Medical Coding Market Analysis

Medical Coding Market Analysis

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Based on category, the market is classified into ICD (International Classification of Diseases), CPT (Current Procedural Terminology), and HCPCS (Healthcare Common Procedure Coding System). The ICD (International Classification of Diseases) segment generated the highest revenue of USD 7 billion in 2023.
 

• ICD codes are used globally for coding and classifying mortality data from death certificates, as well as for billing and diagnosis. This coding system is updated periodically, with ICD-10 being the current standard in most countries and the transition to ICD-11 underway. The ICD category is expected to hold the major market share due to its wide adoption and regulatory requirements in healthcare systems worldwide. The frequent updates and inclusion of new diseases and conditions further drive its dominance.
   
• Moreover, regulatory mandates by governments are also projected to have substantial impact on the segment growth during the forecast period. In February 2023, the World Health Organization announced new release of ICD-11 with extended reporting of illness causes and deaths.
   

Based on mode, the medical coding market is classified into outsourced and in-house. The outsourcing segment dominated the market in 2023 with a market share of 73%.
 

• The outsourced segment is expected to experience significant growth, potentially overtaking in-house coding in market share due to its cost-effectiveness and scalability.
   
• Outsourced medical coding involves contracting external vendors to manage the coding process. This strategy can lower overhead costs, provide access to specialized expertise, and ensure adherence to the latest coding standards. The trend toward outsourcing is gaining momentum, driven by the increasing complexity of medical coding, the need to comply with evolving regulations, and a shortage of skilled coders.
   

Based on application, the medical coding market is segmented into oncology, neurology, cardiology, anaesthesia, emergency services, and other applications. The oncology segment dominated the market in 2023 and is anticipated to reach USD 12.1 billion by the end of forecast period.
 

• Coding in oncology involves documenting complex treatment regimens, including chemotherapy, radiation therapy, and surgery. The need for precise coding is critical in this specialty due to the high costs of treatment and the specific protocols followed.
   
• In addition, active government involvement for cancer is also expected to offer favorable opportunity for segment growth during the forecast period. For instance, in March 2024, The Biden Cancer Moonshot announced commitments from leading health insurers and oncology providers to make navigation services accessible to more than 150 million Americans. This initiative also includes implementing appropriate medical coding to ensure proper and timely reimbursement.
   

Based on end use, the medical coding market is segmented into hospitals, diagnostic centres, and other end-users. The hospital segment dominated the market in 2023 and is anticipated to reach USD 22 billion by the end of forecast period.
 

• The hospital segment is expected to dominate the market share among end-users, owing to the breadth and depth of services offered and the complex coding requirements associated with inpatient and specialized care.
   
• Hospitals are the primary users of medical coding systems, given their comprehensive range of services and the volume of patients they handle. Accurate coding is crucial for hospital revenue cycle management, ensuring proper billing and reimbursement for a wide array of services. In addition, rising demand for advanced solutions for clinical documentation improvements is also likely to accelerate market growth.
   

North America medical coding market accounted for USD 7 billion market revenue in 2023 and is anticipated to grow at CAGR of 9.1% between 2024 – 2032 period.
 

• The North American market, including Canada is expanding rapidly due to several factors. The adoption of advanced healthcare IT systems, increased focus on healthcare data management, and the need for accurate medical billing and insurance claims are driving demand.
   
• The region's aging population also contributes to the rise, as more elderly patients require medical services, necessitating precise coding for reimbursement processes. Moreover, the increasing prevalence of chronic diseases and the implementation of healthcare reforms further boost the demand for skilled medical coders to ensure compliance with regulatory standards and maximize operational efficiencies?.
   

U.S. medical coding market accounted for USD 6.6 billion market revenue in 2023 and is anticipated to grow at substantial rate during the forecast period.
 

• The growth of U.S. market is attributed to the transition to the ICD-10 coding system, which offers greater specificity and detail. This transition has increased the complexity of coding, creating a higher demand for qualified coders. Moreover, increasing collaborations amongst market players are also estimated to have positive impact on the market. For instance, in July 2024, Maverick Medical AI extended its presence in the U.S. by collaborating with leading medical coding service provider.
   
• Additionally, the U.S. healthcare system's emphasis on value-based care and quality reporting has made accurate coding essential for reimbursement and performance measurement. The expansion of telemedicine, accelerated by the healthcare digitalization and awareness, also plays a role in the growing need for medical coders to manage the increased volume of virtual healthcare services.
   

U.K. medical coding market is projected to grow remarkably in the coming years.
 

• The UK's medical coding demand is driven by the National Health Service (NHS) and private healthcare sectors. The implementation of electronic health records (EHRs) and the need for standardized data across healthcare providers contribute to this demand.
   
• Moreover, the UK's focus on improving healthcare quality and efficiency, coupled with regulatory compliance requirements, has increased the need for skilled coders. The shift towards digital healthcare and the integration of AI and automation in medical coding processes also enhance the sector's growth prospects.
   

Japan holds a dominant position in the Asia Pacific medical coding market.
 

• In Japan, the demand for medical coding is on the rise due to the country's aging population, which leads to a higher volume of healthcare services. The Japanese government is focusing on healthcare system modernization, including the adoption of electronic medical records (EMRs) and digital health technologies.
   
• This modernization effort requires accurate and comprehensive coding systems to manage patient data and streamline healthcare operations. Additionally, Japan's universal healthcare system necessitates precise coding for efficient billing and reimbursement processes, further driving the demand for medical coders.