An update to the blog, “Medical Billing Outsourcing Market to Grow at 12.5% CAGR by 2023”
On-time submission of medical claims and better denial management are crucial for any healthcare specialty to improve cash flow and patient satisfaction. Medical billing outsourcing comes with diverse advantages for practices such as increased cash flow, reduced billing errors, better billing compliance, less claim denials and more. Practices can also save costs on infrastructure and employee expenses.
According to a report from Grand View Research, the global medical billing outsourcing market size that was valued at USD 10.2 billion in 2020, is expected to reach USD 25.9 billion by 2028, expanding at a compound annual growth rate (CAGR) of 12.66% from 2021 to 2028.
Key factors that are expected to boost the market growth are –
- Increasing usage of billing and medical coding procedures in revenue cycle management
- Growing emphasis on compliance and risk management
- Increasing need to make the medical billing process efficient
- Efforts to cut down in-house processing costs
- Increasing healthcare costs and medical billing complexities
- Frequent revisions in the classification systems for medical coding
Based on the report, post-COVID, the market is expected to demonstrate a growth rate of approximately 10.30% through 2021, reaching USD 11.2 billion in 2021.
The report has segmented the global market on the basis of component, service, end use, and region:
By component, the market is divided into in-house and outsourced. The outsourced segment that held the largest revenue share of over 50.0% in 2020 is expected to register the highest CAGR from 2021 to 2028, as physician practices (acute care hospitals and clinics/physicians) are facing challenging times with declining reimbursements and rising costs. The newly introduced regulations have made business more complex. Outsourcing reduces costs and is a good option for small and medium practices.
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Based on service, the market is divided into Front End, Middle End and Back End. Though the front-end service segment held the largest share of over 35.0% in 2020, this segment is facing a gradual decline in revenue growth due to market saturation and increased competition. The front-end segment comprises the major functions of medical billing outsourcing and includes processes such as scheduling, preregistration, registration, eligibility, insurance verification, and pre-authorization. Owing to factors such as the entry of new market players and the growing awareness among healthcare practitioners, middle-end services are expected to witness the fastest growth in the forecast period.
End-users of the market are Hospitals, Physician Offices and others. As hospitals were prime users of such services due to high claim volume, the hospital segment held the largest revenue share of over 45.0% in 2020. The demand for outsourcing is high in hospitals, as consolidations of hospitals further increased the complexity of billing and reimbursement procedures. At the same time, the physician office segment accounted for the second-largest revenue share in 2020 and is expected to grow at the fastest rate over the forecast period. This growth is owing to factors such as – rising expenditure on healthcare by small and midsized healthcare providers due to the growing emphasis on risk management and regulatory compliance, and complex technology and staffing requirements.
Region-wise, the market is divided into North America (U.S., Canada), Europe (Germany, U.K., Spain, France, Italy), Asia Pacific (China, Japan, India), Latin America (Brazil, Mexico), Middle East & Africa (MEA) (South Africa, Saudi Arabia). North America held the largest share of over 45.0% in 2020. Many healthcare providers in the U.S. rely on outsourcing firms to manage their billing processes, maximize operating margins and manage high-volume transactions. As outsourcing practices are being standardized across the globe, developing regions such as Asia Pacific and Latin America are expected to register a lucrative CAGR through the forecast period.
The demand for revenue cycle management (RCM) has also increased, as the International Classification of Diseases-10th revision (ICD-10) has made the medical billing business even more complex in nature. Also, providers are choosing companies offering the right combination of RCM with electronic medical records (EMR) for improved patient outcomes.
Some key players mentioned in the market report are R1 RCM, Inc., Cerner Corporation, Allscripts Healthcare Solutions, Inc., Experian Information Solutions, Inc., eClinicalWorks, GE Healthcare, Genpact, HCL Technologies Limited, Kareo, Inc., McKesson Corporation, Quest Diagnostics, Athenahealth Inc., and The SSI Group, LLC.