London - March 9th, 2010

Research from PAC shows that for 2009, growth in core software and IT services (SITS) expenditure for Europe’s three key geographies, France, Germany and the UK, grew at 4.9%, 6.2% and 4%, respectively. When compared with national core SITS performance in these countries (-2.6%, -2.8% and -1.8%) it is clear that health has been a bastion of strength in the European market during this time of economic crisis.

According to Dominic Trott, Consultant at PAC London, there are several key drivers behind the strong performance of core SITS expenditure in the European healthcare market: “Health organizations across Europe face many of the same challenges, each of which can be addressed (at least to some extent) through the use of IT. These include aging populations, a rising occurrence of long-term conditions (LTCs), higher requirements for quality of care and tighter budgets. In reaction to these challenges, organizations across the healthcare spectrum are looking to automate and standardize processes to save time and money, as well as give patients greater satisfaction in their treatment.”

One of the largest and most visible drivers for healthcare IT in Europe, due to both its scale and political sensitivity, is the growing trend towards national electronic health record (EHR) systems, either in the form of patient-portable health cards (e.g. Austria, France, Germany) or through standard applications available over a national IT infrastructure (e.g. Denmark, Sweden, UK).

Many existing EHR programs have faced a number of significant difficulties, such as budget over-runs, shifting scope and political uncertainty. However, as governments continue to search for improvements in efficiency and quality in health through the use of IT, this is one of the areas that will provide the most significant growth in expenditure. For these reasons, Arnold Aumasson, Senior Consultant at PAC Paris, believes that healthcare will move closer to the core of vendors’ strategies in the coming years. However, this will also serve to drive competition, meaning strong partnerships (across ISVs, telcos and services providers) and capabilities to address larger deals will be key.

“Deals will become larger all the time as the market for hospitals and health insurances in Germany consolidates,” says Martin Barnreiter, Senior Consultant at PAC Munich. The larger SITS players will take advantage of this development as a chance to address the major IT problems that exist within health organizations, and to consolidate IT systems. All over Europe, modern applications will help health providers to work more efficiently and with greater patient centricity.