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

Industry Insights

The U.S. medical billing outsourcing market size was valued at USD 3.46 billion in 2018. It is likely to experience a CAGR of 11.0% during the forecast period. Medical billing, sometimes referred to as revenue cycle management (RCM), comprises most complex and crucial components of healthcare IT business. Healthcare service providers are facing challenges in managing large volume of claims and reimbursements, resulting in huge losses. This is expected to propel the market in the U.S. in the coming years.

Furthermore, there are constant changes in regulations for the insurance industry. Keeping pace with such rapid changes in the industry and being well updated with expanding knowledge base is a time-consuming and tedious process for businesses. Hence, outsourcing RCM services is one of the best options for hospitals and other medical institutions.

RCM practices involve high technological sophistication, coupled with trained expertise. Large medical groups with high claim volume are experiencing significant revenue growth due to outsourcing. Increasing the implementation of several healthcare IT platforms has been positively influencing the growth of the market.

Hassle-free process of settling claims with features such as accounts receivable management denied claims management, and availability of professional coders acquainted with the latest medical codes are the primary driving forces behind practices opting to outsource their billing services.

Component Insights

By component, the market has been bifurcated 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 maintenance of the in-house billing team. In addition, these include extra costs that arise to manage an administrative team. On the other hand, outsourcing activity significantly reduces costs and proves as a good fit for small and medium practices.

To reduce healthcare costs, to increase profit margin, and to improve patient-physician relationships, various hospitals, and independent physicians are accepting outsourcing billing services as a good option. Hence, outsourced medical billing is estimated to surpass in-house billing in the coming years.

Furthermore, a doctor could not provide the best possible care to patients if he/she is engaged with managing administrative processes, such as recovering claims and managing bills. Hence, to enhance the focus on medical care, large hospitals started outsourcing these services.

Service Insights

Front-end services consist of processes such as scheduling, preregistration, registration, eligibility, insurance verification, and pre-authorization. This service type dominated the U.S. medical billing outsourcing market and accounted for just over 40.0% of the overall revenue in 2018. Managing front end services well is a key to reduce repetitive work and improve the patient experience with faster service. Therefore, the demand for outsourcing these services is strong.

Middle-end services are anticipated to witness the fastest growth in the coming years due to the entry of new market players, growing awareness among healthcare practitioners, and increasing adoption of services.

End-Use Insights

By end-use, the hospital segment accounted for the largest market in 2018 as they were prime users of outsourcing services due to high claim volume. Consolidations of hospitals further increase complexity in billing and reimbursement procedures. Hence, the demand for medical billing outsourcing is high in hospitals.

The physician offices segment is projected to expand at a higher CAGR during the forecast period. Soaring need for more cost-effective and efficient processes and increasing emphasis on compliance & risk management by regulatory authorities are supplementing the growth of the segment.

U.S. Medical Billing Outsourcing Market Insights

Major players operating in this market include Accretive Health, Inc.; Allscripts; Cerner Corporation; EClinicalWorks; Experian Information Solutions, Inc.; GE Healthcare; Genpact; Kareo; McKesson Corporation; Quest Diagnostics; and The SSI Group. These companies are focused on streamlining their offerings and identify areas that would lead to cost improvement. This will result in more healthcare practitioners opting to outsource their revenue management process for better returns.

Furthermore, partnerships and acquisitions are the major business strategies undertaken by these companies to expand their geographical reach and service offerings. For instance, in August 2018, Access Healthcare acquired Pacific BPO, a revenue cycle management service provider. With the addition of hospital inpatient RCM services, Access Healthcare expanded its customer base.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at country level and provides an analysis of industry trends in each of the sub-segments from 2015 to 2026. For the purpose of this study, Grand View Research has segmented the U.S. medical billing outsourcing market report based on component, service, and end use:

• 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