U.S. Healthcare Payer Analytics Industry Overview
The U.S. healthcare payer analytics market is expected to reach USD 19.4 billion by 2030, registering a CAGR of 22.1% from 2023 to 2030, according to a new report by Grand View Research, Inc. The digital advancements in the healthcare field, and the digitization of records, are one of the key factors driving the growth of this market. Adoption of such technologies is on an upward trend thus propelling the market. Digital data is being used to derive meaningful results, cost reduction, and minimize fraudulent insurance claims.
The U.S. government has been increasingly spending on healthcare and focusing on improving digital infrastructure, which is boosting technological advancements in the field. Due to technological advancements, decision-making for payers and healthcare providers has become easier with the help of analytical tools. The overall increase in healthcare expenditure has amounted to more than USD 4 trillion in the year 2020. It is not only helping the healthcare industry develop faster but has also made healthcare more affordable and precise.
The healthcare analytical tools are helping administrators and policymakers in determining what is the best course of action, how successful is it going to be, and how much cost can be saved by cutting unnecessary expenditures. For insurance companies, analytical tools have helped in recognizing patterns of insurance fraud and in turn saving billions of dollars per year. Doctors’ analytical tools have helped to determine the best treatment plans for a particular patient by studying and analyzing their history.
In the analytics type, the descriptive analysis held the largest market share of 358% in 2022. Descriptive analytics has been widely used during COVID by various research organizations as well as laboratories, to determine how contagious the virus is by studying the past and present tests being conducted for coronavirus. Descriptive analytics analyzes data to derive meaningful results and can significantly impact future decisions. The fastest-growing was the predictive analytics segment, this helps in charting the best treatment plan for a personalized treatment plan, it can help the doctor to find out what works best for a patient and can give better treatment outcomes.
In the components, the service segment dominated the market in 2022. Since the majority of establishments do not have an analytics department, it is generally outsourced to industry experts which saves the cost of training and teaching the staff about tools and methods. The fastest-growing component was the hardware, with rapid investment in healthcare IT, the need for better computers and hardware components has been responsible for the growth of the market.
Currently, the largest market share is held by the on-premises delivery model. Healthcare organizations have been opting for the installment of analytical tools and software. The on-premises installation results in less theft of data and provide easier access and maintenance of data and patient records. However, cloud-based storage has been gaining popularity due to ease of storage, and minimum requirement of setup, which has been a key driving factor for the growth of the market.
In the applications segment, the largest market share is currently held by financial applications. Private and government facilities have been increasingly adopting analytics for financial applications. Healthcare analytics is being used for claim settlement, risk analysis, and identifying frauds in insurance claims. The fastest-growing application is also financial applications, for use in identifying frauds related to insurance which cost the payers billions of dollars per year. These factors have contributed significantly to the growth of the healthcare payer analytics market.
The COVID-19 pandemic created a huge opportunity for the healthcare analytics market. The amount of patient data generated during the pandemic has greatly helped in studying how the disease spreads, how contagious it is, and what implications it can have on people. Economies around the world have suffered gravely due to supply chain disruptions saw a decline in the market, but the usage and rate of adoption of analytics have increased overall. Telehealth, a means to communicate with patients and doctors saw 38 times increase in adoption from pre-COVID times, as per McKinsey.
U.S. Healthcare Payer Analytics Market Segmentation
Grand View Research has segmented the U.S. healthcare payer analytics market based on analytics type, component, delivery model, and application:
Based on the Analytics Type, the market is segmented into Descriptive Analytics, Predictive Analytics, and Prescriptive Analytics.
- The descriptive analytics segment had the largest market share of 35.8% in 2022. This analytics type is the most widely used in process optimization as well as administrative activities. This method analyzes past as well as present data to bring forth meaningful information or a pattern that can significantly impact future decisions.
- The fastest growing segment is predictive analysis, with a CAGR of 26.4% for the forecast period. Predictive data analytics helps care providers to course the best treatment plan for the patients for better outcomes. Personalized care has been gaining a lot of momentum and predictive analysis has proved useful to understand the specific treatment needs of each patient and enables providers to offer the best treatment plans.
Based on the Delivery Model, the market is segmented into On–Premises, Web-Hosted, and Cloud-Based.
- The healthcare industry is evolving in terms of technology, the use of on-premise models has largely been adopted by the industry, and it has many benefits like better access to data, reduced chances of theft of data, reduced cost, and ease of maintenance. On-premises storing of data has the biggest downside of storage capacity limitations making it a huge hurdle in the growth of this segment.
- Cloud-based storage and improvement in privacy concerns have made the cloud-based delivery model the fastest-growing sub-segment anticipated to register the fastest growth rate of 25.7%. The rapid adoption of this delivery model by healthcare organizations has resulted in the rapid growth of the sub-segment.
Based on the Application, the market is segmented into Clinical, Financial, and Operational Administrative.
- The financial application segment dominated the market with a revenue share of 35.7% in 2022, the increased rate of adoption by government and private facilities alike has been the main factor driving the growth of the market. A number of financial applications can save millions in fraudulent claims, claims settlement, and risk analysis for insurance companies.
- Financial is anticipated to register the fastest growth rate of 23.1%, it is expected to grow at a substantial rate during the forecast period. Increased implications related to financial aspects have been a primary driving factor for the growth of the healthcare payer analytics market.
Based on the Component, the market is segmented into Software, Hardware, and Services.
- In the component segment, the services had the largest market share of 41.8% as of 2021. Outsourcing of data has been the recent trend in this segment, this not only offers the establishments to get the data analyzed from industry experts but also saves the cost of training and educating their staff to do the same.
- In 2022, services accounted for the largest revenue share of 42.0%, the services segment was recorded to have the fastest growth rate of 22.7%, the lack of appropriate staff for analytics in the industry is a major driver for the growth of this segment. Due to this the analytics part is often outsourced and is thus helping the service sector grow, in turn helping the growth of healthcare payer analytics.
Key Companies Market Share Insights
The increase in the adoption of healthcare analytics across the industry vertical has been the primary factor responsible for the growth of the market. Ease of data understanding, as well as better outcomes, have also contributed significantly to market growth. The market is witnessing a surge in demand for advanced payer analytics owing to the growing healthcare costs and the need for organizations to devise strategies to curb expenditure.
Market players are focusing on innovating advanced solutions which could help organizations plan their financial budgets efficiently, avoid improper payments frauds, and effectively assess risk. Healthcare payers comprise insurance companies and health plan sponsors (employers and unions) and they use analytical solutions to expand their business, improve healthcare services, and quality and minimize administrative costs.
Some of the renowned players are IBM, Oracle, CloudMedX, and DataSmart Solutions. These key players are focusing on devising their mergers acquisition and partnership strategies to expand their business outreach geographical presence. For instance, in February 2021, IBM Watson Health and Humana Inc. collaborated on IBM’s artificial intelligence solution to enhance the member experience for Humana Employer Group members. Some of the key players operating in the U.S. healthcare payer analytics market include
- CloudMedx
- DataSmart Solutions
- Amitech Solutions
- Altegra Health
- Caserta Concepts
- Greenway Health, LLC
- IMAT Solutions
- Health Catalyst
- Indegene
- IBM
- Optum
- Oracle
- HMS
- Citius Tech
- MedeAnalytics
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About Grand View Research
Grand View Research, U.S.-based market research and consulting company, provides syndicated as well as customized research reports and consulting services. Registered in California and headquartered in San Francisco, the company comprises over 425 analysts and consultants, adding more than 1200 market research reports to its vast database each year. These reports offer in-depth analysis on 46 industries across 25 major countries worldwide. With the help of an interactive market intelligence platform, Grand View Research Helps Fortune 500 companies and renowned academic institutes understand the global and regional business environment and gauge the opportunities that lie ahead.
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