Healthcare Compliance Software Market Size, Share & Trends Analysis Report By Product Type (On-premise, Cloud-based), By Category (Policy & Procedure Management, Auditing Tools), By End-use, By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global healthcare compliance software market size was valued at USD 2.8 billion in 2022 and is projected to expand at a compound annual growth rate (CAGR) of 11.6% over the forecast period of 2023 to 2030. Healthcare compliance management software streamlines operations related to compliance, including risk assessment, medical, billing, coding, testing, and control evaluation. The shift from manual healthcare compliance methods to automated compliance software and the benefits associated with healthcare compliance software are factors expected to boost the demand for these software solutions.

Human errors are inevitable with manual processes. Hence, organizations are shifting towards automated software to decrease the violations associated with the laws and regulations of the healthcare industry. For instance, in October 2020, Aetna agreed to pay around USD 1,000,000 to the U.S. Department of Health and Human Services (HHS) - Office for Civil Rights (OCR) to settle violations of HIPAA Privacy and Security Rules. To reduce such instances, companies are adopting such compliance software tools, which is expected to boost the growth of the market.                                                           

Moreover, organizations are shifting towards automating HIPAA compliance to reduce data breaches and identify thefts in the healthcare industry. According to reports by the Fortified Health Security and Check Point, in the first ten months of 2020, data breaches in the healthcare industry accounted for around 79.0% of all data breaches reported. Moreover, cyberattacks in healthcare organizations increased by approximately 45.0% in January. These breaches cause companies huge losses, which can be reduced by adopting compliance software. For instance, according to Panacea Healthcare Solutions, LLC, data breaches cost healthcare organizations around USD 6.45 million annually. 

With the changing laws and health policies to promote greater accessibility and efficiency, the legal team has to be ready to align the organization with updating the existing rules. This software could make the process easier and reduce errors. Hence, companies are launching technologically advanced products to cater to this growing demand for compliance software. For instance, in February 2023, Integral, a health tech startup, launched end-to-end collaborative software to automate data compliance in healthcare, driving patient-centric analysis and enhancing the ability to evaluate healthcare data. 

The COVID-19 pandemic positively impacted the industry owing to the flexibilities and waivers that made it easier for healthcare providers to provide care for patients requiring compliance software. Moreover, companies eased the penalties associated with the use of telehealth. For instance, in March 2020, the Department of Health and Human Services Office for Civil Rights removed certain HIPAA penalties regarding telehealth use during the pandemic. Furthermore, with the expiration of many flexibilities and waivers, organizations are preparing for post-pandemic compliance, adopting healthcare compliance software. For instance, in August 2021, First Healthcare Compliance announced the launch of tracking abilities for companies in the U.S. using its 1^st Premium or 1st Professional packages to document COVID-19 vaccination of employees, including booster doses. 

Product Type Insights 

On the basis of product type, the cloud-based segment held the largest market share of 52.3% in 2022. The high share in the market can be attributed to the high adoption and availability of cloud-based software. Also, it ensures the safety and acts as a repository of data. On the other hand, the lower operational and ownership cost associated with the on-premise solutions is expected to drive the growth of the market during the forecast period. 

In addition, the cloud-based segment is expected to witness the fastest growth over the forecast period. This can be attributed to the growing prominence of SaaS solutions and public cloud platforms to simplify healthcare business operations. This software has the ability to deploy services rapidly, scale workloads and applications, and have affordable pricing, which increases its adoption to build HIPAA security programs and could manage infrastructure without depending on the on-premise data center experts and servers. 

Category Insights 

The policy and procedure management segment dominated the industry with a revenue share of 20.9% in 2022, owing to the benefits of this software such as patient safety, improved internal communication and processes, and reduced liability. Policy and procedure management could be challenging as the maintenance and volume of changing policies could be difficult, and documentation is subject to mistakes. According to HealthStream, a typical hospital manages around 500-1,000 policies in a year with around 3 employees involved in each revision. 

The medical billing and coding segment is expected to expand at the fastest CAGR over the forecast period. The growth of the segment can be attributed to the continuous changes in reimbursement and higher costs associated with non-compliant billing practices. For instance, submitting false claims to Medicare or Medicaid violates the Federal Civil False Claims Act, which incurs three times the amount sustained by the government owing to damages due to false claims and penalties of up to USD 22,927 for every filed false claim. Hence, every organization is required to ensure correct billing and coding practices to optimize reimbursement. 

End-use Insights 

On the basis of end-use, the hospital segment dominated the market with 50.6% of the share in 2022. Challenges associated with keeping pace with the regulatory changes and limited resources and time to perform manual compliance in hospital settings are the factors contributing to the high share of the segment. The complex nature of changing regulations increases the risk of enforcing significant penalties. Hence, hospital settings are adopting these solutions to ensure compliance and reduce penalties. For instance, in January 2023, Radar Healthcare entered into a partnership with Circle Health Group to provide risk management and compliance software to the 54 hospitals of Circle Health Group.

However, specialty clinics are expected to expand with the fastest CAGR over the forecast period. Specialty clinics such as long-term care, nursing, and residential care offer work on reduced staff and have high turnovers, which makes delivering compliant care difficult for the clinics. Hence, these organizations are increasingly using these software solutions to reduce the manual efforts associated with compliance-related work. 

Regional Insights 

North America had the largest revenue share of 48.9% as of 2022 due to increasing changes in the laws and policies related to healthcare and rising demand for healthcare compliance software for medical billing and coding in the region. For instance, in August 2022, the Federation of American Hospitals (FAH) requested HHS to extend COVID-19 public health emergency (PHE) up to 2023, which is expected to expire in May 2023. Moreover, the presence of major players in the region is expected to drive the demand for the market. These players are collaborating with local organizations to provide their solutions. 

Asia Pacific is anticipated to register the fastest growth rate over the forecast period. The rising incidence of healthcare data breaches and cyberattacks in the region has increased the demand for these software solutions. According to research conducted by the CyberPeace Foundation, around 1.9 million cyberattacks were recorded in the healthcare industry in India from January 2022 to November 2022. Moreover, as per the Ministry of Health (MOH) Singapore, the medical records of around 73,000 patients were breached by specialist ophthalmology clinic Eye & Retina Surgeons in Singapore in October 2021. 

Key Companies & Market Share Insights

The healthcare compliance management software market is moderately fragmented, with the presence of a few major and local players holding the majority of the share. Key companies are focusing on various growth strategies to enhance their market reach and gain a larger market share. Moreover, these players are looking for funding and are entering into partnerships to accelerate their growth trajectories through partnership development and product expansion. For instance, in April 2022, MedTrainer, a Las Vegas-based credentialing, training, and compliance management software solution provider, raised around USD 43 million in funding from Vista Equity Partners. Some prominent players in the global healthcare compliance software market include:

• HealthStream

• Atlantic.net

• HEALTHICITY, LLC

• ByteChek

• ConvergePoint Inc.

• RLDatix

• Compliancy Group

• Accountable HQ

• Complinity

• Sprinto

• Panacea Healthcare Solutions, LLC

• Radar Healthcare

• Beacon Healthcare Systems 

Healthcare Compliance Software Market Report Scope

Global Healthcare Compliance Software Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For the purpose of this study, Grand View Research has segmented the global healthcare compliance software market report on the basis of product type, category, end-use, and region:

• Product Type Outlook (Revenue, USD Million, 2018 - 2030)

  • On-premise

  • Cloud-based

• Category Outlook (Revenue, USD Million, 2018 - 2030)

  • Policy and Procedure Management

  • Auditing Tools

  • Training Management and Tracking

  • Medical Billing and Coding

  • License, Certificate, and Contract Tracking

  • Incident Management

  • Accreditation Management

• End-use Outlook (Revenue, USD Million, 2018 - 2030)

  • Hospitals

  • Specialty Clinics

  • Others

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

    • Spain

    • Italy

    • Sweden

    • Norway

    • Denmark

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

    • Australia

    • Thailand

  • Latin America

    • Brazil

    • Mexico

    • Argentina

  • MEA

    • South Africa

    • Saudi Arabia

    • UAE

    • Kuwait