"The medical billing outsourcing market is driven by greater management and financial flexibility offered through outsourcing"
The global medical billing outsourcingmarket was valued at nearly USD 6.3billion in 2015and is expected to reach USD 16 billion by 2024. Medical billing, sometimes referred to as revenue cycle management (RCM), comprises the most complex and crucial components of the healthcare IT business. The current systems in practice for managing revenue are gradually becoming obsolete, because oflack of expertise in tackling new payment models and revenue management tools. Providers are facing challenges in managing flooding claims and reimbursements, resulting in huge losses. The advent of new technological solutions, increasing government requirements, and bad debt &uncollectible accounts have sparked a new trend leading to increased preference for RCM outsourcing by several healthcare providers.
RCM practices involvehigh technological sophistication coupled with trained expertise. Large medical groups with high claim volume are experiencing significant revenue growthdue to outsourcing. Increasing implementation of several healthcare IT platforms poses a significant impact on the acceptance and growth of this market. Furthermore, the market is expected to be driven by factors such as efforts to contain and decrease in-house processing costs, requirement of error minimization, meeting federal mandates to implement digital record-keeping by healthcare providers, and changing healthcare regulations. Implementation of RCMby medical providers has improved their cash flow, reduced claim denials, and helped them gain an analytical approach to allocate resources and ensure effective revenue management.
However, the growth restraining factors such as high costs of technology, reluctance of providers to provide patient records to third-party sources is anticipated to hinder market growth.
"Outsourced medical billing is expected to surpassin-house medical billing"
This market by component is segmented into in-house and outsourced billing. According to reports, total costs incurred by providers for in-house RCM operations were USD 252 billion in the year 2014. These costs are inclusive of IT costs and maintainingof in-house billing team. In addition, these include the extra costs that arise to manage an administrative team. On the other hand, outsourcing activity significantlyreducescosts and proves as a good fit for small and medium practices. Furthermore, a doctor could not provide the best possible care to the patients if he/shewas concerned with managing administrative processes, such as recovering claims and managing billing.
"Front-end services held the highest market share"
Front-end services (also referred to as preintervention phase) consist of processes like scheduling, preregistration, registration, eligibility, insurance verification, preauthorization, etc. The front-end service constitutes the major function of RCM outsourcing and accounted for the highest market share in 2015. However, front-end services are gradually facing decline in revenue growth attributedto market saturation and increase in competition.
"Increasing usage of outsourcing services by physicians will ensure lucrative growth opportunities for physician office end-use segment"
Physician office centers represent one of the end-use segments amongst hospitals and others. The hospitals segment holds the highest market share in 2015, but this trend will be marred by the increasing preference for outsourcing services by private clinics and physician offices. The billing process complexity involved in the in-house medical billing practices is increasingly driving adoption rate of third party RCM providers by the individual practitioners. Hospitals segment,on the other hand, is expected to lead growth in revenue share as they areprime users of outsourcing services and possess high claim volumes compared to individual practices.
"North America holds the highest revenue share in 2015"
The medical billing outsourcing market by region is categorized into North America, Europe, Asia Pacific, Latin America, and Middle East Africa. North Americanregion is a significant revenue generator in this market. Large numbers of healthcare providers in the U.S. have turned their focus on end-to-end outsourcing firms for managing their billing processes. Realizing the benefits of the economies of scale offered by the outsourcing firms, the providers are relying on billing service providers to handle high-volume transactions and maximize their operating margins. As these practices are being standardized and healthcare providers are realizing their benefits worldwide, markets such as Asia Pacific and Latin America are expected to record lucrative growth in the near future.
"Major companies in medical billing outsourcing are focused toward streamlining their offerings and pin point areas that would lead to cost improvement"
Some of the key players in this industry include Accretive Health, Inc.; Allscripts; Cerner Corporation; EClinicalWorks; Experian Information Solutions, Inc.; GE Healthcare; Genpact; HCL; Kareo; McKesson Corporation; Quest Diagnostics; and The SSI Group. These companies are focused toward streamlining their offerings and pin point areas that would lead to cost improvement. This will result in more healthcare practitioners opting to outsource their revenue management process for better returns.
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