Market Trends of US Healthcare BPO Industry
The Claims Management Segment is Expected to Have the Highest CAGR Over the Forecast Period
Claims processing outsourcing (CPO) is a relatively new business concept for insurance firms. It has emerged as the preferred option for organizations aiming to minimize operating expenses while improving service quality. Understanding the relationship between policyholders, healthcare providers, and insurance companies is essential for understanding the details of the medical billing and coding process.
Medical claims management is the process of billing, filling, updating, and processing medical claims related to a patient's diagnosis, treatments, and medications. Many hospitals and medical facilities outsource these tasks to medical claims management firms, as maintaining patient records, interacting with health insurance agencies, and preparing medical service invoices are time-consuming processes.
The rising burden of chronic diseases, the aging population, and the rising healthcare claims are driving the segment's expansion. For instance, according to the data published by the American Cancer Society in January 2024, an estimated 2.0 million new cancer cases will be diagnosed in the United States in 2024, among which prostate cancer is estimated to be the highest with 299,010 cases, followed by 234,580 cases of lung cancer, and 313,510 cases of female breast cancer. Therefore, with the rising burden of chronic diseases such as cancer, insurance companies can receive more claims from healthcare providers to offset the treatment cost incurred for cancer, which drives the demand for claim management services, thereby boosting the segment's growth.
Strategic activities by market players, such as partnerships, are expected to boost market growth over the forecast period. For instance, in May 2024, Aflac established a strategic collaboration with Nayya to transform how employees utilize their supplemental health benefits. Nayya will facilitate the integration of supplemental health claims for employers within Aflac’s top-tier group benefits sector, streamlining the claims filing process and minimizing the associated complexities and time.
In March 2024, UnitedHealth Group mentioned that its subsidiary Change Healthcare completely rebuilt and restored its cloud-based services for managing medical claims. Change's Assurance and Relay Exchange are cloud-based applications that depend on authentication services. Assurance is a software solution for managing medical claims and remittances, whereas Relay Exchange is a clearinghouse that verifies insurance claims for inaccuracies. Thus, such initiatives by market players are anticipated to drive the segment's growth in the United States.
Thus, all the factors above, such as the growing burden of chronic diseases and strategic activities by the market players, are expected to boost the segment's growth.
The Revenue Cycle Management Segment is Expected to Hold a Significant Share Over the Forecast Period
Revenue cycle management (RCM) is a tool healthcare institutions use to monitor all financial interactions with patients, from their first appointment until the settlement of any outstanding debt. All clinical and administrative tasks involved in managing and collecting patient service revenues collectively come under RCM. Therefore, the growing need for RCM services in healthcare is anticipated to promote the segment's expansion.
RCM provides various advantages to the supplier, from billing and collections to administrative responsibilities. It is a cutting-edge system that manages administrative tasks via sophisticated billing, payment processing, and electronic health record systems. According to an article published by the Medical Group Management Association (MGMA) in June 2022, medical practices that outsource their RCM experience increased performance in collections, staff efficiency, and other sectors. Thus, owing to the benefits associated with RCM and its growing adoption, the segment is expected to grow over the forecast period.
The market players are focusing on new partnerships and agreements to bolster their market positions, resulting in the segment's growth. For instance, in July 2022, Waystar, a revenue cycle management (RCM) vendor, planned to buy Patientco in the latest transaction involving an RCM vendor and a patient payment company.
The RCM vendor hopes that the combination will improve patients' financial experience by providing user-friendly options for medical costs. In December 2022, Luminis Health, situated in Annapolis, Maryland, selected VisiQuate, an AI-powered analytics firm, to handle its revenue cycle management operations. Similarly, in November 2022, Cornerstone Specialty Hospitals partnered with CareCloud to take on its revenue cycle management services in West Monroe, Louisiana.
Thus, the factors mentioned above, such as the enormous benefits of RCM outsourcing and strategic collaborations between healthcare companies and market vendors, are expected to boost the segment's growth.
