Price has slowly grown the effects of the Affordable Care Act and increases in economic prosperity, which have led to higher health expenditures
Los Angeles, CA (PRWEB) January 18, 2015
The flexible spending account (FSA) management services market has a buyer power score of 4.0 out of 5, representing a high level of buyer power in negotiations. According to IBISWorld analyst Dale Schmidt, the market is structured to enhance competition among vendors, which boosts buyer power, but prices have risen anyway due to surging demand.
The market for FSA services is highly competitive. The low level of specialization of the service diminishes differentiation. As a result, vendors are forced to compete on price to secure business, which benefits buyers because competing price bids are easily comparable. The inability to significantly differentiate competing products also prevents any vendors from accumulating large market shares, and the resulting fragmented market yields more competition still, continues Schmidt. Finally, health savings accounts and health reimbursement accounts compete to cover the same expense as FSAs, increasing competition further.
However, fast-growing demand has led to price increases anyway. Health spending has grown over the past three years as a result of the recovering economy, leading to increased demand for FSAs to help manage this spending. Also, the 2010 Affordable Care Act expanded health insurance coverage, further boosting health spending, and introduced limited annual rollover options to FSA plans for the first time. The effects of this bill have led to growing demand for FSAs that will continue over the next three years. Due to the expected price increases, buyers are encouraged to purchase now and secure lower rates. For more information, visit IBISWorld’s Flexible Spending Account Management Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of flexible spending account management services. A flexible spending account is a fund set aside on a pretax basis for an employee to use toward qualifying healthcare or dependent care expenses. Flexible spending account management services oversee the development and administration of an employer's flexible spending account program.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.