The rapid increase in demands of the healthcare industry generates the need for a helping hand that provides all the specialised supplementary services. The healthcare consulting industry is fulfilling this need efficiently. It provides supplementary services including financial management, human resources, information technology and many other services to the healthcare sector.
The growth of the digitalization in healthcare industry drives the growth of the healthcare consulting industry. This industry helps the healthcare sector by improving quality, cost control, and inventory management which results in increased profitability.
MARKET SIZE AND SEGMENTATION
The healthcare consulting industry is expected to boom in the upcoming years. Growing digitalization in healthcare, adoption of data analytics, IoT & cloud deployment and favourable government policies are driving the market growth of Healthcare consulting services.
The global healthcare consulting industry was estimated at $23.9 billion in 2021 and is expected to grow with a CAGR (Compound Annual Growth Rate) of 11.5%. With this rate, the healthcare consulting industry is projected to reach $41.2 billion by 2026.
Over the last five years, the industry has enjoyed extraordinary growth as companies started using the services of healthcare consultants more frequently. As the corporate profit of a company has increased, it has more funding available to use the supplementary services. With this increased demand, healthcare consulting service providers are able to charge higher rates. The high margin and profitability encourage more companies to enter the healthcare consulting market.
As stated above, the healthcare consulting industry provides supplementary services to the healthcare industry. The services provided by the consulting industry are varied. The industry is segmented on basis of:
i) Technology Consulting
ii) Strategy Consulting
iii) Market Consulting
iv) HR and Operations Consulting and others
ii) Research Institutes
iii) Pharmaceuticals Companies
iv) Health Insurance Providers and others
i) North America
iii) Asia Pacific
iv) Rest of the world
The healthcare consulting industry is one of the fastest-growing sectors seen in recent years that is increasing with a CAGR of 11.5%. Here are the key driving factors that boost the growth of the Healthcare consulting industry:
The robust technological advancements play a significant role in driving the growth of the healthcare consulting industry. Agile methodologies, IT security & support, cloud-based services and infrastructure make the process go smoothly. The Healthcare industry is using the services provided by healthcare consultants to make full use of the technology.
Leveraging technological advancements such as machine learning, artificial intelligence, and the Internet of Things, the consulting industry is growing to a great extent.
Total Health Expenditure
The increase in health expenditure is directly related to the growth of the healthcare consulting industry. More budget for health expenditure means it is easier for the healthcare providers to afford the consulting services.
In addition to this, healthcare providers also get the benefits of advisory services on how to reduce expenses. Consequently, the rise in expenditure increases the demand for healthcare consulting services.
Changing Patient Needs
Over the years, patient needs have changed significantly. The changing trends in the healthcare industry arise the need for healthcare consulting to understand the upcoming trends, and market opportunities to provide the best healthcare services.
The ageing population, life expectancy, and prevalence of chronic diseases result in the alteration of healthcare services. It drives the need for healthcare consulting services to enhance patient expectations and experience.
Government Consumption and Investment
The government supports the healthcare consulting industry with favourable policies, rules and regulations. The government agencies are using the expert services of healthcare consultants to better the health system and ensure its smooth functioning.
The revenue of the healthcare consulting industry is closely related to government consumption and investment which has increased in 2020 resulting in the growth of the industry.
CHALLENGES FACED BY THE INDUSTRY
Every industry has to face particular challenges, the healthcare consulting industry is still at its earlier stage and the need of expansion is required in order to function with full efficiency. Here is a list of some of the challenges faced by the healthcare consulting industry:
The expensive services by the industry are restricting its growth. Some hospitals and medical institutions are unable to pay the high fees because it exceeds the budget. Consequently, either the hospitals have to find an alternative way or the consulting providers have to reduce their fees. In both ways, the industry has to suffer losses.
Apart from this, the industry has to face a higher rate of taxes that adds up to the operating costs of the service providers.
Cyber Security Threat
Since the healthcare industry uses a lot of information and data from medical institutions, it makes the industry more prone to cyber danger. Cyber crimes create a situation of precariousness for the industry.
Dealing with a lot of data includes the risk of loss of information. This loss may cost a huge amount of money. Hence, the data and cybersecurity issues make the healthcare industry lagging.
Instead of using one size fits all approach, the Healthcare industry uses a multi-sourcing approach to cater to larger numbers of companies. This breaks the industry into smaller pieces to carry out the tasks. But it does not ensure that these companies hold expertise in that particular area. The government, healthcare providers and payers are pushing the multiple consulting firms to collaborate that put a negative impact on the industry.
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