Technology Spending On Core Administration In Healthcare Market Size & Share Analysis - Growth Trends And Forecast (2025 - 2030)

Global Technology Spending On Core Administration In Healthcare Market Trends and Insights

Shift To Value-Based Care Accelerating CAPS Refresh

Adoption of value-based reimbursement is forcing payers to retire fee-for-service era core administrative processing systems (CAPS) that struggle with shared-savings accounting, longitudinal quality metrics and risk adjustment. UnitedHealth Group’s enterprise-wide AI program illustrates how leading insurers are embedding predictive insights in day-to-day operations to move from detection to prevention. Replacement cycles averaging 3-5 years have intensified as Medicare Advantage enrollment is forecast to surge 60% by 2030, escalating the need for platforms that automate Hierarchical Condition Category (HCC) coding and Star-rating analytics. Regional carriers see modern CAPS as a competitive equalizer against national players that already integrate clinical, financial and social-determinant data.

Escalating Claims Volume & Complexity

Administrative spending jumped 50% to USD 82.7 billion in 2022 as claim-status inquiries grew 71% and eligibility checks rose 60%. Specialty drug pipelines, prior-authorization burdens and multipayer coordination now strain legacy rules engines designed for simpler transactions. Forty-six percent of hospitals employed AI in revenue-cycle tasks in 2024, aiming to push auto-adjudication rates beyond the 75% industry average toward the 94% benchmark achieved by market leaders.^{[2]American Hospital Association, “Artificial Intelligence Adoption in Revenue-Cycle Management—2024 Trend Report,” aha.org} Third-party administrators (TPAs) are under particular pressure because throughput directly impacts fee-based margins.

Regulatory Push For Real-Time Data Exchange (CMS, IFRs)

The CMS Final Rule compels payers to publish FHIR APIs by January 2027 and issue prior-authorization determinations within 72 hours for expedited cases.^{[3]Assistant Secretary for Public Affairs, “CMS Finalizes Rule to Expand Access to Health Information and Improve the Prior Authorization Process,” U.S. Department of Health and Human Services, hhs.gov} TEFCA, effective January 2025, further standardizes bulk data transfer, making compliance an existential requirement rather than an IT enhancement.^{[4]U.S. Department of Health and Human Services, “Health Data, Technology, and Interoperability: Trusted Exchange Framework and Common Agreement (TEFCA),” Federal Register, federalregister.gov} Penalties for information blocking extend to exclusion from federal incentive programs, steering budgets toward natively compliant platforms.

AI-Driven Pre-Payment Integrity Savings

Improper Medicare and Medicaid payments exceeded USD 100 billion in 2023, energizing demand for AI that flags suspect claims before disbursement. Machine-learning models that analyze coding velocity, provider behavior and historical denial patterns can cut administrative cost by 25-30%. Optum reports 20% coder-productivity gains after deploying a predictive auditing engine that prioritizes high-risk claims. Governance maturity—spanning data quality, model explainability and bias checks—has become a differentiator among vendors pitching AI-driven savings.

High Migration & Change-Management Costs

Full CAPS migrations span 18-36 months and can see ancillary expenditures—data cleansing, dual-run operations, end-user retraining—swell to triple license fees. Penn State Health’s prolonged Epic negotiations illustrate the caution even well-funded systems exercise when weighing switch-over risk. The specter of claims-payment disruption and member abrasion often tilts boards toward incremental upgrades over wholesale replacement, delaying uplift to more efficient architectures for years.

Cyber-Security & PHI Privacy Concerns

More than half of global providers faced ransomware attempts in the past 12 months, with downtime costs amplifying the financial hit of ransom demands. Cloud adoption reduces perimeter complexity yet shifts trust to vendors who must show HITRUST, FedRAMP or equivalent attestations. The 2024 ransomware breach at Philippine Health Insurance Corp. forced a multimillion-dollar clean-room rebuild, spotlighting the penalties for inadequate segmentation and backup hygiene.

Segment Analysis

By Solution Type: Claims Platforms Drive Core Spending

Claims and administration platforms accounted for 37.27% of Technology Spending on Core Administration in Healthcare market share in 2024, reflecting their status as the industry’s digital spine. Modern suites support real-time edits, embedded analytics and automated coordination of benefits, positioning them as anchor tenants within composable ecosystems. Payment-integrity engines are scaling fastest at an 8.44% CAGR to 2030 as health plans prioritize fraud-waste-abuse detection, with Technology Spending on Core Administration in Healthcare market size for the sub-segment projected to jump from USD 5.2 billion in 2025 to USD 8.0 billion by 2030. Revenue-cycle management (RCM) remains a staple among provider organizations under margin pressure, while provider-network management tools gain relevance as value-based contracts demand transparent, tiered networks. HR and payroll modules, though niche, experience steady demand in integrated delivery networks struggling with workforce churn. 

Vendor design is converging toward multifunction platforms: Cognizant’s TriZetto unifies claims processing, care management and advanced analytics to widen account stickiness. Standalone reporting suites decline as real-time dashboards embed directly within operational workbenches. As vertical integration deepens, holistic data views are turning solution type boundaries into configuration options rather than separate purchase decisions.

Note: Segment shares of all individual segments available upon report purchase

By Deployment Mode: Cloud Dominance Accelerates

Cloud deployments represented 63.25% of Technology Spending on Core Administration in Healthcare market size in 2024 and are forecast to advance at a 9.36% CAGR through 2030. Public-cloud elasticity appeals to mid-tier plans during open-enrollment spikes, while hyperscaler health-specific compliance frameworks ease CIO concerns about data residency. Hybrid remains popular among large integrated delivery networks that keep protected health information (PHI) on-premise yet burst analytics workloads to cloud. On-premise persists when sunk investments in data centers and tight latency requirements outweigh refresh incentives. 

Oracle Health’s 2025 launch of an AI-infused, cloud-native EHR signposts vendor roadmaps that favor micro-services, containerization and DevSecOps pipelines. Accelerated depreciation allowances introduced in several jurisdictions further tilt total cost of ownership in favor of opex-heavy cloud subscriptions.

By Service Model: BPaaS Transforms Operational Strategies

BPaaS held 53.79% of Technology Spending on Core Administration in Healthcare market share in 2024, Internet-scale automation letting vendors amortize continuous upgrades across a multi-tenant base. Technology Spending on Core Administration in Healthcare market size for BPaaS is projected to rise from USD 19.8 billion in 2025 to USD 30.9 billion by 2030 at an 8.96% CAGR. Licensed software endures among enterprise payers that value code-base control, though even they are shifting non-differentiating work such as premium billing or encounter data submission to managed-service wrappers. Outsourcing partners differentiate through regulatory readiness playbooks and AI operations centers that tune models across client datasets for higher payer ROI. 

UST HealthProof’s BPaaS deal with Zing Healthcare exemplifies the playbook: a greenfield payer taps an established platform, integrated operations and compliance support to launch nationally within six months. As service providers embed generative AI for call-center scripts or authorization summarization, cost-to-serve gaps between BPaaS and in-house models are widening.

Note: Segment shares of all individual segments available upon report purchase

By End User: TPAs Emerge as Growth Leaders

Payers retained 48.67% of Technology Spending on Core Administration in Healthcare market share in 2024, yet TPAs are the growth engine at a 9.12% CAGR. Consolidation among commercial insurers propels employer-sponsored plans toward specialized TPAs that promise flexibility and white-labeled digital front doors. AmeriHealth Administrators’ configurable TPA suite showcases demand for tailored network, benefits and analytics clusters.

Government agencies invest heavily as Medicaid rolls expand and Medicare Advantage penetration climbs; they favor audit-ready systems with hardened privacy controls. Provider organizations, historically laggards in administrative IT, are injecting RCM and prior-authorization automation to stem denials and speed cash collections.

Geography Analysis

North America contributed 44.78% Technology Spending on Core Administration in Healthcare market share in 2024, underpinned by USD 82.7 billion in administrative cost outlays and the stringent CMS interoperability mandate that codifies FHIR APIs as table stakes. U.S. payers drive the majority of spend through Medicare Advantage and Medicaid managed-care scaling, whereas Canada’s single-payer provinces channel funds toward health-information exchanges and population-health registries. Mexico’s private-insurance expansion feeds demand for cost-efficient claim hubs that can handle multicurrency billing and cross-border benefits. 

Asia-Pacific is forecast to clock a 7.84% CAGR—the highest regional clip—boosted by China’s projected RMB 205 trillion healthcare outlay by 2030 and India’s Ayushman Bharat Digital Health Mission which digitizes provider and beneficiary identity layers. Japan and South Korea are early adopters of AI-driven payment integrity, while Australia’s My Health Record evolution accelerates demand for claims gateways that seamlessly ingest pharmacy and diagnostic data. Indonesia’s SATUSEHAT and Singapore’s National Digital Health Blueprint illustrate how smaller economies leapfrog legacy stacks via cloud-native administrative rails. 

Europe maintains steady single-digit growth as aging demographics and DRG-based payment models spur efficiency investments. Germany’s Gematik interoperability requirements, the UK’s NHS continuation of FHIR-based Spine services, and France’s Ségur numérique funding stream guide procurement. The European Union’s GDPR overlay raises data-localization stakes, nudging CIOs toward regionally hosted clouds. The Middle East and Africa are ascending innovation benchmarks: Saudi Arabia’s Vision 2030 and UAE’s Malaffi interoperability push translate into rising core-administration budgets. South America, led by Brazil, seeks cloud-centric BPaaS to circumvent capital scarcity and currency volatility.