Healthcare BPO Market

Global Healthcare BPO Market Forecast

• The approximately US$235.5 Bn market for healthcare BPO (2023) to reach US$430.5 Bn by 2030-end
• Healthcare BPO market size poised to see a CAGR of 9.0% over 2023 - 2030

Quick Report Digest

1. The key trend anticipated to fuel the healthcare BPO market growth is the need for specialised solutions in the healthcare industry, the fast growth of digital technology usage in the industry, and the rising need for affordable healthcare services.
2. Another major market trends expected to fuel the growth are the growing demand for specialised healthcare solutions, the rapidly growing use of digital technologies in the healthcare industry, and the growing requirement for accessible healthcare services. The healthcare BPO market will expand because hospitals and clinics implement cloud-based BPO solutions to implement global service delivery models at a reasonable cost.
3. In 2022, the provider outsourcing services category dominated the industry. This is mainly due to hospitals' and clinics' implementation of healthcare BPO; nonetheless, due to rising demand from healthcare payers and an increase in the number of people looking for health insurance, payer outsourcing services are anticipated to grow at the fastest rate throughout the healthcare BPO Market Forecast period.
4. The North American region is anticipated to account for the largest global healthcare BPO market share. A major source of price pressure on pharmaceutical companies in the region, especially in the US, is Medicare Prescription Drug Coverage (Part D), which provides prescription drug coverage to all Medicare beneficiaries.
5. The market for healthcare BPO is expanding in Asia Pacific due to the reason behind the market's growth is the rising awareness of healthcare IT outsourcing and the increasing number of well-known players in the industry in the area.

A Look Back and a Look Forward - Comparative Analysis

The demand for patient-centered care is rising, and infrastructural improvements in the healthcare sector are driving the expansion of the healthcare BPO industry. The growing demand for lower healthcare expenses is one of the main factors propelling the expansion of the healthcare BPO sector.

High accuracy and cost-effective healthcare BPO services enable healthcare practitioners to concentrate on their core skills, save operating expenses, boost operational efficiency, and enhance patient experience by allocating more time for patient care. The market is expanding because of the benefits of outsourcing healthcare.

The market witnessed staggered growth during the historical period 2018 - 2022. The healthcare BPO market has grown significantly due to the introduction of the Patient Protection and Affordable Care Act (PPAC Act), increased government regulations aimed at reducing overall healthcare costs, pressure on healthcare providers to minimise costs, rising adoption of big data and cloud computing, increased awareness of healthcare IT solutions, increased number of key players, and rapid development of the healthcare infrastructure.

The rise of the healthcare BPO market size is also anticipated to be aided by improved healthcare BPO services and increased investment in healthcare. The healthcare BPO industry is expanding due to developments in services like big data, data analytics, and artificial intelligence (AI) integration. However, several factors will limit the growth of the healthcare BPO market during the forecast period. These include the high cost of system installation and maintenance, losing control over the outsourced process, uncertainties and threats regarding data security and service quality, and quick changes in economic strategies.

Key Growth Determinants

• Expanding Outsourcing Trend

The expanding outsourcing trend is one of the main elements anticipated to support the global healthcare BPO market expansion over the forecast period. Healthcare BPO, or business process outsourcing, refers to any outsourced business activity or process that offers medical professionals, organisations, and institutions help (administrative or otherwise).

Access Healthcare used automation, AI, and big data to speed up healthcare outsourcing in August 2022. Access's cutting-edge, wise, and all-encompassing technology and analytics support healthcare organisations globally in enhancing clinical, administrative, and financial results.

• Increasing Burden of Chronic Illnesses, and Expanding Elderly Population

Players in the healthcare BPO industry should anticipate having tremendous development prospects due to the rising burden of chronic disease and the ageing population. For example, the elderly population is more vulnerable to various illnesses. The rising prevalence of these illnesses causes insurance companies to work harder.

To manage a large volume of patient and claim records and guarantee fast turnaround times, these businesses must invest heavily in infrastructure, technology, and a qualified workforce, which drives up operating costs and is predicted to support the growth of the global healthcare BPO market.

• Surgeing Demand for Reducing Healthcare Costs

Saving money is a crucial factor when outsourcing because it allows businesses to cut expenses on expenses. The growth of health insurance exchanges (online marketplaces where consumers can purchase health insurance from rival providers) in the US has put pressure on healthcare payers' profit margins.

However, this makes it possible for customers to acquire insurance from rival private healthcare providers and will probably hasten outsourcing as a cost-saving measure. It is thus anticipated that rising healthcare expenses will significantly increase offshore outsourcing and, consequently, the growth of the global healthcare BPO market.

Major Growth Barriers

• Complicated Laws

Complicated norms and regulations are another factor impeding the growth of the global healthcare BPO industry. Though there are several issues with the legal structure, including those about taxation, data privacy, IP protection, and clinical trial legislation, India has become a popular outsourcing location for healthcare BPO services in the Asia Pacific area.

To prevent or minimise economic losses, Indian vendors must adhere to international security and privacy requirements when outsourcing services to foreign vendors. Despite this, the government is progressively making these laws clearer.

• Unstated Expenses Associated with Outsourcing

The hidden expenses of outsourcing are one of the main things that are anticipated to impede the expansion of the global healthcare BPO industry. Even when outsourcing might be economical, new and established BPO companies in the healthcare industry may face significant risks due to the hidden expenses associated with establishing a contract across international borders.

The overall cost of outsourcing includes several expenses, including vendor selection, transition, layoff, and cultural costs. Healthcare vendors face significant challenges as a result of all these hidden expenses.

Key Trends and Opportunities to Look at

1. Medical Claim Administration

By increasing accuracy, outsourcing medical claims administration can reduce an organisation's administrative load and increase income. The process of billing, completing, and updating medical claims about a patient's diagnosis, treatments, and medications is known as medical claim management.

Medical claims management companies handle these activities on behalf of several hospitals and medical institutes throughout the globe. It increases the overall speed and effectiveness of the claims management process in the healthcare industry. It is anticipated that this tendency will hold throughout the projected period, propelling the market's expansion.

2. Increasing Use of Innovative Technology

Numerous changes have been made to the healthcare sector due to shifting business models, rising prices, increased personnel requirements, regulatory changes, and the ongoing transition to value-based care.

Nonetheless, the adoption of new technology has expanded due to these reforms. Furthermore, the healthcare sector is changing due to technological advancements and a rise in the need for healthcare services, mainly from the ageing population. This trend will persist throughout the forecast period, propelling the market's expansion.

3. Growing Utilisation of AI-Powered Drug Discovery Instruments

Particularly in the early phases of drug development, artificial intelligence and machine learning significantly increase success rates and streamline the drug discovery process. This would enable healthcare BPO service providers to make significant strides because artificial intelligence is crucial to developing medications for long-term illnesses like cancer.

Due to AI's capabilities, the time it takes to bring a cancer-fighting medication to market is greatly shortened, propelling the healthcare BPO industry to substantial growth.

How Does the Regulatory Scenario Shape this Industry?

Tight rules include patient confidentiality, data privacy, and security compliance; as a result, there is a growing need for BPO companies that can handle these complex needs. The US Health Insurance Portability and Accountability Act (HIPAA), the General Data Protection Regulation (GDPR) in the EU, and comparable data privacy regulations in other countries establish compliance requirements.

Laws favour specialised healthcare BPOs by increasing the complexity of BPO operations and preventing less qualified suppliers from entering the market. Greater emphasis on strong security measures, access controls, and data encryption to guarantee the confidentiality of patient data. Regulatory organisations are enacting stronger penalties for noncompliance.

Fairfield’s Ranking Board

Top Segments

1. Provider Outsourcing Services Category Continues to Spearhead

The provider outsourcing services segment dominated the market in 2022. Medical facilities employ billing monitoring as a tool to keep track of all financial correspondence with patients from the time of the initial consultation until any unpaid recovery debt is settled. RCM refers to all medical and administrative duties required to administer and recover care delivery fees. The increasing need for RCM solutions in healthcare facilities is thus expected to encourage market growth.

Billing planning had the largest client base in 2022 and is expected to stay that way for the predicted period. The category expansion may be attributed to several factors, including the decline in medical expenses, the growing number of government initiatives to incorporate billing and coding systems, and the healthcare industry's spending growth.

Furthermore, the payer outsourcing services category is projected to experience the fastest market growth. The services that the aid measures provide form the foundation of the medical BPO region. Suppliers offer a variety of help programs, such as customer onboarding, reimbursement guidelines, and quality assurance. The quality of medical advancements has improved due to the clinical setting.

By 2021, the claims processing category held the largest market share for global health outsourcing, a position it is expected to hold for the forecast duration. Claiming management is a tactic that handles grievances and develops programs to cut costs and stop theft while preserving customer satisfaction. It is expected that the market will see an outcome.

Regional Frontrunners

North America Drives the Maximum Revenue to Healthcare BPO

North America now leads the healthcare BPO market, and this trend is expected to hold for the foreseeable future. The US holds the largest market share in North America. Pharmacies, pharmaceutical firms, makers of medical equipment, and healthcare institutions are all part of the quickly expanding US healthcare system.

The specialised professionals in charge of these processes are essential to the intricate industry infrastructure. The regional market expansion is attributed to high levels of awareness regarding outsourcing healthcare IT services and the strong presence of significant industry players in the region.

Furthermore, the country's growing government efforts are projected to propel the market expansion under study. For example, to improve healthcare access and quality for underprivileged people through virtual treatment, the Department of Health and Human Services (HHS) gave roughly USD 55 million to 29 HRSA-funded health centers in February 2022. For patients, virtual treatment has changed everything, particularly during the pandemic. Therefore, it is anticipated that the country's market will increase due to the steps taken by government agencies.

Asia Pacific Gears up, Led by China, and India

The market growth is due to the rising awareness of healthcare IT outsourcing, and the increasing number of well-known players in the industry. The pharmaceutical industry is facing patent cliffs, the need to implement ICD-10 codes, the growing number of people seeking insurance, the pressure to lower healthcare delivery costs, and healthcare system consolidation; these and other important factors are propelling the growth of the Asia Pacific healthcare BPO market.

Regional market value is increasing due to healthcare systems and information technology infrastructure development. China, and India, the two biggest rising economies in the region, are actively encouraging the growth of regional markets.

Fairfield’s Competitive Landscape Analysis

The healthcare BPO market is fragmented, with several major players; in terms of market share, a small number of these players currently dominate the market. The market's competitive landscape expects to witness more consolidation over the coming years.

Who are the Leaders in the Global Healthcare BPO Space?

1. Cognizant
2. Accenture
3. Tata Consultancy Services
4. Xerox Corporation
5. HCL Technologies
6. IBM Corporation
7. Wipro
8. Infosys BPM
9. Firstsource Solutions
10. R1 RCM
11. Invensis Technologies
12. WNX Limited
13. NTT Data Corporation
14. GeBBS Healthcare
15. Omega Healthcare
16. United Health Group

Significant Company Developments

Acquisition

• November 2023: Accenture (Ireland) procured ConcentricLife (US), a healthcare marketing firm, to help Life Sciences companies craft the optimal brand experience for their customers throughout their health journey. This acquisition furthers Accenture Song's continuous dedication to offering end-to-end solutions for its Life Sciences clients via relevant communications and experiences customised to the ever-evolving needs of patients and healthcare professionals.
• May 2023: EXL Service Holdings (US) unveiled a generative AI platform to help clients use AI to transform their companies. The platform combines data engineering expertise, AI solutions, and exclusive EXL data sets with the principles of generative AI models. The new portfolio of products will help businesses build AI initiatives across the board because of EXL's strong knowledge of AI-driven digital transformation, which improves operational procedures, provides new business perspectives, and offers more customised consumer experiences.
• October 2021: The Competition Commission of India (CCI) has authorised Betaine B.V.'s acquisition of Hinduja Global Solutions' global healthcare BPO services business. Betaine will purchase certain assets, contracts, and personnel from Hinduja Global Solutions and its global healthcare BPO services as part of the deal.

An Expert’s Eye

Demand and Future Growth

The expanding use of BPO services, healthcare IT solutions, and outsourcing is driving the market. Expanding outsourcing trend, growing numbers of older people, and an increase in the burden of chronic illness, demand to lower the escalating costs of healthcare, increasing the need for healthcare BPO.

Furthermore, medical claim administration, innovative technology use, and the utilisation of AI-powered drug discovery instruments have increased. However, complicated laws and the unstated expenses associated with outsourcing are hindering market expansion.

Supply Side of the Market

According to our analysis, companies can save money on labour, space, and resource management by outsourcing, which is a key factor in cost reduction. Healthcare payer margins are being squeesed by the rise in health insurance exchanges and online marketplaces where customers may shop around and compare prices from various providers.

Outsourcing is anticipated to expand as more people access coverage from multiple private healthcare rivals, which will lower costs. Declining the growth in healthcare spending, structural changes are becoming more noticeable as healthcare becomes a greater part of the wider economy. These changes include a drive towards paying for value, a deeper reliance on care management, and increased cost-sharing with consumers.

Even though medical expenses have been steady over the past five years, ranging between 6% and 7%, an increase in healthcare costs is anticipated. Therefore, rising healthcare expenses are expected to stimulate offshore outsourcing and, eventually, the healthcare BPO industry.

Global Healthcare BPO Market is Segmented as Below:

By Service Type:

• Provider Outsourcing Services
  • Revenue Cycle Management
  • Patient Enrollment
  • Patient Care
• Payer Outsourcing Services
  • Claims Management
  • Customer Relationship Management
  • Billing & Accounts Management
  • HR and IT Services
• Operation Services
  • Manufacturing
  • R&D
  • Supply Chain Management & Logistics
  • Sales & Marketing Services

By Geographic Coverage:

• North America 
  • U.S. 
  • Canada 
• Europe 
  • Germany
  • U.K.
  • France
  • Italy
  • Turkey
  • Russia
  • Rest of Europe 
• Asia Pacific 
  • China
  • Japan
  • South Korea
  • India
  • Southeast Asia
  • Rest of Asia Pacific 
• Latin America 
  • Brazil 
  • Mexico 
  • Argentina
  • Rest of Latin America 
• Middle East & Africa  
  • GCC 
  • South Africa
  • Egypt
  • Nigeria
  • Rest of Middle East & Africa