Report: Healthcare IT Outsourcing Market to Turn $50.4 Billion by 2018

The words healthcare and IT outsourcing seem to be from two different planets altogether, but the healthcare IT outsourcing market across the globe is not only alive, it is thriving. The market is forecasted to grow at an astounding compound annual growth of about 7.6% by 2018. In other terms, the global industry is estimated to reach a $50.4 billion evaluation by 2018.

The numbers stem from three reports –published by RnR market research,, and Research and Markets.

Factors that influence the growth of healthcare IT outsourcing

Production of enormous data: The healthcare industry as a whole produces incredible amounts of data every single day. Between patient records, billing codes and other data, the term big data aptly describes the healthcare data output. The industry would have to expend immense resources just to perform basic functions like electronically track data related to billing codes, medical records, patient care and electronic monitoring systems.

Lack of IT in-house expertise: In an effort to manage and access this invaluable data, the healthcare industry would further have to rely on devices and information technology infrastructure like personal digital assistants or PDAs, networks, servers, desktops and laptops. The healthcare industry, however, is not inherently staffed with IT domain expertise members and the lack of the required skills puts another layer of strain on the process of managing data.

Advantages of IT outsourcing: Thus began the heavy dependence on IT infrastructure outsourcing and specialized IT services in the healthcare field. Engaging the IT services through outsourcing meant that the healthcare industry could have access to data without all the hassles of managing the data. The healthcare industry could finally focus all its energies on its core service areas, specifically healthcare. Quality care and reduced costs allowed the healthcare industry to flourish.

The outsourcing industry has slowly but steadily gained popularity as a business model that significantly reduces the burdens of administration, accounting, procurement, logistics and various other such tasks. While the outsourcing model was easy to adapt to various industries, the healthcare industry was reluctant to part with their confidential data, even for outsourcing.

Cost effectiveness, however won out in the end and it is one of the major driving forces behind outsourcing itself as an industry. The healthcare industry is no different from any other industry and has now begun to rely heavily on the IT outsourcing limbs of the industry.

Healthcare IT outsourcing market share according to report

North America including USA and Canada hold the largest share in the global healthcare IT outsourcing market.

According to a report published by, North America enjoys a whopping share of 72% of the global the market and is all set to reach $36 billion by 2018. In 2013 the region only had a market worth $25 billion.

Reasons for the large share of the market

Although there are several reasons for the unusually large share of the market that the continent seems to own, the impetus to cut healthcare costs is the foremost reason.

The cash flow in the back office administration tasks is one of the first sectors in the industry to take a budget cut when under financial constraints. Amongst the other reasons are:

  • The growing aging population now covered under healthcare insurance policies according to the HIPPA Act
  • Larger medical tourism in Asia
  • Lack of in-house experts in the IT field
  • ICD 10 guidelines meant for coding
  • Higher demand for integrative solutions
  • Higher pressure on the healthcare industry to meet the government’s meaningful use criteria
  • Application development
  • IT management systems of life sciences, healthcare providers and payers

Irrespective of whether small processes like CRM, EMR and billing systems are the only processes being outsourced or the entire information management system is being outsourced, the IT sector in the healthcare industry is definitely getting healthier by the day.

Major players in the healthcare IT outsourcing market

The report states that the companies listed below are major players in the healthcare IT outsourcing market:

  • Accenture Plc.
  • Cognizant Technology Solutions
  • Dell, Inc.
  • Wipro Ltd. (India)
  • HCL Technologies
  • Hewlett-Packard Company
  • International Business Machines (IBM) Corporation
  • Infosys Limited (India), McKesson Corporation
  • Tata Consultancy Services Ltd.
  • Siemens Healthcare (Germany)
  • Xerox Corporation

Healthcare IT outsourcing challenges

While there are factors driving the IT outsourcing industry in the healthcare sector, there are also several factors that are hindering the success of the outsourcing ventures.

Here is a list of the factors that are hindering outsourcing:

  • Fragmented nature of the healthcare system and the IT outsourcing market for the system
  • Concerns of data security as the volume of data increases exponentially
  • Cultural and language barriers restraining the growth of the industry

Despite all the minor setbacks, the IT outsourcing industry is thriving and well as the market research has indicated.

Latest Columns

Portugal sets sights at a high BPM maturity level

Portugal is fast emerging as the BPO domain of Europe with the rapid strides taken by the country in this industry. The record improvements made in the progress of the outsourcing sector have aided the country in inching its way to a high BPM maturity level. In spite of the fact that the unemployment level […]

6 think tanks of Indian BPO industry announced

November 30, 2011: Swami Swaminathan, CEO Infosys BPO and Milind Godbole, Asia Pacific President Aditya Birla Minacs are among the six eminent personalities who made it to the Indian BPO industry’s maiden ‘India 6 (I6)’ think tank. I6 is promoted as the Indian counter part of the admired ‘G6’ think tanks organized by the Shared […]

Speak Your Mind