making the most of digitized healthcare data
DESCRIPTION
The Healthcare IT services market has grown in recent years due to an increasing need for healthcare professionals to digitize healthcare data in EHRs and an increased emphasis on improved patient health outcomes. These changes lead to a desire for increased use of analytics to capture trends and key healthcare performance indicators in the healthcare IT sector. Analyst Joseph Walent shared his perspective on the latest results and provided webinar attendees with additional insight into vendors' performances and the future of the healthcare IT services market. Walent then fielded questions from the audience related to this research. Questions for discussion included: • How are healthcare IT services (HITS) vendors employing data analytics tools and solutions to generate improved outcomes for providers and payers? • What types of solutions are HITS vendors bringing to bear to help ensure patient wellness? • In what ways are HITS vendors delivering value-added service in transformational technologies and the associated business consulting services to maximize the impact?TRANSCRIPT
TBR
TECHNOLOGY BUSINESS RESEARCH, INC.
Making the most of digitized healthcare
Insights from TBR’s 1Q14 Healthcare IT Services Benchmark
July 17, 2014
TBR
2 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
Healthcare IT Services Quarterly Benchmark Readout: Presenter
Joseph WalentLead Analyst, Healthcare IT ServicesProfessional Services Practice
Email: [email protected] Twitter: @JDWalent
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TBR’s healthcare IT services reports deliver unique insight and value through in-depth analysis in a concise, consumable format
TBR Healthcare IT Services Overview
Clients gain advantages and a better understanding of revenue opportunities through our reports and their personal relationships with TBR
• TBR continually covers 20 vendors in its Healthcare IT Services Benchmark.• Of those vendors, we publish five healthcare IT services (HITS) company reports, focusing on the
HITS businesses of Accenture, CSC, Dell Services, HP Services and IBM Global Services.• The healthcare activities of eight other firms are covered in TBR’s overall IT services quarterly and
semiannual reports on CGI, Cognizant, Deloitte, General Dynamics, HCL, Infosys, Leidos and Xerox.• TBR’s Healthcare IT Services Benchmark includes the activities of Allscripts, Cerner, CPSI, Epic,
Harris, McKesson and NextGen.o TBR reports are unique due to their deep, holistic analysis of leading vendor businesses.o Financial modeling and TBR insights help customers build a better understanding of vendor
business models.o TBR reports and webinars are designed to be responsive to client time lines, to be clear and
concise, and to provide insights across multiple layers of an organization.o TBR’s strategic assessment provides an impartial reality check on how vendors are performing in
their strategic objectives and the overall market.
TBR
4 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
Healthcare IT Services Quarterly Benchmark Readout: Agenda and Format
Today’s Agenda
1. Key fiscal results from the 1Q14 benchmark
2. Strategic actions: M&As, alliances, portfolios
3. Where is the market headed? 2014 outlook
4. Q&A
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5 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
Healthcare IT Services Quarterly Benchmark Research Highlights
Healthcare IT Services Benchmark Highlights for 1Q14
Balancing portfolios: M&As, alliances, internal
Around the bend: HITS market focus areas
Solid vertical demand: Recent fiscal results
Continued evolution of demand in the various segments of the HITS marketplace expanded the scope of opportunities for vendors in 1Q14
SOURCE: WWW.THINKWITHGOOGLE.COM
SOURCE: WWW.INETU.NET
SOURCE: WWW.TREKEARTH.COM
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6 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
The healthcare provider segment will remain the central revenue engine in the majority of HITS vendors’ business models in 2014
Declining federal subsidies for IT implementation in healthcare contributed to softening demand for HITS solutions
Healthcare IT Services Quarterly Benchmark Research Highlights
8.8% 8.9%8.6%
8.0%
6.0%
9.7% 9.3% 9.4%
8.6%
7.9%
0%
2%
4%
6%
8%
10%
12%
1Q13 2Q13 3Q13 4Q13 1Q14
Gro
wth
%
Calendar Quarter
Average Growth (YTY TTM Revenue & YTY Quarterly Revenue) for HITS Vendors
Average YTY Growth Average TTM YTY Growth
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SOURCE: TBR ESTIMATES AND COMPANY DATA
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7 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
A maturing market encouraged HITS vendors to develop and implement mission-specific solutions to secure market share
Vendors that focused on niche HITS solution delivery fared better than their generalist counterparts in 1Q14
Healthcare IT Services Quarterly Benchmark Research Highlights
Accenture CGI
Cognizant
Harris
Cerner
Allscripts
Infosys
Leidos
Deloitte Epic
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
-20% -10% 0% 10% 20% 30% 40%
Ope
rati
ng M
argi
n TT
M
Healthcare IT Services Revenue TTM Growth YTY
1Q14 HITS TTM Operating Margin and Revenue Growth
NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE. SOURCE: TBR ESTIMATES AND COMPANY DATA
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9.4% Avg. Healthcare IT Vendor TTM Growth YTY 13.2% Avg. Healthcare IT Vendor TTM Operating Margin
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8 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
HITS revenue growth leaders are expanding their presence in new segments and pursuing international opportunities to drive growth
Healthcare IT Services Quarterly Benchmark Research Highlights
Healthcare IT Services TTM Revenue Growth Leaders in 1Q14
• Logica acquisition masked the negative impact of loss of HealthCare.gov and Massachusetts Health Connector engagements.
• Opportunities captured in Europe offset setbacks in the U.S. public sector.
• Focus on systems for large-scale U.S. provider market continued to generate leading growth rates.
• Expanded presence in federal and consumer healthcare IT markets in 1Q14.
26.3% in 1Q14
25.7% in 1Q14
29.9% in 1Q14
• Internal development of proprietary solutions for business process outsourcing (BPO) and IT outsourcing (ITO)
• Aggressive pursuit of engagements in public sector, payer and life sciences segments
Other vendor revenue growth leaders in 1Q14: Deloitte (23.1%), Cognizant (19.9%), Cerner (17.7%)
Infosys
CGI
Epic
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9 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
HITS operating margin leaders employed a variety of strategies to secure top spots for profitability
Healthcare IT Services Quarterly Benchmark Research Highlights
Healthcare IT Services Operating Margin Leaders in 1Q14
• Expanding offshore labor pools • Introduction of automated service delivery to maximize resource utilization
• Near-exclusive focus on the small and midsize provider community combined with efficient use of technology helped preserve profits.
• Expiration of federal incentive payments for HITS adoption will weigh on CPSI’s business in coming quarters.
25.6% in 1Q14
23% in 1Q14
24.7% in 1Q14
• Strong market position with premium price points coupled with exclusivity on customization of systems
• Leverage of C&SI firms for lower-value implementation and integration work• Epic’s push to generate additional analytical insights for clients will increase
value and improve profitability.
Other operating margin leaders in 1Q14: Cerner (22.3%), Cognizant (19.4%), Infosys (17.8%)
HCLT
Epic
CPSI
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10 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
HITS vendors are adjusting their offerings as healthcare industry clients widen their use of IT-enabled solutions
Healthcare IT Services Quarterly Benchmark Research Highlights
Healthcare IT Services Segment Trends in 1Q14
Payer: HITS vendors are supporting payer clients with patient engagement solutions such as patient portals and population health management tools that help members make positive healthcare decisions.
Provider: Healthcare providers are moving to a collaborative healthcare system where IT system interoperability is critical to improving quality of care and patient outcomes.
Life Sciences: Life sciences IT vendors are generating analytics offerings that provide capabilities to help drive insights around drug discovery or biological manufacturing.
Federal: Growth of the federal healthcare segment decelerated as financial outlays for the implementation of the Affordable Care Act (ACA)-mandated health insurance exchanges diminished.State and Local: As part of the ACA, states are revamping Medicaid Information Management Systems, creating opportunities for vendors such as Xerox and HP.
SOURCE: WWW.DAC-LAW.COM
SOURCE: WWW. CPRNETWORK.CA
SOURCE: WWW. XCONOMY.COM
SOURCE: WWW. OCCASIONALPLANET.COM
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11 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
Healthcare IT Services Quarterly Benchmark Research Highlights
Healthcare IT Services Benchmark Highlights for 1Q14
Balancing portfolios: M&As, alliances, internal
Around the bend: HITS market focus areas
Solid vertical demand: Recent fiscal results
Broader access to HITS solutions affords HITS vendors opportunity to secure wallet share from clients
SOURCE: WWW.THINKWITHGOOGLE.COM
SOURCE: WWW.INETU.NET
SOURCE: WWW.TREKEARTH.COM
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12 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
Gaining IP to facilitate the delivery of a wider range of HITS services and capabilities influenced 1Q14 acquisitions
Healthcare IT Services Quarterly Benchmark Research Highlights
Healthcare IT Services Vendors: Key Mergers and Acquisitions in 1Q14
Cloudant: As healthcare becomes increasingly personalized, access to Cloudant’s Database as a Service (DBaaS) capabilities will provide IBM GS an attractive offering that caters to developers creating mobile and Web apps.
ISG Holdings: Xerox’s acquisition of ISG’s established medical bill review, care management services and analytics solutions will enhance Xerox’s healthcare provider BPO portfolio. Xerox
IBM
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13 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
HITS vendors engaged in alliances to deepen portfolios and extend market reach
Healthcare IT Services Quarterly Benchmark Research Highlights
Healthcare IT Services Vendors: Key Alliances and Partnerships in 1Q14
Texas A&M Health Science Center: Dell and Texas A&M partnered to create a health technology academy that will provide healthcare professionals specialized information technology education.
Amazon Web Services: The partnership will result in the development of healthcare cloud solutions that leverage Amazon’s public cloud offerings and CSC’s cybersecurity, cloud management and electronic health record (EHR) system integration capabilities.
Apple: Epic’s MyChart will integrate with Apple’s HealthKit, allowing consumers to feed their biometric information into the application, increasing Epic’s direct exposure to the healthcare consumer.
CSC
Dell Services
Epic
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14 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
Healthcare IT services vendors focused internal development efforts on improving efficiency and security of healthcare organization operations
Healthcare IT Services Quarterly Benchmark Research Highlights
Healthcare IT Services Vendors: Key Service Announcements in 1Q14
FusionFX: Harris released its long-awaited EHR integration platform enabling the efficient exchange of patient information through its patient portal interface.
ConvergeHealth: Deloitte launched a transformational business unit focused on delivery of outcome-based solutions by providing data-driven consulting services.
Managed Mobile Services: The expansion of McKesson’s HITS portfolio to include a mobile device management solution addresses the security concerns of provider IT departments that are stretched thin.
Deloitte
Harris
McKesson
TBR
15 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
Healthcare IT Services Quarterly Benchmark Research Highlights
Healthcare IT Services Benchmark Highlights for 1Q14
Balancing portfolios: M&A, alliances, internal
Around the bend: HITS market focus areas
Solid vertical demand: Recent fiscal results
Changes in how healthcare is delivered and results are measured will spur solution development for HITS vendors in 2014
SOURCE: WWW.THINKWITHGOOGLE.COM
SOURCE: WWW.INETU.NET
SOURCE: WWW.TREKEARTH.COM
TBR
16 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
Healthcare IT Services Vendor Trends for 2014 — Patient Engagement
HITS vendors will enhance patient and member communication solutions to deliver more personalized medical treatment
Healthcare IT Services Quarterly Benchmark Research Highlights
Challenges• Shift to outcome-based remuneration, placing more risk
with providers.• Personalization of healthcare plans and strategies
requires flexibility and interoperability in healthcare data exchange.
Opportunity• HITS vendors with experience in development and
implementation of retail customer contact solutions will translate offerings to healthcare patient case management strategies and solutions.
• Integration of security within solutions across platforms and access points will stand out in the marketplace.
SOURCE: WWW.SNAPCOMMS.COM
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17 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
Healthcare IT Services Vendor Trends for 2014 — Convergence and Consolidation
Expanding regulatory requirements and demand for more coordinated care are changing the payer and provider landscape
Healthcare IT Services Quarterly Benchmark Research Highlights
Challenges• Expansion of the payer and provider model across
various states with varying insurance regulatory structures and requirements
• Maintaining protected health information (PHI) while simultaneously improving information liquidity
Opportunity• Consumer-oriented healthcare delivery will encourage
leverage of economies of scale.• Improved population health data enables improved
preventive healthcare delivery.• Solutions limiting internal sharing of certain healthcare
data in converged organizations
SOURCE: WWW.WORKLIFECHAMPIONS.COM.AU
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18 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
Healthcare IT Services Vendor Trends for 2014 — Management of Chronic Conditions
Solutions for managing secure communication across accountable care organizations will be in demand from HITS vendors in 2014
Healthcare IT Services Quarterly Benchmark Research Highlights
Challenges• Chronic conditions such as diabetes, asthma and
heart disease consume the majority of healthcare delivery spend globally.
• Expansion of healthcare coverage in the U.S. increases demand for healthcare infrastructure for chronic condition management.
Opportunity• Development and implementation of remote
monitoring and telemedicine delivery capabilities via cloud and mobility solutions
• Vendors with international HITS delivery have greater exposure to in-home medical delivery models effective in chronic condition management.
SOURCE: WWW.DIABETESMINE.COM
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19 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
Questions?
Healthcare IT Services Quarterly Benchmark Research: Questions
TBR
20 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
Joseph WalentLead Analyst, Healthcare IT ServicesProfessional Services Practice
Email: [email protected] Twitter: @JDWalent
James McIlroy Vice President of SalesEmail: [email protected]: 603.929.1166
Twitter: @TBRincSlideShare: www.slideshare.net/TBR_Market_InsightYouTube: www.youtube.com/user/TBRIChannelLinkedIn: www.linkedin.com/company/technology-business-research
Healthcare IT Services Quarterly Benchmark Research: Contact Information
TBR
21 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
Healthcare IT Services Quarterly Benchmark Research: Appendix
Accenture CGI
Cognizant
CSCHarris
CernerIBM GS
HP Services
Allscripts
Infosys
Dell Services
Xerox
Leidos
NextGen
McKesson
Deloitte
General Dynamics
EpicHCL
CPSI
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
-20% -10% 0% 10% 20% 30% 40%
Ope
rati
ng M
argi
n TT
M
Healthcare IT Services Revenue TTM Growth YTY
1Q14 HITS TTM Operating Margin and Revenue Growth
NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE. SOURCE: TBR ESTIMATES AND COMPANY DATA
TBR
9.4% Avg. Healthcare IT Vendor TTM Growth YTY 13.2% Avg. Healthcare IT Vendor TTM Operating Margin
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22 TBR HITS Benchmark Webinar | 1Q14 | www.tbri.com | ©2014 Technology Business Research Inc.
PSP Syndicated Research CoverageIT Services Vendors Public Sector Vendors Benchmarks
(Benchmark XLS data also available)• Accenture• Atos• Capgemini• CGI*• Cisco Services• Cognizant• CSC• Dell Services• Fujitsu• HCL Technologies• HP Services• IBM Global Services• Infosys• T-Systems• Tata Consultancy Services• Unisys• Wipro IT Services• Xerox Services
• Booz Allen Hamilton*• CACI International*• General Dynamics IS&T*• L-3 Communications*• Leidos*• Lockheed Martin IS&GS*• ManTech*• Northrop Grumman IS&TS*• Raytheon Intelligence, Information & Services*• SAIC*
• Global Delivery Market Landscape • Healthcare IT Services Vendor Benchmark• IT Services Vendor Benchmark • Management Consulting Benchmark• Public Sector IT Services Vendor
Benchmark• Software Alliance Benchmark
Healthcare IT Services Vendors
• Accenture HITS*• CSC HITS*• Dell HITS*• HP HITS*• IBM HITS*
Management Consulting Vendors
• Bain & Company*• Booz & Company*• Boston Consulting Group*• Deloitte Consulting*• McKinsey & Co.*
TBR Professional Services Practice Syndicated Coverage
*Semiannual publication
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