A new report has predicted that the existing fragmented European Healthcare IT industry, with different vendors control different niche segments, is rapidly moving towards consolidation and may double in size within five years.
The report by market analysts Frost & Sullivan values the European healthcare information system (HIS) market as valued at $3.13 bn in 2003, and estimates that the market grew 9.7% in 2003. By 2010 it projects that the European HIS market will be worth $6.3 billion.
This high growth rate is attributed to implementation programmes for clinical information systems in major European markets including the United Kingdom, Germany, France and Scandinavia.
Initiatives such as Germany’s Health Smartcard, the English NHS’s National Programme for Information Technology and the European Commission’s e-Health initiative are expected to have a positive effect on the growth rate of the European HIS market.
"Although these initiatives do not directly mandate HIS modules, the associated IT upgrades required could force stakeholders to bring systems to a common platform to support the integration," said Frost & Sullivan Industry Manager Siddharth Saha.
According to the report, companies with proven integrated IT solutions for the healthcare market will continue to take the lead in the European markets. The strong trend towards integrated healthcare delivery in major markets such as the United Kingdom, Germany and Scandinavia is further fuelling the need to install scalable systems.
Examining the current state of the market, the report states that technology vendors that have implemented legacy systems retain a strong hold on pockets of provider groups across the primary, secondary and acute care sectors, simply because the end users do not have the resources for expensive upgrades. It predicts that once customers start replacing legacy systems, provided their budgets permit it, there is likely to be a major initiative to integrate new modules with existing systems.
According to Frost & Sullivan, established supplier-end user relationships therefore remain extremely valued. As a result in many new entrants, including multinational technology vendors and technology consultancy firms, find it extremely difficult to penetrate new European markets.
The Frost & Sullivan report predicts that the companies that will thrive in European healthcare IT markets will be those with proven integrated information technology solutions. The report notes that some vendors have tried the acquisitions route to gain control over potential customer groups, and predicts that this trend will continue.