Healthcare Claims Management Market Size, Share & Trends Analysis Report By Component (Software, Services), By Delivery Mode (On-premise, Cloud-based), By Application (Claims Adjudication, Billing and Coding, Fraud Detection, Compliance Management, Others), By End User (Healthcare Payers, Healthcare Providers, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global healthcare claims management market size was valued at USD 15.91 billion in 2023. It is estimated to reach USD 24.15 billion by 2032, growing at a CAGR of 5.4% during the forecast period (2024–2032). The expansion of the health insurance industry is a key factor propelling the growth of the healthcare claims management market.

Healthcare claims management is an essential aspect of the healthcare industry involving the administration and processing of medical claims submitted by patients and healthcare providers. It incorporates the entire claim lifecycle, from submission to payment. Claims management's primary objective is to ensure the accuracy, efficacy, and timeliness of claims processing while mitigating errors and maximizing revenue for healthcare organizations.

Interactions between healthcare providers, insurance companies, and patients form the basis of healthcare claims management. Claims management entails various responsibilities, including data entry, coding, billing, claims submittal, follow-up on outstanding claims, denial management, and appeals. A comprehensive understanding of medical coding systems, insurance policies, billing regulations, and industry standards is required for efficient claims management.

Market Dynamics

Global healthcare claims management market drivers

Rising adoption of cloud-based solutions

The growing demand for healthcare due to the rising prevalence of chronic illnesses and the increasing patient population will necessitate adopting IT solutions, such as cloud-computing systems, in the healthcare industry. Healthcare provider systems that leverage cloud services and cloud-based computing offer multiple benefits compared to in-house client-server systems, which include economic, operational, and functional advantages.

Using cloud-based solutions in medical claims management quickens the time to market new and updated products and custom benefit plans. Cloud-based healthcare solutions and automated medical claims processing solutions are assisting healthcare service providers in reducing insurance claims expenses, improving patient payment management, and enhancing revenue. Such medical claim solutions can be developed from scratch or easily integrated with enterprise software. Such factors drive market growth.

Growth in health insurance sector

Due to the government closure and the coronavirus pandemic, the demand for health insurance has soared. According to industry researchers, past experiences with Middle East Respiratory Syndrome (MERS) and severe acute respiratory syndrome (SARS) demonstrate that the demand for health insurance plans increases during epidemics, with insurers reporting increased inquiries regarding pandemic coverage. In addition to increased demand for health insurance policies, there is a surge in demand for plans with higher insured quantities.

Additionally, the number of individuals purchasing health insurance policies with higher coverage limits has increased dramatically. An increase in the number of seniors acquiring health insurance has also surged. Age is associated with various health hazards and decreased susceptibility to various diseases. Thus, the growth in the health insurance sector drives the healthcare claims management market.

Global healthcare claims management market restraint

High cost of claims processing

Processing claims is an expensive undertaking for both health insurers and providers. For instance, the US healthcare industry spends USD 4.5 billion annually on claim submissions, which accounts for 13% of the total expenditure on administrative transactions. Australia's insurance performance deteriorated in June 2020 due to reduced premium revenue, increased claims, and increased management expenses.

Global healthcare claims management market opportunities

Upsurge in private health insurance

Private insurance offers multiple choices that include the chance to choose a specialist/obstetrician/surgeon and the preferable hospital from the private health insurer's agreed providers. Private insurance companies usually offer better and multiple choices compared to public plans. Therefore, insurers can choose from various options based on their requirements. Some noted benefits of private health insurance include lower wait times, more sophisticated facilities, and individualized attention.

Compared to public insurance centers, the centers for private insurance are comparatively less crowded at times and provide a higher level of care in various cases. Even public hospitals have witnessed the ease of providing better care with private medical insurance. The private medical industry offers high growth potential to incumbents and new entrants. Major factors contributing to the demand for private health insurance include the growing elderly population, rising chronic diseases, and increasing incomes in the developing world. Thus, the benefits of private insurance plans create opportunities for market growth in the coming years.

Regional Analysis

Based on region, the global healthcare claims management market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America Dominates the Global Market

North America is the most significant global healthcare claims management market during the forecast period. Major factors contributing to the growth of the regional market include a rise in the aging population, growing chronic and infectious diseases, increasing hospitalization rates, rising number of patients using medical insurance, constantly growing healthcare spending, rise in billing errors and cloud-based claims solutions, and the rising importance of denials management. In North America, 60% of adults in America and 44% of adults in Canada have at least one chronic condition like stroke, heart disease, diabetes, or cancer for which medications play a vital role in their treatment.

With the rise in chronic conditions, there has been a rise in surgical procedures, hospitalization rates, and simultaneous uptake of medical insurance in the North American population. For instance, in the US alone, more than 48 million surgeries are performed, while in Canada, more than one million surgeries are performed yearly. These characteristics have raised the adoption of medical insurance across North America. Such factors have accelerated the demand for claims management systems.

Europe is the second most significant contributor to the healthcare claims management market. The region is witnessing considerable growth due to the increasing frequency of hospitalizations, growing medical expenditure, advancing healthcare infrastructure, and several government initiatives. The rising adoption of AI in claims management, the expanding population covered by medical insurance, the increasing presence of cloud-based solutions, and the growing importance of denial management solutions are also driving the regional market.

In addition, the surging prevalence of chronic illnesses is accelerating the adoption of insurance coverage for maintaining patients during hospitalization. For instance, more than 50 million individuals in Europe suffer from many chronic conditions. The rise in the number of surgeries conducted in European countries annually drives the demand for health coverage, boosting regional market growth. 

Asia-Pacific is expected to witness the quickest expansion rate in the healthcare claims management market during the forecast period because of the rising adoption of health insurance and the simultaneous need for claims management. Other growth drivers for the market include the rising elderly population, growing healthcare spending, and increasing frequency of hospitalizations and surgeries. The surge in the adoption of IT solutions in the healthcare industry and the rise in the number of claims-managing companies are also expected to drive market growth. With the growing frequency of chronic diseases in the Asia-Pacific population, there has been a simultaneous increase in the number of surgical procedures performed across various countries. For instance, more than 1.2 million surgeries are performed yearly in Japan, accounting for 6.3% of the global total. This led to a rise in patient adoption of medical coverage, which increased the need for claims management.

Latin America has advanced healthcare infrastructure and growing technological developments in the medical sector. Factors contributing to this growth include the aging population of chronic illnesses undergoing surgical procedures. Most Latin American countries have a unique healthcare system. Likewise, healthcare services are much cheaper in Latin American nations than in other parts of the world. Universal public healthcare is available in major countries such as Argentina, Columbia, and Chile, making it an attractive destination for healthcare services. Various types of insurance coverage available across the region include inpatient, outpatient, maternity, vision, and dental, fueling the healthcare claims management market.

The Middle East and Africa region has highly populated countries with many elderly. Increasing hospital admissions will fuel the need for medical coverage to support patients' medical expenses. Low access to healthcare facilities, inadequate medical personnel, lack of universal coverage, and the presence of a few medical claims management companies are responsible for the region's minimal market share in the global market. The high cost of medical facilities and drugs due to the absence of indigenous research and greater reliance on missionary support and foreign aid hinders market growth in Africa.

Segmental Analysis

The global healthcare claims management market is segmented by component, type, delivery mode, and end-user.

Based on components, the global healthcare claims management market is bifurcated into software and services. 

The software segment dominates the global market. Healthcare claims management software is used by manufacturers, insurers, and healthcare providers requiring claims processing systems. Such claims management software enables organizations to build and deploy automated end-to-end claims processes that are extremely intelligent, agile, and readily deliver high returns on investment.

Claims management software also provides efficient claims processing, eliminates error-prone and inconvenient paper and email-based operations, and takes all data and processes into a unified working environment. Claims management software is a strong tool that assures medical claims' swift and successful processing. The use of digital technology in the insurance landscape has revived the entire healthcare claims management cycle and made it quicker and error-free.

Based on type, the global healthcare claims management market is segmented into integrated and standalone solutions. 

The integrated segment owns the highest market share.  An integrated claims management software system helps insurance claims and risk professionals achieve better visibility and control over all aspects of insured risks. Integrated claims management solutions can enable structured program management and efficient organizational change management processes. Integrated claims management gives claims managers and adjusters direct and centralized access to relevant information.

In addition, data integration into a single system offers tremendous potential to automate manual processes and workarounds, which can negatively affect the adjuster's productivity. Workflow automation technologies are part of an integrated claims management solution, which can enhance the claims handling procedure by promoting informed decision-making, productivity, and the quick, economical resolution of claims.

Based on delivery mode, the global healthcare claims management market is divided into web and cloud-based, and on-premise segments.

The web and cloud-based segment is the most significant contributor to the market. Web and cloud-based deployment of healthcare claims management is a proven, fast, and cost-effective way to accelerate digital initiatives without infrastructure and setup costs. Cloud-based claims management systems offer benefits such as fully featured workflow automation solutions, such as automatic software updates, reduced software dependency, lower support and administration costs, and easy scaling based on imminent requirements. Greater accessibility, low upfront costs, and minimal IT requirements are major growth drivers for many healthcare payers and providers that prefer web-based systems.

Based on end-users, the global healthcare claims management market is divided into healthcare payers and healthcare providers. 

The healthcare providers segment is the largest revenue contributor to the market during the forecast period. Healthcare providers like hospitals, clinics, and physician practices are significant in reimbursement systems, especially claims management. Claim processing is initiated each time a healthcare provider treats a patient, and the medical billing process begins. The healthcare provider then sends the bill to the designated payer, which evaluates and processes the claim. The healthcare provider records the policyholder's healthcare services and associated costs.

Healthcare institutions are attentively examining their internal procedures and technological advancements to provide improved patient care. One of the major advantages is having incident reporting and claims management functionalities that can help work seamlessly. Insurance claims management software can benefit healthcare providers by minimizing training and maintenance costs, eliminating operational inefficacies and legacy issues, and enhancing customer experience.

Recent Developments

• February 2023- To address one of healthcare's most urgent issues, Experian® Health, a prominent provider of revenue cycle products, announced the introduction of AI Advantage™ to reduce the rising number of healthcare insurance claim denials. The products utilize artificial intelligence (AI) as the most streamlined and comprehensive claims management system in the healthcare industry today.
• In April 2023-Google Cloud introduced a new AI-enabled Claims Acceleration Suite that streamlines prior authorization and claims processing for health insurance. The solution, which leverages the newly developed Claims Data Activator, will assist health plans and providers in reducing administrative burdens and costs by transforming unstructured data into structured data, enabling experts to make quicker, more informed decisions to improve patient care.