Healthcare Analytics Market Size, Share, & Trends Analysis Report By Type (Descriptive, Predictive), By Component (Hardware, Services), By Delivery Mode (On-premises, Cloud-based), By Application, By End-use, And Segment Forecasts, 2020 - 2027

Report Overview

The global healthcare analytics market size was valued at USD 25.9 billion in 2019 and is expected to grow at a Compound Annual Growth Rate (CAGR) of 7.5% from 2020 to 2027. Technological advancements, adoption of analytics for sales & marketing applications, increasing prevalence of chronic diseases, and growing pressure to reduce healthcare spending are driving the market. Extensive usage of big data owing to the rising need of reducing healthcare expenditure and maintaining standardization in numerous internal processes, while accommodating variation in regulatory needs, is further boosting the market growth. Moreover, the COVID-19 pandemic has fueled the adoption of these solutions, which help organizations in navigating the complexities through advanced analytics solutions and support optimal outcomes.

According to an article published by Oliver Wyman in March 2020, the pandemic is encouraging the adoption of analytics solutions to actively identify individuals that are at greater health risk and to help focus on offering timely treatment. The rise in the implementation of these solutions further contributes to managing potential risks and delivering meaningful benefits, such as improving provider satisfaction by offering data & analytics services, which is expected to boost the market growth in the healthcare sector.

Moreover, the increasing shift from volume-based to value-based care is boosting the adoption of these solutions among end-users. As per the report published by IBM titled “2019 Payer Analytics Market Trends Report”, payers are increasingly adopting analytics to support the transition from Fee-for-Service (FFS) to Value-based Care (VBC). Furthermore, the availability of a variety of pay-for reporting (P4R), pay-for-performance (P4P), and risk- & revenue-sharing programs with providers is leading to an increase in investments by payer organizations for applications that support balancing cost and quality through improved understanding of healthcare needs & risks by their members.

However, high implementation costs associated with healthcare analytics is anticipated to restrain the growth of the market. On the other hand, rising investments, mergers & acquisitions, partnerships, collaborations, product launches, and government initiatives supporting the adoption and implementation of healthcare analytics is propelling market growth. For instance, in January 2019, IBM launched its partnership with eQHealth Solutions to strengthen the capabilities of eQHealth’s analytics in digesting & extracting value and insights from structured as well as unstructured healthcare data from clinician notes, care coordinator’s health risk assessments, and other forms of unstructured data.

Type Insights

The descriptive segment accounted for the largest revenue share of 39.1% in 2019. It utilizes a lot of data visualization for answering significant questions or identifying patterns of care, which, in turn, offers a broader perspective for evidence-based clinical practice. Moreover, benefits offered by this solution, such as understanding patient or member population cohorts and identifying irregularities related to insurance claims for supporting organizations in gauging their performance, are further enabling its adoption among organizations, thereby aiding the market growth. However, the predictive segment is expected to register the fastest growth rate over the forecast period.

This is attributed to its adoption in forecasting future market scenarios owing to the benefits offered by this solution, such as controlling patient deterioration, population health & risk scoring, outbreak prediction, improving operational efficiency, supply chain management, personal medicine, and improving outcomes or precision medicine. Moreover, it is enabling healthcare organizations to adopt these solutions for identifying treatment or billing anomalies to eliminate waste, fraud, and abuse. This, in turn, is positively contributing to the segment growth.

Component Insights

The hardware segment accounted for the largest share of over 36% in 2019. Healthcare analytics requires an extensive network system for storing, analyzing, and reproducing an enormous amount of data. High costs associated with hardware infrastructures, such as a computer system coupled with high-speed internet, is boosting the segment growth. Moreover, the prices of electronic devices are anticipated to decline over the forecast period, which is likely to reduce the overall cost of implementation of healthcare analytics solutions, thereby aiding the market growth.

However, the services segment is expected to register the fastest growth over the forecast period. This is attributed to the ongoing trend of outsourcing, owing to factors such as lack of resources & skill set required for deploying these solutions and increasing demand for controlling operational costs. The outsourcing can be short- or long-term, or project-based contract. Other factors driving the adoption of services include growing adoption of cloud, technological advancements, rising focus on value-based care, and increasing awareness & availability of analytics.

Delivery Mode Insights

On-premises was the largest delivery mode segment in 2019 and accounted for a revenue share of over 50%. The on-premises delivery mode includes the installation of services and solutions on computers available within the organization. Even though the software is installed within the premises, it can also be accessed via remote locations, offering benefits of power consumption, reduced cost, and maintenance. However, the maintenance cost and physical area cost of the server room is anticipated to decrease growth in this segment. These server rooms also require a large amount of energy to prevent heating up of the hardware, which adds to the maintenance cost.

The cloud-based delivery mode is expected to emerge as the fastest-growing segment from 2020 to 2027, as it supports storing a large amount of data remotely to provide free space on devices and facilitates data retrieval as per the requirement of the client. These cloud-based services offer large storage capacity, access, and security, which, in turn, drives the segment growth. In addition, these services increase workforce efficiency, reduce redundant tasks, and optimize process efficiency. The technology provides three services—Infrastructure as a Service (IaaS), Software as a Service (SaaS), and Platform as a Service (PaaS).

Application Insights

The financial application segment accounted for the largest revenue share of over 35% in 2019. Increasing burden on financial teams at hospitals and health systems for identifying opportunities to reduce costs without affecting the quality of care is driving the adoption of healthcare analytics for financial applications. The key financial applications include fraud analysis, risk adjustment & assessment, and claim settlement. For instance, Optum Performance Analytics helps in improving clinical and financial performance by leveraging analytic insights to improve care quality, optimize care coordination, reduce variation, and manage financial performance.

However, the clinical applications segment is expected to register the fastest growth rate over the forecast period. Increasing adoption of clinical applications owing to various benefits, such as increasing revenues, generating insights, and cost savings by utilizing real-time medical data is supporting segment growth. In addition, the growing implementation of clinical analytics has led to improved population health, reduced medication errors, and cost savings for many organizations. Moreover, technological advancements and the rising adoption of Electronic Health Records (EHRs) are further driving the segment growth.

End-use Insights

The healthcare payers segment accounted for the largest revenue share of over 36% in 2019 as these solutions support payers in identifying the areas of improvement in patient care, implementing advanced strategies for engaging high-risk patients, and promoting optimal outcomes. In addition, it further supports payers in tackling significant challenges that include incorporating new health plans, increasing customer base, reducing organizational costs, and surviving in a competitive space. It also helps improve efficiency and increase revenue.

However, the healthcare providers segment is expected to record the fastest CAGR over the forecast period. Providers comprise healthcare professionals, such as physicians and clinicians, hospitals, and clinics. This segment is expected to witness lucrative growth owing to the increasing usage of analytics, especially in hospitals. The applications include population health management, operational intelligence, performance management, and financial management.

Regional Insights

North America accounted for the largest revenue share of over 50% in 2019. Growing adoption of EHRs, increasing regulatory requirements, and value-based reimbursements are the key factors driving the market growth in North America. In addition, growing federal healthcare mandates to reduce rising healthcare costs & delivering quality care, and rising government initiatives primarily focusing on personalized medicine, are further boosting the adoption of healthcare analytics in the region.

The Asia Pacific segment is anticipated to register the fastest growth over the forecast period owing to the development of healthcare and IT infrastructure, rising adoption of big data in various developing countries, and increasing public & private funding to support the adoption of advanced analytics solutions. Moreover, the growing adoption of these solutions to streamline hospital workflow & reduce medical costs is driving the regional market.

Key Companies & Market Share Insights

A growing number of collaborations and partnerships among industry players is enabling them to gain a competitive edge in the market. For instance, in June 2018, MedeAnalytics announced its partnership with HealthEdge to enable payers to lower costs, reduce gaps in care, enhance broker & employer plan engagement, improve quality outcomes, and increase member satisfaction by leveraging each company’s complementary capabilities. Some of the key players in the global healthcare analytics market are:

• IBM Corp.

• OptumHealth, Inc.

• Oracle Corp.

• Verisk Analytics, Inc.

• MEDai, Inc.

• MedeAnalytics, Inc.

• McKesson Corp.

• Truven Health Analytics, Inc.

• Allscripts Healthcare Solutions, Inc.

• Cerner Corporation

• SAS Institute, Inc. 

Healthcare Analytics Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2014 to 2027. For the purpose of this study, Grand View Research, Inc. has segmented the global healthcare analytics market report on the basis of type, component, delivery mode, application, end-use, and region:

• Type Outlook (Revenue, USD Million, 2014 - 2027)

  • Descriptive

  • Predictive

  • Prescriptive

• Component Outlook (Revenue, USD Million, 2014 - 2027)

  • Hardware

  • Software

  • Services

• Delivery Mode Outlook (Revenue, USD Million, 2014 - 2027)

  • On-premises

  • Web-based

  • Cloud-based

• Application Outlook (Revenue, USD Million, 2014 - 2027)

  • Clinical

  • Financial

  • Operational and Administrative

• End-Use Outlook (Revenue, USD Million, 2014 - 2027)

  • Healthcare Payers

  • Healthcare Providers

  • Lifescience Companies

• Regional Outlook (Revenue, USD Million, 2014 - 2027)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Spain

    • Germany

    • France

    • Italy

  • Asia Pacific

    • Japan

    • China

    • India

    • South Korea

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa

    • South Africa

    • Saudi Arabia

    • UAE