January 6, 2012: MarketsandMarkets published a report on global health care BPO. The study researches and evaluates the healthcare outsourcing market in terms of the factors that drives the market, challenges and opportunities in the different parts of the globe, focusing mainly on the United States, Eastern Europe, and Asia.
The study observes that the global healthcare outsourcing market is advancing at a promising Compound Annual Growth Rate of 21.4 per cent and will be worth USD 330 billion by 2016. Pharmaceutical outsourcing occupies the major portion with a share of 64.3 per cent, and will advance at a Compound Annual Growth Rate of 14.6 per cent from 2011 to 2016 as the market is saturated. The health care provider outsourcing ranks first in terms of growth rate with a CAGR of 31.9 per cent from 2011 to 2016 and claims 15.7 per cent of the market share. The outsourcing market is said to advance at a rate of 30 per cent during 2011 to 2016; and it claims 20 per cent of the market share.
Claims processing is considered to be one of the expensive activity of the payer industry. It enjoys the highest share in the healthcare payer market, with a share of 59 per cent, which is pursued by member services or customer care services. In the United States, the administrative cost is around 30 percent. With the introduction of the Health Insurance Portability and Accountability (HIPAA) act, the payer is forced to invest 80 to 85 per cent on enhancing the services and for providing quality health care. This has made it necessary for the payer to check administrative cost, and the best available option to check and enhance quality in outsourcing.
The US payer industry in 2009 consisted of about 1300 insurance companies, which present tremendous opportunities for the outsourcing service providers. While the market is huge, only about 10 per cent of functions are currently outsourced to third party service providers.
Traditionally the insurance companies fall into the category of late adopters of outsourcing or off shoring services. With the recent increase in cost and the reduced margins, increased claims disbursements and increasing competition, has made it ultimately necessary for the insurance companies to outsource in a desperate attempt to increase efficiency and to focus on core issues such as product development and innovation.
The report is available at the official site