Medical Coding Market Research Report: By Classification System (International Classification of Diseases, Healthcare Common Procedure Coding System, Current Procedural Terminology), End User (Hospitals, Diagnostic Centers) - Global Industry Analysis and Growth Forecast to 2030

Medical Coding Market Overview

Valued at $15.2 billion in 2019, the global medical coding market is projected to witness a CAGR of 9.6% during the forecast period (2020–2030). Rising incidence of insurance frauds and growing demand to modernize hospital billing procedures are the key growth factors driving the medical coding industry.

Segmentation Analysis

International Classification of Diseases (ICDs) Category Held the Largest Market Share

In 2019, the ICDs category accounted for the largest market size in the medical coding industry, on the basis of classification system. It is also expected to maintain the same trend throughout the forecast period. This is due to fact that ICD helps to organize information into standard groupings of diseases that allows easy storage, retrieval, and analysis of health information for evidenced-based decision-making, and sharing health information among healthcare institutions, countries, and regions.

Hospitals Category to Witness the Fastest Growth

The hospital category, based on end user, is projected to witness the fastest growth in the medical coding market, during the forecast period. The category also accounted for the largest size in the market. Globally, hospitals are considered the first choice of patients for medical procedures. Further, it is expected that by 2022, ICD-11 will be adopted by all countries, as the new standard. ICD-11 has around 55,000 codes, which is four times the diagnostic codes present in ICD-10. Additionally, majority of the hospitals in countries, such as the U.S., Germany, France, and the U.K., utilize medical coding whenever a patient arrives, as part of their revenue management process. This is further expected to support the high growth of the market in this category during the forecast period.

Geographical Outlook

Europe Leads the Medical Coding Industry

Europe held the largest share in the medical coding market in 2019, mainly due to the high-patient visits and mandates of medical coding in healthcare settings. Medical coding has enabled European healthcare bodies in generating statistical analysis of diseases and recommending suitable therapies. Besides, it has helped healthcare insurance providers in quick and easy reimbursement of medical bills. The outbreak of COVID-19 in the region, primarily in countries such as Italy, Spain, Germany, the U.K., and Russia, has further pushed the need for medical coding for the direct surveillance of the pandemic and the efficient allocation and management of medical resources.

Asia-Pacific (APAC) Market to Showcase the Highest Growth

Globally, the APAC medical coding market is expected to witness the fastest growth during the forecast period. The digitization of health records in countries, such as China, India, South Korea, and Indonesia, is projected to drive the demand for medical coding services in the region. Further, improving health insurance facilities in these countries is also driving the market growth. Medical coding procedures have ensured efficient and timely approval of medical claims and encouraged a large number of people than before to take health insurance.

Moreover, developing economies of the region, including India, Indonesia, Vietnam, and Thailand, are adopting electronic health records (EHRs) for better monitoring of diseases and related diagnostic procedures. This structural change from the paper-based system to the electronic system has driven the requirement for coding services in the region and is expected to boost the growth of the regional medical coding market in coming years.

Trends & Drivers

Increasing Utilization of Computer-Aided Coding Systems (CACS) is a Key Market Trend

The prominent trend in the medical coding market is increasing utilization of CACS. Generally, medical coding procedures are performed by medical coders, but the growing technological advancements and rising adoption of technologies, such as artificial intelligence (AI), natural language processing (NLP), and internet of medical things (IoMT), in the healthcare vertical are raising the demand for CACS. It offers numerous advantages over manual coding, including higher coding productivity and efficiency, and consistent implementation of coding rules. A study performed by American Health Information Management Association (AHIMA) stated that coders who used a CACS spend nearly 22% less time in coding a record than coders who do not utilize a CACS.

Rising Incidence of Insurance Frauds

The incidence of insurance frauds in the healthcare industry is increasing, globally, which plays a pivotal role in the growth of the medical coding market. This situation is resulting in the incursion of excessive financial losses, which amount to billions of dollars every year, as estimated by the National Heath Care Anti-Fraud Association (NHCAA). Furthermore, in 2018, around $3.6 trillion was spent on healthcare services (which included expenditure for healthcare goods and services, public health activities, net cost of health insurance, and investment related to healthcare) in the U.S., which represented billions of health insurance claims, out of which some claims were fraudulent.

By using the medical coding and billing standards due to their advantages, medical billers generate uniform checklists, which are to be followed according to the process claims. Additionally, irregularities in these checklists support medical billers in spotting any fraud, before the document is submitted to an insurance company.

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Growing Demand to Modernize Hospital Billing Procedures

Medical billing procedures have been much more effective since the arrival of medical coding systems, especially the current procedural terminology (CPT) medical code. It has been developed by the American Medical Association (AMA) to help standardize and facilitate medical billing procedures. The coding system comprises alpha-numerical codes, which are designated to describe several treatments and services that a medical facility or a doctor performs on patients. These sets of codes are defined and entered into a database, which is used for billing insurance organizations for the services rendered. By using this billing system, medical professionals are better able to keep a track of the receipt of their medical payments and financial records, which, in turn, is benefitting the growth of the medical coding market.

Market Players Involved in Collaborations and Partnerships

The global medical coding market is fragmented in nature, with presence of several key players, including Aviacode Inc., Medical Record Associates LLC, Maxim Healthcare Services Inc., Oracle Corporation, 3M Company, and Parexel International Corporation.

In recent years, the players in the medical coding industry have been focusing on partnerships and collaborations, as part of their strategic measures. For instance:

• In June 2019, Paraxel International Corporation announced its strategic partnership with Clariness GmbH, a patient recruitment company, to enhance its clinical trial recruitment and channels for engagement with patients in China.
• In August 2018, Dolbey System Inc. announced a partnership with Aprima Medical Software, a U.S.-based company, which provides EHR, practice management (PM), and revenue cycle management (RCM) solutions for medical practices. Under this partnership, Dolbey System Inc. integrated its Fusion Narrate speech recognition solution into the Aprima EHR, to enable healthcare providers to become more-efficient in carrying out the documentation and coding.
• In September 2017, Aviacode Inc. signed a partnership with athenahealth Inc., a U.S.-based company providing network-enabled services to the healthcare sector, through its More Disruption Please (MDP) program. As part of the partnership, Aviacode Inc.’s coding services are now available as an integrated offering, to athenahealth’s growing network of more than 100,000 healthcare providers, to help reduce their operational costs, eliminate backlogs, and ensure more-accurate reimbursements.

Some of the Key Players in the Medical Coding Market include:

Market Size Breakdown by Segment

The medical coding market report offers comprehensive market segmentation analysis along with market estimation for the period 2014–2030.

Based on Classification System

• International Classification of Diseases (ICDs)
• Healthcare Common Procedure Coding System (HCPCS)
• Current Procedural Terminology (CPT)

Based on End User

• Hospitals
• Diagnostic Centers
• Others

Geographical Analysis

• Europe
  • Germany
  • France
  • U.K.
  • Italy
  • Spain
  • Netherlands
  • Norway
• North America
  • U.S.
  • Canada
• Asia-Pacific (APAC)
  • China
  • Japan
  • India
  • Australia
  • South Korea
• Latin America (LATAM)
  • Brazil
  • Mexico
• Middle East and Africa (MEA)
  • South Africa
  • Saudi Arabia