The global hospital outsourcing market is anticipated to reach market size of around US$ 500 Bn by 2027 and is anticipated to grow at a CAGR of around 10% in terms of revenue during the forecast period 2020 - 2027.
Outsourcing encourages hospitals to focus on their core goal of delivering productive healthcare services. Outsourcing supplementary operations can improve financial efficiency by lowering overhead costs and increasing revenue, output, and overhead quality. In hospitals, most auxiliary roles require technical skills or a vast infrastructure.
Hospitals are increasingly contracting third-party functions to external resources such as health accounting and IT resources. As there is little experience and no access to qualified on-site resources, hospitals primarily provide non-participating care providers medical facting and IT services. By establishing and accrediting these service providers, they are also responsible for their quality standards. In addition, in-house expertise, capability and expenditure constraints arise for private hospitals in the field. Contract healthcare providers are the perfect option for containing private hospitals' low cost facilities. This resulted in mutually advantageous ties between hospitals and third-party vendors. In the fields of sales cycle management, payroll processing and central supply management, and home utilities, there are also important factors that fuel demand during the expected period of volatility and a lack of expertise. The growing concern for data security, cultural and linguistic gaps is projected to continue to restrict the growth of the hospital sector during the projected period.
Currently, the healthcare sector is seeing by the federal requirement to offer Electronic Medical Records (EMR) an expansion in outsourcing of in-house facilities, increased insurance expenses and the introduction of complex ICD-10 coding schemes. The growth of the market can be supported by the increasing patient traffic and pressure of medical processes, such as health eligibility and patient check-in records.
Due to the involvement of a large number of service providers in the region, North America represented the highest revenue share of 71.1% in 2019. Furthermore, the rising outsourcing of local hospitals pushes the hospital externalization markets in the area further. Since hospitals follow the paperless method in developing nations, such as the US, there's a massive volume of patient data, so many hospitals employ third-party service vendors to handle such vast volumes of data. The growth of the hospital outsourcing industry in the area is expected to be led. However, it is predicted that Middle East and Africa will record the highest growth during the estimated timeframe as hospital facilities are more and more outsourced to countries like Saudi Arabia. There is estimated to be a large demand in the area because of the available professional capital, low-cost facilities and rising use of modern technology.
The other segment was the largest share of sales in 2019 at 39.0%, including laundry, cafeteria and catering, defense, housing and maintenance. However, the highest CAGR of 11.3% over the forecast period is projected to be registered in the Clinical Services Segment as hospitals can outsource these services to third-party service providers or joint partners in a wide scale. Medical facilities include laboratory (pathology and microbiology), radiology, pharmaceuticals, dialysis and recovery.
The outsourcing industry of hospitals is highly competitive and involves many main players. However, the medium-sized firms have expanded their market presence by launching new goods and services at low costs, through technical advances and product improvements. Some of the prominent players in the hospital outsourcing market include Sodexo, Cerner Corporation, The Allure Group, Allscripts, Integrated Medical Transport, LogistiCare Solutions, LLC, Flatworld Solutions, Aramark Corporation, Alere, Inc., ABM Industries Inc., and others.
The global hospital outsourcing market is segmented as below:
Hospital Outsourcing Market By Service
Hospital Outsourcing Market By Type
Hospital Outsourcing Market By Geography
Middle East & Africa