Medical Network Solution Market Trends

Growth Drivers

• Implementation of Stringent Federal Mandates- In order to reduce operating costs while simultaneously improving the coverage of benefits and increasing customer satisfaction, the implementation of healthcare mandates such as the Patient Protection and Affordable Care Act, including the Medical Loss Ratio and the Administrative Loss Ratio, has forced payer organizations to effectively manage their provider networks. Additionally, under regulations like Medical Loss Ratio (MLR) health insurance, issuers are required to spend 80% to 85% on medical care and efforts to improve the quality of healthcare; the remaining portion can be used for administrative expenses. Payers are turning to provider network management as a result of the implementation of strict federal regulations, an expanding customer base, and a growing demand to reduce operational and administrative expenses.

• Advanced Data Analytics- Owing to the dynamic nature of the healthcare industry, payers face various challenges in maintaining provider networks and managing medical loss ratios. As a result, healthcare payers are increasingly focusing on employing highly advanced IT technologies such as data analytics. With a focus on managing medical loss ratios, it is critical for payers to use data analytics to retain current members and implement effective care management programs. Payers can use analytics in clustering, optimization, unbiased predictive modeling, and propensity score shaping. Many payers have started using patient data analytics, which makes extensive use of data, enables statistical and quantitative analysis, and use predictive models to drive better fact-based decision-making. This improves performance in areas such as provider contracting.

• Rising patient population- The rising patient population is expected to propel the growth of the medical network solution market going forward.  The number of patients going to hospitals is also increasing because of the growing patient population. The network solution facilitates the monitoring of patients' records to predict their hospitalization and readmissions, which enables healthcare providers to manage healthcare management programs. For example, more than 33.35 million hospital admissions were registered in the United States during the year 2020, according to the American Hospital Association, a US-based organization representing all types of hospitals and healthcare networks in its annual 2020 survey.

• IT infrastructure constraints in developing countries- One of the biggest obstacles to implementing HCIT solutions is cost issues. There are significant costs associated with network management software provided by the provider. The costs associated with maintaining and updating the network management systems provided by providers can be higher than that of software. The recurrent cost of support and maintenance is nearly 30% of the total ownership costs, which includes software upgrades. Moreover, training for end users is necessary in order to maximize the effectiveness of providers' network management systems due to a lack of internal information technology expertise within the healthcare sector. This, in turn, leads to higher costs of ownership for such systems. It is difficult to assess information systems in the healthcare sector. Consequently, smaller healthcare organizations are precluded from investing in medical network solutions due to the heavy costs associated with deployment and maintenance.

• There is intense competition in the market for medical network solutions. In order to differentiate and succeed, it is necessary to face competition pressures and understand the strategies of competitors.

• The disruption of the supply chain may lead to interruptions in operations, which can have an impact on product availability. To maintain a smooth operation, it is essential that these interruptions are anticipated and mitigated.