Medical Billing Outsourcing Market Size, Share & Trends Analysis Report By Component (In-house, Outsourced), By Service (Front End, Middle End, Back End), By End-use, By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global medical billing outsourcing market size was valued at USD 10.2 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 12.3% from 2021 to 2028. Medical billing involves the Revenue Cycle Management (RCM) process which comprises the most complex and crucial components of the healthcare IT business. The current systems in practice for managing revenue are gradually becoming obsolete, due to the lack of expertise in tackling new payment models and revenue management tools.

Moreover, increasing usage of billing and medical coding procedures in revenue cycle management is estimated to bolster the market growth. There are frequent revisions in the classification systems for medical coding, which also drives the market for medical billing outsourcing. The spread of the novel coronavirus has adversely affected the sector. New codes were created for COVID-19. For instance, the World Health Organization created International Classification of Diseases (ICD-11) codes, which will come into effect in January 2022. The advent of new technological solutions, increasing and changing government requirements, and bad debt and uncollectible accounts have sparked a new trend leading to an increased preference for medical billing outsourcing by several healthcare providers.

The coronavirus pandemic has made unparalleled consequences on daily lives in addition to the global economy. A substantial burden is formed on healthcare systems around the world. The COVID-19 pandemic has negatively affected and will be expected to adversely affect the medical billing outsourcing sector by reducing patient or service volumes and payment ability. Healthcare providers need to prevail over these challenges by reconsidering their financial plans to lessen the impact of the COVID-19 pandemic on revenues. On the other hand, telemedicine solutions can boost patient volumes, improve patient satisfaction and experience, and eventually propel revenues.

Medical billing outsourcing increases cash flow, helps save on the cost of equipment and software, and reduces staff size and employee expenses. Increasing the geographical reach of the key companies through mergers and acquisitions is expected to boost the market for medical billing outsourcing in the coming years. For instance, in December 2016, Allscripts acquired an Australian healthcare IT software provider, Core Medical Solutions, to significantly increase Allscripts offerings in the country.

North America is expected to be the largest regional market for medical billing outsourcing over the forecast years. This is attributed to high awareness levels about outsourcing healthcare IT services and the strong presence of prominent market players in the region. In 2019, Becker's Hospital Review listed around 210 revenue cycle management solutions in the global market space and recognized Athenahealth (U.S.), Accenture (Ireland), R1 RCM (U.S.), Atos (France), and Experian Health (U.S.) as some of the leading revenue cycle vendors.

Europe is also a major market for outsourcing healthcare services, which is majorly driven by the demand for minimizing the overall healthcare delivery costs. The region has high growth potential owing to factors, such as consolidation of large healthcare providers, change in pricing and reimbursement policies, and increasing pressure on European healthcare providers to build more sustainable healthcare systems.

Component Insights

The outsourced segment dominated the market for medical billing outsourcing and held the largest revenue share of 51.5% in 2020. The segment is expected to register the highest CAGR in the coming years. Medical billing outsourcing significantly reduces costs and proves as a good fit for small and medium practices. For the last 5 years, physician practices (acute care hospitals and clinics/physicians) are facing challenging times as reimbursements have declined and costs are rising, and the newly introduced regulations have made business more complex. Hence the demand for medical billing outsourcing is expected to increase in years to come.

Service Insights

The front-end services segment dominated the market for medical billing outsourcing and accounted for the highest revenue share of 39.3% in 2020. Front-end services consist of processes like scheduling, preregistration, registration, eligibility, insurance verification, and pre-authorization. However, front-end services are gradually facing a decline in revenue growth due to market saturation and increased competition. Middle-end services are expected to observe the fastest growth rate in the coming years due to the entry of new market players and growing awareness among healthcare practitioners.

End-use Insights

The hospital segment held the highest revenue share of 47.2% in the market for medical billing outsourcing in 2020 as hospitals were prime users of such services due to high claim volume. Consolidations of hospitals further increase the complexity of billing and reimbursement procedures. Hence, the demand is high in hospitals.

Regional Insights

North America held the largest revenue share of 47.8% in the medical billing outsourcing market in 2020. The presence of a number of healthcare providers in the U.S. has turned their focus on end-to-end outsourcing firms for managing their billing processes. Due to increased awareness about the benefits offered by the outsourcing firms, providers are relying on the companies to maximize operating margins and manage high-volume transactions. Developing regions, such as Asia Pacific and Latin America, are expected to record lucrative CAGRs in the forecast years as outsourcing practices are being standardized across the globe.

The newly introduced International Classification of Diseases-10th revision (ICD-11) has made the medical billing business even more complex in nature. Owing to this, the demand for Revenue Cycle Management (RCM) has increased drastically. In addition, providers are choosing the companies offering the right combination of RCM with Electronic Medical Records (EMR) for improved patient outcomes.

Companies like AthenaHealth, Inc., and eClinicalWorks are providing RCM services that offer EHR software. Other large EMR providers have begun offering RCM services as well, including GE Healthcare; McKesson; and Allscripts Healthcare Solutions, Inc. Kareo, Inc., a practice management software provider released a free EMR with RCM services to physicians.

Key Companies & Market Share Insights

Partnerships, mergers and acquisitions, and technological advancement are some of the key business strategies undertaken by these companies to expand their geographical reach and service offerings. For instance, in July 2019, Cerner Corporation partnered with Amazon Web Services (AWS) for access to its cloud space and global infrastructure to drive healthcare IT innovations. The partnership is expected to improve clinical efficiency and lower operational budgets for healthcare organizations.

In February 2019, Veritas Capital acquired Athenahealth, Inc. in collaboration with Evergreen Coast Capital, as a minority investor. Virence Health, a subsidiary of Veritas Capital, combined with Athenahealth to gain access to its network-enabled services for hospital and ambulatory customers. In another acquisition in July 2018, Veritas Capital acquired GE Healthcare’s Enterprise Financial Management asset which includes its RCM business, Ambulatory Care Management asset, and Workforce Management assets. Some of the prominent players in the medical billing outsourcing market include:

• 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.

• The SSI Group, LLC.

Medical Billing Outsourcing Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2028. For the purpose of this study, Grand View Research has segmented the global medical billing outsourcing market report on the basis of component, service, end-use, and region:

• Component Outlook (Revenue, USD Million, 2016 - 2028)

  • In-house

  • Outsourced

• Service Outlook (Revenue, USD Million, 2016 - 2028)

  • Front-end

  • Middle-end

  • Back-end

• End-use Outlook (Revenue, USD Million, 2016 - 2028)

  • Hospitals

  • Physician Office

  • Others

• Regional Outlook (Revenue, USD Million, 2016 - 2028)

  • 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