The global behavioral health software market is experiencing rapid growth, projected to expand from $2 billion in 2021 to $4.9 billion by 2026 at an impressive 19.6% CAGR. Several factors are fueling this market’s rise, including increasing adoption of such software, government funding availability, initiatives encouraging EHR use in behavioral health organizations, greater focus on high-quality mental health care, favorable U.S. reforms, and soaring demand amidst provider shortages. Key players are actively launching new products, services, and partnerships to drive further market expansion.
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Catalysts for Growth
High treatment costs for mental illnesses are a major government concern globally. Depression alone affects over 264 million people worldwide, with projected global treatment costs skyrocketing from $2.5 trillion in 2020 to $6 trillion by 2030. In the U.S., serious mental illnesses result in $193.2 billion in lost earnings annually. Excessive paperwork, medication errors, and inefficient revenue cycle management contribute to these staggering costs. Behavioral health software offers solutions by reducing paperwork, enhancing clinician productivity, improving workflow, and minimizing healthcare expenses – driving its increased adoption, especially in large hospitals and clinics.
Hurdles to Overcome
Data privacy remains the biggest concern for behavioral health providers bound by regulations like HIPAA restricting sharing of patient information. Despite measures like HIPAA and GDPR, data breaches continue rising, with 183 incidents in the U.S. healthcare sector in 2021 alone. Financial constraints also pose challenges, as behavioral health software solutions are relatively costly with high maintenance and upgrade expenses sometimes exceeding the software price itself.
Opportunities Ahead
Emerging markets in Asia-Pacific, Latin America, and the Middle East & Africa present significant growth potential. Government initiatives establishing standards, regulations and infrastructure in countries like Australia are encouraging healthcare providers to adopt EMR and EHR technology to reduce errors and increase efficiency.
Within the market, the support services segment demanding continuous software upgrades and maintenance is expected to dominate in 2021. Community clinics are projected to be the fastest-growing end-user segment driven by government support and patient preferences. Geographically, North America led by the U.S. will maintain its dominance due to increasing behavioral health services demand, reforms, and government funding in the region.
Major players shaping the landscape include Cerner, Netsmart, AdvancedMD, Credible, Kareo, Nextgen, Qualifacts, Valant and others actively pursuing product innovations, service expansions and strategic collaborations to secure a larger stake.
CERNER (US)
Cerner is the leading player in the behavioral health software market. The company’s expertise, experience, and comprehensive capabilities in various business functions have enabled it to maintain its leading position in this market. The company has a major presence in the US, and approximately 88% of its revenues came from the US in 2020. Its solutions are licensed by ~27,000 facilities worldwide. Cerner has a strong sales and marketing network, with sales offices in 35 countries across the globe. The company focuses on achieving sustainable growth by adopting inorganic growth strategies such as mergers and acquisitions.
NETSMART(US)
Netsmart is the second-leading player in the behavioral health software market. The leading position of the company in this market is attributed to its strong relationship with its customers. The company has a keen focus on building and maintaining strong client relationships to enhance its growth. Additionally, Netsmart focuses on inorganic growth strategies such as acquisitions, partnerships, and collaborations to enhance its presence in this market. In February 2020, Netsmart acquired GPM, a North Carolina-based Software-as-a-Service technology and services company. This will help Netsmart’s CareFabric platform to deliver interoperable data sharing between long-term care facilities and providers. The company‘s client base includes more than 560,000 users and 25,000 organizations across 50 state systems.
QUALIFACTS (US)
Qualifacts is the third-leading player in the behavioral health software market. The company‘s strong customer base is a major reason for its leading position in the market. Qualifacts has a client base of ~50,000 behavioral healthcare providers and ~15,000 clinical personnel. The company has a strong market presence in over 40 states across the US, allowing it to market products effectively and maintain its position in this market.
