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Spiralling Expenditure Creates Pressing Need for Sustainable Business Models in Healthcare IT: Frost

Spiralling Expenditure Creates Pressing Need for Sustainable Business Models in Healthcare IT, Says Frost & Sullivan

Involvement of Top Management in Healthcare Facilities and Key Stakeholders Crucial to Successful Implementation of Such Models

LONDON – 11th June 2012 – Healthcare expenditure is reaching unsustainable levels on a global scale. There is an urgent need for sustainable business models that can curb expenditure and promote better healthcare delivery. The focus is shifting from traditional to newer, more sustainable business models.

New analysis from Frost & Sullivan (, Strategic Analysis of Healthcare IT Implementation Business Models, finds that a critical factor for the successful implementation of IT business models in healthcare is the involvement of top management in healthcare facilities and key stakeholders in the entire process. This research analyses software as a service (SaaS), Managed Services, Open Source and the Freemium business models.

The healthcare system across most of Europe has remained unchanged for many decades. However, since the 1970s, some Western European countries have been closely monitoring the performance and cost-effectiveness of their healthcare systems and the delivery of healthcare.

“As a result of such endeavours, Europe is witnessing a rise in the adoption of innovative business models in healthcare information technology,” notes Frost & Sullivan Senior Research Analyst Simone Carron-Peters. “Business models such as SaaS, Managed Services, Open Source and Freemium are gaining prominence, alongside traditional capital investment and licensing alternatives.”

In addition to limiting spiralling healthcare outlays, other factors highlighting the popularity of innovative business models have been the growing need for physicians to be able to access patient records at any time and at any place, the increase in consumer demand and an ageing population.

But while there is an undeniable need for innovative healthcare models, a key concern is security, particularly related to data privacy and reliability. The fact that patient data will be stored remotely in an off-site facility sparks concerns about patient privacy.

“Customers still distrust the aspect of remote data storage and management and are also sceptical about the fact that they have no control over disaster recovery and business continuity protocols that the software vendor places on their data,” elaborates Carron-Peters.

Ultimately, healthcare involves many stakeholders - patients, health professionals, insurers and government bodies. The key strategy would be to implement a business model that accounts for the interests of all relevant stakeholders.

Therefore, software service providers should work with hospital management to ensure that their IT goals are aligned with overall business objectives. This would enable hospital staff to focus on their core competencies and provide quality patient care.

There is a need to devise a business model with a workable core architecture that would provide social and economic benefits, thereby achieving a profound transformation of the health system in the long-term. A partnership-based approach towards managed services will provide the flexibility to face challenges pertaining to changes in technology, regulations and user needs.

“IT managed service providers should focus on long-term relationship building and finding strategic win-win solutions by maintaining regular communication and ensuring mutual adjustment,” concludes Carron-Peters. “Software vendors should ensure the safe exchange of medical data across national borders, respecting the need to protect health data and the personal integrity of the patient.”

If you are interested in more information on this study, please send an e-mail with your full contact details to Janique Morvan, Corporate Communications, at

Strategic Analysis of Healthcare IT Implementation Business Models is part of the Healthcare & Life Sciences IT Growth Partnership Services Programme, which also includes research in the following markets: Clinical Information systems in Europe – Cardiology, European Market for Computerized Physician Order Entry (CPOE) Systems, Hospital Information Systems Market in Europe and Electronic Medical Records Market in Europe. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

About Frost & Sullivan

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Strategic Analysis of Healthcare IT Implementation Business Models



Janique Morvan

Corporate Communications – Europe

P: +33 (0)1 42 81 20 37

M: +33 (0)6 79 22 41 42


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Frost & Sullivan
+33 (0)6 79 22 41 42

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