Digital care coordination software market to top $3B by 2022, but hurdles remain
- The U.S. care coordination software market is on track to hit $3.18 billion by 2022, up from $1.55 billion currently and growing at an compound annual growth rate of 15.4%, a new Frost & Sullivan report finds.
- Among factors fueling growth are inefficiencies in referral management and increased consumer demand for coordinated medical insights on treatment plans. According to the report, providers lose up to 55% of their potential revenue growth due to poor referral management.
- But challenges to growth in care coordination IT (CCIT) remain, including a lack of products offering interoperability between payers and providers and overlap of care management and population health management tools, which hinders investment in both markets.
Digital care coordination tools are key to attaining the goals of value-based care. Frost & Sullivan notes up to 80% of medical errors stem from lack of communication during care transition.
Healthcare organizations increasingly associate care coordination with overall health of their communities, with two-thirds of executives in a recent Industry Pulse survey saying lack of care coordination is a barrier to health and wellbeing. The use of CCIT will become even more important as more providers take on risk, through federal ACO programs or bundled payment models.
Besides automating referral management and boosting patient revenue and satisfaction, CCIT offers potential to communicate patient outcomes in real time and realize savings from improved chronic disease management and community health efforts, the report notes. CMS' proposed Promoting Interoperability initiative is also expected to speed uptake of care coordination software and services.
"The care coordination software market is embracing large-scale innovation, aided by advanced technologies such as AI and blockchain, which support data interoperability and normalization within a defined clinical network," Koustav Chatterjee, industry analyst for transformational health at Frost & Sullivan, said in a statement. "The growing need to auto-trigger worklists and personalize intervention plans for complex patient populations will further drive investments in care coordination IT."
Still, CCIT adoption remains limited to providers and payers that are tying a majority of their patient revenue to value- or risk-based programs, the report says.
Lack of provider-payer interoperability isn't the only factor threatening CCIT growth, however. Introduction of EHRs and practice management platforms with care coordination capabilities could discourage potential customers from investing in independent solutions, according to the report. Cuts in reimbursement for inpatient and transitional care have also made providers hesitant to invest in care coordination efforts initiated within those delivery modes.
The fact that most value-based revenue continues to stem from risk-free tracks in the Medicare Shared Savings Program also hampers uptake of care coordination tools that could improve patient outcomes.
Health information exchanges could help in broader efforts around interoperability and care coordination. A recent study in Health Affairs found that hospital participation in HIEs reduced readmissions 30-day readmissions for heart attack patients, in part due to more information sharing with outside providers.
"A greater policy focus on integrating HIE into quality improvement initiatives may help shift hospitals' focus to making better use of electronic patient information from outside providers in clinical decisions," the study said.
- Frost & Sullivan US Care Coordination Software Market, Forecast to 2023