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.
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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 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.
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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.
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.
Related Reports :
A. Healthcare Information Technology Market
https://www.industryarc.com/Research/Healthcare-Information-Technology-Market-Research-502131
B. Revenue Cycle Management Market
https://www.industryarc.com/Report/16229/revenue-cycle-management-rcm-market.html
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