HITS Vendors Met a Throng of Sector-Specific and External Headwinds to Round Out 2017

HAMPTON, New Hampshire, Jan. 10 -- Technology Business Research, an independent technology market research and consulting firm, issued the following news release:

Healthcare IT services (HITS) trailing 12-month revenue continued to slow in 3Q17, falling to 3.8% in 3Q17 from 5.4% in 2Q17. The ongoing trend of decelerating sales growth owes largely to a dearth of strategic acquisitions by the HITS companies tracked by Technology Business Research, Inc. (TBR), turbulence in the U.S. payer market being drawn out by U.S. legislative inaction on proposed reforms to the Affordable Care Act (ACA), and a series of natural disasters in North America during 3Q17 that impacted provider IT spending patterns.

"The ongoing absence of a legislative resolution to the ACA-reform process continues to generate significant downward pressure on sales in the health insurance sector," said Senior Analyst John Caucis, TBR's public sector and healthcare lead. "The M&A-generated tailwind on HITS revenue growth through 2016 has all but dissipated, save for Allscripts' acquisition of McKesson Enterprise Information Solutions and a handful of smaller-scale acquisitions by Allscripts' HITS counterparts. Compounding the impact of weak health payer IT spending on overall HITS growth were the natural disasters that occurred in 3Q17: hurricanes Harvey, Irma and Maria, which impacted the Caribbean and the U.S., as well as a pair of earthquakes in Mexico."

The final participant tally from the open-enrollment period that ran until Dec. 15, 2017 (8.8 million enrollees, down from 9.2 million in 2016), suggests the current lull in payer IT spending may persist, though a growing number of HITS vendors believe the IT investment trough among health insurers has been reached. Aside from the current solution focus on analytics, population health management and revenue cycle management, opportunities for HITS solutions, as well as advisory services, will emerge in 2018 in ambulatory and post-acute care, behavioral health, and employer services.

For additional information about this research or to arrange a one-on-one analyst briefing, please contact Dan Demers at +1 603.758.1803 or [email protected].