MEDICAL BILLING OUTSOURCING MARKET ANALYSIS

The global medical billing outsourcing market was valued at US$ 12.5 Bn in 2022 and is forecast to reach a value of US$ 53.78 Bn by 2030 at a CAGR of 20.0% between 2023 and 2030. The global medical billing outsourcing market is experiencing strong growth due to the growing trend of outsourcing in healthcare and rapidly changing healthcare regulations worldwide. Furthermore, federal mandate to implement digital record keeping by healthcare providers and rise in healthcare digitalization is expected to boost the growth of the market. However, factors such as high threats of data breaching and high cost of outsourcing are expected to hamper the market growth.

Global Medical Billing Outsourcing Market: Regional Insights

Based on geography, the global medical billing outsourcing 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 growing digitalization in healthcare, increasing need to make billing processes efficient, need to decrease in-house processing costs, and growing emphasis on compliance and risk management in the region. For instance, in October 2021, R1 RCM Inc. announced that APP (American Physician Partners) has extended its revenue cycle management partnership with R1 until 2031. R1 utilized its expertise to re-design APP’s patient financial experience, implementing mobile functionality, predictive outreach solutions, and a proprietary emergency medicine billing system. This in turn is driving the growth of the market.

Europe and Asia Pacific are also expected to witness robust growth in the global medical billing outsourcing market due to the growing digitalization in healthcare, increasing need to make billing processes efficient, rise in healthcare expenditure, increasing adoption of outsourcing services, and emergence of novel technologies in these regions. For instance, in Europe, European Outsourcing Agency is providing back office solutions for medical billing companies and healthcare facilities for more than 10 years. The agency has the experience, knowledge, and highly skilled workforce required to handle the most demanding billing operations with ease of implementation.

Figure 1. Global Medical Billing Outsourcing Market Share (%), by Region, 2023

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Global Medical Billing Outsourcing Market Drivers:

Increasing outsourcing in healthcare to underpin market growth

Another factor which is driving the growth of the global medical billing outsourcing market is the increasing outsourcing in healthcare. For instance, around 65% of medical billing companies have a positive outlook on the outsourced billing industry, according to a report by Tebra. Tebra's State of the U.S. Medical Billing Industry Report surveyed 277 medical billing companies to examine the outsourced billing landscape. Almost half of companies (43%) see outsourcing as a significant opportunity, while 42% see significant opportunities to expand services. This in turn is expected to augment the growth of the market during the forecast period.

Rapidly changing regulations to augment market growth

One of the key factors expected to augment the growth of the global medical billing outsourcing market during the forecast period is the rapidly changing healthcare regulations across the world. Many healthcare providers across the world are undertaking initiatives to facilitate smoother health data exchange and improve efficiency of healthcare systems. For instance, an initiative undertaken by healthcare suppliers in the United States to utilize paperless healthcare systems and incorporate HIT systems is expected to increase demand for medical billing outsourcing services in the U.S., driving the growth of market in the region.

Global Medical Billing Outsourcing Market Opportunities:

Federal mandate to implement digital record keeping by healthcare providers is expected to offer significant growth opportunities for players in the global medical billing outsourcing market. For instance, implementation of digital record keeping helps increase staff efficiency, reduce coding errors, and improve reimbursement rates. Integration of EHR and medical billing services enables seamless transfer of billing data from documentation system to billing company, eliminating the tedious task of entering patient data in two systems. Many governments around the world have set aside billions for an incentive program that encourages hospitals and providers to adopt electronic health record systems (EHR) to reduce the administrative burden on medical billing.

Rise in healthcare digitalization is also expected to offer lucrative growth opportunities for players in the global medical billing outsourcing market. For instance, technology is a key differentiator in today's healthcare systems, including localized healthcare systems that existed earlier. Digital development accelerated by the COVID-19 pandemic had a positive impact on the market growth. Furthermore, the future of medical billing outsourcing looks promising as the healthcare industry is increasingly adopting different technologies. In October 2021, France government planned to invest over US$ 650 million to expand their digital health infrastructure on a national level. This in turn is expected to augment the growth of the market.

Global Medical Billing Outsourcing Market Trends:

Growing trend of outsourcing is a recent trend

Medical billing outsourcing refers to a process of outsourcing billing by a company or healthcare institution. It assists in reducing billing errors while ensuring accuracy with the timely submission of work. It helps accelerate cash flow, improve patient satisfaction, and save money, and provide quality care by managing hospital staff and hospital operations effectively. Furthermore, medical billing outsourcing is widely used in hospitals and clinics as it helps in faster insurance payments and increases transparency. This trend is expected to continue over the forecast period.

Rise in adoption is another trend

Rapid growth of healthcare infrastructure and increase in hospital admissions is increasing or has increased the demand for software (technologically advanced) solutions, along with government initiatives towards digital health. Moreover, emergence of novel technologies and their adoption is helping several healthcare facilities worldwide to improve their healthcare infrastructure. The rising healthcare cost is the prime factor responsible for the growth of this sector. This trend is also expected to continue over the forecast period, diving the market growth.

Global Medical Billing Outsourcing Market Restraints:

Data breaching to hinder growth of the market

One of the key factors expected to hinder growth of the global medical billing outsourcing market is the high threats of data breaching associated with medical billing. Data breaches have become a major concern. Protecting patient records and their confidentiality is critical in medical process outsourcing. With growing implementation of EHRs, the issues regarding data breaches are also rising. According to Becker’s Healthcare data, in 2021, around 50 million of the US population’s health data was breached, which is around 3 times greater than in the past three years.

High cost of outsourcing to hamper market growth

Another factor which is hampering the growth of the global medical billing outsourcing market is the high cost of outsourcing. Improper planning and budget allocation for outsourcing operations can have a detrimental impact on cost savings and business value that outsourcing may provide. Unexpected or hidden costs, such as on assessing and selecting a vendor, maintaining offshore contracts, process transfer, and increasing security & severance pay for employees, are not factored into financial plans of companies, when outsourcing their business operations.

Figure 2. Global Medical Billing Outsourcing Market Share (%), by Component, 2023

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Global Medical Billing Outsourcing Market Segmentation:

The global medical billing outsourcing market report is segmented into Component, Service, End User, and Region.

Based on Component, the market is segmented into In-house and Outsourced. Out of which, Outsourced Segment is expected to dominate the medical billing outsourcing market over the forecast period and this is attributed to the growing trend of outsourcing. It significantly reduces costs and proves a good fit for small and medium practices.

Based on Service, the market is segmented into Front End, Middle End, and Back End. Out of which, Front End Segment is expected to dominate the market over the forecast period and this is attributed to the rise in adoption of front-end outsourcing services. Front-end services consist of processes, such as scheduling, preregistration, registration, eligibility, insurance verification, and pre-authorization. It comprises the main function of medical billing outsourcing.

Middle End Segment is also expected to witness significant growth in the near future and this is owing to rising awareness among practitioners about middle-end services.

Based on End User, the market is segmented into Hospitals and Physician Offices. Out of which, Hospitals Segment is expected to dominate the market during the forecast period and this is attributed to the increasing demand for medical billing outsourcing services in the hospital sector.

Physician Offices Segment is also expected to witness significant growth in the near future and this is owing to growing emphasis on risk management and regulatory compliance and complex technology and staffing requirements.

Global Medical Billing Outsourcing Market: Key Developments

In January 2023, Mikal Murders of Bentonville launched a HIPAA-compliant, full-service medical billing and consulting firm in Bentonville called AMB Technology LLC to help individual and small group medical and dental practices increase revenue and lower costs using a custom blend of software and services.

In August 2022, Access Healthcare accelerated healthcare outsourcing with automation, AI, and Big Data. The company’s utilizes global delivery, automation, and analytics to deliver meaningful financial results to its customers.

In March 2022, Omega Healthcare, a prominent healthcare management solution company leading the vast healthcare ecosystem acquired Reventics, a revenue cycle management solution developer that provides provider engagement solutions to improve physician reimbursement and compliance.

In February 2022, National Medical Billing Services completed the acquisition of National Billing Partners, a provider of RCM services to surgical practices and ASCs.

Global Medical Billing Outsourcing Market: Key Companies Insights

The global medical billing outsourcing market is highly competitive. This is attributed to the rise in demand for medical billing outsourcing services, as a result, players in the market are focusing on launching novel products in the market.

Some of the key players in the global medical billing outsourcing market are GE Healthcare, R1 RCM, Inc. (Accretive Health), Quest Diagnostics, Allscripts Healthcare Solutions, Inc., Kareo, Inc., Cerner Corporation, and Experian Information Solutions, Inc., among others.

*Definition: Medical billing outsourcing refers to a process of outsourcing billing by a company or any healthcare institution. It enhances the health of the patients by providing quality care and managing hospital staff and other operations effectively.