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Healthcare BPO Market Is Projected to Reach $468.5 Billion. Here’s What America Is Outsourcing

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By Rene Mallari

Despite the threats of the COVID-19 pandemic to the global population and economy, things are shaping up well for the healthcare business processing outsourcing (BPO) market.

According to Indian-based market research firm Markets and Markets, the healthcare BPO industry is seen to grow at $468.5 billion before 2026 from the projected $296.4 billion in 2021, at a compound annual growth rate (CAGR) of 9.6% in the five-year period.

Experts say various sectors across the globe are being hit hard and slowed down by the pandemic, including airlines, casino and gaming, leisure facilities, hotels, travel and tourism, and transportation.  However, the healthcare BPO market is one of the few that is defying the slowdown and is poised to progress in the years ahead.

What is healthcare BPO outsourcing?

Healthcare BPO outsourcing can be defined as an activity in which a healthcare company outsources its non-core operations to a third party. The healthcare provider contracts with an external provider to manage its secondary (but vital) activities for them. Most companies hire a firm specializing in outsourcing, such as a call center firm or a contact center group.

Among the healthcare companies and institutions are hospitals, doctors’ clinics, outpatient clinics, orthodontics offices, dental offices, laboratories and diagnostics clinics, nursing homes, assisted living facilities, and specialists’ offices and clinics.

What is the BPO industry?

Online media Forbes explains that the BPO industry is a group of companies or subcontractors that handle important business operations without the need for the main contractors to hire additional internal employees.

Outsourcing processes, such as payroll, data entry, customer service operations, is a cost-effective strategy that many companies have adopted to either keep abreast of the competition or gain a competitive advantage. Many of them depend on the services and expertise of offshore BPO organizations. For instance, Unity Communications, a fast-growing BPO company based in Arizona specializing in customer service and sales support, provides healthcare-related services, including billing, insurance verification, and medical coding.  Its operations in the labor-competitive countries the Philippines and Costa Rica perform the outsourcing functions.

What operations do U.S. healthcare companies outsource the most?

Healthcare companies of all sizes in the United States consider the services of diagnosing and treating patients as their main operation or core competency. The non-core activities, which are also essential and typically corner a substantial share in their overall expense, are outsourced to BPOs to reduce costs. Below are some of the operations that the U.S. healthcare organizations outsource the most:

  • Revenue cycle management. This pertains to the financial process of using medical billing software that healthcare organizations rely on to keep track of patient care services, such as final payment, appointment scheduling, and registration.
  • Customer relationship management. This includes the practices and guidelines that healthcare institutions follow when interacting with patients and related recipients. The procedure is designed to offer patients detailed and correct information, valuable insights, and quality support, to name a few.
  • Finance and accounting. This consists of managing finances, auditing economic events, internal accounting, budgeting, and bookkeeping that influence the performance and resources of a healthcare company.
  • IT functions. This refers to the utilization of IT systems and processes to manage electronic health-related information, handle electronic billing and payment systems, access patient databases, improve coding and billing policies, and run cloud computing systems.
  • Patient management. This relates to a set of guidelines healthcare providers use to manage and address the patients’ various needs. This procedure is applied to advance and maintain patient relationships apart from treating illnesses.
  • Claims management. This concerns processing, filing updating, billing, and organizing medical claims in connection to patient diagnoses, medications, and treatments. This process allows patients to understand the amount they have to pay for and the medical equipment that obtain the payments for their services.
  • Supply chain management. This refers to all needed resources such as goods and services that a company should provide to its customers. The supply chain in healthcare is regarded as a dispersed and complex network that entails procuring resources, managing supplies, and delivering the needed goods and services to the patient and healthcare professionals.

How have BPO services affected the healthcare industry positively?

One major advantage of getting the services of BPOs is that an organization is no longer required or pressed to recruit additional employees. Outsourcing means paying fees to an external provider serving as a subcontractor. The organization having its non-core activities being managed by a BPO translates to lower costs in internal employee benefits, training, and other similar forms of expense.

Access to a bigger and diversified talent workforce is another benefit. Hiring local staff means that companies have access to a high-quality but limited talent reserve. With outsourcing, they can tap more skilled and better-qualified workers overseas. A larger talent resource prevents businesses from compromising their standards since these foreign professionals have sufficient experience to be specialists in specific fields.

The most substantial gain when acquiring outsourcing services to BPOs is cost-effectiveness Reducing labor costs is among the primary reasons why the US outsources about 300,000 jobs yearly. Outsourcing allows companies to locate and hire the right people for the job at a competitive price.

How will the Healthcare BPO market reach $468 billion?

Markets and Markets reports that the healthcare BPO market expansion is mainly brought about by the need of the industry to control rising healthcare costs coupled with the enforcement of the Patient Protection and Affordable Care Act  (PPACA). Both developments have urged healthcare organizations to turn to BPOs located in affordable labor markets, such as the Philippines and India to outsource their business to decrease operational expenses.

Additionally, the pandemic has made a major impact on the world’s economy and population.  Due to the ongoing coronavirus outbreak, healthcare institutions are facing the challenge of developing a highly-organized setting. Such a well-coordinated environment requires that clinical functions should be connected internally, and organizations operate seamlessly with other healthcare units. This is another reason why healthcare companies find it relevant to outsource to BPOs.



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Medical Device News Magazine provides breaking medical device / biotechnology news. Our subscribers include medical specialists, device industry executives, investors, and other allied health professionals, as well as patients who are interested in researching various medical devices. We hope you find value in our easy-to-read publication and its overall objectives! Medical Device News Magazine is a division of PTM Healthcare Marketing, Inc. Pauline T. Mayer is the managing editor.

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