Medical Billing Outsourcing Market Size, Share & Trends Analysis Report By Component (In-house, Outsourced), By Service (Front-end, Middle-end, Back-end), By End-use- Global Industry Analysis, Share, Growth, Regional Outlook and Forecasts, 2022-2030

The global Medical Billing Outsourcing market size was estimated at USD 11.2 billion in 2021 and is expected to surpass around USD 30.8 billion by 2030 and poised to grow at a compound annual growth rate (CAGR) of 12.06% during the forecast period 2022 to 2030.

Key Takeaways:

• By Component, the U.S. Medical Billing Outsourcing market was valued at USD 4.9 Billion in 2021 and expected to witness growth at a CAGR of 11.4% from 2022 to 2030.
• Based on the components, the outsourced segment held the largest revenue market share in 2021 due to the rising preference of hospitals, physician offices, and startups for outsourced medical billing services for hassle-free claim management at a low cost
• The front-end services segment held the largest revenue market share in 2021. However, the middle-end services segment is expected to register the highest CAGR during the forecast period due to the growing demand for Revenue Cycle Management (RCM) services offering Electronic Health Records (EHR) software
• North America held the largest revenue share in 2021. It is projected to expand further as the U.S. has witnessed a change in the healthcare system with the introduction of ICD-11 coding in 2019 and pressure from the government to incorporate the Electronic Medical Record (EMR) management system
• In November 2020, Conduent Incorporated announced a commercial agreement with Experian Health, a leading provider of RCM solutions that spans patient retention, patient access, and patient collection. The agreement will enable Conducent's IntelliHealth Digital Platform to connect with Experian's consumer data and electronic revenue verification tools to accelerate prescription drug approval and reduce the time to prescription drug fulfillment and treatment

New trends have emerged due to new technological solutions, bad debts, and bills, and expanding and changing regulatory requirements, all of which have contributed to the increased impact of healthcare claim outsourcing by many healthcare providers. Medical billing outsourcing improves cash flow, lowers software and equipment expenses, and reduces employee costs and size.

Due to the rising use of IT resources in the healthcare business and steady government support, the market for medical billing outsourcing is growing at a substantial rate. Increased medical costs, particularly in industrialized nations, have resulted in continuous advancements in the field, allowing for greater adoption of modern technology devices and equipment, such as RCM software. The rising patient load and the need to address the ever-growing record and bills are creating a burden on health practitioners. To counter such a situation, hospitals are outsourcing the clinical billing process which is expected to drive the growth of the market for medical billing outsourcing.

Medical billing involves revenue cycle management, which is the most complex and important component of the healthcare IT business. Due to a lack of expertise in dealing with new payment models and revenue management tools, current revenue management systems are becoming obsolete. In addition, the increasing use of billing and medical coding techniques in revenue cycle management is estimated to spur market growth.

The medical coding classification system is subject to frequent revisions, which is propelling the market for medical billing outsourcing.  Billing for surgeries can be a daunting task for many health professionals and businesses who do not have access to qualified personnel to perform their duties properly. As a result, hospitals, healthcare providers, physicians, and clinicians prefer to outsource their healthcare financing needs to third-party providers.

The advent of advanced technology, time and money savings, and labor cost savings are increasing the preference for outsourcing healthcare billing by multiple healthcare providers. The need for medical billing outsourcing services is increasing due to the efforts of healthcare providers to reduce errors and internal procurement costs. It increases revenue by significantly saving time and money on payroll, infrastructure, purchase, maintenance, and software updates. Well-established outsourcing companies offer a very transparent process. Many service providers have HIPAA complaints and a secure process to protect them from hackers.

Report Scope of the Medical Billing Outsourcing Market

Component Insights

The outsourced segment dominated the market for medical billing outsourcing and held the largest revenue share of 52.6% in 2021. The segment is expected to register the highest CAGR from 2022 to 2030. In-house and outsourced are the major components of the market. It significantly reduces costs and proves a good fit for small and medium practices. Physician practices (acute care hospitals and clinics/physicians) are facing challenging times as reimbursements have declined and costs are rising, and the newly introduced regulations have made business more complex. It is estimated that approximately 20% of physicians' income will be lost due to health billing errors, and on average, healthcare providers or businesses spend 30 to 40% of their revenue on the billing process. This is boosting the segment’s growth.

Some companies are launching or adopting new cloud-based medical billing capabilities for superior security of patient data. For example, eClinicalWorks, a provider of medical billing services, launched a cloud-based revenue cycle management platform in 2018. In addition, outsourcing reduces labor costs by eliminating the need to hire an accounting team. Also, the company does not have to train or stay up to date, saving additional costs.

Service Insights

The front-end services segment dominated the market for medical billing outsourcing and accounted for a revenue share of 38.9% in 2021. Front-end services consist of processes, such as scheduling, preregistration, registration, eligibility, insurance verification, and pre-authorization. It comprises the main function of medical billing outsourcing.

Managing front-end services well is a key to reducing repetitive work and improving the patient experience with faster service. Therefore, the demand for outsourcing these services is strong. However, the segment is expected to face a decline in revenue growth owing to increased competition and saturation in the market. On the other side, the middle-end services segment is projected to witness lucrative growth over the coming years because of new entrants in the sector as well as the rising awareness of the middle-end service among practitioners.

End-use Insights

The hospital segment dominated the market for medical billing outsourcing and accounted for a revenue share of 47.2% in 2021. The segment is estimated to maintain its dominance during the forecast period. This is mainly due to the high demand for financing services in hospitals. In addition, hospital consolidation adds to the complexity of the reimbursement and billing process. This is driving the demand for medical billing outsourcing services in the hospital sector.

The newly introduced International Classification of Diseases-10th revision (ICD-11) has made the medical billing business even more complex in nature. Owing to this, the demand for Revenue Cycle Management (RCM) has increased drastically. In addition, providers are choosing the companies offering the right combination of RCM with Electronic Medical Records (EMR) for improved patient outcomes.

The physician office segment is expected to grow at the fastest rate over the forecast period. Rising expenditure on healthcare by small and midsized healthcare providers due to the growing emphasis on risk management and regulatory compliance and complex technology and staffing requirements is expected to drive the segment in the years to come.

Regional Insights

North America held the largest revenue share of over 47.6% in 2021. The presence of numerous healthcare providers in the U.S. and the shift in their focus on end-to-end outsourcing firms for managing billing processes is augmenting the market in North America. Due to the increased awareness about the benefits offered by outsourcing firms, providers are relying on the companies to maximize operating margins and manage high-volume transactions.

In Asia Pacific, the market for medical billing outsourcing is anticipated to witness remarkable growth during the forecast period. Emerging countries such as Singapore, Australia, India, and China are the most profitable markets due to the expansion of patient pools and improved healthcare facilities. Increasing awareness about clinical billing software and the rising adoption of the latest technology is expected to boost the market. The increasing need to reduce the healthcare delivery cost is favoring the growth of the market in Europe. In Latin America and Middle East and Africa, the market for medical billing outsourcing is likely to propel owing to increasing investment in healthcare by the government and an increasing number of private hospitals.

Key Companies & Market Share Insights

The market is highly competitive, with many large, as well as medium and small-sized companies competing with each other. Partnerships, mergers and acquisitions, and technological advancements are some of the key business strategies undertaken by key companies to expand their market position. For instance, in February 2022, National Medical Billing Services, a well-known healthcare RCM company, completed the acquisition of National Billing Partners, a provider of RCM services to surgical practices and ASCs. Additionally, in March 2022, Omega Healthcare, a prominent healthcare management solution company leading the vast healthcare ecosystem acquired Reventics, a revenue cycle management solution developer that provides provider engagement solutions to improve physician reimbursement and compliance. Some of the prominent players in the global medical billing outsourcing market include:

• R1RCM Inc.
• Allscripts Healthcare, LLC
• Cerner Corporation
• eClinicalWorks
• Kareo, Inc.
• McKesson Corporation
• Quest Diagnostics Incorporated
• Promantra Inc.
• AdvancedMD, Inc.

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Nova one advisor, Inc. has segmented the global Medical Billing Outsourcing market

• Component

• In-house
• Outsourced
• Service
• Front-end services
• Middle-end services
• Back-end services
• End-use
• Hospital
• Physician Office
• Others

By Geography

North America

• U.S.
• Canada

Europe

• Germany
• France
• United Kingdom
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• Southeast Asia
• Rest of Asia Pacific

Latin America

• Brazil
• Rest of Latin America

Middle East & Africa (MEA)

• GCC
• North Africa
• South Africa
• Rest of Middle East & Africa

Key Points Covered in Medical Billing Outsourcing Market Study:

• Growth of Medical Billing Outsourcing in 2022
• Market Estimates and Forecasts (2017-2030)
•  Brand Share and Market Share Analysis
•  Key Drivers and Restraints Shaping Market Growth
•  Segment-wise, Country-wise, and Region-wise Analysis
•  Competition Mapping and Benchmarking
•  Recommendation on Key Winning Strategies
•  COVID-19 Impact on Demand for Medical Billing Outsourcing and How to Navigate
•  Key Product Innovations and Regulatory Climate
•  Medical Billing Outsourcing Consumption Analysis
•  Medical Billing Outsourcing Production Analysis
•  Medical Billing Outsourcing and Management