In 2024, the medical billing outsourcing industry size stood at USD 15.6 billion, and it is projected to advance at a CAGR of 12.3% over the projection period, to attain USD 31.4 billion by the end of 2030.
The growth can be credited to the growing utilization of IT resources in the medical business, the increasing funding and also schemes from governments, and the increasing use of medical billing outsourcing services by hospitals, doctors, and other healthcare services, credited to their advantages.
The market for medical billing outsourcing is growing due to several key factors. There’s a rise in medical prescriptions globally, driven by increasing incidences of chronic and infectious diseases and higher hospital admissions. The COVID-19 pandemic further accelerated this trend, boosting demand for medical billing outsourcing as hospitalization rates surged. This heightened the need for robust, scalable, and collaborative digital healthcare infrastructure.
Digitalization and outsourcing have led to increased demand for advanced software technology for medical billing and patient database management. There’s also a growing adoption of electronic health records for patient care and billing purposes.
Rapidly rising demand for telemedicine or telehealth is among several trends seen in the outsourcing of medical billing. Most of the common health care services like consultation, diagnosis, discussion of health issues, treatment, and follow-up can be delivered at a distance with the help of telecommunication equipment like audio/video communicators.
Key Insights
- Front-end services hold a substantial industry share because of their role in preregistration, registration, scheduling, insurance verification, eligibility checks, and pre-authorization, improving efficiency and patient satisfaction.
- Middle-end services is projected to advance significantly with new entrants and augmented awareness among healthcare practitioners.
- Out-patient bills are estimated to advance at a CAGR of 12.6%, propelled by minor injuries, outpatient operations, and improvements in medical technology.
- The large hospital category leads the market with a 50% share in 2030, credited to their acceptance of electronic health records (EHRs) and the requirement for error-free billing processes.
- The hospital category dominates the industry in terms of end users, propelled by the growing load of patient records management and increasing reimbursement complexities.
- Physician offices are expected to proliferate, driven by increased healthcare spending, regulatory compliance needs, and cost reduction efforts through outsourcing.
- North America leads the global market with a 55% revenue share in 2023, driven by technological advancements, R&D investments, and the presence of major industry players focused on customer satisfaction and service quality.
- The adoption of medical billing outsourcing is increasing among healthcare providers due to the complexity introduced by the International Classification of Diseases-10th revision (ICD-11), driving demand for robust revenue cycle management (RCM) solutions integrated with electronic medical records (EMRs).
- Physician offices are focusing on outsourcing to manage healthcare billing errors and operational costs, with approximately 15% of physician earnings spent on billing errors and 25% of revenue allocated to billing processes.