HEALTHCARE BPO MARKET ANALYSIS

The global healthcare BPO market was valued at US$ 273.96 Bn in 2022 and is forecast to reach a value of US$ 539.08 Bn by 2030 at a CAGR of 8.8% between 2023 and 2030. The global healthcare BPO market is experiencing strong growth due to the growing trend of outsourcing and growing adoption of healthcare IT solutions or BPO services. Moreover, rise in burden of chronic disease and growing geriatric population and the outbreak of COVID-19 (pandemic) is expected to boost growth of the market. However, factors such as complex rules and regulations and hidden costs of outsourcing are expected to hamper the market growth.

Global Healthcare BPO Market: Regional Insights

Based on geography, the global healthcare BPO market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Among regions, North America is expected to gain highest share in the market during the forecast period owing to the rapid growth of the pharmaceutical industry, rise in adoption of healthcare IT services, growing trend of outsourcing, and well-established healthcare infrastructure in the region. For instance, in May 2023, Optum, American healthcare services provider, planned to invest some P800 million in medical business process outsourcing (BPO) in the Philippines. Optum, in March this year, have already met with the Board of Investments (BOI) to discuss details of their planned new project in Davao and queries on the importation of equipment.

Europe and Asia Pacific are also expected to witness robust growth in the global healthcare BPO market owing to the growing trend of outsourcing, rise in adoption of healthcare IT services, rapid growth of the pharmaceutical industry, and favorable government initiatives in these regions. For instance, the Indian pharmaceutical industry has seen a massive expansion over the last few years. According to the India Brand Equity Foundation, India’s domestic pharmaceutical market stood at US$ 42 billion in 2021 and is expected to reach US$ 65 billion by 2024 and to reach US$ 120-130 billion by 2030. This in turn is driving the growth of the market.

Figure 1. Global Healthcare BPO Market Share (%), by Region, 2023

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Global Healthcare BPO Market Drivers:

Growing trend of outsourcing to augment market growth

One of the key factors expected to augment the growth of the global healthcare BPO market over the forecast period is the growing trend of outsourcing. Healthcare business process outsourcing, or Healthcare BPO, means outsourced business activity or process that provides support (admin or otherwise) to medical institutions, staff, and/or organizations. In August 2022, Access Healthcare accelerated healthcare outsourcing with automation, AI, and Big Data. Access's highly advanced, intelligent, and comprehensive technology and analytics help healthcare organizations worldwide improve clinical, administrative, and financial outcomes.

Adoption of healthcare IT solutions to drive market growth

Another factor which is driving the growth of the global healthcare BPO market is the increasing adoption of healthcare IT solutions or BPO services across the world. For instance, in June 2022, healthcare BPO service provider, Access Healthcare, planned to invest INR. 190 crore to scale up its delivery operations and build a new campus in Chennai. The new unit will house the company's BPO and IT operations and serve as the hub for technical infrastructure. A new campus will deliver advanced healthcare BPO and IT services to clients in the healthcare revenue cycle. This in turn is expected to augment the growth of the market.

Global Healthcare BPO Market Opportunities:

Rise in burden of chronic disease and growing geriatric population is expected to offer significant growth opportunities for players in the healthcare BPO market. For instance, geriatric population is prone to various health conditions. Increasing burden of such diseases lead to increased workload for the insurance companies, and to handle high volume claim records, patient records, and ensure quick turnaround time, these companies need to invest resources in infrastructure, technology, and skilled talent pool, leading to very high operational costs, which in turn is expected to augment the growth of the global healthcare BPO market.

The outbreak of COVID-19 (pandemic) is expected to provide significant growth opportunities for players in the global healthcare BPO market. For instance, Healthcare BPO firm, Carelon Global Solutions Philippines, expanded aggressively during the pandemic. Carelon Philippines’s country head Nora Terrado said the company's full-time employees (FTEs) grew from 800 in 2020 to 7,000 in 2022. She said the growth of BPO firms was driven by the demand from health insurance and healthcare companies seeking to improve their administrative efficiency and provide better access to healthcare services to their clients.

Global Healthcare BPO Market Trends:

Medical claim management is a recent trend

Outsourcing medical claims management can lower the administrative burden of an organization and boost their revenue by improving accuracy. Medical claim management is a process that deals with billing, filling and updating, and processing of medical claims, related to the patient diagnosis, treatments, and medicines. Many medical facilities and hospitals worldwide outsource these tasks to medical claims management firms. It helps improve both the speed and efficiency of the entire process of claims management in healthcare. This trend is expected to continue during the forecast period, driving the growth of the market.

Rise in adoption of novel technologies is another trend

The healthcare industry has been subjected to various reforms due to regulatory reforms, escalating costs, increasing workforce needs, changing business models, and continuous shift toward value-based care. However, these reforms have increased the adoption of new technologies. Moreover, technological advances in medical care and increasing demand for healthcare services, primarily from the aging population, are driving transformations in the healthcare industry. This trend is also expected to continue over the forecast period, driving the growth of the market.

Global Healthcare BPO Market Restraints:

Complex regulations to hamper the market growth

Another factor which is hampering the growth of the global healthcare BPO market is the complex rules and regulations. India has emerged as a preferred outsourcing destination for healthcare BPO services in the Asia region, however, several concerns regarding policy framework, in terms of tax laws, data privacy laws, IP protection laws, and clinical trial laws, exists. To provide outsourcing services to overseas vendors, vendors in India need to comply with the international standards of security and privacy, to reduce/avoid business losses. Although the government is gradually taking steps to provide more clarity on these laws.

Hidden costs of outsourcing to hinder market growth

One of the key factors expected to hamper the growth of the global healthcare BPO market is the hidden costs of outsourcing. Although, outsourcing is cost-effective but at times, the hidden costs involved in signing a contract across international boundaries may pose a serious threat to new and existing healthcare BPO companies. There are different components of the total outsourcing costs, such as the cost of selecting a vendor, cost of transition, cost of layoffs, and cultural cost. All these hidden costs create a major problem for healthcare vendors.

Figure 2. Global Healthcare BPO Market Share (%), by Service, 2023

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Global Healthcare BPO Market Segmentation:

The global healthcare BPO market report is segmented into Payer Service, Provider Service, Pharmaceutical Service, and Geography.

Based on Payer Service, the global healthcare BPO market is segmented into Human Resource Management, Claims Management, Customer Relationship Management (CRM), Operational and Administrative Management, Care Management, Provider Management, & Other Payer Services. Out of which, Human Resource Management Segment is expected to dominate the healthcare BPO market during the forecast period and this is attributed to the growing burden of disease and rise in patient pool across the globe. It is a practice in which an organization hires a third-party organization to handle its human resources activities and administrative tasks.

Claims Management Segment is also expected to witness significant growth in the near future and this is due to the increasing number of people worldwide seeking health insurance and medical claims management outsourcing. Insurance claims outsourcing is a process of hiring a third-party company to take care of client's insurance claims.

Based on Provider Service, the market is segmented into Patient Enrolment and Strategic Planning, Patient Care Service, and Revenue Cycle Management. Of which, Patient Enrolment and Strategic Planning Segment is expected to dominate the market over the forecast period and this is attributed to the growing burden of disease and rise in patient pool across the globe.

Patient Care Service Segment is also expected to witness significant growth in the near future and this is owing to rise in focus on addressing the medical needs of specific patients.

Based on Pharmaceutical Service, the market is segmented into Research and Development, Manufacturing, Non-clinical Services, Supply Chain Management and Logistics, Sales and Marketing Services, and Other Non-clinical Services. Out of which, Research and Development Segment is expected to dominate the market over the forecast period and this is attributed to the increasing research and development activities.

Manufacturing Segment is also expected to witness significant growth in the near future and this is owing to increasing drug discovery and development.

Global Healthcare BPO Market: Key Developments

In October 2022, Performant Healthcare Solutions and Priority Health collaborated to provide a customized, end-to-end solution focused on all aspects of payment integrity.

In September 2022, Surgical Solutions signed an agreement for outsourced surgical services with Conductiv. The new agreement allows Conductiv members to take advantage of pricing and terms as set forth in the Conductiv Agreement for integrated, on-site surgical support.

In October 2021, Competition Commission of India (CCI) approved the acquisition of worldwide healthcare BPO services business of Hinduja Global Solutions by Betaine B.V. The transaction will involve the acquisition of worldwide healthcare BPO services of Hinduja Global Solutions, along with certain assets, contracts, and employees by Betaine.

In February 2021, Annexus Health announced the launch of Adparo, a suite of financial assistance cycle management (FACM) outsourcing services to meet a range of provider needs.

Global Healthcare BPO Market: Key Companies Insights

The global healthcare BPO market is highly competitive. This is attributed to the growing trend of outsourcing in the healthcare industry, as a result, players in the market are focusing on launching novel products in the market.

Some of the key players in the global healthcare BPO market are Parexel International, IQVIA, IBM Corporation, Genpact Limited, Cognizant, Capgemini, Accenture, Sutherland Healthcare Solutions, GeBBs Healthcare Solutions, and UnitedHealth Group Incorporated, among others.

*Definition: Healthcare BPO (business process outsourcing) is the process of hiring an external contractor (third-party organization) to handle non-clinical or non-core activities of a healthcare organization. Hospitals, clinics, and other medical facilities outsource work instead of performing the tasks in-house to improve patient care, provide greater access to specialists, lower costs, lessen critical mistakes, and to offer more services.