About the Report
The value-based healthcare services market is expected to reach a valuation of US$13.98 Bn by 2031. The demand for value-based healthcare services is increasing as they offer different types of payment models such as accountable care organizations, bundled payments, pay for performance and patient-centered medical home. Services they offer are often dependent on requirement of the users. Also, the rising usage of social tools, mobile apps and real time analytics is expected to drive the global value-based healthcare services market over the forecast period.
In its new study, ESOMAR-certified market research and consulting firm Future Market Insights (FMI) offers insights about key factors driving demand for value-based healthcare services. The report tracks the global market value of value-based healthcare services in 20+ high-growth markets, along with analyzing the impact COVID-19 has had on healthcare industry or the healthcare providers in general, and value-based healthcare services in particular.
How the Historical & Future Projections for Value-Based Healthcare Services Market Match Up?
Between 2016 and 2020, global value-based healthcare services market registered a CAGR of 19.0%. Increasing need to provide better services to patient and increase customer satisfaction is driving demand for value-based healthcare services.
The lockdown has impacted the world in more ways than what was anticipated. In the last few months, the healthcare industry has been impacted significantly by the pandemic outbreak. Due to the spread of COVID-19, many healthcare providers are struggling to generate revenues and the American Hospital Association (AHA) has estimated the total four-month financial impact on hospitals in America, which will be more than $200 billion.
In a survey conducted among accountable care organizations, almost 60% are likely to quit their value-based contracting. Thus during the short term period, value-based payment models will experience a showdown to get through the crisis. Despite the impact on market in short term period, value-based care models will continue to thrive in achieving the Quadruple Aim. The response of Centers for Medicare & Medicaid Services (CMS) to sustain value-based healthcare initiatives is reassuring. Further, the pandemic in fact re-emphasizes the importance of implementing value-based delivery models.
Why are Value-Based Health Care Services in High Demand?
There has been a number of rapid developments in healthcare following the advent of digital technology, which contributes to the growth of the value-based healthcare services market. The demand for value-based healthcare services is rising steadily as more informed patients are expecting high quality care from healthcare service providers.
Due to digitization over time, healthcare policies and ways of delivering medical care have changed a lot. Greater collaborations will take place due to rapid expansion in value-based healthcare services. Patients with any kind of disease will be diagnosed earlier though value-based healthcare with greater transparency. Therefore, rapid expansion in value-based healthcare services is driving the value-based healthcare services market growth.
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Which Factors Are Boosting Adoption Of Value-Based Healthcare Services?
Increasing rate of chronic diseases is fuelling the demand for value-based healthcare services. Rising incidence of chronic diseases will increase the need for value-based care services across hospitals and clinics. The growing need for high quality care services drives the value-based healthcare services market growth.
Patients with diseases such as cancer, diabetes, and high blood pressure are spending good amount of money, which is costly for them. With value-based care, patients can prevent and avoid chronic diseases before they start. The continuous rise in chronic diseases and physical disabilities is the increasing adoption of value-based healthcare services.
What are the Key Benefits of Value-Based Healthcare Services?
Expensive healthcare procedural factors such as doctor visits, hospital admissions, and prolonged hospital stays can be strategically managed via value-based healthcare services. Moreover, value-based healthcare services enhance home care facilities and the real-time data offered by healthcare providers. It is based on the fluctuations detected in the condition of a patient.
These factors help eliminate the need for planned doctor appointments, thus reducing the expenditure of treatment. Thus patients are adopting and demanding more value-based health care models to reduce the treatment costs.
What are the Challenges in Rolling out Value-Based Healthcare Services?
Ensuring reliable data in value-based healthcare services is a new challenge for administering medicare payment systems. Providers will have to ensure the reliability of data as many of the payments are linked to quality and outcomes, and also they will have to make sure the data is appropriate and meaningful. Ensuring accurate information is going to be critical as the performance is determined on the basis of Medicare.
Electronic Health Records (EHRs) contain different types of patient-level variables such as medications, demographics, vital signs, problem lists, diagnoses, and laboratory data, and these outcomes play an important role as these are assessed to ensure correct payment. The integrity of information is most likely the biggest challenge providers face.
In addition, teetering between two reimbursement models and aligning two payment mechanisms, is another factor hindering the growth of the market. As with two reimbursement models, providers need to spend more time with patients for quality care and that results into requirement of more staff and administrative work. It will be a task for providers to examine the same number of patients and perform the same amount of services. Thus it is going to be a challenge for providers to keep the profits up.
The figure highlights some of the strategy and business operation level trends have been identified varying with respect to these regional clusters and relative product lifecycle (PLC) position. The image depicts a close scrutiny of value-based healthcare services and its availability in different industries across 23 countries and relative emplacement on PLC leaves regional clusters at different curve.
North America holds largest share of value-based healthcare services market in 2020, however, market in Europe is anticipated to grow at significant rates during the forecast period. North America is expected to retain a leading position in the value-based healthcare services market for next few years, as U.S. has the headquarters of many large enterprises and corporate companies.
Europe and East Asia are expected to be the key markets for sustainable revenue generation from value-based healthcare services market. Countries such as France, Japan, Germany, South Korea, Australia & New Zealand and India are witnessing high growth in technology owing to the digital transformation plans. On the back of strong economic growth, total disposable income is rising robustly and boost consumer expenditure in the region, which is further contributing towards the growth of the market.
How are Healthcare Service Providers Enhancing Communications Reliability In France?
The Internet of Things-enabled network connectivity shows the potential to cure ailing healthcare system in remote areas of France, and turn it into an efficient and well-integrated patient-centric system. By enhancing the network connection reliability, healthcare service providers active in France are focused on transforming the present medicinal care to well-being and wellness in collaboration with the French National Government.
This is intended at lessening the healthcare expenditure burden through holistic measures. Though technology cannot substitute for doctors, network-enabled healthcare equipment with cloud connectivity can enable medical professionals to store and access health data of patients in remote and under-developed areas of the country. Local key players are focused on developing innovative remote clinical monitoring systems and clinical communication platforms for in-home and out-patient remote monitoring.
How are Advance IT Systems boosting Value-Based Healthcare Services in Japan?
The advancement in IT systems and healthcare technologies plays an important role in fueling growth of digital healthcare IT platforms. The development in the mobile health technology has emerged as a natural extension of new generation of healthcare systems and IT platforms. Also, federal mandates in Japan are encouraging healthcare organizations to adopt advanced IT systems and technologies in order to improve patient care experience and care team communication.
Current set of secure mobile communication technologies and solutions support multiple directories and are multi-site capable, which allows healthcare professionals to work at multiple facilities. All these factors are supporting rapid adoption of value-based healthcare model and services in Japan and ultimately fueling growth of value-based healthcare services market.
How is Increasing Patient Engagement Driving Growth in United States?
In the past, doctors were the lead man in the treatment of a patient’s disease, but now the pace to embrace value-based healthcare services is picking up and patient is playing a role of final-decision maker. This results in improving the patient experience at all levels by providers and payers.
Patients now have access to everything, they can book appointments for consulting the doctor on websites like WebMD, Healthgrades, Ciox Health, Rally Health and others, to discuss potential diagnoses, symptoms, and treatments. The relationship of doctor and patient will be considered as a gateway to value-based healthcare services. Patient engagement as a trend is most likely to have a major impact on value-base healthcare services market in United States.
Cost Transparency in Patient-centered medical home (PCMH)
Cost transparency is one of the major trends that will meliorate the value-based healthcare services market. Healthcare systems are helping patients to make them understand what they are paying for by sharing pricing structure, and as a result it will increase the trust between patients and health systems. Making them know about bills before the patient gets the bill will help patients to understand the financial repercussions.
Patient’s trust is built by providing information about the cost in simple terms and this insight impels healthcare systems to drive down cost and deliver quality care. Patient explore options and choose the best-suited health system in their care process through cost transparency. As per FMI, among models available in the market, the demand for Patient-centered medical home (PCMH)will be slightly higher.
Increase in Deployment of Cloud-Based Models
Wireless and cloud technologies in healthcare IT provide medical professionals and patients with fast and easy access to clinical data in a cost effective manner. Wireless and cloud technologies are expected to grow rapidly in the healthcare sector as these are convenient and cost-effective means of communication between the healthcare organization and the consumer. The adoption rate of the system is expected to increase by 26.9% and the number of patients worldwide who uses home health monitoring systems is also anticipated to increase simultaneously. Companies such as Qualcomm Life Inc., Opzoon Technology Co., Ltd., and Fibocom Wireless Inc. are involved in the sales of wireless and cloud technology products used in the healthcare industry.
Hospitals Emerge as Key End Users
Hospitals remain the key end user thanks to the higher percentage of patient foot fall. With hospitals focusing on not only expanding their infrastructure but improving it, the demand for advanced technologies is expected to rise. Thanks to digitization, hospitals are capable of accommodating millennial models to offer improved patient care. Spurred by this factor, the demand for value-based healthcare services is expected to rise.
Value-Based Healthcare Services Market: Regional Outlook
North America and Europe collectively holds more than 50% share of the global value-based healthcare services market, owing to the presence of key players of the market in these regions. In the U.S., value-based healthcare services is largely being used as providers have understood, how they can achieve high patient satisfaction with better care efficiencies by diagnosing the diseases earlier. Rising medical costs are outmatching economic growth, but value-based healthcare could be the answer as it helps in controlling costs.
According to the United Nations Department of Economic and Social Affairs, by 2050, the number of people aged 60 years and above would be approximately 437 million in China, 324 million in India, 107 million in the U.S., and 58 million in Brazil. By 2025 – 2030, the population aged over 60 years is expected to grow 3.5 times as fast as the total population. According to the United Nations World Population Prospects report, the aging population, 65 years and above, is expected to grow from 16% in 2000 to 24% by 2030. With the increase in geriatric population, the need for better healthcare facilities is expected to increase, and, in turn, lead to rise in demand for value-based healthcare services.
The companies are focusing on entering into collaboration with other businesses that offer complementary products, services, and technologies, which strengthen its market coverage and enhance its technological capabilities. This strategy helps the company deliver more innovation to empower companies to connect with their customers in a whole new way. The company focuses on enhancing its solutions for value-based healthcare by collaborating with leading players.
For instance, in March 2020, Baker Tilly and IBM MarketScan collaborated to help healthcare companies unlock their growth potential with real-world evidence strategies. This collaboration enables Baker Tilly to provide its client with one-stop partnership for real-world evidence generation. Some of the players competing in the value-based healthcare services market include:
- Siemens Healthcare GmbH
- NextStep Solutions
- McKesson Corporation
- NextGen Healthcare
- Genpact Limited
- Athena Healthcare
- Boston Consulting Group
- Change Healthcare
*The list is not exhaustive, and only for representational purposes. Full competitive intelligence with competition deep dive available in the report
Value-Based Healthcare Services Market Report Scope
Historical Data Available for
US$ Mn for Value
Key Regions Covered
North America, Europe, Middle East & Africa and Rest of the World
Key Countries Covered
U.S., Canada, Germany, Italy, France, U.K., Spain, GCC and South Africa
Key Segments Covered
Model, Deployment, End-user and Region
Key Companies Profiled
Customization & Pricing
Key questions answered in the report
How will value-based healthcare services market expand until 2031?
FMI projects the global value-based healthcare services market to register a CAGR of 20.9% across the 2021-2031 assessment period. Cloud segment is expected to offer the highest incremental opportunity in terms of deployment during the forecast period.
What are the key challenges for value-based healthcare services market?
Ensuring reliable data in value-based healthcare services is a new challenge for administering medicare payment systems. Thus the integrity of information is most likely the biggest challenge providers face.
Who are the leading players in value-based healthcare services market?
Prominent players operating in the global value-based healthcare services landscape include Siemens Healthcare GmbH, NextStep Solutions, McKesson Corporation, NextGen Healthcare, Genpact Limited, Boston Consulting Group among others.
What are the key trends impacting value-based healthcare services market?
Cost transparency is one of the major trend, which will meliorate the value-based healthcare services market. As patient explore options and choose the best-suited health system in their care process through cost transparency.
Which region is expected to be at forefront in the value-based healthcare services market?
North America is expected to remain dominant in the global value-based healthcare services market, however Europe is anticipated to grow at a significant rate over the forecast period.
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Is the value-based healthcare services market research conducted by FMI?
Yes, the research has been conducted by expert analysts of Future Market Insights through a combination of primary research and secondary research. To know more about how the research was conducted, you can speak to research analyst
What research methodology is followed by FMI?
Future Market Insights follows a methodology that encompasses demand side assessment of the market, and triangulates the same through supply side analysis. This methodology is based on use of standard market structure, methods and definitions. Request detailed methodology
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What are the sources of secondary research?
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Value-Based Healthcare Services Market by Category
- Accountable care organization (ACO)
- Patient-centered medical home (PCMH)
- Pay for performance (P4P)
- Bundled payments
- Insurance Companies
- North America
- Latin America
- South Asia and Pacific
- East Asia
- Middle East and Africa