Healthcare NLP Market Size, Share, Growth & Industry Analysis, By Application (Clinical, Documentation and Coding, Clinical Decision Support and Others), By End-User (Hospitals and Clinics, Research Centers, and Pharmaceutical Companies), By Deployment Mode, and Regional Analysis, 2024-2031

Healthcare NLP Market Size

Global Healthcare NLP Market size was recorded at USD 3,185.1 million in 2023, which is estimated to be at USD 3,647.2 million in 2024 and projected to reach USD 10,733.2 million by 2031, growing at a CAGR of 16.67% from 2024 to 2031. In the scope of work, the report includes solutions offered by companies such as 3M, Oracle, Ardigen, IBM Corporation, IQVIA Inc, Apixio, Wave Health Technologies, Lexalytics, Conversica, Inc., Inovalon and others.

The expansion of the market is driven by the increasing adoption of electronic health records (EHRs) and the growing need for efficient data analysis and extraction from unstructured medical data. NLP technologies enable healthcare organizations to extract valuable insights from clinical notes, thereby improving decision-making and enhancing patient care outcomes, which is likely to further boost market growth.

The healthcare NLP market is rapidly expanding, fueled by the digitization of healthcare systems and the critical need to derive actionable insights from vast amounts of unstructured medical data. NLP technologies enable the understanding, interpretation, and generation of human language by computers, making them essential in various healthcare applications. These applications enhance clinical decision-making, improve patient care, and streamline operational efficiencies.

Market progress is further propelled by the proliferation of electronic health records (EHRs), which necessitate advanced NLP solutions to effectively analyze and utilize the accumulated unstructured data and continuous advancements in artificial intelligence (AI) and machine learning (ML). Additionally, there is a growing emphasis on personalized medicine, which requires deep analysis of individual patient data to tailor treatments, making NLP technologies indispensable in supporting precision medicine.

• NLP technologies are emerging as a vital component in transforming healthcare delivery and improving patient outcomes.

Healthcare natural language processing (NLP) refers to the application of natural language processing techniques and technologies in the healthcare domain. It involves the use of computational methods to understand, interpret, and generate human language in the context of healthcare-related data. Healthcare NLP encompasses a wide range of tasks, including extracting information from clinical notes, medical records, and other unstructured healthcare data sources, as well as generating structured data for analysis and decision-making.

This field leverages techniques from artificial intelligence, machine learning, and linguistics to facilitate tasks such as clinical documentation improvement, automated coding, information retrieval, clinical decision support, and population health management. By enabling the processing and analysis of large volumes of unstructured healthcare data, Healthcare NLP plays a crucial role in improving patient care, enhancing clinical workflows, and supporting data-driven healthcare initiatives.

Analyst’s Review

In the healthcare NLP market, key players are strategically navigating various avenues to foster growth and innovation. The surge in the adoption of electronic health records (EHRs), propelled by advancements in AI and machine learning, is significantly contributing to market growth. Moreover, customizable and scalable solutions are being developed to seamlessly integrate with existing healthcare systems, facilitating efficient data management and analysis.

Collaborations and partnerships with cybersecurity firms are forging stronger defense mechanisms against data breaches, while investments in research and development continue to yield innovative NLP solutions capable of handling complex medical data. Furthermore, educational initiatives and enhanced customer support underscore a commitment to empowering healthcare professionals with the necessary tools and knowledge to leverage NLP effectively.

Healthcare NLP Market Growth Factors

The increasing adoption of electronic health records (EHRs) across healthcare facilities is expected to significantly contribute to the proliferation of unstructured data. EHR systems are extensively utilized in modern healthcare to capture a vast range of patient information, including clinical notes, diagnostics, treatment plans, and patient histories.

However, this wealth of information is often in an unstructured format, making it challenging to analyze and utilize effectively. Healthcare natural language processing (NLP) technologies are instrumental in addressing this challenge by transforming unstructured data into structured, actionable insights. These advanced NLP tools facilitate better clinical decision-making by providing healthcare professionals with deeper, data-driven insights into patient conditions and treatment outcomes. They further support personalized patient care by enabling the identification of specific patient needs and tailoring treatments accordingly.

Moreover, NLP technologies enhance operational efficiency by automating routine tasks such as coding, documentation, and data entry, thereby reducing administrative burdens and minimizing errors. The growing reliance on EHRs and the pressing need for sophisticated data processing and analysis solutions are expected to augment market growth.

• In April 2023, Cerner Enviza, a subsidiary of Oracle, collaborated with John Snow Labs, to support the U.S. Food and Drug Administration's Sentinel Initiative. This joint effort focuses on developing artificial intelligence (AI) tools for extracting critical information from clinical notes within electronic health records (EHR). This initiative aims to enhance the FDA's understanding of the effects of medications on large populations. Focusing on the asthma drug montelukast and its potential mental health side effects, this two-year project intends to showcase how machine learning and natural language processing (NLP) technology can leverage unstructured data to address knowledge gaps in drug safety.

However, the healthcare NLP market experiences a high frequency of data breaches and security issues, posing a significant challenge to industry development. Healthcare data is highly sensitive and subject to strict regulatory standards, such as the Health Insurance Portability and Accountability Act (HIPAA) in the United States and the General Data Protection Regulation (GDPR) in Europe. Implementing NLP solutions requires accessing and processing large volumes of patient information, which leads to rising concerns regarding protecting this data from breaches and unauthorized access.

Ensuring compliance with these regulations while maintaining the integrity and confidentiality of patient data is a complex task. This challenge is further compounded by the need for secure data sharing and integration across different healthcare systems and platforms. Key market players are addressing data privacy and security concerns through several comprehensive measures. They are employing advanced encryption techniques to secure data both at rest and in transit, thus ensuring that patient information remains protected from unauthorized access.

Adhering to regulatory standards such as HIPAA and GDPR is a top priority, with companies implementing robust compliance frameworks and conducting regular audits. Secure data architectures, including cloud and on-premises solutions, provide multiple layers of protection against breaches. Data anonymization and de-identification techniques are increasingly used to protect patient identities by removing personal identifiers from data sets. By implementing these measures, key players are fostering trust and facilitating the broader adoption of NLP technologies in healthcare.

Healthcare NLP Market Trends

The rise of telehealth and remote patient monitoring is a notable trend in the market, mainly fueled by the continuous advancements in digital health technologies. As healthcare providers and patients adapted to evolving methods of delivering and receiving care, the integration of natural language processing (NLP) with telehealth platforms emerged as a pivotal development. NLP technologies are being increasingly employed to analyze patient interactions during virtual consultations, extracting valuable information from conversations, chat logs, and voice recordings.

This enables healthcare providers to monitor patient health conditions more effectively and gain real-time insights into patient symptoms, treatment responses, and overall well-being. By automating the interpretation of unstructured data from remote monitoring devices and patient communications, NLP assists in early identification of potential health issues, facilitates timely interventions and personalized care plans. The broader application of NLP in telehealth expands the potential uses of NLP technologies in the healthcare sector, highlighting their importance in modern healthcare delivery systems.

• In July 2023, AWS announced the launch of AWS HealthScribe, a new HIPAA-eligible service that target healthcare software vendors. This innovative service facilitated the development of clinical applications that automatically generated preliminary clinical notes by analyzing patient-clinician conversations. AWS HealthScribe integrated conversational and generative AI to streamline clinical documentation workflows and enhance the consultation experience, all without requiring machine learning expertise. This advancement underscored AWS's commitment to leveraging AI to improve healthcare efficiency and interactions between providers and patients.

The healthcare industry is increasingly prioritizing patient-centered care and personalized medicine through comprehensive analysis of individual patient data. Natural language processing (NLP) is at the forefront of this transformation, playing a crucial role in extracting valuable insights from a myriad of unstructured data sources such as patient records, clinical notes, and other health-related documents.

By leveraging NLP, healthcare providers are able to uncover nuanced information about a patient’s medical history, lifestyle, and specific health conditions, allowing for the development of tailored treatment plans and interventions that address the unique needs of each patient. This approach improves patient outcomes by ensuring that care is specifically tailored and aligned with the broader movement toward precision medicine, where treatments and preventive measures are customized based on genetic, environmental, and lifestyle factors. The growing demand for personalized care is likely to boost the healthcare NLP market growth in the coming years.

Segmentation Analysis

The global market is segmented based on application, end-user, deployment mode, and geography.

By Application

Based on application, the market is categorized into clinical documentation and coding, clinical decision support, drug discovery and development, and others. The clinical documentation and coding segment led the healthcare NLP market in 2023, reaching a valuation of USD 1,377.5 million. This notable growth is mainly attributed to the pressing need to streamline documentation processes and ensure regulatory compliance. NLP technologies play a crucial role in automating the extraction and coding of information from clinical notes, thereby reducing administrative burdens and enhancing data accuracy. ,

• Regulatory standards such as ICD-10 and CPT necessitate precise documentation, a task facilitated by NLP tools that ensure accuracy and compliance to guidelines.

The integration of machine learning (ML) and artificial intelligence (AI) has significantly advanced the capabilities of NLP systems, enabling better understanding and processing of medical terminology. These technologies support automated coding, clinical documentation improvement (CDI), and real-time documentation during patient encounters, thus improving workflow efficiency and patient satisfaction.

By End-User

Based on end-user, the market is classified into hospitals and clinics, research centers, and pharmaceutical companies. The hospitals and clinics segment is poised to observe significant growth, registering a CAGR of 16.26% through the forecast period (2024-2031). NLP technologies significantly enhance clinical decision-making by extracting valuable insights from patient records and clinical notes, leading to improved patient outcomes and more efficient care delivery.

They enable healthcare providers to gain a comprehensive understanding of a patient's health history, allowing for more personalized and effective treatment plans. By ensuring complete and accurate documentation, NLP facilitates regulatory compliance, helping hospitals and clinics avoid fines and penalties. Moreover, NLP contributes to patient safety and quality improvement by identifying potential risks and adverse events and supporting quality initiatives through insights into clinical practices.

These technologies further lead to significant cost reductions by automating and optimizing administrative and clinical processes, reducing errors, minimizing unnecessary tests and procedures, and enhancing resource utilization. These factors highlight the critical role of NLP in improving the performance and efficiency of hospitals and clinics, thereby fostering the growth of the segment.

By Deployment Mode

Based on deployment mode, the market is segmented into on premise and cloud. The on premise segment secured the largest healthcare NLP market share of 53.21% in 2023. On-premise deployments offer several advantages such as high reliability and performance, thereby eliminating dependency on external networks. While the initial investment is higher, long-term cost savings are achieved by avoiding recurring cloud service fees.

Furthermore, on-premise solutions ensure data sovereignty and can be scaled to meet the growing data demands of healthcare organizations. These factors make on-premise NLP solutions an attractive option in the healthcare industry.

Healthcare NLP Market Regional Analysis

Based on region, the global market is classified into North America, Europe, Asia-Pacific, MEA, and Latin America.

The North America Healthcare NLP Market share stood around 36.18% in 2023 in the global market, with a valuation of USD 1,152.4 million. This considerable growth is bolstered by the region's advanced infrastructure and early digital adoption. The widespread adoption of EHRs led to an increased demand for NLP solutions to extract insights rises. Technological advancements in AI and stringent regulatory standards further stimulate regional market expansion.

• Key players such as 3M Health Information Systems and Cerner Corporation are actively focusing on innovation and collaborations, contributing significantly to domestic market progress.

Asia-Pacific is poised to experience steady growth, depicting a CAGR of 17.93% over the forecast period. This robust growth is largely attributed to the region's rapid digital transformation in healthcare, growing healthcare IT spending, and emerging opportunities in key markets.

With a focus on modernizing healthcare systems and improving accessibility, governments across APAC are investing heavily in digital healthcare solutions, which is creating a conducive environment for the adoption of NLP technologies. Emerging economies such as China, India, and Southeast Asian countries are witnessing rapid urbanization and an expanding middle-class population, leading to a greater demand for advanced healthcare analytics solutions.

Competitive Landscape

The global healthcare NLP market report will provide valuable insight with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies such as partnerships, mergers and acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their market shares across different regions. Manufacturers are adopting a range of strategic initiatives, including investments in R&D activities, the establishment of new manufacturing facilities, and supply chain optimization, to strengthen their market standing.

List of Key Companies in Healthcare NLP Market

• 3M
• Oracle
• Ardigen
• IBM Corporation
• IQVIA Inc
• Apixio
• Wave Health Technologies.
• Lexalytics
• Conversica, Inc.
• Inovalon

Key Industry Development

• May 2023 (Acquisition): Intelligent Medical Objects (IMO), a leading provider of clinical terminology management and data quality solutions, announced the acquisition of Melax Technologies, Inc. (Melax Tech). Melax Tech used artificial intelligence (AI) and natural language processing (NLP) to extract information from biomedical data. This acquisition enhanced IMO’s healthcare data solutions and expanded its offerings, improving clinical and administrative workflows, clinical research, and patient outcomes.

The global healthcare NLP market is segmented as:

By Application

• Clinical Documentation and Coding
• Clinical Decision Support
• Drug Discovery and Development
• Others

By End-User

• Hospitals and Clinics
• Research Centers
• Pharmaceutical Companies

By Deployment Mode

• On-premise
• Cloud

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • France
  • U.K.
  • Spain
  • Germany
  • Italy
  • Russia
  • Rest of Europe
• Asia-Pacific
  • China
  • Japan
  • India
  • South Korea
  • Rest of Asia-Pacific
• Middle East & Africa
  • GCC
  • North Africa
  • South Africa
  • Rest of Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America