October 2023, IDC #US50105223 IDC FutureScape IDC FutureScape: Worldwide Healthcare Industry 2024 Predictions Adriana Allocato Nadia Ballard Lynne Dunbrack Jennifer Eaton Nino Giguashvili Nimita Limaye Federico Mayr Silvia Piai Jeff Rivkin Mutaz Shegewi Michael Townsend Manoj Vallikkat IDC FUTURESCAPE FIGURE FIGURE 1 IDC FutureScape: Worldwide Healthcare Industry 2024 Top 10 Predictions Note: Marker number refers only to the order in which the prediction appears in the document and does not indicate rank or importance unless otherwise noted in the Executive Summary. Source: IDC, 2023 ©2023 IDC #US50105223 2 EXECUTIVE SUMMARY This IDC FutureScape provides executives across the globe with actionable insights and analysis for future healthcare industry scenarios. The intended readers include but are not limited to members of the business, clinical, and IT leadership of healthcare provider (HCP) and payer organizations worldwide. The IDC FutureScape 2024 predictions suggest that healthcare organizations will prioritize mastering AI everywhere in the next five years. With a focus on more capabilities and services transitioning from digital experimentation to digital value realization, these organizations are poised to navigate dramatic increases in IT scale and complexity. Emphasis will be placed on optimizing technology investments, particularly in generative AI (GenAI), to deliver efficient operations and improve patient outcomes. IDC's worldwide healthcare industry 2024 predictions are:  Prediction 1: Driven by perceived value of purpose-built functionality for healthcare, 70% of healthcare organizations will adopt industry clouds by 2025.  Prediction 2: Driven by the need for improved diagnostic accuracy, speed, and workflow efficiency, care providers will see a 60% increase in AI solution adoption by 2025.  Prediction 3: By 2025, GenAI will free up to 15% of clinicians' time, translating into an estimated $350 billion in annual global healthcare savings to realize more workflow automation and efficiency.  Prediction 4: By 2026, driven by the demand to scale hyper-personalized patient experiences, improve collaboration, and foster equity, 60% of global healthcare organizations will double GenAI investments.  Prediction 5: By 2026, 55% of worldwide private health insurance companies and 75% of U.S. health systems will be "payviders" to improve risk management and address the rising cost of care.  Prediction 6: By 2027, 70% of the healthcare industry will leverage GenAI to address data and workflow fragmentation across care settings to improve diagnosis and patient safety to scale care anywhere.  Prediction 7: By 2027, a doubling of hospital-at-home patients will propel a 55% growth in investments in tech-enabled integrated care initiatives to address patient safety, workforce, and care access concerns.  Prediction 8: By 2027, 60% of the healthcare industry will prioritize tech partnerships that champion "techquity," reducing the digital divide and recognizing social determinants of health as vital influencers.  Prediction 9: Personalized health data platforms will support 75% of covered patients in advanced economies by 2028 while building more accurate patient journey simulations for providers and life science companies.  Prediction 10: By 2029, hospital investments in sustainability and modernization will increase by 60%, driven by the need to reduce costs, improve quality of care, and enhance organizational resiliency. This IDC study provides executives across the globe with actionable insights and analysis for future healthcare industry scenarios. "The 2024 worldwide healthcare industry predictions show that the industry is at an inflection point, being driven largely by the need to master AI everywhere and the drive to automate, while there ©2023 IDC #US50105223 3 continues to be a growing emphasis on sustainability and governance to build resilient systems that can adapt to evolving challenges," says Mutaz Shegewi, research director, IDC Health Insights. "The healthcare industry is not just navigating challenges but seizing opportunities for sustained growth. As the healthcare industry finds itself at the nexus of enduring, interconnected challenges and opportunities, traditional models are giving way to innovative paradigms demanding not just reactive measures but proactive strategic investments in technology and human capital. The imperatives for rapid action and strategic foresight have never been more pronounced as the industry landscape continues to evolve in complex, interlinked dimensions." IDC FUTURESCAPE PREDICTIONS Summary of External Drivers  AI everywhere — Generative AI takes the spotlight  The drive to automate — Maximizing efficiency and new opportunities  Cybersecurity and risk — Building resilience against multiplying threats  The digital business imperative — Competitiveness and outcomes  Dynamic work and skills requirements — New work mode era  Shifting tech regulatory landscape — Navigating risk and opportunity  Operationalization of ESG — Measuring and implementing sustainability Predictions: Impact on Technology Buyers Prediction 1: Driven by Perceived Value of Purpose-Built Functionality for Healthcare, 70% of Healthcare Organizations Will Adopt Industry Clouds by 2025 IDC defines industry clouds (ICs) as cloud-based platforms, applications, or services providing industry-specific information, technology, or operational capabilities. ICs are distinct from traditional clouds due to their vertical integration and modularity, collaboration options, and ability to generate network effects. Representative examples of ICs for healthcare include AWS for Health, Microsoft Cloud for Healthcare, and Salesforce Health Cloud. ICs are most popular in the healthcare industry; 59% of providers and 66% of payers use ICs today — more than any other industry1. Telecom and financial services companies each reported 54% adoption of ICs. Providers and payers will continue exploring ICs designed for healthcare; 40% and 28% of providers and payers plan to do so in the next 12 months. Overwhelmingly, hyperscaler cloud service providers are the primary source for ICs. However, healthcare EHR vendors like Epic, care delivery organizations like Optum, and service providers like Cognizant and Deloitte are partnering with cloud service providers to develop ICs. IDC anticipates that by 2025, ICs will become nearly ubiquitous in the healthcare industry because of the tangible benefits they provide, such as accelerated deployment of clinical workloads to the cloud and regulatory compliance. Associated Drivers  The drive to automate — Maximizing efficiency and new opportunities  Cybersecurity and risk — Building resilience against multiplying threats  The digital business imperative — Competitiveness and outcomes ©2023 IDC #US50105223 4 IT Impact  Interoperability and integration with clinical and operational applications are critical to success.  It includes enabling the migration from legacy on-premises industry specialty applications to the cloud.  Internal resources will be freed up to focus on offering capabilities designed for the industry. Patient Impact  Fast and secure access to patient health information across the continuum of care, including the patient's home, accelerates and improves the accuracy of clinical decision making, leading to positive patient outcomes.  ICs are incorporating GenAI use cases designed to improve patient engagement and experiences by reducing workflow friction. Guidance  Evaluate the depth and breadth of industry partnerships as they will support end-to-end healthcare-specific processes.  Confirm that the IC service provider has staff on hand with domain expertise and offers healthcare-focused professional services to support rapid deployment of its cloud services.  Prioritize interoperability when selecting an IC to ensure seamless integration with existing systems, facilitate communication among diverse platforms, and provide a foundation for future scalability and adaptability to evolving healthcare needs.  Select an IC service provider that is a true partner with solutions that can evolve to meet new business, clinical, and technology requirements. Prediction 2: Driven by the Need for Improved Diagnostic Accuracy, Speed, and Workflow Efficiency, Care Providers Will See a 60% Increase in AI Solution Adoption by 2025 AI technology has emerged as a powerful tool to improve accuracy, speed, and efficiency throughout the diagnostic process. The World Health Organization (WHO) has recognized the importance of diagnostics in promoting better care, passing a resolution this year to strengthen diagnostic capabilities. At the same time, the World Heart Federation has sounded the alarm that cardiovascular disease is the leading cause of death worldwide, with four in five deaths occurring in low and middle income countries2. One notable example of AI's impact on diagnosis is at Apollo Hospitals, the largest hospital chain in India, where AI is used to diagnose cardiovascular risk with greater accuracy than established benchmarks and at a large scale. Similar AI-driven diagnostic tools have been adopted for other noncommunicable diseases like diabetes, asthma, and liver fibrosis and are now being used in at least eight countries. In the United Kingdom, for example, the NHS is deploying AI to diagnose and treat patients more quickly and effectively for cancers, strokes, and cardiovascular conditions. As the healthcare industry continues to search for ways to reduce costs, improve the quality of patient care, and reduce wait times, it is increasingly turning to AI and automation. IDC survey data revealed that healthcare providers worldwide consider investing in AI and automation (30%) as the second-most immune area against budget reductions after security3, and many are already using AI in medical imaging4. Furthermore, the FDA reports that there are over 500 market-cleared AI medical algorithms in the United States as of January 2023, which further highlights the importance of AI in diagnostics.