Healthcare ITO accelerates

The Everest Group has predicted a healthy year for ITO in the healthcare sector, with  14% uptick annually forecast between now and 2020.

This follows years of stagnation and will no doubt be a relief to companies operating in the sector, particularly Accenture, CGI, CSC and Dell Services, which are the companies Everest believes will do best out of this new growth.

“We anticipate US$9.2 billion in contract renewals in the healthcare provider ITO segment by 2020,” said JimitArora, vice president at Everest Group. “Near-term technology adoption will be focused on infrastructure modernization, regulatory compliance and cost-containment outcomes. Medium term, we’ll see large transformational deals structured around application development and maintenance, testing, business intelligence and network services.”

Drivers behind the growth include consumerisation of technology, allowing people to take control of their own health data, with providers looking for ways to educate and inform people through their hand-held devices and promote better health using them.

“Healthcare providers, previously restrained in technology spending, now are actively looking at investing in technology initiatives,” said Abhishek Singh, practice director at Everest Group. “Therefore, service providers are orienting offerings to act as strategic partners to healthcare providers, as they address consumerization, cost takeout and reform imperatives. Service providers’ ITO activity with healthcare providers is largely concentrated in North America, particularly the United States, given the massive structural reforms underway and transition to a value-based reimbursement model.”

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