Federal Health Information Technology Market, 2016-2021

Published: December 20, 2016

Federal Market AnalysisHealth IT

Deltek's Federal Health Information Technology Market, 2016-2021 examines the trends and drivers shaping the federal Health IT marketplace and provides a forecast for the next five years.

The federal government estimates that the federal portion of national health care spending will grow 86%, from $920 billion in 2015 to $1.7 trillion by 2025. As the need for improvements in health care quality, interoperability and privacy grows, federal agencies acting as payers, promoters and providers will continue to invest in technologies and solutions to improve health outcomes and reduce waste, fraud and abuse.

Efforts to digitize, share, analyze and secure health information will support strong federal spending in this market segment over the next five years. The Department of Defense is in the throes of implementing a new electronic health records system worldwide and the Department of Veterans Affairs is in the midst of creating an entire digital health platform. Investments such as these solidify the spending forecast for this market area, offering a degree of protection from the budget tightening that other areas of federal IT will experience over the same time period. Federal investments to support medical innovation, betterment of population health, health care cost containment, and a reduction in medical fraud will also strengthen contract spending on Health IT goods and services.

Deltek forecasts the demand for vendor-furnished Health IT products and services by the U.S. federal government will increase from $6.0 billion in FY 2016 to $6.4 billion in 2021 at a compound annual growth rate (CAGR) of 1.4%.

Key Findings

  • Growth in federal health IT contractor addressable spending will be supported by agency investments in EHRs and continued investments to improve population health and combat disease.
  • Future health initiatives remain largely uncertain under the new presidency. However, previous comments and newly appointed senior leadership by the Trump administration suggest a decrease in funding for health care mission oriented agencies. However, DOD and VA spending will likely see an increase in funding under the new administration to support the nation’s veterans and military forces.
  • Top federal health IT areas of focus include data standardization, data integrity, information exchange, interoperability, analytics, storage, infrastructure modernization, legacy system modernization, cloud adoption, telehealth and mobile applications.
  • Legislative and administration policy, such as the HITECH Act, MACRA, and the 21st Century Cures Act, promote population health and the use of health IT on a nationwide level, but provide relatively limited funds to agencies for the implementation of health IT.
  • The Provider market segment is expected to show the most year-over-year growth due to VA and DOD EHR initiatives, as well as VA efforts to implement its digital health platform.

    Critical Insight for Vendors

    This report provides a view of diverse factors driving the federal spending on health IT with market sizing for the Provider, Promoter, and Payer segments of the market, as well as thirteen individual federal agencies. The report also identifies major health IT investments and activities by agency. The report provides recommendations to guide solutions providers in maximizing their market positioning to best take advantage of federal business opportunities.

    Deltek’s Federal Health Information Technology Market, 2016-2021 is delivered in PowerPoint® presentation format, including an Executive Briefing presentation summarizing the key findings and an Excel® workbook with data for the various forecasts and other key findings.

  • Introduction

    Market Drivers

    Market Forecast

    Agency Analysis

  • Health and Human Services - Overview
  • Centers for Medicare and Medicaid Services
  • Food and Drug Administration
  • National Institutes of Health
  • Centers for Disease Control
  • Other HHS Agencies
  • Department of Defense
  • Veterans Affairs
  • Department of Agriculture
  • Social Security Administration
  • Department of Homeland Security
  • Office of Personnel Management
  • Department of State
  • Conclusions and Recommendations