Legislative Uncertainties Cause Lowered Growth Projections for Healthcare & Life Sciences IT Services Market — Everest Group

Dallas, TX (PRWEB) May 16, 2017

The global healthcare and life sciences (HLS) IT services (ITS) market is facing headwinds due to legislative uncertainties in the U.S., so Everest Group is lowering its projected growth rate for the industry. The HLS ITS market is likely to exhibit a compound annual growth rate (CAGR) of 8.3 percent during the period between 2016 and 2025, as opposed to the 12 percent CAGR previously predicted for the period 2014 to 2020.

In February 2017, two mega payer mergers--Aetna and Humana, and Anthem and Cigna--were rejected by the U.S. federal judiciary, which cited market monopoly concerns. Anthem is appealing the ruling and was supportive of the Trump administration's failed American Health Care Act (AHCA) bill, presumably to garner favor for its appeal. The Anthem-Cigna merger could determine the fate of the individual insurance market, signal the possibility for other large payer mergers, and limit the bargaining power of HCS IT service providers, adversely impacting provider revenue and reimbursement rates.

Also unresolved is the Trump administration's efforts to repeal and replace the Affordable Care Act (ACA). AHCA, the Republican party's initial effort, would have been more favorable to payers, as they would have been allowed to raise premiums and choose the type of benefits to reimburse. The AHCA bill was withdrawn, however, largely due to public outcry over the likelihood that the AHCA would penalize the sick and elderly and leave millions uninsured. Although the AHCA bill introduced various clauses attempting to build an inclusive insurance program, the certainty of those clauses was questionable. Recently, the Trump administration has indicated that healthcare reform legislation is still a top priority, but doubts are rampant about the success of such an effort.

Each of these uncertainties--how they came to be and the implications they hold for payers, service providers and consumers--are discussed in detail in "Acing Uncertainties in the Payer Market: The Trump Cards." Download a complimentary report abstract.

"These legislative trends are serving as significant inhibitors to the market and spurring us to revise downward our estimates for short- and medium-term market growth," said Abhishek Singh, practice director at Everest Group. "However, numerous other factors are driving growth. Economic stability in the U.S., economic growth in Asia-Pacific, the heightened emphasis on compliance and cybersecurity, consumerization in healthcare, the rise of value-based care models, and technology adoption in areas such as cloud-based infrastructure, automation and analytics--these are all growth drivers that assure the HLS market will remain robust in the long term."

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, and sourcing. We are trusted advisors to senior executives of leading enterprises, providers, and investors. Our firm helps clients improve operational and financial performance through a hands-on process that supports them in making well-informed decisions that deliver high-impact results and achieve sustained value. Our insight and guidance empowers clients to improve organizational efficiency, effectiveness, agility and responsiveness. What sets Everest Group apart is the integration of deep sourcing knowledge, problem-solving skills and original research. Details and in-depth content are available at http://www.everestgrp.com.

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Contact:

Andrea M. Riffle, Everest Group
andrea.riffle(at)everestgrp(dot)com

Robert Cathey, Cathey Communications
+1-865-386-6118
robert(at)cathey(dot)co

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