Aggregated US provider and payer healthcare ICT spending was close to $26 billion in 2004 and will grow to over $34 billion by 2008, with a CAGR of 7%. By 2008 payer spending will amount to $7.5 billion and provider spending will be at $26.7 billion. (based on forecast from Research & Reports)
To gear up for this emerging trend, CSC made a $375 million acquisition of First Consulting Group along with increasing the offshore capabilities in India.The healthcare provider market currently is cornered by CSC, IBM, Accenture,EDS and Perot systems with billion dollar deals in the bag,spread over several years.
Indian IT companies have not been strong in the US provider market primarily due to the lack of availability of HL7 certified professionals in India. However, this is changing fast. In 2007 India produced the most number of HL7 certified professionals worldwide, (120) followed by US with 60 professionals.
As the Financial services sector in US continues to reel under the mortgage crisis, the healthcare market comes as a relief to the major IT outsourcing companies.
According to analysts, Syntel and TCS can capitalize on the growing healthcare provider market in US, primarily because of their extensive experience in HL7. HL7 (Health Level Seven) standards is the primary standard for data interchange in the healthcare provider market. TCS has experience working with the NHS-UK healthcare project while Syntel has deep domain expertise built from working with Mc Kesson.
Subscribe to:
Post Comments (Atom)
7 comments:
Hi,
I am following this blog through RSS.
Good post.
If possible, please post more frequently.
(Maybe you are very busy. Just a request.)
-Bhargava
Hi,
Interesting - I have also found Wipro Tech to be extremely active in the Provider as well as the HL7 marketspace
Vijay
Interesting Blog Saji,
Didnt realize that it exist, came to it while browsing.
Mckesson is slowly moving away from Syntel. It is going off to a bagalore based larger firm.
Syntel could have leveraged Mckesson deal to get into Provider domain.But one would say they have not gone outside their comfort zone namely technology and mainfarme.
They were building a non-mainframe product for Mckesson. Last I heard since 6 years they have not been able to get the product up and running at a single Beta site.
Its a virtual ping pong game out there , Syntel says requirements change and Mckesson say some mumbo jumbo about contract.
HIT vendors do outsource to India, the product development part of it. Although I canot say that a single provider side product which earns in the excess of 30mil a year has been developed out of India.
Not many USA based Hospitals want to outsource their IT dept to a vendor based out of India.
But yet we await for deals and hope 2008 will be a better year.
I am aware that the scope and contract negotiations held in 2002 were pretty complex and hence a couple of offshore vendors walked away from the deal.
Indian IT companies may not be able to make a dent in the US healthcare IT market by relying on an organic growth strategy.
Hi,
read your write up on the US healthcare industry and the way the Indian IT firms are leveraging it. However, youhave mentioned just TCS and Syntel. Firstsource recently acquired Medassist. It has 800 clinets including hospitals, physicians etc. What do you have to say on that?
There is no doubt that this is a great buy in the BPO space. Basically this is the way to go for IT companies as well if they would like to scale and work against some of the offshore "perception" problems.
I have found India based non IT companies .(read Tata Steel,Tata Motors,Mallaya Group,Indian Pharma etc)to be more savvy when it comes to overseas acquisitions
Post a Comment