Federal Health IT Market, 2021-2023

Published: August 27, 2021

FeaturedFederal Market AnalysisElectronic Health RecordHealth CareHealth ITInformation Technology

Deltek's Federal Health IT Market, 2021-2023 report takes an in depth look at the policies, budgets and technology drivers that are shaping federal health IT and provides an outlook for the marketplace over the next three years.

The COVID-19 pandemic brought unprecedented challenges, demands and opportunities for federal health mission agencies. As the nation still struggles to recover and emerge from the pandemic, federal agencies with health missions are prioritizing patient care, disease surveillance, population health, biomedical research, and improved medical outcomes.  They are leveraging information technology to empower care, propel research, track disease permeation, monitor medical supply chains, and drive vaccine distribution.  

Additionally, rising federal expenditures on healthcare drive federal investments in health IT to improve care, deliver better outcomes, reduce healthcare fraud and gain efficiencies. The Office of the Actuary at the Centers for Medicare and Medicaid Services forecasts a 6.7% annual increase for federal healthcare spending from 2021 to 2028 due to increased Medicare and Medicaid costs and enrollment. Implementation of VA and DOD Electronic Health Records (EHR) further influences federal health IT spending over the forecasted period.

Deltek forecasts federal spending on contractor-supplied health IT products and services to decrease from $9.0 billion in FY 2021 to $8.6 billion in FY 2023 at a compound annual growth rate (CAGR) of -2.1%.

Key Findings

  • Strengthened Focus. The COVID-19 pandemic has fueled a renewed federal focus on health and medical research, disease surveillance and public health security and innovation, which has resulted in additional health IT investments.
  • EHR Deployment. Expected federal health IT spending in the next three years is predominantly driven by DOD and VA EHR implementations, along with associated IT infrastructure upgrades. The revised schedule and budget for VA’s EHR rollout will greatly affect spending in this federal market area.
  • Past Spending Growth. Total federal spending on health IT rose over the last five years and contract spending on the health IT Special Item Numbers (SIN) for GSA Multiple Award Schedules (MAS) grew exponentially over the last three years.
  • Biden Administration Support. Several executive actions early in the administration, as well as the FY 2022 budget request, indicate support for investments facilitating data-driven decision-making and health IT capabilities for health mission agencies.
  • Expected Investments. Deltek expects health mission agencies to continue to invest in telehealth, virtual care, analytics, big data solutions, AI, machine learning, automation, infrastructure modernization, cloud computing, and cybersecurity. 

Critical Insight for Vendors

Deltek’s Federal Health IT Market, 2021-2023 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, 2021-2023 report is delivered in PowerPoint® format, including a PowerPoint® Executive Briefing, and an Excel® data workbook.

  • Introduction
  • Market Drivers
  • Contracting Environment and Historical Spending
  • Market Forecast
  • Agency Analysis
  • Conclusions and Recommendations
  • Appendix