Healthcare consulting sector reaches global revenues of $10 billion

16 December 2019 5 min. read
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The healthcare sector consulting market has broken the $10 billion barrier for global revenues, with growth in China recorded at 27 percent last year.

In a recent report, professional services firm Deloitte projected the global healthcare market to eclipse a worth of $10 trillion by 2022 – with the health technology segment to hit $280 billion by 2021 at a five-year compound annual growth rate of nearly 16 percent. It’s little wonder then that the healthcare sector consulting market is also growing at a rapid clip, with global revenues crossing the $10 billion mark in 2018 according to a new report from Source Global Research.

The consulting industry research and strategy firm also predicts the healthcare market to continue its upwards growth trend in the coming years, building on the 9.1 percent rise in 2018 (which followed growth figures of 8 percent in 2017) to reach double figures this year and then 12 percent in 2020. “The first three quarters of 2019 have been nothing short of remarkable,” said interviewee Ed Giniat, National Sector Leader for Healthcare & Life Sciences at KPMG US.

While the US commands the bulk of the overall market – currently generating over 70 percent of the global revenues – markets in the Asia Pacific are among the world’s primary hot-spots for healthcare consulting, led by China, which in another ‘blockbuster’ year delivered growth of 27.3 percent. Southeast Asia, India and Australia also recorded double-digit rises, the latter, up 13 percent, is now the fastest growing segment in Australia’s $6 billion consulting industry.

This is likewise the case for China’s consulting market, which is also rapidly closing in on the $6 billion mark. Altogether, eight of the ten largest healthcare consulting markets experienced accelerated growth last year, with much of that growth driven by demand for digitisation; the healthcare tech consulting segment accounting for a third of overall revenues, with growth of 11.6 percent. Operational improvement meanwhile contributed $2.5 billion, up by 9.9 percent last year.  

Healthcare consulting sector reaches global revenues of $10 billion

“Greater patient-centricity is a major theme driving consulting work around the world. A push to improve patient experience is generating strong demand for digital solutions similar to those delivered in retail,” said Source Global senior editor B. J. Richards. “Clients are also looking to use technology to improve the customer/patient-facing side of operations, with automated portals for managing appointments, referrals, test results, and advice presenting opportunities to improve service while also cutting costs.”

This tilt to digital and cost-cutting in the healthcare landscape was backed by Protiviti Global Healthcare Practice Leader Richard Williams, one of a large number of healthcare consulting heavyweights canvassed for the report; “The entire industry is facing a digitally transformed future. They know they need digital tools to facilitate new ways of serving patients while also streamlining costs, labour, and processes and delivering improved margins over time.”

In a familiar story, such has been seen in the financial services sector (the consulting industry’s traditionally biggest money spinner), healthcare incumbents are also under pressure from market disruption. “The healthcare market is very strong globally; however… new non-traditional players are driving the innovation agenda, testing creative business models and architecting the development of new ecosystem partner networks,” commented EY Global Health Advisory leader Aloha McBride.  

The growth of the healthcare industry at large is due to a number of converging factors, in particular ageing populations and the rise in chronic disease brought about by unhealthy lifestyles. Coupled with growing populations in general, the healthcare costs of current and traditional models have become increasingly unsustainable – such that strategy consultancy Solidiance for example recently warned of a $320 billion budgetary black-hole facing the largest ASEAN economies by 2025.

This is in turn giving rise to the need for functional and technological solutions, generating a huge medtech industry and propelling the growth in consulting. Recently, McKinsey highlighted the multibillion-dollar potential of bioelectronics, although, as a further factor which might help to continue driving the healthcare advisory markets of Asia, L.E.K.'s new Global Healthcare co-Leader Fabio La Mola has also called for greater APAC-specific research into precision medicine due to distinct regional genotypes.