According to a new report published by MarketsandMarkets, the global healthcare business process outsourcing (BPO) market is expected to see rapid growth in the next five years, doubling in size by 2018. Presently valued at an estimated $92.3bn, the market is poised to grow at a CAGR of 10.8 percent to reach approximately $188.9bn before the decade is out.
BPO is the contracting of specific business tasks such as payroll to third party services. Usually, BPO is implemented as a means of outsourcing tasks that a company requires but does not depend upon to maintain its position in the marketplace.
The healthcare BPO market is spread across the payer, provider and pharmaceutical sectors, of which pharmaceuticals has the largest share, accounting for close to 80 percent of the market in 2013. Cost reduction is the main driver for outsourcing business functions which include HR services, finance and accounts, claims processing, medical billing and contract research. Healthcare reforms introduced by the Obama administration are also driving the market.
Healthcare BPO is divided into source and destination geographies. The US accounts for the largest share of the market, followed by Europe. The most preferred destination is India, which has the advantage of a high number of healthcare professionals, affordable cost of living, a large patient pool, and decreased time and costs for recruitment.
Overall, the healthcare BPO market is highly fragmented with many small players competing for their share, particularly in India and China, where many entrepreneurs have entered the market. The major players include Accenture, GeBBS Healthcare, Omega Healthcare, Parexel and Boehringer Ingelheim.
In recent years, the market has come under scrutiny by regulatory bodies, and regulatory change in key regions such as the US and Europe is expected to result in increased requirements for payer and provider outsourcing services.