Published: May 2015
Report Code: LS10021
Category : Healthcare IT
Laboratory Information System (LIS) Market Overview
The global laboratory information system market size was $1,438.5 million in 2014, which is expected to reach $2,184.1 million by 2020, growing at a CAGR of 7.3%. The laboratory information system (“LIS”) refers to the set of programs and hardware, that are part of an integrated system designed for healthcare information. It is an information system intended for capturing complex data and information related to medical and industrial laboratories, including clinical and analytical laboratories. The laboratory information system interfaces with analytical instruments and allows users to obtain, store, manage, retrieve and record laboratory data. The information provided by LIS is then used in the diagnosis, prevention, management and treatment of various diseases and acts as an indicator for individual and population health. The laboratory information system market has been segmented on the basis of application, component, and delivery.
Based on application, the LIS market has been segmented as clinical, drug discovery, and industrial. The clinical segment remained the largest application of the laboratory information system market, in 2014, due to increasing demand for advanced healthcare monitoring systems, better efficiency of laboratories, and hospitals and laboratories prioritizing for information systems.
On the basis of component, the LIS market has been segmented as software, hardware, and services. Software accounted for the largest share in the laboratory information system market, in 2014, since it is the core element of laboratory information systems.
On the basis of delivery, LIS market is segmented into three main technologies, including web based technology, on-premise-based technology and cloud-based technology. With the increased use of mobile devices, web based technology accounted for the majority share in the LIS market, in 2014. However, cloud-based technology is expected to witness fastest growth during 2015-2020, mainly due to growth in cloud computing industry.
Laboratory Information System (LIS) Market Dynamics
The growth of laboratory information system market is driven by various factors such as need for advanced healthcare techniques, cost improvement measures of hospitals, growing cloud computing, increasing investment from healthcare IT players, and need for increased lab productivity. However, restraints such lack of experienced professionals and high maintenance and service expenses are some of the key restraints hindering the growth of the market.
Increasing demand in personalized medical care, untapped market in emerging economies, growth of remote patient monitoring, and need of integrated IT systems in diagnostics and medical laboratories are some of the opportunities that provide various growth avenues to the players operating in the market. Countries such as China and India have a large population base but still lack primary healthcare facilities. It has been observed that the prevalence of various chronic diseases such as diabetes, coronary heart disease (CHD) and cancer are very high in these countries. However, healthcare facilities in these countries have not been developed, as compared to various other developed companies. Healthcare information technology, which includes LIS, widens the scope of improvement in healthcare facilities in the developing nations. With the help of LIS, diagnosis results can be obtained more accurately and on time. Moreover, in rural areas of the U.S., the state and federal governments are making investments to improve the standard of healthcare information technology which also involves implementation of LIS. Various initiatives have been taken worldwide to improve the conditions of healthcare information technology, including LIS. All these factors provide immense growth opportunities to the players operating in the global market.
With the need for betterment of laboratory facilities, by improving the quality of treatment, reducing cost and making the treatment more effective, the demand for integrated healthcare information systems is expected to increase, thus boosting the development of the LIS market.
Hospitals are focusing on LIS in their IT buying, because these systems help in reducing the testing cost and provide a managed care environment, where healthcare providers measure the quality of the care and cost effectiveness they provide. Hospitals are considering LIS for future benefits as these systems would enable pathologists and laboratorians to be an integral part of the healthcare team, focusing on patient-centered care. According to Healthcare Information and Management Systems Society (HIMSS) which focuses on better health through information technology, total IT spend in hospitals of the Europe was $1.65 billion, in 2012. The U.S. hospitals increased their IT spending to 48.3% in 2011 from 46.5% in 2010. Also, the American Recovery and Reinvestment Act (ARRA) passed in the U.S. in February 2009, focused on maintaining the quality of healthcare and bringing down healthcare costs. It also focused on sharing laboratory data between state public health laboratories and Department of Public Health (DPH) disease prevention programs.
Many diagnostic companies such as Abbott, and Roche are increasing their investments for the development of new and advanced healthcare IT solutions. Companies such as Cerner Corp. and McKesson Corp. are expanding their business in this segment. Cerner Corp. is investing more than one third of its operating expenses on development of healthcare IT services for international markets. The number of hospitals is also increasing worldwide, which would require implementation LIS for cost effective and efficient healthcare services. For instance, in China the number of hospitals increased from 19,246 in 2006 to 21,415 hospitals in 2011. In the U.S., since 2005, the percentage of hospitals relying primarily on healthcare information technology has increased from 18.4% in 2005 to 28.4% in 2008.
Cloud-based LIS are intended for hospitals and physicians who seek to concentrate more on patient care improvement, as compared to information management. Cloud computing enables organizations to scale up resources as and when needed and eliminate the need to access IT resources far ahead of demand. Furthermore, hospitals are also considering LIS for future benefits as these systems could enable pathologists and laboratorians to be an integral part of the healthcare team, focusing on patient-centered care. According to the Healthcare Information and Management Systems Society (HIMSS) which focuses on better health through information technology, total IT spends in hospitals of Europe was $1.65 billion in 2012. As hospitals and other healthcare providers focus more on utilizing technologies such as cloud-computing, the laboratory information system market is expected to witness growth during the forecast period.
Laboratory Information System (LIS) Market Competitive Landscape
The laboratory information system market is in the growing phase in most of the countries and there are few large vendors that hold significant market share. Healthcare IT players are investing in the market to grow organically. Many new players have also been entering the market, and the consolidation of small players with large players is shaping the competitive landscape. Competition is tough and market players are trying to sustain themselves by differentiating their LIS products from their competitors. For instance, in August 2014, Cerner Corporation acquired assets of Siemens’ health information technology business unit, Siemens Health Services, for a consideration of $1.3 billion in cash. By combining investments in R&D, knowledgeable resources, and complementary client bases, the acquisition was aimed at creating scale for future innovation. As part of the agreement, Cerner and Siemens formed a strategic alliance to bring new solutions to market that combine Cerner’s health IT leadership and Siemens’ strengths in medical devices and imaging.
Some of the other key players operating in the global laboratory information system market are STARLIMS Corporation (Abbott Laboratories), Sunquest Corporation (Roper Industries), McKesson Corporation, LabWare and LabVantage Solutions, Inc. and Thermo Fisher Scientific Inc.