Hospital Services Market Expected To Growth USD 24.1 Trillion Valuation on the Horizon

Trishita Deb
Trishita Deb

Updated · Jun 11, 2024

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Introduction

The Global Hospital Services Market was valued at USD 13.1 trillion in 2023 and is projected to experience substantial growth, reaching USD 24.1 trillion by 2033. This represents a compound annual growth rate (CAGR) of 6.3% over the forecast period. The growth of this market can be attributed to several key factors, including advancements in medical technology, increased healthcare spending, and the rising prevalence of chronic diseases.

Hospitals are increasingly investing in advanced medical technologies and equipment to meet the healthcare requirements of an aging population. This includes state-of-the-art diagnostic tools, surgical equipment, and telemedicine solutions, all of which contribute significantly to hospital revenue growth. The growing demand for mental health services tailored to older adults has led hospitals to offer geriatric psychiatry services and dedicated psychiatric units, tapping into this expanding market segment.

Furthermore, hospitals are extending their services beyond physical facilities by offering home healthcare services, such as home nursing and remote monitoring, catering to older adults who prefer home-based care. The aging population is associated with more frequent hospital admissions for conditions like heart disease, diabetes, orthopedic issues, and cancer, resulting in higher patient volumes and increased revenue opportunities for hospitals. Additionally, older patients often require long-term services, post-surgery rehabilitation, skilled nursing care, and palliative care, further boosting hospital admissions and revenue.

Elective surgeries, such as joint replacements and cataract surgeries, are increasingly popular among older adults seeking to improve their quality of life. Hospitals offering these procedures experience an influx of patients, driving revenue growth.

Hospital Services Market Size

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Key Takeaways

  • Global Hospital Services Market was valued at the USD 13.1 Trillion in 2023, and is projected to reach USD 24.1 Trillion by 2033, with a 6.3% CAGR.
  • The market growing at a CAGR of 6.3% during the forecast period from 2024 to 2033.
  • The public hospital segment captured a remarkable market share of 38.4%, largely due to the provision of specialized medical procedures at comparatively lower costs.
  • In terms of service type, the inpatient segment dominates the market with a commendable revenue share of 60.1% in 2023, primarily due to prolonged hospital stays required for certain medical procedures.
  • – Cardiovascular services hold a significant market share of 26.3%, driven by the rising prevalence of cardiovascular illnesses globally.
  • – Despite the growth opportunities presented by the aging population and the prevalence of chronic illnesses, the high cost of treatments and limited reimbursement policies may pose challenges to market expansion.
  • North America, particularly the United States, showcased a significant market presence, accounting for 54.8% of the market share in 2023.
  • Technological Advancements: Investments in advanced medical technologies, including diagnostic tools, surgical equipment, and telemedicine solutions, are driving revenue growth in the hospital services sector.
  • The aging global population is increasing the demand for hospital services, particularly for chronic diseases, mental health services, and elective surgeries.
  • Services: Hospitals are extending their services beyond traditional facilities by offering home healthcare services, which cater to the needs of older adults preferring home-based care.
  • Higher admission rates for conditions such as heart disease, diabetes, orthopedic issues, and cancer are contributing to increased patient volumes and revenue growth for hospitals.

Hospital Services Statistics

  • Outpatient Services Growth: Outpatient services are expected to register the fastest CAGR growth due to advancements in telemedicine and remote consultations, leading to shorter patient stays and lower medical costs​​.
  • Private Hospitals: Private hospitals dominated the market in 2022, driven by their focus on improving specialized services for critical conditions like cancer and heart diseases. The segment is expected to continue leading with significant investments in medical technologies​.
  • Technological Integration: The adoption of AI in healthcare is projected to save the industry over USD 150 billion annually by 2026 by improving diagnostics, streamlining processes, and enhancing patient care​.
  • Healthcare Expenditure: In 2022, OECD countries spent an average of 8.8% of their GDP on healthcare, with the U.S. leading at 16.9%. This spending is expected to continue increasing as populations age and demand for healthcare services rises​.
  • Cardiovascular and Cancer Care: The cardiovascular and cancer care segments are anticipated to grow rapidly, driven by high disease prevalence and advancements in medical research and treatments. For instance, cardiovascular diseases account for 17.9 million deaths globally each year​.
  • Home Healthcare Services: Home healthcare services, including home nursing and remote monitoring, are growing in demand. The global home healthcare market was valued at USD 299.6 billion in 2021 and is expected to reach USD 515.6 billion by 2028.
  • Aging Population Impact: The aging global population leads to higher demand for hospital services. For example, by 2030, 1 in 6 people globally will be aged 60 years or over, significantly increasing healthcare needs​.
  • Mental Health Services: Hospitals are expanding geriatric psychiatry services to cater to the growing mental health needs of older adults. Approximately 15% of adults aged 60 and over suffer from a mental disorder​​.
  • Long-term Care Services: The need for long-term care services is rising, with the global long-term care market projected to grow from USD 1.04 trillion in 2020 to USD 1.7 trillion.
  • Elective Surgeries: The demand for elective surgeries such as joint replacements and cataract surgeries is increasing among older adults. In the U.S., about 1 million knee replacements are performed each year​​.
  • Government Initiatives: Government subsidies and free healthcare services, like the UK’s NHS, make healthcare more accessible. In 2021, the NHS budget was approximately USD 200 billion, supporting free healthcare services for legal residents​.
  • Environmental Sustainability: Healthcare organizations are adopting eco-friendly practices, with the goal of reducing the sector’s carbon footprint by 30% by 2030, saving an estimated USD 15 billion annually in operational costs​​.
  • Global Health Initiatives: WHO and other international organizations provide comprehensive health statistics and support global health initiatives, influencing healthcare strategies worldwide. The World Health Statistics 2023 report includes data on over 50 health-related indicators from WHO’s member states​.

Hospital Services Company Recent Developments

  • HCA Healthcare: HCA Healthcare acquired five hospitals from Tenet Healthcare for approximately $1.2 billion. This strategic acquisition aims to expand HCA’s presence in high-growth markets, particularly in Texas and Florida. The acquisition includes facilities that specialize in cardiac care, orthopedics, and emergency services, enhancing HCA’s portfolio and ability to provide comprehensive healthcare services​.
  • Cleveland Clinic: Cleveland Clinic merged with Indian River Medical Center, committing $250 million over ten years. This merger strengthens Cleveland Clinic’s network in Florida, enhancing its capabilities in providing specialized care and expanding its reach. The investment will support facility upgrades, advanced medical technologies, and recruitment of top healthcare professionals, ensuring high-quality care for the community​
  • Fortis Healthcare: Fortis Healthcare launched a new telemedicine platform designed to provide remote consultations and follow-up care for patients with chronic diseases. This platform leverages advanced AI algorithms to monitor patient health metrics and offer personalized treatment plans. The initiative aims to improve patient access to healthcare services, particularly in rural areas, and reduce hospital readmission rates​.
  • Ramsay Healthcare: Ramsay Healthcare acquired Elysium Healthcare for £775 million. This acquisition strengthens Ramsay’s mental health services portfolio, making it one of the largest providers of mental health services in Europe. Elysium’s extensive network of facilities complements Ramsay’s existing operations, allowing for an integrated approach to mental health care and expanded service offerings​.
  • Johns Hopkins Medicine: Johns Hopkins Medicine opened a new state-of-the-art cancer treatment center in Baltimore, Maryland. The facility features the latest in radiation therapy, immunotherapy, and personalized medicine, aiming to provide cutting-edge treatments for cancer patients. This center is part of Johns Hopkins’ broader strategy to lead in cancer care and research, enhancing patient care and advancing oncology studies​​.

Emerging Trends

  • Telemedicine Expansion: Telemedicine continues to grow rapidly, with advancements in communication technologies enabling remote consultations and follow-up care. The global telemedicine market is expected to reach USD 185.6 billion by 2026, driven by the need for accessible and efficient healthcare services​​.
  • Home Healthcare Services: Hospitals are increasingly providing acute care in home settings, supported by remote patient monitoring (RPM) tools. The RPM market is projected to grow from USD 53.6 billion in 2022 to USD 175.2 billion by 2027, reflecting a CAGR of 26.7%​.
  • Artificial Intelligence (AI) Integration: AI is being utilized to enhance diagnostics, streamline administrative tasks, and improve patient care. AI in healthcare is predicted to save the industry over USD 150 billion annually by 2026 through improved efficiency and reduced errors​.
  • Value-Based Care (VBC): The shift towards value-based care models is accelerating, with a focus on improving patient outcomes and reducing costs. VBC initiatives are expected to expand significantly, driving changes in reimbursement structures and care delivery​.
  • Cybersecurity Investments: With the rise in cyberattacks on healthcare systems, hospitals are investing heavily in cybersecurity measures to protect patient data and critical infrastructure. In 2022 alone, over 370 ransomware attacks exposed the personal health information of nearly 42 million individuals​.
  • Retail Health Clinics: The share of retail health clinics in the primary care market is doubling as patients seek convenient, no-appointment-needed care. The U.S. retail clinic market was valued at USD 3.49 billion in 2022, and this trend is expected to continue as more retail giants enter the healthcare space​.
  • Economic Pressures and Hospital Closures: Economic downturns and changing consumer behaviors are expected to increase hospital bankruptcies by 30%. Rural hospitals are particularly at risk, with more than 30% facing immediate closure due to financial instability​.
  • Population Health Management: Hospitals are adopting advanced analytics and predictive tools to manage population health more effectively. This includes monitoring chronic diseases and reducing readmissions, which is critical as six in ten Americans live with at least one chronic disease​.
  • Advanced Medical Technologies: Investment in cutting-edge medical technologies, such as quantum computing and high-performance computing, is transforming research and treatment methodologies. Cleveland Clinic, for instance, has integrated quantum computing to advance biomedical research and develop new therapies​.
  • Workforce Challenges: The healthcare sector is facing significant workforce challenges, including shortages of physicians and nurses. The U.S. may see a shortage of between 37,800 and 124,000 physicians by 2034, necessitating new strategies for workforce recruitment and retention​.

Use Cases

  • Remote Patient Monitoring: Leveraging technologies such as 5G, remote patient monitoring can be enhanced, allowing for real-time data transmission and analysis. This capability improves patient outcomes by enabling continuous monitoring and timely interventions. The U.S. Department of Health and Human Services (HHS) highlights AI use in remote monitoring to improve patient care​.
  • Telemedicine: The integration of telemedicine services in hospitals allows patients to receive care from specialists without the need for physical travel. This is particularly beneficial for rural and underserved areas. According to HealthData.gov, telemedicine has been crucial in maintaining healthcare access during the COVID-19 pandemic, reducing the need for in-person visits.
  • Video-Enabled Medication Adherence: Using video technology, pharmacists and healthcare providers can remotely ensure patients adhere to their medication schedules. This method is particularly effective for elderly patients and those with mental health challenges, reducing hospital readmissions due to medication non-compliance​.
  • AI-Driven Diagnostics: Artificial Intelligence (AI) can analyze medical images and patient data to assist in diagnosing diseases more accurately and quickly. The Centers for Medicare & Medicaid Services (CMS) report that AI applications are increasingly being used to support diagnostic processes in hospitals, improving accuracy and efficiency​.
  • Augmented Reality (AR) for Surgery: AR technology can be used in operating rooms to provide surgeons with enhanced visualizations of the patient’s anatomy, improving precision in surgical procedures. This technology also allows remote experts to guide surgeries in real-time, enhancing surgical outcomes.
  • Emergency Department Triage: Efficient triage systems in emergency departments use advanced algorithms to prioritize patients based on the urgency of their conditions. This ensures that critical patients receive timely care, improving survival rates and overall patient outcomes​.
  • Hospital-at-Home Programs: These programs allow patients to receive acute care in their homes, reducing hospital overcrowding and associated healthcare costs. According to the Australian Institute of Health and Welfare, such initiatives have shown to decrease hospital readmissions and improve patient satisfaction​​.
  • Digital Health Records: Implementing electronic health records (EHRs) in hospitals improves patient care coordination and reduces medical errors. EHR systems facilitate the seamless sharing of patient information across different healthcare providers, enhancing the continuity of care​​.
  • Mobile Health Units: Mobile health units provide essential medical services to remote and underserved communities. These units are equipped to deliver preventive care, screenings, and vaccinations, improving public health outcomes. The U.S. Department of Health and Human Services supports the use of mobile units to increase healthcare accessibility​.
  • Robotic-Assisted Surgery: Robotic systems assist surgeons in performing complex procedures with greater precision and control. These systems enhance the capabilities of human surgeons, leading to fewer complications and faster recovery times for patients​.

Conclusion

The Hospital Services Market demonstrates robust potential for growth, fueled by technological advancements and evolving healthcare needs. With strategic investments and innovative approaches, stakeholders can navigate challenges and capitalize on emerging opportunities, fostering a dynamic and resilient healthcare ecosystem.

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Trishita Deb

Trishita Deb

Trishita has more than 7 years of experience in market research and consulting industry. She has worked in various domains including healthcare, consumer goods, and materials. Her expertise lies majorly in healthcare and has worked on more than 400 healthcare reports throughout her career.