A new Deltek report predicts that U.S. federal government demand for vendor-furnished health information technology products and services will hit $6.4 billion by fiscal year 2021 from $6 billion in fiscal 2016 at a compound annual growth rate of 1.4 percent.
The “Federal Health Information Technology Market, 2016-2021” report forecasts that efforts to digitize, share, analyze and protect health information will foster strong federal spending in the health IT market through FY 2021, Deltek said Tuesday.
The Centers for Medicare and Medicaid Services expects national health expenditures to reach $5.6 trillion by 2025 and that the federal portion of such spending will increase by 86 percent to $1.7 trillion in 2025 from $920 billion in 2015.
Federal initiatives to address medical technology, population health, health care costs and medical fraud are also projected boost contract spending on health IT products and services, Deltek noted.
The company added federal health IT contractor addressable spending will decrease in FY 2017 due to lower spending for the Federally Facilitated Marketplace at CMS as well as a decline in spending at the Department of Veterans Affairs.
Deltek also predicts spending will bounce back over the forecast period due to the Defense Department‘s implementation of the MHS Genesis electronic health record and possible VA investments in digital health technology.