Medical Coding Market Size, Share & Trends Analysis Report By Classification System (International Classification of Diseases, Healthcare Common Procedure Code System), By Component, And Segment Forecasts, 2018 - 2025

Industry Insights

The global medical coding market size was worth USD 10.6 billion in 2016 and is anticipated to exhibit a CAGR of 10.0% during the forecast period. Rising need for a universal language in medical documents in order to streamline hospital billing procedures is driving the growth of the market. 

Rising occurrence of insurance frauds and insurance issues associated with misinterpretation of medical documents is also driving demand for medical coding services, especially in developed countries. Frequent revision of classification systems, coupled with increasing adoption of coding and billing procedures in hospital revenue cycle management, is expected to generate significant growth opportunities during the forecast period.

In terms of the demand-supply scenario, demand for medical coding services is much higher in countries with universal healthcare systems and/or compulsory health insurance. As major use of such systems is in healthcare insurance claims, the insurance industry has a history of a large number of frauds reported. Some of the renowned frauds related to healthcare insurance in 2016 include Fiango Home Healthcare (Texas), Hope Pharmacy (Houston), and Tenet Healthcare (Texas).

Classification System Insights

Among the two commonly used classification systems - International Classification of Diseases (ICD) and The Healthcare Common Procedure Coding System (HCPCS), ICD accounted for the largest market share in 2016. The current version of ICD contains around 69,823 codes for diagnostics and 71,924 for procedures.

The addition of more than 140,000 new codes from its previous version is expected to significantly increase demand for trained coders, thus, boosting segment growth. Frequent introduction of updated versions and availability of training for specialty courses in coding is expected to create multiple vacancies for coders in healthcare institutes.

HCPCS is used for procedures for Medicare, Medicaid, and other third-party health insurance providers. In most cases, the U.S. government, through the Health Information Portability and Accountability Act (HIPAA), has made use of HCPCS code mandatory.  Level II of HCPCS codes include non-physician services such as durable wheelchairs, ambulance, stretchers, and walkers. Similar to other systems, these codes are updated and revised constantly.

Component Insights

Selection of outsourcing or in-house medical coding depends on various factors including the availability of skilled labor, the healthcare system in the country, and the size of business. A shift from in-house coding to outsourcing these services has been observed in recent years. Outsourcing of such services is constantly increasing mainly because it avoids the need for hiring skilled and qualified professionals, which results in cost savings for healthcare facilities.

Furthermore, outsourcing of these services reduces the burden of updating the staff with the latest regulations and guidelines. In addition, companies offering third-party coding practice HIPAA-compliant security measures and adhere to ICD-10 guidelines, which ensures quality. Thus, the outsourcing segment is anticipated to expand at the fastest growth rate in the medical coding market during the forecast period.

Regional Insights

North America dominated the market by capturing the largest revenue share in 2016. High adoption rate of advanced healthcare solutions in routine hospital operations and the availability of a large number of medical coding solution providers are factors expected to aid in maintaining the dominance of the region throughout the forecast period.

Increasing awareness regarding the availability of advanced hospital solutions, growing penetration of private healthcare insurance companies, and rising number of medical coding outsourcing companies in Asia Pacific are some of the key factors expected to boost regional growth at a lucrative rate through 2025. Moreover, factors such as developing healthcare facilities and booming medical tourism in countries such as China, India, Malaysia, and Thailand are expected to support the Asia Pacific market.

Medical Coding Market Share Insights

The market is highly fragmented with the presence of many players catering to offshore demand. Some of the major companies providing platforms for coders to engage with healthcare services providers and insurance providers are STARTEK Health; Oracle Corporation; Verisk Analytics; Aviacode, Inc.; Parexel International Corporation; Maxim Health Information Services; nThrive, Inc; and Medical Record Associates LLC. Client engagement through long-term contracts and increasing regional presence are some of the principal strategies practiced by these players to dominate the market.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels as well as provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global medical coding market report on the basis of classification system, component, and region:

• Classification System Outlook (Revenue, USD Million, 2014 - 2025)

  • International Classification of Diseases (ICD)

  • Healthcare Common Procedure Code System (HCPCS)

• Component Outlook (Revenue, USD Million, 2014 - 2025)

  • In-House

  • Outsourced

• Regional Outlook (Revenue, USD Million, 2014 - 2025)

  • North America

    • The U.S.

    • Canada

  • Europe

    • The U.K.

    • Germany

  • Asia Pacific

    • China

    • India

  • Latin America

    • Brazil

    • Mexico

  • MEA

    • South Africa