The HR health and administration services market in the US was valued at almost $41 billion in 2015 and is expected to reach around $50 billion by 2020.
Procurement market intelligence analysts have announced its latest market research report on HR health administration services in the US for the period 2016-2020. This market analysis discusses the major drivers and key emerging trends that will influence the growth of the HR health and administration services market in the US during the forecast period. Some of the top vendors listed in this industry analysis include United Health Group, Anthem, Aetna, Mercer, and Aon Hewitt.
In terms of end-user analysis, the retail/wholesale segment is the largest shareholder in the global market with a market share of around 21%. The demand for HR health administration services in the retail/wholesale sector is spurred by the need for cost reduction with respect to providing healthcare services to employees among organizations.
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According to Angad Singh, a category specialist at Technavio for research on category spend intelligence, “There is an increased need among organizations to comply with regulatory norms such as the Affordable Care Act. ACA is applicable to companies that have more than 50 employers. The ACA was enacted to increase insurance coverage for employees and also reduce the cost of healthcare. Such regulations make the managing the HR benefits systems complex, resulting in the need for third-party expertise for management of the same.”
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The new procurement market intelligence report analyzes some of the key drivers and trends responsible for the growth of this market and its sub-segments.
Need to comply with stringent regulatory norms
Health administration service providers have developed expertise and knowledge in the field of managing stringent regulatory legislations pertaining to healthcare services such as HIPAA compliance and ACA. Besides, majority of the organizations do not have the in-house talent required to take care of compliance issues. This creates the need for expertise from a HR health administration service provider, leading to the growth of the market.
Focus on cost reduction
Performing in-house healthcare administration is a cost intensive process for many organizations. To perform claim handling tasks, the company will have to recruit and train its own dedicated staff apart from investing in advanced technologies. Instead, companies increasingly prefer hiring health administration service providers for such tasks as it can bring about cost savings of about 15%. The government’s intervention to bring in technology to make healthcare more affordable is also increasing in the US, thereby augmenting the demand for HAS providers.
Growing need for better employee engagement initiatives
Employee engagement is essentially activities or actions taken by the HR team in an attempt to motivate their employees and enhance their performance. Initiatives such as taking care of the healthcare needs of their employees’ and their families creates an opportunity for the HR team to form a strong bond with employees. By hiring expert HAS providers, the HR team can ensure that its employees get the best services available in the market. According to a research survey conducted by Gallup in 2015, there is an urgent need for better employee engagement initiatives in the US as only 32% of employees were engaged by their respective organizations.
A more detailed analysis is available in the procurement market intelligence report titled, ‘HR Health Administration Services in the US – Procurement Market Intelligence 2016.’
