The Future Of Health Care IT Outsourcing Looks Promising

A recent research report from the Black Book Research Group claims that the IT payer outsourcing market will exceed $60 billion by the end of 2017. This is due to the demands on data security, benefits solutions and population health. The report was based on a survey that included data from more than 800 health plan IT outsourcing users from Q2 to Q4 2015. Trends were determined in the marketplace of service providers and client expectations. The report has predicted that there will be 40% growth in the next two years. This is due to the fact that better solutions in software has created faster IT expenses than expected with no increase in revenue. This is why outsourcing is now being offered to control organizational costs.

The report said that less than one in 10 of health plan IT executives  are considering  full or end-to-end off-shored solutions. However, the Black Book report was able to show that health plans are budgeting at least 20 percent increases in outsourcing spends for 2016 for service models and functions including application support, desktop support, and help desk support. Nearly 80 percent of larger health plans could turn to outsourced vendors for help desk support in the next 12 months, the survey found.

It is expected that security and privacy projects, and cloud initiatives will grow over 50% of all new outsourcing business initiatives for 2016 in managed care organizations. Payers will soon focus on three additional outsourcing areas by 2016: comprehensive software in core administration, care and network management, and constituent engagement. It expects that by 2018, half of all health plans will demand substantial risk sharing with their outsourcing providers as operational efficiency will become critical at four in 10 of the nation's small health insurers and plans, resulting in the development of more intense data-driven payer strategies.

Doug Brown, managing partner of Black Book Research Group said, "Changing government regulations are leading insurers to outsource more IT functions including big data and data base management, analytics as a service, mobile applications, population health, and security solutions,"

The fact is, while there are many business which began to utilize IT outsourcing since the 1990s, the healthcare sector was not quick to embrace the idea. Brown remarked, "The decision health insurance companies have been among the slowest to adopting outsourcing. However, shrinking margins, higher claim disbursement, and increasing competition have forced health insurers to look at outsourcing at this point in time to prove efficiencies and focus resources toward the core functions of product development and innovation."

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