The Global Medical Billing Outsourcing Market
The market size was valued at USD 10.2 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 12.66% from 2021 to 2028. 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. Moreover, increasing billing and medical coding procedures in revenue cycle management is estimated to bolster market growth. There are frequent revisions in the classification systems for medical coding, which also drives the market.
The spread of the novel coronavirus has adversely affected the sector. New codes were created for COVID-19. For instance, the World Health Organization created the International Classification of Diseases (ICD-11) codes, which will come into effect in January 2022. 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.
The coronavirus pandemic has had unparalleled consequences on daily lives in addition to the global economy. A substantial burden is formed on healthcare systems around the world. The COVID-19 pandemic has negatively affected and is expected to adversely affect the medical billing outsourcing sector by reducing patient or service volumes and payment ability. Healthcare providers need to prevail over these challenges by reconsidering their financial plans to lessen the impact of the COVID-19 pandemic on revenues. On the other hand, telemedicine solutions can boost patient volumes, improve patient satisfaction and experience, and eventually propel revenues.
Medical billing outsourcing increases cash flow, helps save on the cost of equipment and software, and reduces staff size and employee expenses. The growing geographical reach of the key companies through mergers and acquisitions is expected to drive 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.
COVID-19 U.S.medical billing outsourcing market impact
Pandemic Impact
The medical billing outsourcing market experienced a 9.38% year-on-year growth rate in 2020 when compared to 10.01% in 2019.
The COVID-19 pandemic had a negative impact on the medical billing outsourcing sector due to reducing patient or service volumes and payment ability.
Post COVID Outlook
The increasing healthcare costs and medical billing complexity has created a rise in outsourcing of revenue cycle management services. This is expected to boost growth in the coming years.
Post-COVID, the market is expected to demonstrate a growth rate of approximately 10.30% during 2020-2021, reaching USD 11.2 billion in 2021.
North America emerged as the largest regional market for medical billing outsourcing in 2020 and is expected to maintain its lead over the forecast years. This is attributed to the 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 a major market for outsourcing healthcare services, which is driven by the demand for minimizing healthcare delivery costs. The region has high growth potential owing to factors such as the consolidation of large healthcare providers, changes in pricing and reimbursement policies, and increasing pressure on European healthcare providers to build more sustainable healthcare systems.