The healthcare business process outsourcing or BPO includes back-office administrative functions related to billing, coding, claims processing and revenue cycle management. With the rapid rise in healthcare costs, the need to reduce costs and enhance productivity has increased considerably. Healthcare BPO services help hospitals and healthcare providers to focus on their core areas of expertise by outsourcing non-core administrative and revenue cycle processes. The global healthcare BPO market is estimated to be valued at US$ 10.19 billion in 2023 and is expected to exhibit a CAGR of 6.1% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
Revenue cycle management presents a major market opportunity for players in the healthcare BPO market. Revenue cycle management involves all administrative and clinical functions that contribute to the generation of payments for services rendered. Outsourcing of revenue cycle management services helps healthcare providers to streamline their revenue cycle and maximize payments. The increasing complexity of medical billing and coding has raised the need for outsourcing revenue cycle management. Healthcare BPO providers offer end-to-end revenue cycle management solutions ranging from medical coding and billing to payment posting and denial management. They help hospitals and clinics to improve cash flow by optimizing revenue cycle processes. The focus on reducing costs and maximizing payments from the revenue cycle presents a lucrative growth opportunity for healthcare BPO providers over the forecast period.
Porter's Analysis
Threat of new entrants: The healthcare BPO market has moderate threat of new entrants as this is a niche market which requires high capital investment and expertise to start operations. However, the growing demand for cost-effective BPO services provides opportunities for new players.
Bargaining power of buyers: The bargaining power of buyers is high in this market as there are many existing players providing diversified services. Buyers can negotiate on price and switch between service providers easily.
Bargaining power of suppliers: The bargaining power of suppliers is low to moderate as there are many companies providing outsourcing services and business process management.
Threat of new substitutes: The threat of substitutes is low as there are limited substitutes available for the diversified services provided in the healthcare BPO sector.
Competitive rivalry: The competitive rivalry is high among the existing players in areas like medical coding, medical billing, revenue cycle management, and pharmacy benefit management. Companies are focusing on development of technologically advanced products to hold the largest share in the market.
SWOT Analysis
Strengths: Large pool of skilled resources, cost benefits, focus on quality services, and domain expertise.
Weaknesses: Dependency on third party vendors, confidentiality and data security issues, lack of direct control over operations.
Opportunities: Growth in healthcare expenditure, emergence of new technologies like AI and blockchain, rise in chronic diseases.
Threats: Stringent regulations, economic slowdownsimpact outsourcing, migration to in-house services.
Key Takeaways
The global healthcare BPO market is expected to witness high growth at a CAGR of 6.1%during the forecast period of 2023 to 2030. The market size is projected to reach $10.19 Bn by 2023 from $6.86 Bn in 2020.
Regional analysis: North America dominates the global market currently owing to rising healthcare costs, implementation of Affordable Care Act, and presence of leading service providers in the region. Asia Pacific is expected to be the fastest growing market due to increasing medical tourism, large population base and economic growth.
Key players: The key players operating in the healthcare BPO market are Concentrix Corporation, Exlservice Holdings, Inc., LabCorp, Syneos Health, WNS (Holdings) Ltd., Accenture Plc., Cognizant Technology Solutions, GeBBS Healthcare Solutions, Genpact Limited, HCL Technologies Ltd. Companies are focusing on development of technologically advanced products to hold the largest share in the healthcare BPO market.
