diseases namely diphtheria, whooping cough, tetanus, polio, tuberculosis, measles and hepatitis B by 2020. Government has set a target of 95 per cent immunisation cover by end of 2016.
      • The E-health initiative, which is a part of Digital India drive launched by Prime Minister Mr Narendra Modi, aims at providing effective and economical healthcare services to all citizens. The programme aims to make use of technology and portals to facilitate people maintain health records and book online appointments with various departments of different hospitals using eKYC data of Aadhaar number.

       Road Ahead

      India is a land full of opportunities for players in the medical devices industry. The country has also become one of the leading destinations for high-end diagnostic services with tremendous capital investment for advanced diagnostic facilities, thus catering to a greater proportion of population. Besides, Indian medical service consumers have become more conscious towards their healthcare upkeep.

      India’s competitive advantage also lies in the increased success rate of Indian companies in getting Abbreviated New Drug Application (ANDA) approvals. India also offers vast opportunities in R&D as well as medical tourism. To sum up, there are vast opportunities for investment in healthcare infrastructure in both urban and rural India.

      Exchange Rate: INR 1 = US$ 0.01502 as on September 10, 2015

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