Healthcare IT market to reach $484 billion by 2026
Amid the COVID-19 crisis, the global market for healthcare IT estimated at $276.8 billion in the year 2022, is projected to reach a revised size of $484 billion by 2026, growing at a CAGR of 15.1% over the analysis period, according to Global Industry Analysts.
Services, one of the segments analyzed in the report, is projected to grow at a 15.2% CAGR to reach $306.8 billion by the end of the analysis period. After a thorough analysis of the business implications of the pandemic and its induced economic crisis, growth in the Software segment is readjusted to a revised 15.8% CAGR for the next 7-year period. This segment currently accounts for a 29.5% share of the global healthcare IT market.
Governments across the world are focusing efforts on promoting the use of information technology (IT) in hospitals. Increasing government support for healthcare IT in the form of stimulus packages and initiatives such as ARRA (American Recovery and Reinvestment Act); introduction of healthcare reforms such as ICD-10, and ACOs; government policies aimed at lowering healthcare costs such as PPACA; and increasing automation of healthcare organizations are all favoring growth in the healthcare IT market.
Healthcare technology aims at enhancing outcomes and improving community health and care quality. Technology is only a tool to support healthcare and a sustainable success necessitates a clear vision, proper publicly defined scale, communication of plans, user engagement and buy-in, accountability and schedule for implementation, along with post-live optimization. Rapid increase in applications and devices is leading to a new realism in healthcare.
IoT is set to proliferate into almost all areas of human life including healthcare, increasing its efficiency. However, technology developments in healthcare are also creating challenges, especially in terms of vulnerability and risks. Ensuring the performance and availability of healthcare services right through hospital networks, clinics, medical buildings, insurer/payer systems and in public/private cloud data centers is also critical. Network services would become virtualized, while enterprises are expected to turn into ‘as-a-service’ model in the next few years.
Currently, around one-third of the enterprises are employing ‘as-a-service solutions. In fact, a number of healthcare applications are currently available and are implemented ‘as a service,’ especially EMR solutions. The use of cloud storage ‘as a service’ is also growing on account of its agility and flexibility, which is essential for maintaining multitude of large imaging files.
Healthcare applications are rapidly gaining importance as disruptions are not tolerated and could impact patient care. Studies indicate that approximately 40% of the companies are using the services of two or more public cloud providers, largely to prevent disruptions, leading to delay and loss of time.
The U.S. healthcare IT market is estimated at $100.3 billion in 2022
The healthcare IT market in the U.S. is estimated at $100.3 billion in the year 2022. The country currently accounts for a 36.2% share in the global market. China, the world’s second largest economy, is forecast to reach an estimated market size of $29.4 billion in the year 2026 trailing a CAGR of 22% through the analysis period.
Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 12.5% and 14.5% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 14.6% CAGR while Rest of European market (as defined in the study) will reach $34.5 billion by the end of the analysis period.
The COVID-19 situation prompted a large number of healthcare practices and hospitals to embrace virtual care, with federal and state governments announcing wavers and changes to existing guidelines for removing barriers to virtual service payments. The fraction of Medicare primary care visits handled using the virtual technology increased dramatically from just 1% from the pre-pandemic phase to around 43.5% during the outbreak.
The technology was adopted by private insurers as well as acute care patients to interact with their family members. With enhanced patient satisfaction rate with remote visits, virtual modalities including telehealth are poised to witness increasing uptake in the post-pandemic phase.
The shift requires healthcare organizations to recognize that the rising competition from unconventional players like direct-to-consumer telehealth services is poised to limit their ability to fully control and own these service delivery pathways. These organizations are also required to rethink existing processes to accommodate low-cost delivery of digital services owing to reduced margins as a result of high competition along with pricing pressure.
Hardware segment to reach $61.4 billion by 2026
In the global hardware segment, USA, Canada, Japan, China and Europe will drive the 13.2% CAGR estimated for this segment. These regional markets accounting for a combined market size of $22.6 billion will reach a projected size of $53.9 billion by the close of the analysis period. China will remain among the fastest growing in this cluster of regional markets.
Led by countries such as Australia, India, and South Korea, the market in Asia-Pacific is forecast to reach $5.4 billion by the year 2026, while Latin America will expand at a 15% CAGR through the analysis period.