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, 2020 - 2027

Industry Insights

The global medical billing outsourcing market size was valued at USD 9.3 billion in 2019 and is projected to register a strong CAGR of 12.3% over the forecast period. 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.

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.

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 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

In-house and outsourced are the major components of the medical billing outsourcing market. The outsourced segment held the largest market share in the component segment in 2019 and 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. Since 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

Front-end services consist of processes like scheduling, preregistration, registration, eligibility, insurance verification, and pre-authorization. The front-end service constitutes the major function of medical billing outsourcing and accounted for the highest share in the market for medical billing outsourcing, in 2019. 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 in the market for medical billing outsourcing in 2019 as hospitals were prime users of such services due to high claim volume. Consolidations of hospitals further increase the complexity 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 office segment is likely to expand at the fastest CAGR in the market for medical billing outsourcing during the forecast period. The 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

North America held the highest share of the market for medical billing outsourcing in 2019. The presence of a number of healthcare providers in 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 the 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-10) has made 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 the 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.

Medical Billing Outsourcing Market Share Insights

Some of the key companies in the market for medical billing outsourcing 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.; and The SSI Group, LLC. 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.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global medical billing outsourcing market report based on component, service, end use, and region:

• Component Outlook (Revenue, USD Million, 2016 - 2027)

  • In-house

  • Outsourced

• Service Outlook (Revenue, USD Million, 2016 - 2027)

  • Front End

  • Middle End

  • Back End

• End-Use Outlook (Revenue, USD Million, 2016 - 2027)

  • Hospital

  • Physician Office

  • Others

• Regional Outlook (Revenue, USD Million, 2016 - 2027)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • Spain

    • France

    • Italy

  • Asia Pacific

    • China

    • Japan

    • India

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa

    • South Africa

    • Saudi Arabia