Medical Billing Outsourcing Market Size, Share & Trends Analysis Report By End Use (Hospitals, Physician Offices), By Service (Front-end, Middle-end, Back-end), By Component (Outsourced, In-House), And Segment Forecasts, 2019 - 2026

Industry Insights

The global medical billing outsourcing market size was valued at USD 8.2 billion in 2018 and is projected to register a strong CAGR of 11.8% over the forecast period. 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, due to the lack of expertise in tackling new payment models and revenue management tools.

Providers are facing challenges in managing claims and reimbursements, resulting in huge losses. The advent of new technological solutions, rising 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. Efforts to decrease in-house processing costs and rising need for error minimization are also likely to augment the demand. In addition, need for meeting the federal mandates to implement digital record-keeping by healthcare providers and changing healthcare regulations will drive the market further.

Medical billing outsourcing increases cash flow, helps save on the cost of equipment and software, and reduces staff size and employee expenses. Increasing geographical reach of key companies through mergers and acquisitions is expected to boost the market in 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 over the forecast years on account of high awareness levels about outsourcing healthcare IT services and strong presence of prominent market players in the region.

In 2017, 10 top revenue cycle management leaders, following a Becker's Hospital Review, recognized R1 RCM and Cerner as some of the leading revenue cycle vendors in U.S. 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

In-house and outsourced are the major components of the global industry. The outsourced segment is expected to register the highest CAGR in the coming years. Medical billing outsourcing significantly reduces cost and proves as a good fit for small and medium practices. Since the last 5 years, physician practices (acute care hospitals and clinics/physician) 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 outsourced services is expected to increase in years to come.

Service Insights

Front-end services consist of processes like scheduling, preregistration, registration, eligibility, insurance verification, pre-authorization, etc. The front-end service constitutes the major function of medical billing outsourcing and accounted for the highest market share in 2018. 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 in 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 market share in 2018 as hospitals were prime users of such services due to high claim volume. Consolidations of hospitals further increase the complexation in billing and reimbursement procedures. Hence, the demand is high in hospitals.

Currently, private clinics and physician offices are also outsourcing several services. Hence, the physician offices segment is likely to expand at the fastest CAGR during the forecasts period. Rise in the number of services provided by physicians and change in government regulations are responsible for a significant number of physicians adopting RCM services at their medical facilities.

Regional Insights

Based on regions, the market is categorized into North America, Europe, Asia Pacific, Latin America, and Middle East Africa. North America led the industry in 2018. Presence of a number of healthcare providers in U.S. have 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.

Medical Billing Outsourcing Market Share Insights

Some of the key companies in the market 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. Partnership and M&A are some of the major business strategies undertaken by these companies to expand their geographical reach and service offerings. For instance, in July 2018, MTBC, a provider of cloud-based and revenue cycle healthcare IT solutions, acquired the assets of Orion with an aim to increase client base, service portfolio, and team.

Report Scope

Segments Covered in the Report

This report forecasts revenue and volume growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2015 to 2026. 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, 2015 - 2026)

  • In-House

  • Outsourced

• Service Outlook (Revenue, USD Million, 2015 - 2026)

  • Front End

  • Middle End

  • Back End

• End Use Outlook (Revenue, USD Million, 2015 - 2026)

  • Hospitals

  • Physician Offices

  • Others

• Regional Outlook (Revenue, USD Million, 2015 - 2026)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

    • Spain

    • France

    • Italy

  • Asia Pacific

    • Japan

    • China

    • India

  • Latin America

    • Brazil

    • Mexico

  • Middle East and Africa

    • South Africa

    • Saudi Arabia