Healthcare Payer Services Market by Service Type (BPO (Claims, Front end, Provider, Product Development, Care Management, Billing, HR), ITO (Provider Network, Accounts, Analytics, Fraud), & KPO), End User (Public and Private) & Region - Global Forecasts to 2027
Updated on : March 27, 2023
The global healthcare payer services market in terms of revenue was estimated to be worth $69.9 billion in 2022 and is poised to reach $118.2 billion by 2027, growing at a CAGR of 11.1% from 2022 to 2027.
TIncreased health insurance enrollment, rising incidences of healthcare fraud, increased usage of outsourcing, federal mandates, and rising cases of chronic diseases are driving growth in this market. However, the risks of data breaches, loss of managerial control, cultural and linguistic hurdles, and high outsourcing costs are projected to limit the market's growth to some extent.
Healthcare Payer Services Market Trends
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Healthcare Payer Services Market Dynamics
Drivers: Outsourcing of services to reduce costs and increase efficiency
Over the past few decades, healthcare costs have been extremely increasing. Rising health insurance costs fuel the rising cost of healthcare, the increasing need for healthcare services, the rising geriatric population worldwide, and the subsequent increase in chronic conditions. Additional factors contributing to healthcare expenses include wasteful use of resources, inflated claims, and administrative costs. Due to the increasing costs associated with healthcare, payers are focusing on leveraging the advantages of outsourcing. The need of outsourcing services to reduce costs and increase efficiency is one of the key growth drivers for the global market.
Restraints: Data breaches and loss of confidentiality
Working with healthcare payer servicing firms increases the danger of security breaches and data leaks. Extremely sensitive and legally protected information such as patient contact information, medical history, insurance plans, and illnesses can significantly impact demand. The healthcare provider could be extremely impacted due to a breach or leak of this data, as it would undermine patient confidence. Additionally, it can result in legal actions, costing the business more losses. Incidents of healthcare data breaches rose by 55% in 2020 over 2019. In 2020, there were around 600 breaches that affected over 26 million people.
Opportunities: Adoption of advanced data analytics
The increasing volume of patient data created by electronic records and various other sources, including connected technologies and devices, has also fueled the expansion of this industry. Since the data is unstructured and raw, analytics is necessary to draw useful conclusions. Business intelligence (BI) tools are used more frequently to interpret this data. Pharma companies, healthcare providers, payers, and patients, continuously produce digital data; using BI technologies not only suggests the best course of action to follow throughout the treatment process but also helps reduce the risk of disease. With a focus on managing medical loss ratios, payers must use data analytics to retain current members and implement effective care management programs. Many payers have started using analytics that extensively uses data, enables statistical and quantitative analysis, and uses predictive models to drive better fact-based decision-making. Due to the benefits of advanced data analytics and its applications, its adoption can be expected to increase; this provides major growth opportunities for the healthcare payer outsourcing market.
Challenges: Migration from legacy systems
A legacy system is an old method, technology, or application program that continues to be used, typically because it still caters to users’ needs, even though newer technologies and more efficient methods are available. Nearly all companies in the insurance sector offer the same goods. Therefore, one of the most crucial market differentiators is customer service. Bringing consumers closer to the business, providing facilities for easy information and transaction access, and ensuring continuous distributor support are new trends driving this market. Since these platforms are intrinsically limited and unable to support business simplicity and enterprise-wide data interpretation, the legacy landscape is rapidly shifting to support this business change. Legacy systems present difficulties since the application software is typically built in out-of-date programming languages and is typically mainframe-based. Moreover, there also exists a lack of resources with the knowledge of these systems.
The BPO services segment accounted for the largest share of the healthcare payer services market, by type of service.
On the basis of service type, the market is bifurcated into ITO services, BPO services, and KPO services. In 2021, the BPO services segment accounted for the largest market share. The large share of this segment is primarily attributed to the lower costs, higher efficiency, and ability to concentrate on essential business operations provided by BPO services. This greatly contributes to the fact that BPO services offer administration in important administrative domains. This thus makes it possible for payers to cut costs and accelerate time to market, which is primarily the target of any payer organisation.
The private payer segment is expected to grow at the highest CAGR in the healthcare payer services market during the forecast period, by end user.
On the basis of the end user, the market is bifurcated into private payers and public payers. During the forecast period, the private payer segment is expected to grow at the highest CAGR. The high growth of this segment is attributed to the rising competitiveness among private payers, the rising demand for private health insurance due to increasing healthcare costs, and the growing prevalence of chronic diseases.
North America was the most populous region in the healthcare payer services market.
On the basis of region, the market is bifurcated into North America, Europe, Asia Pacific, and the Rest of the World (RoW). In 2021, North America dominated the global market, followed by Asia Pacific. However, Asia Pacific is expected to grow at the highest CAGR during the forecast period. This highest growth in Asia Pacific can be attributed to the implementation of new ICT guidelines in Japan, investments and reforms to modernize China’s healthcare infrastructure, and the rapidly growing healthcare industry in India.
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Prominent players in the healthcare payer services market include Accenture (Ireland), Cognizant (US), Tata Consultancy Services (India), XEROX Corporation (US), WNS (Holdings) Limited (India), NTT Data Corporation (Japan), IQVIA Inc. (US), Mphasis (India), Genpact (US), Wipro (India), Infosys BPM (India), Firstsource Solutions (India), IBM Corporation (US), HCL Technologies (India), Solutions (US), Lonza (Switzerland), Omega Healthcare (India), R1 RCM, INC. (US), Invensis Technologies (India), UnitedHealth Group (US), Paraxel Corporation International (US),
Healthcare Payer Services Market Report Scope:
Market Revenue in 2022
Estimated Value by 2027
Poised to grow at a CAGR of 11.1%
Service Type, and End User
North America (US and Canada), Asia Pacific (Japan, China, India, and RoAPAC), Europe (Germany, UK, France, Italy, Spain and RoE), and the Rest of the World
The research report categorizes the healthcare payer services market into the following segments and sub-segments
By Service Type
- Claims Management Services
- Integrated Front-End Services and Back-Office Operations
- Member Management Services
- Product Development and Business Acquisition Services
- Provider Management Services
- Care Management Services
- Billing And Accounts Management Services
- HR Services
- Claims Management Services
- Provider Network Management
- Billing and Accounts Management Services
- Fraud Management Analytics Services
- Other ITO Services
- KPO Services
By End User
- Private Payers
- Public Payers
- In July 2021, Cognizant (US) collaborated with Royal Philips (Netherlands) to create Philips HealthSuite, a cloud-based platform, to deliver and maintain leading-edge digital health solutions, providing advanced connectivity and using big data to create actionable insights.
- In April 2021, Xerox Corporation (US) acquired Groupe CT (Canada), an independent document management provider in Eastern Canada, to accelerate a digital transformation roadmap by combining its document management services expertise and leadership with Xerox’s portfolio of workplace solutions to expand its reach in the North American market.
- In December 2020, Accenture (Ireland) acquired OpusLine (France) to help clients innovate and deliver digital innovation across their organizations.
- In June 2018, WNS (Holdings) Limited (India) entered into a global shared services partnership with Hyperion Insurance Group (UK), which enabled WNS to highlight its position as an industry leader in high-end global insurance BPM.
Frequently Asked Questions (FAQs):
What is the projected market value of the global healthcare payer services market?
The global market of healthcare payer services is projected to reach USD 118.2 billion.
What is the estimated growth rate (CAGR) of the global healthcare payer services market for the next five years?
The global healthcare payer services market is projected to grow at a Compound Annual Growth Rate (CAGR) of 11.1% from 2022 to 2027.
What are the major revenue pockets in the healthcare payer services market currently?
The market is bifurcated into North America, Europe, Asia Pacific, and the Rest of the World (RoW). In 2021, North America dominated the healthcare payer services market, followed by Asia Pacific. However, Asia Pacific is expected to grow at the highest CAGR during the forecast period. This highest growth in Asia Pacific can be attributed to the implementation of new ICT guidelines in Japan, investments and reforms to modernize China’s healthcare infrastructure, and the rapidly growing healthcare industry in India.
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11.5 AUTHOR DETAILS
The study involved four major activities in estimating the current size of the global healthcare payer services market. Exhaustive secondary research was done to collect information on the market, its peer markets, and its parent market. The next step was to validate these findings, assumptions, and sizing values 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 segments and subsegments.
Secondary research was mainly used to identify and collect information for the extensive, technical, market-oriented, and commercial study of the healthcare payer services market. Secondary sources include directories; databases such as Bloomberg Business, Factiva, and Wall Street Journal; white papers; and annual reports were also used to obtain key information about major players, market classification, and segmentation according to industry trends, regional/country-level markets, market developments, and technology perspectives.
In-depth interviews were conducted with various primary respondents, including key industry participants, subject-matter experts (SMEs), C-level executives of key market players, and industry consultants, among other experts, to obtain and verify the critical qualitative and quantitative information as well as assess the prospects of the market. Various primary sources from both the supply and demand sides of the market were interviewed to obtain qualitative and quantitative information. The following is a breakdown of primary respondents:
Note: Tiers are defined based on a company’s total revenue. As of 2021, Tier 1 = >USD 5 billion, Tier 2 = USD 500 million to USD 5 billion, and Tier 3 = <USD 500 million.
* Others include sales managers, marketing managers, and product manager
To know about the assumptions considered for the study, download the pdf brochure
Market Size Estimation
Both top-down and bottom-up approaches were used to estimate and validate the total size of the healthcare payer services 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
- The revenue generated from the sale of healthcare payer services solutions and services by leading players has been determined through primary and secondary research
- All percentage shares, splits, and breakdowns have been determined using secondary sources and verified through primary sources
After arriving at the overall market size from the market size estimation process, the total market was split into several segments and subsegments. To complete the overall market engineering process and arrive at the exact statistics for all segments and subsegments, 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.
- To define, describe, and forecast the healthcare payer services market based on service type, end user, and region.
- To provide detailed information regarding the major factors influencing the growth of the market (such as drivers, restraints, opportunities, and industry-specific challenges)
- To strategically analyze micromarkets1 with respect to individual growth trends, prospects, and contributions to the overall market
- To analyze opportunities in the market for stakeholders and provide details of the competitive landscape for market leaders
- To forecast the size of the global market with respect to five geographic regions—North America, Europe, the Asia Pacific, and the Rest of the World
- To profile key players and comprehensively analyze their core competencies2 and market shares
- To track and analyze competitive developments such as agreements, partnerships, collaborations, acquisitions, service launches, and R&D activities of leading players
- To analyze the impact of the recession on the healthcare payers market
With the given market data, MarketsandMarkets offers customizations as per the company’s specific needs.
The following customization options are available for this report.
- Product matrix, which gives a detailed comparison of the product portfolios of the top companies
- Further breakdown of the RoAPAC market into South Korea, Australia, New Zealand, and others
- Further breakdown of the RoE market into Belgium, Russia, the Netherlands, Switzerland, and others
- Further breakdown of the RoW market into Latin America (LATAM), Middle East, and Africa (MEA)
- Detailed analysis and profiling of additional market players (Up to Five)
Growth opportunities and latent adjacency in Healthcare Payer Services Market