Medical Billing Outsourcing Market Size, Share & COVID-19 Impact Analysis, By Service (Front-End, Middle-End, and Back-End), By End-user (Hospitals, Physicians’ Office, and Others), and Regional Forecast, 2023-2030

The global medical billing outsourcing market size was valued at USD 13.16 billion in 2022. The market is projected to grow from USD 14.65 billion in 2023 to USD 31.78 billion by 2030, exhibiting a CAGR of 11.7% during the forecast period.

Medical billing outsourcing refers to the management of the medical billing of healthcare facilities, such as hospitals, specialty clinics, radiology departments, and private clinics through third party companies. These outsourced medical billing services are required for the complex and evolving healthcare industry, regulatory compliance & risk management, and easing the billing burden on healthcare practitioners and providers. The various benefits associated with it, including an increased focus on patient care, reduced billing errors, and cost-effectiveness have increased the adoption of these services by healthcare providers.

The rising number of patient visits and hospital admissions will positively influence the global medical billing outsourcing market growth. Furthermore, the growing demand for billing compliance and the rising number of hospitals adopting such services are expected to boost market growth over 2023-2030.

COVID-19 IMPACT

COVID-19 Positively Impacted Market Revenue Due to Increased Medical Billing Outsourcing

The emergence of the COVID-19 pandemic increased the demand for medical billing outsourcing services in hospitals and private medical clinics due to increase in patient volumes for the diagnosis and treatment of COVID-19 and other emergency treatments. Additionally, key market players recorded an increase in their revenues due to the outbreak of the COVID-19 virus.

• For instance, Experian Information Solutions, Inc. witnessed an increase of 3.7% in its overall revenue in 2020 as compared to the previous year 2019.

Moreover, during the pandemic, various clinics were shut down, which made healthcare facilities switch to remote patient care and virtual consultations. This scenario increased the demand for the medical billing outsourcing processes to support these new consultation services by hospitals and clinics.

The rise in patient admissions and visits increased the pressure on the billing staff, which further increased the demand for medical billing outsourcing solutions in hospitals. The demand for medical billing services through third parties also provided other healthcare facilities the opportunity to increase the adoption of such services. This created a promising future for the market in 2021 and 2022. Furthermore, the increased adoption of medical billing services among hospitals and clinics during the pandemic drove market growth.

LATEST TRENDS

Integration of Technology to Increase Adoption of Medical Billing Outsourcing Services in Healthcare Facilities

The market is continuously evolving with the advent of advanced software and services provided by third-party players. The need to focus on patient care and cost-effective billing solutions has allowed for higher adoption of outsourcing medical billing services. The market players are focusing on developing innovative and technologically advanced software for medical billings to enhance their billing quality and attract a wider customer base of healthcare providers by offering improved, fast, error-free, and cost-effective billing facilities.

Artificial Intelligence (AI) and machine learning algorithms are being integrated into medical billing systems to enhance the accuracy of coding and claims submission. These technologies can analyze large datasets to identify patterns and trends, ensuring that the codes are correctly assigned and claims are less likely to be denied.

Furthermore, with the increased adoption of telehealth services, billing outsourcing companies are integrating telehealth billing into their offerings. They utilize telehealth-specific billing software to handle claims related to virtual consultations and other remote services. This ensures that healthcare facilities can efficiently bill for telehealth visits while maintaining compliance with the evolving regulations.

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DRIVING FACTORS

Shortage of Skilled Staff and Difficulty in Maintaining Profitability to Boost Market Growth

The market is anticipated to experience significant growth in the coming years due to the rising demand for fast and accurate medical bills for healthcare providers. There has been an increase in the adoption of billing services provided by third parties due to the increasing burden on hospital staff and shortage of skilled workforce for billings and record maintenance.

• For instance, according to a study published by QWAY Healthcare in December 2021, the U.S. could face a labor shortage of around 3.2 million people for healthcare billing services by 2026.

Hospitals and private clinics are also hiring more staff for their patients' billing and administrative tasks and maintenance. Such an increase in workforce exerts pressure on healthcare providers of extra expenses, thereby increasing the demand for outsourcing medical bills. Adopting outsourcing services to increase profitability and reduce financial burden is expected to drive market progress.

• For instance, in April 2023, according to an article published by Capline Healthcare Management, medical practices adopting outsourcing services noticed a 16.9% decrease in their billing-related costs. According to the same report, healthcare practices saw an average increase in their revenue of 11.6% due to outsourcing their medical bills.

Therefore, discrepancies associated with in-house billings are expected to drive the growth of the market in the coming years.

Increasing Patient Burden to Boost Demand for Medical Billing Outsourcing

Healthcare providers face unique challenges while managing their patients’ bills and tracking policies, primarily due to the growing burden of the patient population. The increasing burden of persistent diseases, such as arthritis, asthma, lung infections, diabetes, heart diseases, and hypertension is the leading cause of the growing number of patient visits in hospitals and private clinics worldwide.

• For instance, in January 2020, according to a report published by The Commonwealth Fund, adults in the U.S. had the highest chronic disease burden - about 28% across the globe. Also, according to the same report, the U.S. has the highest rate of obesity - about 40% of the total population.

Such a high prevalence of diseases has increased the patient burden on hospitals and radiology clinics. Also, limited adoption of the latest billing software by healthcare providers is expected to drive the demand for medical billing outsourcing services during the forecast period.

The rise in patient visits to radiology and surgical centers is also driving the adoption of these services in the market. Moreover, the need to be updated on coding and billing changes, documentation requirements, mitigating the risk of billing errors, reduction in claim denials, and balance of financial health in ASCs and hospitals are factors anticipated to drive the medical billing outsourcing market forecast.

RESTRAINING FACTORS

Concerns Associated with Data Privacy and Breaches to Hinder Market Growth

In emerging countries, there has been an increase in the adoption of billing outsourcing services by healthcare providers. However, several factors, such as lack of awareness, risk to patient data privacy, and increased threat of breaches related to medical data and bills are expected to impede the market growth. Additionally, internal and external healthcare data breaches affect many patients, clients, stakeholders, and hospitals.

Furthermore, the increased frequency of such attacks and breaches has resulted in unauthorized internal disclosures, financial losses, and a high magnitude of exposed records.

• For instance, according to an article published by the NCBI in April 2020, from 2015 to 2019, 157.4 million individuals were affected by data breaching. Also, the average cost of a healthcare data breach in the U.S. is USD 15 million. According to the same article, from 2014 to 2019, the average data breach cost increased by 12% globally.

Hence, factors, such as risk to medical data privacy and data breaches are responsible for the lower adoption rate of billing outsourcing services.

SEGMENTATION

By Service Analysis

Middle-End Services to Gain Momentum Due to Growing Awareness among Healthcare Professionals

Based on service, the market is segregated into front-end, middle-end, and back-end. The middle-end services segment will expand at the highest CAGR during the forecast timeframe. This segment’s growth is due to the growing number of hospitals and surgical centers coupled with rising awareness among healthcare facilities about middle-end services. Furthermore, the market players are focusing on various strategies to expand such services for easy and errorless medical billing, thereby increasing the segment’s growth during the forecast period.

The front-end segment captured the highest medical billing outsourcing market share in 2022 and is estimated to record a significant CAGR over 2023-2030. The rising demand for managing patient schedules, verification of insurance eligibility, and pre-authorization, especially among hospitals in developing countries, is expected to boost the segment’s growth during the forecast period.

The back-end segment accounted for a significant share of the market. The rising pressure on hospital administrative branches for managing claims denials & credit balance, remittance processing, and provider enrollment & credentialing is expected to drive the segment’s growth in the coming years.

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By End-user Analysis

Hospitals Segment to be Major End-User Due to Growing Number of Patient Visits

Based on end-user, the market is segregated into hospitals, physicians’ office, and others. In 2022, the hospital segment dominated the market share, and is projected to register a notable CAGR during 2023-2030. The segment’s higher share is attributed to increasing patient visits and higher adoption of electronic health record systems to retrieve and organize information of patient health and also assist in billing.

• For instance, according to a report published by MGMA (Medical Group Management Association), 55% of medical practices reported that their patient visit volumes in 2022 were above those in 2021.

The physicians' office segment is expected to grow significantly over 2023-2030. The segment’s growth is due to a growing number of physicians and surgeons opening their independent clinics and radiological centers, and boosting their focus on outsourcing medical bills to third parties. The others segment includes radiology centers, surgical centers, and pain management centers. This segment is expected to record a higher CAGR during the forecast timeframe owing to higher adoption of these billing outsourcing services.

REGIONAL INSIGHTS

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North America generated a revenue of USD 7.23 billion in 2022. The region is anticipated to dominate the global market share owing to the surge in the presence and expansion of various key players providing medical billing services in the region. Moreover, growing developments and expenditures in medical infrastructures, a large population base visiting hospitals & private clinics, and increase in patient admissions for their treatment will foster the regional market outlook.

Europe captured a substantial market share in 2022 and is predicted to record a notable CAGR during the forecast period of 2023-2030. The change in healthcare regulations and rising need for managing medical policies are expected to drive the demand for billing outsourcing services. Furthermore, established market players are anticipated to propel the regional market growth during the forecast period.

Asia Pacific is anticipated to register the highest CAGR from 2023 to 2030. The high CAGR of the regional market is attributed to the increasing demand for medical billing outsourcing services in hospitals and radiology clinics, coupled with the growing patient population across the region. Moreover, growing investments by regional companies are expected to drive the regional market growth.

Latin America and the Middle East & Africa are anticipated to witness growth prospects during the forecast period. The growing percentage of the population suffering from chronic and infectious diseases, rising healthcare investments, and increased focus by key players on providing billing services in these regions are expected to propel the market expansion during the forecast period.

KEY INDUSTRY PLAYERS

R1 RCM Inc. and CareCloud Inc. to Hold Key Market Share with Front-End Services in Their Portfolios

R1 RCM Inc., CareCloud Inc., Veradigm LLC, and Experian Information Solutions Inc. are considered some of the leading players in the market. The dominance of these companies is attributable to their strong direct and indirect presence across the world and the vast portfolio of services they provide. These market players are focused on entering merger and acquisition agreements to penetrate new markets.

Other companies operating in the market include Billing Paradise, 3Gen Consulting, AdvancedMD Inc., NOVAmedtek, Neolytix LLC, CureMD Healthcare, and other small & medium-sized players. These companies are focusing on strategic developments, such as partnerships, collaborations, and regional expansions. Furthermore, the growing focus on introducing new and advanced services in the untapped markets is expected to boost their share in the market.

LIST OF KEY COMPANIES PROFILED:

• CareCloud Inc. (U.S.)


• R1 RCM, Inc. (U.S.)


• Experian Information Solutions, Inc. (U.S.)


• Veradigm LLC (U.S.)


• Billing Paradise (U.S.)


• 3Gen Consulting (U.S.)


• Altera Digital Health Inc. (U.K.)


• eClinicalWorks (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• February 2023 - GeBBS Healthcare Solutions announced the acquisition of CPa Medical Billing, a provider of Revenue Cycle Management (RCM) services to federally qualified health centers and other multi-specialty physician groups.


• April 2022 - Omega Healthcare acquired ApexonHealth, an AI and automation-based revenue cycle management and payor solutions provider. ApexonHealth provides services, such as medical billing, coding, and collections processes, and offers virtual nursing services.


• March 2022 – Omega Healthcare announced the acquisition of Reventics, a U.S.-based company, to expand its Revenue Cycle Management (RCM) services by leveraging cloud-native platforms - RevCDI and RevMAX for improvement in clinical documentation and revenue cycle management.


• October 2022- National Medical Billing Services acquired MedTek, LLC. It is a leading provider of revenue cycle management solutions to hospitals, clinics, and ASCs.


• May 2021- R1 RCM Inc. announced a definitive agreement to acquire VisitPay, a digital payment solution, for approximately USD 300 million, further transforming the payment service and driving patient satisfaction and higher collection yield of payment,


• April 2021- Cerner Corporation announced the acquisition of Kantar Health, a division of Kantar Group, to accelerate innovation and advance patient care services worldwide.

REPORT COVERAGE

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The market research report provides a detailed competitive landscape. It provides an overview of the market and its dynamics, such as drivers, restraints, opportunities, and trends. Besides this, the report provides information related to key industry developments, such as mergers & acquisitions and regional expansions in the market. In addition, the impact of COVID-19 and the industry overview during the pandemic are covered in the report.

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