The global medical billing outsourcing market size is expected to decline from $8.69 billion in 2019 to $8.41 billion in 2020 at a compound annual growth rate (CAGR) of -3.16%. The decline is mainly due to the COVID-19 outbreak that has led to patients’ preference for deferred care to avoid visiting hospitals, which resulted in reduced patient volume. The global medical billing outsourcing market size is then expected to recover and reach $12.44 billion in 2023 at a CAGR of 13.93%.
The rising need for error minimization contributed to the growth of the global medical billing outsourcing market worth. It is estimated that, in the US, 80% of medical bills contain errors. For instance, Equifax, a credit agency firm, found in its audit that hospital bills ranging above $10,000 have an average error amount of $1,300. It is also estimated that doctors lose around $125 billion each year due to poor billing practices in the USA. The rising need for error minimization and optimization of billing process drove the medical billing outsourcing market’s growth.
The variable cost charged in the medical billing services by the service provider is expected to limit the medical billing outsourcing market. According to the Medical Billing Service Review, there is a price for every service provided by medical billing service providers. The charge on the billing services is a percentage ranging between 3% to 10% per bill, indicating more the number of patients, more the hospital or clinic should pay to the service providers. The variable cost added to medical billing services has a negative impact on the medical billing outsourcing market.
Medical billing service providers are expanding their service through cloud-based medical billing software and Electronic Health Record (EHR) services. Cloud-based medical billing software provides more security with patient details compared to the alternatives, and companies are launching cloud-based software to provide enhanced security to their clients. For instance, in 2018, eClinicalWorks, a medical billing service provider, launched the cloud-based platform for revenue cycle.
Companies in the medical billing outsourcing market are investing in mergers and acquisitions to strengthen their business. For example, in June 2020, R1 RCM, a Chicago-based healthcare revenue management cycle company serving hospitals and physician groups, agreed to acquire Cerner RevWorks for a deal amount of $30 million. The acquisition is expected to extend the comprehensive revenue cycle capabilities of R1 and help drive sustainable financial improvements for healthcare providers, and to enhance their patients’ overall experience.
The medical billing outsourcing market consists of sales of medical billing outsourcing services by entities (organizations, sole traders and partnerships) that provide medical billing outsourcing services in which a healthcare provider hires a medical billing service provider outside their practice to do all the billing works.
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