North American Healthcare IT Market by Products & Services (Healthcare Provider Solutions, Healthcare Payer Solutions & HCIT Outsourcing Services), Component (Services, Software, Hardware), End User (Hospitals, ASC, Payers) & Region - Global Forecast to 2027
Updated on : March 06, 2023
The global north american healthcare IT market in terms of revenue was estimated to be worth $193.2 billion in 2022 and is poised to reach $496.7 billion by 2027, growing at a CAGR of 20.8% from 2022 to 2027. The factors of opportunistic market growth include growing adoption of e-prescribing, telehealth, mHealth, and other HCIT solutions due to COVID-19, increasing adoption of mHealth, telehealth, and remote patient monitoring solutions, and the need to maintain regulatory compliance. However, interoperability issues and security concerns is challenging the growth of the global market to a certain extent.
Global North American Healthcare IT Market Trends
e-estimated, p-projected
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North American healthcare IT Market Dynamics
Drivers: Growing need to curtail escalating healthcare costs
The overall cost of healthcare delivery has grown significantly in the past few decades. Increasing health insurance premiums, growing demand for quality healthcare services, the increasing number of elderly people, and the growing incidence of chronic disorders are driving the demand for healthcare services across North America. Other factors contributing to the high expenditure on healthcare services include patient readmissions, medical errors, and administration costs.
According to a CMS report, health spending in the US grew 9.7% in 2020, reaching USD 4.1 trillion or USD 12,530 per person. Projected demographic changes and increased spending on public pensions are expected to increase healthcare spending over the next 20 to 50 years. According to the UN Population Division, the aging population in North America is set to increase from 880 million in 2011 to 2 billion by 2050, representing 22% of the world’s population. If left unchecked, healthcare spending is expected to increase by 25% by 2030, largely because of the aging population. Currently, the US is facing major challenges in countering the rising healthcare costs.
The CMS projected that, by 2028, healthcare spending would reach USD 6.19 trillion and account for 19.7% of the GDP, up from 17.7% in 2018. Before the COVID-19 pandemic, the agency had projected health spending would continue to grow at a rate of 5.4% per year, reaching nearly USD 6.2 trillion by 2028. If those increases continue unabated over the next 20 years, health spending can reach USD 11.8 trillion by 2040. According to an OECD study on healthcare expenditure, the US spends 43% more on healthcare than Switzerland (ranked second) and 66% more than Norway (ranked third). With the increase in healthcare spending, the purchasing power of the end users will also increase, leading to an increase in the adoption of these solutions in the coming years.
Governments and healthcare systems in North America are focusing on controlling soaring healthcare costs by minimizing patient readmissions, medical errors, and administration costs with the effective utilization of various healthcare IT solutions. The successful adoption and implementation of healthcare IT solutions are expected to save billions of dollars for healthcare systems by ensuring smoother workflows, better care coordination, as well as reduced labor costs and compliance risks. The US Department of Health and Human Sciences estimates that the widespread adoption of healthcare IT solutions will result in annual savings worth USD 80 billion to USD 100 billion by automating care delivery systems and another USD 100 billion by reducing medical errors and wastage throughout the healthcare system.
Restraints: High cost of deployment of healthcare IT solutions for small and mid-sized organizations
The cost of various healthcare IT solutions is considerably high, making it difficult for small and medium-sized healthcare organizations to implement them. This is mainly due to difficulties in implementing multiple networks with health setups, a lack of wireless connectivity options, and the need to install subsequent security layers to avoid data breaches. Moreover, support and maintenance services, which include modifying and upgrading software as per changing user requirements, represent a recurring expenditure that accounts for a large share of the total cost of ownership. Also, post-sales custom interface development for device integration requires additional verification and validation to ensure solution accuracy and completeness. This further increases the total cost of ownership for healthcare providers. Small hospitals and healthcare organizations cannot afford these additional costs.
Considering the lack of internal IT expertise in the healthcare industry, it is essential to provide training to end users to maximize the efficiency of interoperability solutions. This, in turn, adds to the cost of deploying connectivity solutions for healthcare organizations. In addition to the high total cost of ownership, procurement decisions among healthcare organizations are also affected because it is difficult to evaluate the impact and benefits of interoperability solutions in healthcare settings. Also, the infrastructural costs for implementing EHR systems and associating them with different devices with distinct interfaces are major obstacles for this market, especially in emerging regions. Hospitals often prefer investing in core technologies directly linked to patient care quality rather than technologies for allied departments.
Opportunities: Rising use of healthcare IT solutions in outpatient care facilities
In response to the rising pressures on health systems to lower the cost of care, the industry is shifting towards outpatient settings to reduce care costs. It is estimated that a procedure performed in an outpatient surgery center costs 30–60% less than in inpatient hospital settings. In addition, convenience is another important factor driving the rise of ambulatory care. With the increase in outpatient settings and patient influx, the demand and usage of HCIT solutions in outpatient settings will increase.
According to a survey sponsored by United Health (US), around 10% of US hospitals had dedicated HCIT clinical documentation improvement programs for their outpatient settings. An additional 10% planned to implement these services in the next six months. Furthermore, 14% of hospitals planned to implement advanced solutions in the near future. This trend is expected to drive the use of HCIT solutions, such as RCM solutions, for outpatient settings in the coming years.
In addition, due to the benefits of HCIT solutions, various federal bodies also support deploying these solutions in outpatient care settings. For instance, in June 2021, the US government invested USD 80 million in creating a new public health informatics & technology program. This has boosted the adoption of HCIT solutions among stakeholders in outpatient care facilities to deliver better health services and help enhance patient outcomes. Furthermore, with the benefits of web-based management for constant care, many patients are now moving towards outpatient care needs.
Challenges: Increased data security concerns
Increased use of automated technologies, such as EHRs and medical claims processing, and the move towards healthcare integration and health information exchanges (HIEs) have helped expand the healthcare privacy and security landscape. Electronic exchange of patient data offers a greater reach and efficiency in healthcare delivery but has high-security risks due to the broader access offered.
Approximately one-third of data breaches result in medical identity theft in the healthcare industry, mainly due to the lack of internal control over patient information, outdated policies and procedures or non-adherence to existing ones, and inadequate personnel training. The HIPAA Journal recorded 712 healthcare data breaches in its 2021 breach list in the US, an increase of 10.9% over the total number of breaches tracked in 2020. Between 2009 and 2021, 4,419 healthcare data breaches of 500 or more records have been reported to the HHS Office for Civil Rights. Those breaches have resulted in the loss, theft, exposure, or impermissible disclosure of 314,063,186 healthcare records, which equates to more than 94.63% of the 2021 population of the US. In 2018, healthcare data breaches of 500 or more records were reported at around 1 per day. The rate has only doubled in the four years since. In 2021, an average of 1.95 healthcare data breaches of 500 or more records were reported daily. Thus, creating a secure communication platform is a major challenge faced by IT vendors catering to the healthcare industry. Potential security concerns related to healthcare IT systems may lead to a rise in the sense of insecurity among users and, hence, restrain their adoption until secure healthcare IT solutions are available in the market.
Healthcare provider solutions to register the highest growth in the product & service segment of North American healthcare IT market in 2021.
On the basis of product & service, the healthcare provider solutions segment to register highest growth. The high growth of this segment can be attributed to government initiatives to improve the quality of patient care and the need to improve the efficiency of healthcare services. The healthcare provider solutions segment is further divided into clinical and non-clinical HCIT solutions. The market for clinical solutions segment is growing owing to the rising demand for improved patient safety and patient care, stringent regulations regarding healthcare provider solutions, and the need for integrated healthcare systems.
Healthcare providers is the largest end user segment by healthcare providers in the North American healthcare IT market in 2021
Based on end user, the healthcare providers segment accounted for the largest share in the market during the forecast period. Factors such as stringent government regulations, and the need to improve patient care while increasing operational efficiency account for its large share. The increasing number of patients, hospitals, and ambulatory care centers and the strong purchasing power of hospitals are also driving the growth of this end-user segment.
US accounted for the largest share of the North American healthcare IT market during the forecast period.
In 2021, North America accounted for the largest share of the market. The large share of the US can be attributed to the large adoption of healthcare IT solutions in the region, stringent regulations regarding healthcare quality, and the increasing need to curtail the escalating healthcare costs through healthcare IT solutions.
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The products and services market is dominated by a few globally established players such as Cerner Corporation (US), Veradigm, Inc. (Allscripts Healthcare Solutions, Inc.) (US), Mckesson Corporation (US), Koninklijke Philips N.V. (Netherlands), Optum, Inc. (US), Oracle (US), Change Healthcare (US), Cognizant (US), GE Healthcare (US), Siemens Healthineers (Germany), Epic Systems Corporation (US), Athenahealth (US), Infor (US), Dell Technologies, Inc. (US), CVS Health (US), IBM (US), EClinical Works (US), Nextgen Healthcare, Inc. (US), Greenway Health, LLC (US), Nvidia Corporation (US).
North American Healthcare IT Market Report Scope
Report Metric |
Details |
Market size available for years |
2020–2027 |
Base year considered |
2021 |
Forecast period |
2022–2027 |
Forecast units |
Million/Billion (USD) |
Segments covered |
Product & Services, Component, End user, and region. |
Geographies covered |
US, Canada, Mexico |
Companies covered |
Cerner Corporation (US), Veradigm, Inc. (Allscripts Healthcare Solutions, Inc.) (US), Mckesson Corporation (US), Koninklijke Philips N.V. (Netherlands), Optum, Inc. (US), Oracle (US), Change Healthcare (US), Cognizant (US), GE Healthcare (US), Siemens Healthineers (Germany), Epic Systems Corporation (US), Athenahealth (US), Infor (US), Dell Technologies, Inc. (US), CVS Health (US), IBM (US), EClinical Works (US), Nextgen Healthcare, Inc. (US), Greenway Health, LLC (US), Nvidia Corporation (US). |
The study categorizes the North American healthcare IT market into following segments & Sub-segments:
By Product & Service
- Introduction
-
Healthcare Provider Solutions
-
Clinical Solutions
- Electronic Health Records
- Population Health Management Solutions
- Specialty Management Information Systems
- PACS & VNA
- Mobile Health Applications
- Healthcare IT Integration Solutions
- Telehealth Solutions
- Medical Image Analysis Systems
- Laboratory Information Systems
- Practice Management Systems
- Clinical Decision Support Systems
- E-prescribing
- Radiology Information Systems
- Computerized Physician Order Entry
- Cardiovascular Information Systems
- Patient Registry Software
- Infection Surveillance Solutions
- Radiation Dose Management Solutions
-
Non-Clinical Healthcare IT Solutions
- Healthcare Asset Management Solutions
-
Revenue Cycle Management Solutions
- Front-End RCM Solutions
- Mid-RCM Solutions
- Back-End RCM
-
Healthcare Analytics Solutions
- Clinical Analytics Solutions
- Financial Analytics Solutions
- Other Healthcare Analytics Solutions
- Customer Relationship Management Solutions
- Pharmacy Information Systems
- Healthcare Interoperability Solutions
- Healthcare Quality Management Solutions
-
Supply Chain Management Solutions
- Procurement Management Solutions
- Inventory Management Solutions
-
Medication Management Systems
- Electronic Medication Administration Systems
- Barcode Medication Administration Systems
- Medication Inventory Management Systems
- Medication Assurance Systems
- Workforce Management Solutions
- Financial Management Systems (Billing & Accounting)
- Healthcare Information Exchanges
- Medical Document Management Solutions
-
Clinical Solutions
-
Healthcare Payer Solutions
- Claims Management Solutions
- Population Health Management Solutions
- Pharmacy Audit and Analysis Solutions
- Payment Management Solutions
- Customer Relationship Management Solutions
- Member Eligibility Management Solutions
- Fraud Analytics Solutions
- Provider Network Management Solutions
-
HCIT Outsourcing Services
- IT Infrastructure Management Services
-
Payer HCIT Outsourcing Services
- Claims Management Services
- Provider Network Management Services
- Billing and Accounts Management Services
- Fraud Analytics Services
- Other Payer HCIT Outsourcing Services
-
Provider HCIT Outsourcing Services
- Revenue Cycle Management Services
- Medical Documents Management Services
- Laboratory Information Management Services
- Other Provider HCIT Outsourcing Services
-
Operational HCIT Outsourcing Services
- Supply Chain Management Services
- Business Process Management Services
- Other Operational IT Outsourcing Services
By Component
- Introduction
- Software
- Services
- Hardware
By End User
- Introduction
-
Healthcare Providers
- Hospitals
-
&Ambulatory Care Centers (Outpatient Settings)
- Physician Groups and Offices
- Emergency Care and Hospital Outpatient Care Departments
- Ambulatory Surgery Centers
- Home Healthcare Agencies & Assisted Living Facilities
- Diagnostic & Imaging Centers
- Pharmacies
-
Healthcare Payers
- Private Payers
- Public Payers
By Region
- North America
- US
- Canada
- Mexico
Recent Developments
- In October 2022, Optum acquired Change Healthcare. The acquisition will connect and simplify the core clinical, administrative, and payment processes that providers and payers depend on to serve patients, resulting in lower costs and a better experience for all stakeholders. The company announced plans to acquire Change Healthcare in 2021.
- In June 2022, Cerner partnered with Hazelden Betty Ford Foundation. The Oracle Cerner EHR and Xealth’s digital therapeutic distribution platform made it easier for Hazelden Betty Ford clinicians to personalize patient care by assigning them digital content, including therapeutic education, exercises, and workshops, accessible via the EHR’s patient portal.
- In March 2022, Cognizant (US)) collaborated with Microsoft(US) .The collaboration aimed to deliver a new digital health solution to enhance remote patient monitoring and virtual health, utilizing products like smart watches, blood pressure monitors, and glucose meters to collect and communicate patient health data to providers for improved medical care.
Frequently Asked Questions (FAQ):
What is the projected market value of the global north american healthcare IT market?
The global market of north american healthcare IT is projected to reach USD 496.7 billion.
What is the estimated growth rate (CAGR) of the global north american healthcare IT market for the next five years?
The global north american healthcare IT market is projected to grow at a Compound Annual Growth Rate (CAGR) of 20.8% from 2022 to 2027.
What are the major revenue pockets in the north american healthcare IT market currently?
In 2021, North America accounted for the largest share of the market. The large share of the US can be attributed to the large adoption of healthcare IT solutions in the region, stringent regulations regarding healthcare quality, and the increasing need to curtail the escalating healthcare costs through healthcare IT solutions.
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This research study involved the extensive use of both primary and secondary sources. Various factors affecting the industry were studied to identify segmentation types; industry trends; key players; the competitive landscape of the market; and key market dynamics, such as drivers, restraints, opportunities, challenges, and key player strategies.
Secondary Research
This research study involved widespread secondary sources; directories; databases, such as D&B, Bloomberg Business, and Factiva; white papers; annual reports; and companies’ house documents. Secondary research was used to identify and collect information for this extensive, technical, market-oriented, and commercial study of the HCIT market. It was also used to obtain important information about the top players, market classification, and segmentation according to industry trends to the bottom-most level, geographic markets, technology perspectives, and key developments related to the market. A database of the key industry leaders was also prepared using secondary research
Primary Research
In the primary research process, various sources from both the supply and demand sides were interviewed to obtain qualitative and quantitative information. The primary sources from the supply side include CEOs, vice presidents, marketing and sales directors, marketing managers, regional/area sales managers, product managers, distributors, business development managers, technology & innovation directors of healthcare IT software solutions providers, and suppliers & distributors. Primary sources from the demand side include industry experts such as directors of hospitals, department heads, research scientists, imaging & diagnostics center personnel, and healthcare payers.
A breakdown of the primary respondents is provided below:
*Others include sales managers, marketing managers, and product managers.
Note: Tiers are defined based on a company’s total revenue, as of 2020: Tier 1 = >USD 1 billion, Tier 2 = USD 500 million to USD 1 billion, and Tier 3 = <USD 500 million.
To know about the assumptions considered for the study, download the pdf brochure
Market Size Estimation
The total size of the North American healthcare IT market was arrived at after data triangulation from different approaches, as mentioned below. After each approach, the weighted average of approaches was taken based on the level of assumptions used.
Data Triangulation
The individual shares of each HCIT product & service, component, and end-user segment were determined by assigning weightages based on their utilization/adoption rate. Regional splits of the overall HCIT market and its subsegments are based on the adoption or utilization rates of the given products and services in the respective regions or countries
Global North American healthcare IT market Size: Top-Down Approach
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Objectives of the Study
- To define, describe, and forecast the North American healthcare IT market based on product & service, component, end user, and region
- To provide detailed information regarding the major factors influencing the growth of the market (drivers, restraints, opportunities, and challenges)
- To strategically analyze micromarkets1 with respect to individual growth trends, prospects, and contributions to the overall market
- To analyze opportunities in the market for stakeholders and provide details of
- the competitive landscape for market leaders
- To forecast the size of the North American healthcare IT market with respect to three main countries, namely, the US, Canada, and Mexico
- To profile key players and comprehensively analyze their core competencies2 and market shares
- To track and analyze competitive developments such as agreements, partnerships, collaborations, acquisitions, product/technology/service launches, and R&D activities of the leading players
Available Customizations
With the given market data, MarketsandMarkets offers customizations as per your company’s specific needs. The following customization options are available for the report:
Company Information
- Detailed analysis and profiling of additional market players (up to 5)
Product Analysis
- Product matrix, which gives a detailed comparison of the product portfolios of the top companies
Growth opportunities and latent adjacency in North American Healthcare IT Market