Global healthcare information technology (IT) outsourcing will grow at a 12 percent compound annual growth rate from 2014 to 2020 to reach US$68.3 billion by 2020, according to a new study by global market research and consultancy firm Everest Group. North America will continue to be the biggest consumer of healthcare IT outsourcing services. The region currently has $9 billion worth of IT outsourcing contracts up for renewal from 2016 to 2020.

Everest said the global healthcare industry will increase IT outsourcing spending to enable innovation and reduce operational expenses amid shrinking profit margins, tighter regulations and increasing customer demands. Everest Group practice director Abhishek Singh said the highest IT outsourcing activity from 2014 to 2020 will come from the healthcare provider segment compared to the life sciences and healthcare payer segments.

Healthcare providers will step up their IT capabilities to make up for the historical lag in technology adoption and prepare for regulations like patient-centric care, new reimbursement models, digitization of the value chain and payer-provider convergence. The report said that providers are using technology to improve patient engagement and population health management.

A Black Book survey published in November 2015 echoed similar findings, showing that 81 percent of respondents will prioritize IT outsourcing in 2016. Nearly 70 percent of chief information officers (CIOs) supported outsourcing for mobile solutions, big data, predictive analytics and claims management.

Meanwhile, Everest reports that healthcare IT outsourcing vendors that wish to succeed in this market must build capabilities in key services, develop and acquire in-demand skills and align their goals with changing vendor engagement models.