The increased adoption of telehealth, hospital information system, electronic health records and web-based services has expanded digital patient data, demanding the deployment of robust IT infrastructure in Indian healthcare industry, writes Anshuman Ojha of Elets News Network (ENN)

With the growing awareness about healthcare products and services, hospitals are gaining a lot of importance. The growing burden of disease, along with unhealthy lifestyles, aging population, growing affordability and widespread health insurance penetration comprise some of the key factors propelling the hospital sector.

The market is clearly segmented into public and private sectors wherein the public sector caters to a larger population base that is unable to afford the relatively expensive private hospital services. The private sector is diverting its business progressively from metro city markets and is focusing on capturing market share in tier- II and tier-III cities with the introduction of hospital chains and specialty clinics aimed at attracting the masses towards quality healthcare services.

The investment in hospital information system will increase at a compound annual growth rate (CAGR) of 5.7 per cent between 2014 and 2020

Hospitals are complex organisations with a number of departments and units coordinating with each other for patient care and all allied services. With the growth of IT as backbone for all the data processing, Hospital Information System (HIS) is gaining popularity and becoming an integral part of hospitals.

Market Dynamics

The global HIS market was valued at US$ 35.1 billion and is expected to grow at a CAGR of 7.1 per cent from 2013 to 2019, to reach an estimated value of US$ 53.2 billion by 2019.

The United States is the largest market for Hospital Information Systems with approximately 31 per cent contribution, the US is the leader in the global HIS market. The US$ 2.3 billion US HIS market is expected to grow at a CAGR of 12 per cent and exceed US$ 5.1 billion by 2017. The expected double digit growth in the US HIS market is the result of the healthcare reform initiatives brought in by the Health Information Technology for Economic and Clinical Health (HITECH) Act, a part of the US$ 787 billion American Recovery and Reinvestment Act (ARRA) of 2009.

The Asia-Pacific region (excluding Japan) represents the fastest growing HIS market, exhibiting a CAGR of 11.5 percent over the next few years. Despite being a smaller market in terms of revenue, the Asia-Pacific promises excellent growth opportunities for hospital information systems. Some of the major players include McKesson, Cerner, Allscripts-Misys Healthcare Solutions, Eclipsys, Computer Programs and Systems, Siemens Medical Solutions, QuadraMed, Medical Information Technology, Healthland, GE Healthcare, iSOFT Group, Agfa-Gevaert, Brunie-Software, IBA Health and Integrated Medical Systems.

The market is experiencing an increase in acceptance of customized technology such as Laboratory Information Systems (LIS) and Radiology Information Systems (RIS). The market is also a promising ground for Electronic Medical Record (EMR) systems.

Other technological improvements such as integrated speech recognition capabilities and advanced clinical decision support systems will continue to contribute significantly in expanding the customer pool for HIS.

Healthcare providers in India are expected to spend US $1.2 billion on IT products and services in 2015, an increase of seven per cent over 2014, according to Gartner, Inc. This forecast includes spending by healthcare providers (hospitals, ambulatory service and physicians practices) on internal services, software, IT services, data centre, devices and telecom services.

Internal services will achieve the highest growth rate amongst the spending categories with a 17 per cent increase in 2015 to reach US$ 297 million. Internal services refer to salaries and benefits paid to the information services staff of an organisation. The information services staff includes all company employees that plan, develop, implement and maintain information systems.

Software spending will grow 6.2 percent to reach US$ 103 million in 2015, up from US$ 97 million in 2014, led by growth in vertical specific software.

Hospital Management System

The increased adoption of telemedicine, HIS, electronic health records, mHealth, and web-based services has made digital patient data expand, demanding the deployment of robust IT infrastructure in Indian healthcare organisations. It has amplified growth in data, digitisation trends in health information and electronic medical records. A greater Internet penetration and a huge demand-supply gap in the HIS market will make way for more players and more competition in this arena.

Improvements in collaborative data exchange, workflows and mobility, and need for better financial management are the next phase of technological evolution in Indian healthcare. In addition, the shift to mobile devices, wireless technology and cloud computing will reduce system costs and improve workflows.

Next Big Thing

According to a new research by Frost & Sullivan, the HIS market is poised to become the next booming trend. This is an element of health informatics that focuses mainly on administrative needs. According to the research, 95 percent of non-clinical and 90 percent of clinical information systems have adopted at least a basic version of a hospital information system. However, now that a post-EHR era has started that includes healthcare reform, changing reimbursement models, competitive threats from non-traditional providers and a rise in the health insurance marketplace, investment in new hospital information systems is going to pick up.

The investment in HIS will increase at a compound annual growth rate (CAGR) of 5.7 per cent between 2014 and 2020. By 2020, it is expected to increase by 58.9 percent to US$ 17.6 billion. Administrative systems will grow the fastest, at a CAGR of 10.4 per cent over the forecast period. With the push toward value-based care in full effect, hospitals need to ensure that they are doing everything possible to make quality a high priority. This means healthcare providers need to be proactive to attract and engage new patients, while ensuring that operations are financially viable. The right administrative software can offer a number of cost savings benefits including managing labour costs, driving productivity with new workflow tools, engaging consumers and maximizing operational efficiencies.

Challenges Persist – Solutions Emerging

Rising healthcare costs and rapid demographic changes have forced governments around the world to enhance the quality and outreach of healthcare, while simultaneously reducing related expenses. The world population is expected to exceed nine billion by 2050, while during the same period the population aged 65 years or older is forecast to have tripled. As such, governments around the world face increasing concerns to address financial restraints as well as efficiency and affordability limitations of healthcare.

The Indian governments awareness about the large gap in the delivery of healthcare services is seeing both direct and indirect initiatives towards raising the level of service availability. Higher budgetary allocations, financial incentives and public-private-partnerships are some of the methodologies being adopted to bridge this gap. A number of non-healthcare related business houses are also venturing into the healthcare delivery space due to the immense growth opportunities that exist within the sector, resulting in greater competitiveness and betterment of service delivery on the part of the market players.

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