Introduction

The healthcare industry is witnessing unprecedented churn and transformation, leading to a surge in the adoption of IT and business process outsourcing. Driven by regulatory reforms, tenets of consumerization, market consolidation, and emergence of next-generation digital avenues, acceptance of outsourcing has accelerated in the space. The provider industry is coming to terms with the reforms mandate and tackling structural profitability issues. To tackle these, market participants are actively looking at technology as a lever of operational efficiency and transformational change. As HIX, ACOs, payer-provider convergence, and the overall shift to value-based reimbursement get operationalized; providers need to chalk out an effective IT strategy.

Healthcare providers’ technology mandates are principally governed by systemic problems, increasing personnel expenses, and declining profitability, aligning around the imperatives of containing costs and improving care administration. Providers are embracing the challenge of consumerization, as customers take increasing ownership of health outcomes. The current state of consumerization in the provider industry is characterized by a combination of industry-specific reforms as well as transformation of service consumption habits. As consumers assume greater ownership, control, and responsibility of health outcomes, providers look towards digital enablers of consumerization–social media, mobility, analytics, and cloud. Service providers across the spectrum have beefed up their capabilities to cater to this growing market. With companies stepping up adoption of outsourced delivery, there is an uptick in demand for relevant research and market intelligence on demand and supply trends in healthcare outsourcing across each subvertical – payer, provider, and life sciences. The need is more pronounced for the vertical-specific IT outsourcing function, where business challenges are driving greater adoption.

Contents

In this annual report, we analyze the current trends and future outlook of large, multi-year ITO relationships in the provider market. This report is structured across four key sections, each containing insights on the provider ITO market, with a focus on large-sized contracts:

• Healthcare IT outsourcing market overview: Analysis of the overall healthcare outsourcing market and transaction trends:
• Market size and growth
• Transaction trends for IT outsourcing in healthcare
• Segment-level analysis of healthcare outsourcing transactions, including:
• Business segments: Healthcare payer, provider, and life sciences
• Function segments: Application Outsourcing (AO) and Infrastructure Outsourcing (IO)
• Geographic segments
• Provider ITO market overview: Analysis specific to the provider ITO segment with a focus on large transactions:
• Transaction activity and growth trends
• Demand characteristics for provider ITO services by geography, ITO subfunctions, buyer type, and buyer size
• Delivery trends for provider ITO services, including offshore leverage and global delivery locations
• Renewal opportunity till 2020
• Consumerization in the healthcare provider industry: Focus on the phenomenon of consumerization of healthcare and impact on care providers
• Drivers of consumerism in healthcare
• Business imperatives
• Risks and opportunities
• Enablers of consumerization in healthcare
• Impact of SMAC
• Outlook for 2015: Analysis of the outlook and implications for ITO for the coming year
• Outlook for overall healthcare IT outsourcing
• Outlook for provider IT outsourcing