Fewer health IT contracts last year: report

Healthcare companies inked 39% fewer information-technology contracts last year as the market for IT services saw a contraction across the board.

A report from Ovum, a technology research and consulting firm, found that the volume and value of IT services contracts last year fell to their lowest levels since 2002 as economic uncertainty prompted a cutback in spending in both private and public sectors.

The firm looked at a number of industries in both the U.S. and Europe and found that fourth-quarter IT deal value fell 34% to $20.8 billion, while the number of deals declined 17%.

The report also highlighted a “notable lack of megadeals,” defined as contracts valued above $1 billion.

The findings echo data last year from the Everest Group, which also found a marked decrease in outsourcing contracts in the healthcare sector. With only nine months of data, the research and advisory firm found that healthcare providers had disclosed just 22 outsourcing contracts in the first three quarters of last year compared with 73 for all of 2011.

In addition, only about a third of those contracts were for IT services, while the rest were for business process outsourcing.