Medical Billing Outsourcing Market - Forecast(2024 - 2030)
Medical Billing Outsourcing Market Overview
Medical Billing Outsourcing Market size was estimated
at $10.6 billion in 2020, projected to grow at a CAGR of 9.8% during the
forecast period 2021-2026. Medical billing outsourcing industry is witnessing
significant growth in the forecast period owing to the upsurge if
technologically advanced healthcare infrastructure coupled with remote motoring
of various aspects of healthcare. Medical billing outsourcing is a revenue
cycle management (RCM), that refers to a process of outsourcing billing and
finance related process by a hospital or a healthcare organization. RCM
includes the most complex and vital components of healthcare IT where
electronic medical records are crucial part of it. Medical billing sometimes be
a demanding and a daunting task for many medical professionals and firms who do
not have access to skilled manpower to execute the tasks properly. As a result,
hospitals, healthcare providers, doctors, clinicians prefer to outsource their
medical billing needs to third-party service providers, thus boosting the
medical billing outsourcing industry. The emergence of advanced technology in
Healthcare IT, saving time, money, reduced labor costs are some of the factors
that sparked a new trend leading to an increased preference of medical billing
outsourcing by several healthcare providers. The efforts of healthcare
providers to decrease the medical billing mistakes and in-house procurement
expenses have increased the need for medical billing outsourcing services. Medical
billing outsourcing increases the revenue, as companies save a lot of time and
money by means of salaries, infrastructure, purchasing, maintaining and
upgrading billing software. With the reduced costs, and timely submission of
claims and improved reimbursement results in increased revenue for the company
as well. As it is a third-party service provider it is totally safe. A good
established outsourcing company offers very transparent billing process. Many
of the service providers have HIPAA-complaint and a secured billing process in
order to safeguard from hacking. However, owing to the complex regulatory
environment and hacking issues in healthcare IT, the Medical Billing Outsourcing Market is likely to be hampered.
Medical Billing Outsourcing Market Report Coverage
The report: “Medical Billing Outsourcing Market Forecast
(2021-2026)”, by Industry ARC, covers an in-depth analysis of the following
segments of the Medical Billing Outsourcing
Market.
By Service Type: Front End, Middle End, Back End.
By Component: In-house, Outsourced.
By End User: Hospitals, Physicians’ Offices and
Others.
By Geography: North America (U.S., Canada, Mexico), Europe
(Germany, U.K., France, Italy, Spain, Russia and Rest of Europe), Asia Pacific
(China, Japan, India, South Korea, Australia & New Zealand, and Rest of
Asia Pacific), South America (Brazil, Argentina and Rest of South America), and
Rest of the World (Middle East and Africa)
Key Takeaways
- Geographically, North America Medical Billing Outsourcing Market held the largest revenue share of 44% in 2020 owing to the highest disposable income and growing geriatric population in this region.
- Medical billing and revenue cycle management companies that offer successful implementation of electronic medical records at practice level are poised to transform the market.
- Medical billing outsourcing has shown to improve cash flow by reducing workforce and associated costs and thereby increasing market demand.
- Detailed analysis on the Strength, Weakness and Opportunities of the prominent players operating in the market is provided in the Medical Billing Outsourcing Market.
Medical Billing Outsourcing Market Segment Analysis – By Service:
Based
on Service, Medical Billing Outsourcing Market is segmented in to Front end,
Middle end and Back end. Front end segment has accounted for the largest
revenue market share in 2020 as it is the main function in medical billing
outsourcing. It mainly includes end-to-end patient access, scheduling,
registration, preregistration, insurance eligibility and verification, digital
order management and others. Back end segment is poised to grow with the
fastest CAGR of 10.3% in the forecast period 2021-2026 owing to the rising
awareness on healthcare IT and revenue cycle management among the healthcare
providers and entry of various new market players.
Medical Billing Outsourcing Market Segment Analysis – By Component:
Based
on Component, Medical Billing Outsourcing Market is segmented in to In-House
and Outsourced. Outsourced segment has accounted for the largest revenue market
share in 2020 owing to its benefits in lower cost, transparency, and enhanced
consistency. Outsourced service is less expensive, especially if it’s a new
business owing to the employee’s resignation, outsourcing makes most sense
financially. This further helps in revenue cycle management for the company. In-house
service segment is anticipated to grow with the fastest CAGR of 10.1% in the
forecast period 2021-2026 owing to its advantages like retaining control, close
proximity as it observes billing process and address any queries regarding it.
Medical Billing Outsourcing Market Segment Analysis – By Geography:
Based
on Geography, North America Medical Billing Outsourcing Market accounted for 44% revenue share in 2020. This is majorly attributed to the rapid changes
in the structure of medical systems, implementation of current medical coding
system referred as ICD-10 coding, advanced technologies in healthcare IT,
incorporation of electronic medical record system, and presence of key players in
this region. Moreover, expansion of medical billing services through
cloud-based medical billing, rise in revenue cycle management programmes and upsurge
in usage of electronic medical record services are boosting the market growth in North America. Asia-Pacific market is poised to grow with the
fastest CAGR in the forecast period 2021-2026 owing to the increase in geriatric
population in developing countries. And this has become a significant
factor to aid the healthcare sector, and also led to accelerate medical support
services like electronic medical record. Besides, factors like growing
awareness on medical billing software, improving healthcare facility, and
supportive government initiatives, and policies are anticipated to boost the
market growth.
Medical Billing Outsourcing Market: Market Share (%), By
Region, 2020
Medical Billing Outsourcing Market Drivers
Increase in Profit Margins of Organization that is Outsourcing Medical Billing
Rise
in the healthcare IT solutions and growing need to adopt an efficient billing
process is poised to fuel the markets growth. Outsourcing medical billing
increases the revenue, as companies save a lot of time and money by means of
salaries, infrastructure, purchasing, maintaining and upgrading billing
software. It is predicted that around 20% of medical practitioner’s revenue is
lost owing to the errors in the medical billing, and on an average a healthcare
provider or a company spends 30-40% of its collections on billing process. This
has fuelled the demand for medical billing outsourcing to make the billing
process more efficient. While adopting a medical billing outsourcing, there is
no need to buy the billing software or any other equipment. Outsourcing medical
billing comes with no capital investment. Some of the companies are launching
or adopting new cloud-based medical billing facility owing to this the company’s
offers excellent security to the patient’s data. For example, in 2018, a
medical billing service provider eClinicalWorks has launched cloud-based
platform for revenue cycle management. Moreover, outsourcing reduces the labor
cost as the need for hiring a billing team is not required by outsourcing and
company can save extra money as there is no need to train them and keep things
up-to-date.
Medical Billing Outsourcing Market Challenges
Variable Cost Charged by Medical Billing Companies:
Various costs charged in the medical
billing services by medical billing companies is anticipated to hinder the
market. Most of the healthcare IT service providers charge a percentage on the
collections, the percentage ranges from 3% to 10% per bill, so as the more you
earn in the more is paid out to these service providers. It makes it hard to
budget as the costs differ between slow and busy months. There is a price
allocated for every service offered by the medical billing companies. The variable
cost in the medical billing outsourcing services hampers the medical billing outsourcing
market.
Medical Billing Outsourcing Market Segment Landscape:
Product
launches, mergers and acquisitions, joint ventures and geographical expansions
are key strategies adopted by players in the Medical Billing Outsourcing Market. Medical Billing
Outsourcing Market top 10 companies are R1 RCM, Inc., Allscripts
Healthcare Solutions, Inc., Cerner Corporation, HCL Technologies, GE Healthcare,
Experian Information Solutions, Inc., Quest Diagnostics, Genpact,
eClinicalWorks.
Acquisitions/Product Launches:
- In August 2020, A Perfect team and A Terri Minnichi were acquired by ACU-serve. Terri and its team has built a successful billing company with a track record of improving billing and collection precises.
- In June 2020, R1 RCM, a Chicago-based healthcare revenue cycle management (RCM) company has acquired Cerner RevWorks at a deal amount of $30 million. The acquisition enables to expand the revenue cycle capabilities of R1.
- In February 2019, Veritas Capital in collaboration with Evergreen Coast Capital has acquired athenahealth, Inc.
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