A few days ago, I stumbled across an interesting survey looking at the growth of the outsourced medical billing industry. One of the survey’s key conclusions was that medical billing firms expect to see average revenue growth of 12% during this year as independent medical practices turn this function over to outsiders.
Before I cite other stats, I need to offer one caveat. The research was conducted by Kareo, a vendor which sells a platform that supports these companies, so the data probably shouldn’t be taken completely at face value, but I thought it was worth sharing nonetheless. My guess is that while the data works in Kareo’s favor, it’s also reflecting what their seeing from their clients.
Right off the bat, Kareo’s survey report tosses out a dramatic factoid drawn from the survey, that 28% of physicians and practitioners who don’t currently outsource their billing function plan to do so over the next two years.
Of course, the billing companies hoping to capture that business are working to stand out from the crowd. One way they are doing this is to specialize. The survey found that 47% of small billing companies plan to focus in on a niche.
Meanwhile, larger billing firms are taking the opposite tack, diversifying as much possible to support a wider range of medical specialties. Kareo notes that there’s been 11% growth in multi-specialty medical practices since 2012, which of course gives them a reason to diversify.
Not surprisingly, the survey also found that the growth in high-deductible health plans – and the corresponding explosive increase in patient balances — is making consumer collections functions even more important. Of the billing company surveyed, patient balances now count for an average of 23% of total collections, respondents told Kareo.
Of particular interest to the health IT crowd, the survey also suggests that billing vendors are beginning to play something of a technology consultant role. In fact, the survey found that 75% of respondents are helping medical practices implement and leverage technology, especially the adoption of integrated EHR and billing software.
According to the research, billing companies are also helping practices boost their ability to foster patient engagement, specifically by suggesting tools for patient support and communications.
So what have we got here? If nothing else, the report gives you a picture of how Kareo sees its own market, which is worth knowing given how shrewd its marketers seem to be. The medical billing platform vendor clearly thinks its customers (e.g. the billing companies themselves) are becoming more sophisticated, evolving from providing arm’s-length outsourced services to consultants whose work with billing is just the tip of the iceberg.
The survey clearly suggests — and I think accurately — the medical billers are not going to be successful as a commodity anymore. Let’s see whether mass-market outsourced firms can step up to the challenge.