The global medical billing market is projected to grow significantly, reaching USD 27.7 billion by 2029 from USD 16.8 billion in 2024, growing at a CAGR of 10.5% from 2024 to 2029, driven by factors such as increasing patient numbers, the complexity of billing procedures, expanding healthcare insurance coverage, and rising healthcare expenditure. Key trends include the integration of electronic health records (EHR), adoption of AI and automation, and the shift towards cloud solutions. Challenges like high deployment costs and data security concerns are prevalent, while opportunities lie in AI-driven solutions and cloud-based deployments. The market is segmented by component (software and services), facility size (large, mid, small), end users (hospitals, specialty centers, ambulatory surgical centers), and region (North America leading in market share). Major players include Oracle, McKesson Corporation, and Athenahealth, Inc., with recent developments focusing on enhancing patient support and operational efficiencies through technology integration.
Global Medical Billing Market Dynamics
DRIVER: Growing patient numbers and the ensuing expansion of health insurance
The growing geriatric population, the chronic diseases pervasiveness, and the burgeoning demand for quality healthcare in global healthcare are these days posing an increasing strain on the global healthcare system. The World Health Organization (WHO) reports that the number of people aged 60 and older is expected to grow from roughly 900 million in 2015 to about 2 billion by 2050. The CDC stated that chronic diseases like cancer, cardiovascular disease (CVD), diabetes, and respiratory diseases cause approximately 70% of deaths in the US every year. In addition to this according to Eurostat, 21% of the Europe population was aged 65 and over, compared to the 16% in 2001.
Restraint: High cost of deployment
Factors influencing the cost of medical billing services include the volume and complexity of services handled, impacting the need for extensive billing resources. Medical billing systems are expensive software solutions, with maintenance and software update costs often exceeding the initial purchase price. Support and maintenance services, which include software modifications and upgrades represent a huge recurring expenditure. This contributes to a large portion of the total cost of ownership. Additionally, the healthcare industry often lacks internal IT expertise, necessitating end-user training to maximize the efficiency of medical billing solutions, further increasing the cost of ownership. Post-sale custom interface development for software integration also requires additional verification and validation to ensure accuracy and completeness, adding to the overall expenses.
OPPORTUNITY: Rising demand for AI and cloud-based deployment
Using machine learning algorithms and predictive analytics to shorten drug discovery times, give patients virtual help, and speed up illness diagnosis by analyzing medical images, combining data and artificial intelligence (AI) can potentially improve outcomes and save costs. Because Al can optimize both clinical and non-clinical processes, it is becoming increasingly popular in the healthcare industry. This is because Al can solve a wide range of issues for patients, providers, and the industry as a whole. With Al’s assistance, manual and repetitive processes that arise during patient access, automated coding, expediting claim processing, lowering billing errors, collections, and denials can all be automated. When AI is combined with medical billing, it can mimic intelligent human behavior and carry out these tasks more precisely.
CHALLENGE: Concerns about confidentiality and data security
The shift to digital medical records has amplified data vulnerabilities, escalating the risk of breaches. Issues include inadequate internal controls, outdated policies, and insufficient training. While technologies like EHRs and health data exchanges enhance healthcare efficiency, they also widen security risks. Safeguarding proprietary data and applications remains a pivotal challenge hindering the growth of the medical billing market.
North America accounts the largest share of medical billing industry in 2023.
Based on the region, the medical billing market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East and Africa. In 2023 North America accounted for the largest share of the Medical Billing market. The need for effective billing solutions is being driven by integrated billing systems, a complicated and varied healthcare payer landscape, strict regulatory compliance requirements like HIPAA, and substantial healthcare costs. The area also benefits from a sizable patient and healthcare provider base, which encourages competition and innovation among medical billing service providers and technology vendors.
Prominent players in Medical Billing market include:
- Oracle (US)
- Mckesson Corporation (US)
- Veradigm LLC (US)
- Athenahealth, Inc. (US)
- Quest Diagnostics Incorporated (US)
- eClinicalWorks (US), CureMD (US)
Recent Developments of Medical Billing Industry:
- In January 2024, McKesson Corporation (US) collaborated with Hoffmann-La Roche Limited (Switzerland) to launch patient support program that address administrative challenges and enhances patient experience, streamline the administrative process and accelerates the reimbursement process.
- In November 2023, Veradigm LLC (US) launched a software platform named Veradigm Intelligent Payments to offer Intelligent Payments within Veradigm Payerpath via a collaboration with RevSpring to accelerate payment rates and decrease the time spent manually reconciling records for healthcare provider practices.
- In May 2023, athenahealth, Inc. (US) partnered with LCH Health and Community Services (US) to implemented athenaOne, athenahealth, Inc.’s integrated, cloud-based electronic health record (EHR), medical billing, and patient engagement solution, as well as athenaOne Dental to provide a more seamless experience for its patients and providers and to support the nonprofit’s growth strategy.
Conclusion:
The medical billing market is experiencing significant growth driven by increasing healthcare expenditures, the complexity of healthcare reimbursement processes, and the widespread adoption of digital billing solutions. The shift towards electronic health records (EHRs) and the implementation of stringent regulatory requirements are further propelling the demand for efficient and accurate medical billing services.