FEDERAL HEALTH IT MARKET, 2022-2024
Published: 08/25/2022
Description
Due to the COVID-19 pandemic, federal health mission agencies rallied to overcome extraordinary challenges and demands over the last two and a half years. With unprecedented investments in biomedical research, disease surveillance, vaccines, public health infrastructure and health IT due to the pandemic, federal funding is leveling off as the country settles into a new normal. Preparing for the future, federal health mission agencies are prioritizing patient care, public health infrastructure, disease surveillance, population health, biomedical research, and improved medical outcomes. They are leveraging information technology for health programs to improve and empower care, advance research, expand health equity, track disease permeation, and improve medical supply chains. Additionally, rising federal expenditures on healthcare drive federal investments in health IT to improve care, deliver better outcomes, reduce healthcare fraud and drive efficiencies. The Office of the Actuary at the Centers for Medicare and Medicaid Services forecasts federal healthcare expenditures to reach $2.2T by 2030, with an expected 6.4% annual growth rate. The pace of Electronic Health Records (EHR) implementation at VA and DOD are major influencers on HIT spending, however the pace of VA’s progress is below expectations, resulting in a funding pause for much of the forecast period. Other HIT investments to modernize data and infrastructure at HHS agencies help buoy the market. Deltek forecasts federal spending on contractor-supplied health IT products and services to decrease from $10.6 billion in FY 2022 to $9.3 billion in FY 2024 at a compound annual growth rate (CAGR) of -6.6%. Key Findings Biden Administration Support. Several executive actions early in the administration, as well as the FY 2023 budget request, indicate support for investments facilitating data-driven decision-making and health IT capabilities for health mission agencies.EHR Deployment. Expected federal health IT spending in the next three years is largely driven by VA’s EHR implementation, along with associated IT infrastructure upgrades. The revised schedule and budget for the rollout will greatly impact spending in this federal market area.Legislative Investments: Continued progress under the 21st Century Cures Act and legislative investments made during the pandemic are paving the way for more interoperability, health records exchange, individual access to one’s own records, and advances in health and medical research.Past Spending Growth. Total historical federal budgets for health IT rose over the last five years. Contract spending on the health IT Special Item Numbers (SIN) for GSA Multiple Award Schedules (MAS) grew exponentially over the same time period. Expected Investments. Deltek expects health mission agencies to continue to invest in telehealth, virtual care, virtual/augmented reality, 5G capabilities, analytics, big data solutions, artificial intelligence, machine learning, automation, data and infrastructure modernization, cloud computing solutions, and cybersecurity. Critical Insight for Vendors Deltek’s Federal Health IT Market, 2022-2024 report takes a strategic 3-year look at the trends, drivers, and inhibitors shaping federal health IT procurement. The report will help federal IT contractors: Understand the health IT environment and the trends driving federal investments.Assess the policy and legislative initiatives shaping the current federal healthcare and health IT environment and their impact on the market.Gain an understanding of the health IT applications, technology areas and market segments within the federal health IT market.Assess the market size and forecast for health IT within agencies possessing a health mission.Identify key health IT priorities and investments by agency.Obtain actionable intelligence for strategic planning and business development in the federal health IT market. Deltek's Federal Health IT Market, 2022-2024 report is delivered in PowerPoint® format, including a PowerPoint® Executive Briefing, and an Excel® data workbook.
