Medical Billing Market Size, Share & Trends by Product (Software, Service), Application (RCM, EHR, Practice Management), Type (Account receivable, Claim, Coding, Analytics), Service (Managed, Professional), End User (Hospital, Speciality), & Region- Global Forecast to 2029
Medical Billing Market Size, Share & Trends
The size of global medical billing market in terms of revenue was estimated to be worth $16.8 billion in 2024 and is poised to reach $27.7 billion by 2029, growing at a CAGR of 10.5% from 2024 to 2029. The comprehensive research encompasses an exhaustive examination of industry trends, meticulous pricing analysis, patent scrutiny, insights derived from conferences and webinars, identification of key stakeholders, and a nuanced understanding of market purchasing dynamics.
The market's growth is mainly driven by the increasing number of patients, rising complexity of medical billing and coding procedures, expanding healthcare insurance coverage, growing healthcare expenditure, and the need for regulatory compliance. Additionally, the shift towards electronic health records (EHR) integration and digitalization initiatives and the need to reduce billing errors and administrative costs contribute significantly. Outsourcing medical billing services to specialized firms for better revenue cycle management and the adoption of advanced technologies such as AI, cloud solutions, and automation also propel market expansion.
Medical Billing Market Trends
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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.
With a rapid increase in the elderly population and the subsequent rise in the prevalence of chronic diseases, the number of insurance claims has increased manifold across the globe. This will further aid the demand for medical billing solutions. Moreover, according to the US Department of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation (ASPE), as of 2024, over 45 million people have coverage through the Affordable Care Act's Marketplaces and Medicaid expansion. According to McKinsey, consumer participation rose by 25%, reaching approximately 16 million between 2020 and 2022. This increase coincided with extended enrollment periods and enhanced subsidies introduced under the American Rescue Plan Act of 2021 and extended through 2025 by the Inflation Reduction Act of 2022.
Rising healthcare costs also compel people to opt for health insurance. According to the American Medical Association, in 2022, the US spent around USD 4,464.4 billion or USD 13,493 per person on various health consumption expenditures (HCE). According to the National Association of Insurance Commissioners, in 2022, private health insurance expenditures accounted for USD 1,290 billion (30.4% of overall HCE), Medicare program accounted for USD 944 billion, and Medicaid or CHIP amounted to USD 829 billion. Programs such as TRICARE, and the Department of Veterans Affairs accounted for USD 148 billion (3.5% of total HCE) whereas out-of-pocket spending was USD 471 billion. Similarly, healthcare expenditure in Germany, France, Austria, and Sweden accounted for 12.8%, 12.2 %, 11.5%, and 11.4% respectively as a percentage relative to GDP in 2020. With increasing healthcare spending, the demand for healthcare insurance is rising, this will further increase the burden on healthcare systems, as the growing volume of insurance claims necessitates the implementation of streamlined workflows for payment processing, coding, and fraud detection. Thus driving the demand for medical billing solutions.
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.
The cost of medical billing services varies based on the software used. Practices may utilize various tools like online schedulers and payment platforms, each with its own cost. Basic medical billing software ranges from USD 65 to USD 599 per month. Advanced features can cost up to USD 15,600 monthly, typically for large facilities. Some software offers free trials, while others require outright purchase. Opting for experienced medical billing providers increases costs due to staffing expertise. Choosing between outsourcing and in-house management affects expenses, with outsourcing involving service fees relative to service complexity, while in-house incurs salaries, training, and technology costs. Additionally, selecting cloud or self-hosted systems influences costs, with cloud solutions typically costing around USD 300 per month initially, compared to self-hosted systems ranging from USD 3,000 to USD 8,000 annually. As a result of the high costs involved, small healthcare facilities, especially in emerging countries, are reluctant to replace their legacy systems with medical billing solutions.
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
Predictive analytics use historical data to forecast claim acceptance and patient payment trends, optimizing revenue strategies. Patient billing is personalized through Al analysis, offering tailored payment plans. It optimizes revenue cycle management by streamlining workflows and leveraging natural language processing for accurate coding from clinical notes, aiming to ease administrative burdens and improve financial outcomes in healthcare. For instance, Gentem Health uses Al to automate claim submission, ensuring accuracy and analyzing denial patterns. It offers proactive strategies and dedicated RCM support. CureMD's Al automates tasks, detects fraud, and streamlines workflows. PatientPay uses Al to predict payment behaviors, optimizing collection strategies with personalized approaches.
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.
From 2009 to 2023, the Office for Civil Rights (OCR) published reports of 5,887 healthcare data breaches involving 500 or more records. In 2022 there was a significant breach with 51.9 million records compromised, but 2023, the situation escalated dramatically, shattering all prior records with an astounding 133 million records were exposed, stolen, or improperly disclosed. This is expected to impact the adoption of medical billing solutions negatively. Hackers are increasingly using phishing tactics to steal login credentials, allowing them to hijack automated clearing house (ACH) payments to US-based bank accounts by targeting reimbursement payment logins used by insurance companies and Medicare. Security breaches in healthcare impact the adoption of HCIT and medical billing solutions, necessitating improved safeguards for patient confidentiality to boost trust and adoption rates in the industry.
The Medical Billing Market Ecosystem
The medical billing market is highly fragmented, with many intermediaries involved. The medical billing software and services that businesses offer to healthcare providers to help them manage their billing and reimbursement tasks are included in the market. Furthermore, through financial programs, regulatory monitoring, and policy decisions, government organizations like the National Health Service (NHS) and the Centers for Medicare and Medicaid Services (CMS) affect market dynamics. In the meantime, the need for medical billing solutions is driven by end users, who include healthcare providers such as hospitals, specialty centers, ambulatory surgical centers, and other end users. These end users want to improve patient care delivery, simplify workflow efficiency, and improve diagnostic accuracy. The smooth integration and efficient application of medical billing systems within the healthcare environment is contingent upon cooperation, innovation, and compliance with regulatory standards within this integrated ecosystem.
Source: Secondary Literature, Interviews with Experts, and MarketsandMarkets Analysis
The global medical billing industry is segmented by component, facility size, end users and region
By component type, the service segment accounted for the largest share of the medical billing industry in 2023.
The medical billing market is segmented by component type into software and service solutions. The service segment accounted for the largest market share in 2023. This segment is further sub-segmented into managed services and professional services. The service segment holds the largest share in the medical billing market because of its critical role in providing complete solutions and specialized knowledge that expedites healthcare providers' billing processes. These services include vital tasks like medical coding, claims submission, denial management, and revenue cycle management to maximize reimbursement and financial performance. The dominance of the service segment is further supported by its capacity to provide scalable solutions that can adjust to changing patient volumes and practice sizes, as well as by its dedication to upholding compliance with strict healthcare laws like HIPAA, which guarantees patient privacy and data security.
The cloud based deployment model is the fastest growing segment in the medical billing industry.
Based on deployment, the medical billing market is segmented into on-premises model, cloud-based based model and SaaS based model. The cloud-based model Medical Billing market is poised for significant growth in the forecast period. As these solutions benefits over conventional on-premise options. First off, cloud-based medical billing systems lower startup expenses and increase accessibility for smaller healthcare businesses by doing away with the requirement for upfront hardware infrastructure investments. Second, these systems are scalable, which frees healthcare providers from the limitations of physical infrastructure to quickly modify resources in response to shifting patient volume and commercial needs.
Large-sized facilities accounted for the largest share of the medical billing industry share in 2023.
Based on facility size, the medical billing market is segmented into large, mid, and small-sized facilities. Some important variables drive the expansion of large-scale facilities in the medical billing industry. The rising cost of healthcare and the intricacy of medical billing procedures call for sophisticated billing solutions, which major facilities can provide. These facilities offer a wide range of services necessary for effectively managing large numbers of patient data and transactions. These services include revenue cycle management, coding, compliance, and claims processing
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.
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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), DrChrono (US), NextGen Healthcare, Inc. (US), CareCloud, Inc. (US), AdvancedMD, Inc. (US), , Kareo, Inc. (US), TherapyNotes LLC. (US), RXNT (US), WebPT (US), CentralReach LLC (US), Epic Systems Corporation (US), CollaborateMD Inc. (US), Advanced Data Systems Corporation (US), ChartLogic (US), Meditab (US), EZClaim (US), RevenueXL Inc. (US), Ambula Health (US), , AllStars Medical Billing (US), Apero Health, Inc. (US), TotalMD (US), Proclaim Billing Services (US).
Scope of the Medical Billing Industry
Report Metric |
Details |
Market Revenue in 2024 |
$16.8 billion |
Projected Revenue by 2029 |
$27.7 billion |
Revenue Rate |
Poised to Grow at a CAGR of 10.5% |
Market Driver |
Growing patient numbers and the ensuing expansion of health insurance |
Market Opportunity |
Rising demand for AI and cloud-based deployment |
The study categorizes the medical billing Market to forecast revenue and analyze trends in each of the following submarkets:
By Component
- Software
-
Services
-
Software, By Type
- Integrated medical billing software
- Standalone medical billing software
-
Software, By Deployment
- On-Premise Model
- Cloud-Based Model
- SaaS- Based Model
-
Software, By Application
- RCM
- Practice management software
- Patient engagement software
- EHR
- Others
-
Software, By Type
-
Services
-
Managed Services
- Accounts Receivable/Aging Claims
- Medical coding
- Claim submission and management
- Payment posting and collection
- Reporting and analytics
- Denial management
- Others
-
Professional Services
- Implementation and training
- Technical support
- Others
-
Managed Services
By Facility Size
- Large-sized facility
- Medium-sized facility
- Small-sized facility
By End User
- Hospitals
- Specialty Centers
- Orthopedic
- Cardiology
- Radiology & imaging centers
- Oncology
- Others
- Ambulatory surgical centers
- Other end users
By Region
-
North America
- US
- Canada
-
Europe
- Germany
- UK
- France
- Italy
- Spain
- RoE
-
Asia Pacific
- Japan
- China
- India
- RoAPAC
-
Latin America
- Brazil
- Mexico
- Rest of Latin America
-
Middle East and Africa
- GCC Countries
- Rest of Middle East and Africa
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.
Frequently Asked Questions (FAQ):
Which are the top industry players in the Medical Billing market?
Prominent players in the Medical Billing market include Oracle (US), Mckesson Corporation (US), Veradigm LLC (US), Athenahealth, Inc. (US), Quest Diagnostics Incorporated (US), eClinicalWorks (US), CureMD (US), DrChrono (US), NextGen Healthcare, Inc. (US), CareCloud, Inc. (US), AdvancedMD, Inc. (US), Kareo, Inc. (US), TherapyNotes LLC. (US), RXNT (US), WebPT (US), CentralReach LLC (US), Epic Systems Corporation (US), CollaborateMD Inc. (US), Advanced Data Systems Corporation (US), ChartLogic (US), Meditab (US), EZClaim (US), RevenueXL Inc. (US), Ambula Health (US), AllStars Medical Billing (US), Apero Health, Inc. (US), TotalMD (US), Proclaim Billing Services (US).
Which geographical region is dominating in the Medical Billing market?
The Medical Billing market is segmented into North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa. North America holds the largest share and APAC registers the highest growth during the forecast period in the Medical Billing market. .
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The study involved five major activities to estimate the current size of the Medical Billing market. Exhaustive secondary research collected information on the market and its different subsegments. The next step was to validate these findings, assumptions, and sizing with industry experts across the value chain through primary research. Both top-down and bottom-up approaches were employed to estimate the complete market size. Thereafter, market breakdown and data triangulation procedures were used to estimate the market size of the segments and subsegments.
Secondary Research
In the secondary research process, various secondary sources such as annual reports, press releases & investor presentations of companies, white papers, certified publications, articles by recognized authors, gold-standard & silver-standard websites, regulatory bodies, and databases (such as D&B Hoovers, Bloomberg Business, and Factiva) were referred to to identify and collect information for the study of Medical Billing Market. It was also used to obtain important information about the top players, market classification, and segmentation according to industry trends to the bottom-most level, geographic markets, and key developments related to the market. A database of the key industry leaders was also prepared using secondary research.
Primary Research
Extensive primary research was conducted after acquiring basic knowledge about the global Medical Billing market scenario through secondary research. Several primary interviews were conducted with market experts from both the demand side (Hospital directors, Hospital Vice Presidents, Department heads, and Critical care specialists ) and supply side (such as C-level and D-level executives, technology experts, product managers, marketing and sales managers, among others) across five major regions—North America, Europe, the Asia Pacific, Latin America, Middle East, and Africa. This primary data was collected through questionnaires, e-mails, online surveys, personal interviews, and telephonic interviews
The following is a breakdown of the primary respondents:
Breakdown of Primary Participants:
Note 1: Others include sales, marketing, and product managers.
Note 2: Tiers of companies are defined based on their total revenues in 2023. Tier 1 = >USD 1 billion, Tier 2 = USD 500 million to USD 1 billion, and Tier 3 = <USD 500 million.
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Market Size Estimation
Both top-down and bottom-up approaches were used to estimate and validate the total size of the Medical Billing market. These methods were also used extensively to estimate the size of various subsegments in the market. The research methodology used to estimate the market size includes the following:
- The key players in the industry and markets have been identified through extensive secondary research.
- In terms of value, the industry’s supply chain and market size have been determined through primary and secondary research processes.
- All percentage shares, splits, and breakdowns have been determined using secondary sources and verified through primary sources.
Global Medical Billing Market Size: Bottom-Up Approach
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Global Medical Billing Market Size: Top-Down Approach
Data Triangulation
After arriving at the overall market size—using the market size estimation processes—the market was split into several segments and subsegments. To complete the overall market engineering process and arrive at the exact statistics of each market segment and sub-segment, the data triangulation and market breakdown procedures were employed, wherever applicable. The data was triangulated by studying various factors and trends from both the demand and supply sides in the Medical Billing market.
Market Definition:
Medical billing is the process of creating healthcare claims to be submitted to insurance companies to get payment for medical services provided by providers and provider groups. The medical biller converts a healthcare service into a billing claim and then monitors the claim to make sure the organization is paid for the provider's work. A medical practice or healthcare organization can maximize revenue performance with the help of an experienced medical biller.
Key Stakeholders:
- Medical Billing Vendors
- Government Bodies
- Healthcare Service Providers
- Clinical/Physician Centers
- Healthcare Professionals
- Health IT service Providers
- Healthcare Associations/Institutes
- Ambulatory Care Centers
- Venture Capitalists
- Distributors And Resellers
- Maintenance And Support Service Providers
- Integration Service Providers
- Healthcare Payers
- Advocacy Groups
- Data Security And Privacy Experts
- Investors And Financial Institutions
- Industry Associations And Trade Groups
Report Objectives
- To define, describe, and forecast the global Medical Billing market based on component, facility size, end user, and region.
- To provide detailed information regarding the major factors (such as drivers, restraints, opportunities, and challenges) influencing the market growth
- To strategically analyze micro-markets with respect to individual growth trends, prospects, and contributions to the overall medical billing market
- To analyze opportunities in the market for stakeholders and provide details of the competitive landscape for market leaders.
- To strategically analyze the market structure profile the key players of the medical billing market and comprehensively analyze their core competencies.
- To forecast the size of the market segments with respect to five regions: North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.
- To track and analyze competitive developments such as product launches and enhancements and investments, partnerships, collaborations, acquisitions, expansions, agreements, sales contracts, and alliances in the Medical Billing market during the forecast period.
Available Customizations:
With the given market data, MarketsandMarkets offers customizations to meet the company’s specific needs. The following customization options are available for the report:
- Product Analysis: Product matrix, which gives a detailed comparison of the product portfolios of each company.
- Geographic Analysis: Further breakdown of Latin American Medical Billing into specific countries, the Middle East and Africa Medical Billing into specific countries, and further breakdown of European Medical Billing into specific countries.
Growth opportunities and latent adjacency in Medical Billing Market