– Growing at a compound annual growth rate (CAGR) of 8.4 percent, researchers projected the global healthcare supply chain management market to reach $2.31 billion by 2022, a recent Markets and Markets report showed.
The value of the healthcare supply chain management market is up from an estimated $1.55 billion in 2017. But researchers noted that the global healthcare supply chain management market is still somewhat restricted because of the costs of implementing and maintaining a solution.
However, the North American market is strong. The market is slated to hold the largest share of the healthcare supply chain management market, and it will also experience the highest CAGR during the forecast period, researchers predicted.
Hospital consolidation, regulatory requirements, increasing chronic disease burden, and patient financial responsibility growth will boost the US market, while healthcare supply chain optimization efforts will drive Canadian providers to seek solutions.
Researchers attributed the global market’s growth to provider organizations facing increasing pressure to improve operational efficiency and profitability, especially as value-based reimbursement models tie payment to quality and cost performance and payers reduce claims reimbursement rates under fee-for-service systems.
The development of cloud-based healthcare supply chain management solutions also contributed to the projected market’s growth, the report stated.
Healthcare supply chain management solutions are categorized as on-premise or cloud-based delivery modes. Researchers projected the on-premise healthcare supply chain management mode to hold the largest share of the global market in 2017.
Provider organizations have favored on-premise solutions because of their usability. On-premise solutions also have a lower risk of healthcare data breaches.
But provider organizations will start to consider more cloud-based options by 2022. Cloud-based modes will see the highest rate of growth during the forecast period, the report added.
“Growth in the cloud-based segment can largely be attributed to the several advantages offered by the cloud-based delivery mode over the on-premise delivery mode,” researchers wrote. “Cloud-based solutions are less costly to install and maintain than on-premise solutions which contribute to the high growth and popularity of the cloud-based mode.”
Additionally, the report showed that provider organizations are selecting healthcare supply chain management software products versus hardware solutions.
Researchers predicted the software segment to acquire the largest share of the global market in 2017. Healthcare supply chain management software solutions offer provider organizations increased efficiency and business intelligence services at a lower cost, the report stated.
More providers will be seeking healthcare supply chain management solutions by 2022, researchers explained. Manufacturers are set to command the largest share of the global market, but the provider segment should see the highest CAGR from 2017 to 2022.
In the current healthcare landscape, providers are looking for systems that can support high-quality patient care while also improving profitability. As reimbursements become linked to care quality and cost performance, provider organizations are finding that their revenue is shifting and earning the maximum amount for services delivered will not be as easy as performing a test or procedure.
Ensuring that practices and hospitals implement effective inventory management practices will be key to increasing profitability and improving care delivery efficiency, researchers stated.
Healthcare supply chain management solutions will also gain popularity among hospital and health system users as healthcare merger and acquisition activity increases. Under a hospital consolidation project, leaders and providers tend to centralize business processes and a comprehensive system is critical to tracking inventory across several facilities.
The leading healthcare supply chain management vendors are SAP (Germany), Oracle (US), Infor (US), McKesson (US), TECSYS (Canada). The report also listed GHX (US), Manhattan Associates (US), JDA Software (US), Jump Technologies (US), and LogiTag (Israel) as key players in the global market.