GLOBAL MEDICAL TERMINOLOGY SOFTWARE MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

Global medical terminology software market is expected to reach US$ 5,231.5 Mn by 2030, from US$ 1,439.9 Mn in 2023, at a CAGR of 20.2% during the forecast period.

Medical terminology software helps healthcare organizations and professionals to store, retrieve, and integrate medical terms and vocabularies into various applications such as EHRs, clinical decision support, revenue cycle management, and data aggregation. The software enhances clinical documentation, streamlines reimbursements, improves patient care quality, and reduces medical errors. The key drivers of the market are growing focus on reducing medical errors, need to curtail healthcare costs, rising adoption of EHRs and other HCIT solutions, and increased government support and funding.

Global medical terminology software market is segmented into by product type, application, end user, and region. By product type, the market is segmented into services, platforms, and integrated platforms. The services segment accounts for the largest market share due to the recurring nature of services and their indispensability. Based on application, the market is segmented into data aggregation, reimbursement, clinical decision support, clinical trials, and others. The clinical decision support segment dominates the market, owing to the critical role played by medical terminology software in decision support systems. In terms of end user, the market is segmented into healthcare providers, healthcare payers, and healthcare IT vendors. The healthcare providers segment leads the market share due to utilization of the software to optimize clinical documentation.

Global Medical Terminology Software Market- Regional Insights

• North America is expected to be the largest market for medical terminology software during the forecast period, accounting for over 40.5% of the market share in 2023. The growth of the market in North America is attributed to due to increasing collaborations by market players in the region. For instance, Oon April 18, 2023, 3M,a conglomerate company, collaborated with Amazon Web Services (AWS) to accelerate the innovation and advancement of 3M M*Modal ambient intelligence. This collaboration accelerate the AI innovation in clinical documentation.
• Europe is expected to be the second-largest market for medical terminology software, accounting for over 32.2% of the market share in 2023. The growth of the market is attributed to  rising healthcare expenditure, stringent regulations, and increasing focus on patient safety and care quality in the region.
• Asia Pacific is expected to be the fastest-growing market for medical terminology software, with a CAGR of over 19.3% during the forecast period. The growth of the market in Asia Pacific is attributed to the improving healthcare IT infrastructure, growing medical tourism, and increasing focus on value-based care in the region.

Figure 1. Global Medical Terminology Software Market Share (%), By Region, 2023

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Analyst’s View:

The global medical terminology software market is expected to witness significant growth over the forecast period. Increasing demand for interoperability and integration of healthcare systems are some of the major factors driving the market. Healthcare providers are increasingly adopting medical terminology software to streamline workflow and improve operational efficiency. Additionally, rising need to minimize medical errors and enhance data security is also fueling adoption.

North America dominated the market in recent years owing to substantial investments by private and public organizations to modernize healthcare infrastructure in the region. However, Asia Pacific is likely to offer lucrative opportunities with increasing investments by governments to digitalize healthcare and establish national health programs. China and India are expected to be the fastest growing markets.

Global Medical Terminology Software Market- Drivers

• Need to Reduce Medical Errors and Improve Patient Safety: The need to reduce medical errors and improve patient safety is a major driver fostering growth of the global medical terminology software market. Medical errors arising from inaccuracies in clinical documentation can have severe implications on patient health. According to WHO, medication errors alone contribute to over 1 million patient harms each year globally. Medical terminology software enhances clinical documentation quality by integrating standard terminologies into EHRs and other healthcare IT systems. This pre-coordination of medical phrases and terms eliminates ambiguity and enhances clarity in clinical notes. Smooth data mapping and seamless integration of medical vocabulary enhances patient safety by reducing misinterpretation of clinical information. Medical terminology software is being increasingly adopted to minimize medical errors and advance patient safety. For instance, on April 7, 2023, Cognizant a information technology company collaborated with Microsoft a technology company to help providers and payers that use the TriZetto platform to enhance revenue growth and streamline claims management.
• Adoption of Electronic Health Record (EHR) Solutions: The growing adoption of electronic health records (EHR) and other healthcare IT solutions boosts demand for medical terminology software. EHR systems contain large volumes of patient health data recorded by multiple caregivers. Medical terminology software becomes indispensable in such systems to allow standardized capture, retrieval and interpretation of medical data. It enables aggregation of patient data from disparate systems into EHRs by seamlessly mapping different medical vocabularies. Medical terminology solutions enhance EHR functionalities such as clinical decision support, quality reporting and care coordination by integrating medical dictionaries into workflows. The integration eliminates ambiguity and enhances clinical documentation quality. For instance, on April 17, 2023, Microsoft a technology company collaborated with Epic a software company to develop and integrate generative AI into healthcare by combining the scale and power of Azure OpenAI Service1 with Epic’s industry-leading electronic health record (EHR) software.
• Need to Curtail Healthcare Costs: The pressing need to curtail healthcare costs and enable better reimbursement outcomes is boosting demand for medical terminology software. Medical vocabulary management software allows the seamless capture of clinical data in a standardized form. This enhances the efficiency and accuracy of medical coding and billing processes. Accurate documentation and coding is imperative for securing optimal reimbursement outcomes. According to a survey, up to 90% of denied claims result from improper clinical documentation and coding. By integrating medical terminology into workflows, the software solution enhances coding precision. It also reduces billing errors and minimizes revenue leakage, and thus, driving better financial outcomes. The cost-curbing benefits offered by medical terminology software makes it an indispensable tool for healthcare organizations.
• Regulatory Requirements Mandating Use of Standard Terminologies: Regulatory requirements making the use of standardized medical vocabularies mandatory boosts adoption of medical terminology software. Regional regulations such as the US' Meaningful Use Stage 2 uses terminologies such as SNOMED CT mandatory for EHR certification. International standards such as ICD-10 CM necessitate standardized capture of clinical data for smooth cross-border healthcare data exchange. Medical terminology software solutions enable seamless mapping and integration of such standardized vocabularies into healthcare IT systems and workflows. This allows care providers to comply with regulatory terminology requirements efficiently. The software tools are therefore becoming indispensable assets for healthcare organizations looking to comply with norms and access incentives linked to terminology adoption.

Global Medical Terminology Software Market- Opportunities

• Integration of Medical Terminology Software with Big Data Analytics: The integration of medical terminology software with big data analytics presents significant growth opportunities. As healthcare becomes increasingly data-driven, analytics integration can derive meaningful insights from the massive volumes of standardized clinical data. Medical terminology software harmonizes patient data captured in disparate formats into a standardized structure. This data can be aggregated into data lakes and integrated with analytics tools. Big data analytics when combined with semantically-interoperable data can uncover game-changing insights to transform population health management.
• Adoption in Emerging Markets: Emerging markets across Asia Pacific, Latin America and Middle East offer lucrative growth opportunities for medical terminology software vendors. These markets are witnessing steady growth in EHR adoption due to population health pressures and digital health investments. According to WHO in 2021, the Asia Pacific EHR market is projected to exhibit a CAGR of around 13% through 2030. Medical terminology tools allow the standardization for optimal utilization of EHR systems being rapidly adopted across emerging economies. Localization support also enables localized implementations tuned to regional care settings and terminology needs. Companies that can cater to diverse regional requirements can obtain a strong competitive footing.
• Incorporation of AI Capabilities: Incorporating AI-driven natural language processing and clinical decision support capabilities into medical terminology software solutions offers significant opportunities for growth and product differentiation. NLP integration can allow automated extraction of medical phrases and concepts from unstructured clinical notes using terminology knowledge. CDSS integration can link medical terms to clinical protocols enabling evidence-based guidance. Companies developing AI-enabled terminology management solutions to automate clinical documentation and supercharge decision support can gain popularity. In February 2021, HealthTerm a terminology platform partnered with Saykara a health-tech company to integrate AI-driven voice documentation capabilities into its app.
• Cloud-based SaaS Delivery Models: Cloud-based delivery models present lucrative prospects for medical terminology software vendors. Amid the remote health paradigm, clinicians are demanding better accessibility to medical vocabulary resources. Companies are transitioning from legacy client-server models to SaaS delivery that allows anywhere anytime access via web apps and mobile apps. Cloud-based tools also enable frequent updates to dynamically maintain standards compliance. According to a poll by Black Book in 2020, over 90% of hospitals intend to switch to cloud-based EHR solutions by 2027. Medical terminology software providers embracing next-gen SaaS platforms and cloud technology can future-proof their solutions while meeting changing care delivery needs.

Global Medical Terminology Software Market- Trends

• Demand for Semantic Interoperability Capabilities: The growing need for semantic interoperability is a key trend boosting demand for advanced medical terminology software. Lack of standardized capture of clinical data leads to challenges in healthcare data exchange across systems, care settings and borders. This hampers population health management and coordinated care delivery. Medical terminology solutions that allow semantic interoperability—consistent interpretation of data meaning across systems—address this gap. Solutions allowing enterprise-wide mapping to support use of multiple terminologies are gaining traction. Integration of terminology standards like SNOMED CT, ICD, RxNorm into EHRs is rising to achieve semantic interoperability.
• Utilization of Mobile and Cloud Capabilities: Healthcare organizations are demanding medical terminology solutions harnessing mobility and cloud capabilities. With digitization, clinicians are relying on web and mobile apps to access medical vocabulary on-the-go for point-of-care use. Solutions utilizing responsive web design and cross-platform mobile apps are gaining prominence. Cloud-hosted solutions allowing anywhere anytime access via latest apps and browsers are also rising in demand. Cloud integrations also enable frequent updates to maintain dynamic curation of medical vocabulary. Medical terminology providers are enhancing their solutions with mobile capabilities and secure cloud integrations to provide easy access and seamless workflows for clinicians.
• Application of Natural Language Processing: Natural language processing techniques are being increasingly integrated into medical terminology software solutions to automate clinical documentation workflows. NLP algorithms allow automated extraction of medical concepts and terms from unstructured physician notes. This eliminates the need for manual review and coordination of clinical notes with standard vocabularies. NLP techniques like text segmentation and named entity recognition identify medical phrases using vocabulary ontology and derive meaningful insights from free text. Solutions incorporating NLP deliver higher documentation throughput.
• Increasing Consolidation among Vendors: The medical terminology software space is witnessing increasing consolidation through partnerships and acquisitions among vendors to enhance product capabilities. In February 2022, 3M a conglomerate company acquired LeanTec a software company to leverage its semantic search and NLP capabilities to advance 3M's terminology tools. The trend towards consolidation is likely to rise as vendors seek to derive synergies from combined complementary strengths to deliver end-to-end clinical terminology solutions.

Global Medical Terminology Software Market- Restraints

• Interoperability and Integration Challenges: Interoperability and integration challenges pose a key restraint to the adoption of medical terminology software. Disparate vendor solutions and localized customizations make cross-platform data mapping highly complex. Varying standards adoption across care networks also hinders interoperability. Complex integrations with existing health IT systems deter end users. Lack of regulatory clarity regarding standard terminologies adds to the challenge. Medical terminology software vendors are working to address this by partnering with health IT vendors and developing interfaces leveraging FHIR and other standards. Data harmonization frameworks are being developed to facilitate system-wide implementations. Advances in integration technologies will help overcome interoperability barriers and drive adoption.
• Cost Constraints among Healthcare Organizations: High costs involved in the procurement and implementation of medical terminology software solutions restrain smaller clinics and healthcare organizations from their adoption. High licensing costs and significant investments needed for integrations dissuade many care centers from investing in these solutions. Lack of skilled staff to implement and manage terminology software also escalates costs for healthcare groups with constrained IT budgets. Vendors are addressing this through flexible subscription models and scalable pricing strategies to ease procurement. Rise of cloud-based solutions and automation capabilities will help to curb implementation costs and support uptake across healthcare organizations.
• Complexity in Deployment and Usability: The complexities surrounding deployment and usability of medical terminology software solutions pose adoption challenges. Integrating new workflows and maneuvering complex interfaces requires significant training which is difficult for many organizations. Frequent version updates to maintain standards compliance also complicates usability. Vendors are focusing on enhancing UI/UX design to ease navigation and improving LMS systems to simplify deployment. Emergence of self-learning interfaces driven by AI/ML will help to tackle usability challenges and accelerate mainstream adoption.

Figure 2. Global Medical Terminology Software Market Share (%), By Application, 2023

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Global Medical Terminology Software Market- Recent Developments

New Product Launches:

• In November 2022, Wolters Kluwer, a information service company, launched the Digital Health Architect Consumer Education Suite and EmmiGuide. This solutions helps virtual care vendors and payers to provide consistent, evidence-based information to patients and members and improve care wherever and however it is delivered.
• On April 17, 2023, Intelligent Medical Objects, a healthcare data company, launched IMO Studio, a cloud-based platform that enables a holistic data quality strategy for healthcare organizations. This studio brings next generation technology and security with an ever-growing list of data management capabilities.

Acquisition and Partnerships:

• On April 17, 2023, Microsoft a technology company collaborated with Epic a software company to develop and integrate generative AI into healthcare by combining the scale and power of Azure OpenAI Service1 with Epic’s industry-leading electronic health record (EHR) software
• In June 2021, Cano Health a health company, LLC acquired University Health Care a healthcare service provider for US$ 600 Million. This acquisition enhances proprietary population health management platform that leverages Cano Health's high quality operational and clinical care services to improve health outcomes

Top companies in Global Medical Terminology Software Market:

• Wolters Kluwer
• 3M
• Intelligent Medical Objects
• Apelon
• Clinical Architecture
• Bitac
• B2i Healthcare
• HiveWorx
• BT Clinical Computing
• EzCoder
• Savante International
• Stryker
• CloudPital
• SoftMed Systems
• DXC Technology Company
• GenoLogics

Definition: Medical terminology software refers to specialized vocabulary and language management solutions designed for healthcare organizations and professionals. It comprises pre-defined medical concepts, terms and codes mapped to various medical applications such as EHRs, e-prescribing, clinical decision support, data aggregation, and reimbursement management. Medical terminology software enhances clinical documentation, improves patient care and safety, increases efficiency in medical coding and billing processes, and enables seamless healthcare data exchange through standardized terminologies. It allows easy access to medical dictionaries, ontologies, classifications and codings within healthcare IT systems and applications. The software provides clinicians and medical coders with point-of-care access to accurate medical terms and codes, enhancing clinical workflows.

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