Healthcare Fraud Analytics Market Size, Share & Trends Analysis Report By Solution Type (Descriptive Analytics, Prescriptive Analytics, Predictive Analytics), By Delivery Model (On-premises, Cloud-based), By Applications (Insurance Claim Review, Pharmacy Billing Issue, Payment Integrity, Others), By End-User (Public and Government Agencies, Private Insurance Payers, Third-party Service Providers, Employers) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global healthcare fraud analytics market size has valued at USD 2.10 billion in 2022. It is estimated to reach USD 13.20 billion by 2031, growing at a CAGR of 23.12% during the forecast period (2023–2031). The surging cases of fraudulent activities in the healthcare sector drive the global healthcare fraud analytic market. In addition, there has been a surge in the number of people claiming health insurance due to a surge in the geriatric population and the growing burden of chronic illnesses, which further increases the demand for healthcare fraud analytics. Moreover, technological developments in AI, ML, and data analytics have enhanced the ability to detect and tackle healthcare fraud, creating opportunities for the healthcare fraud analytics market.

Healthcare fraud analytics involves implementing sophisticated analytics methods and data analysis to identify and avert fraudulent operations within the healthcare sector. The importance of this subject has increased as government organizations, insurers, and healthcare providers look for ways to identify and stop fraudulent activities that could lead to losses in funds and jeopardize patient care.

Patterns that are linked to fraudulent behavior can be identified by healthcare fraud analytics through the implementation of machine learning and data modeling techniques. These patterns may include duplicate claims, inconsistent patient information, atypical invoicing patterns, or other irregularities. Healthcare fraud analytics is indispensable in safeguarding the healthcare system's integrity by preventing and detecting fraudulent activities. It assists in safeguarding the financial interests of patients, healthcare providers, and insurers while also contributing to the preservation of the healthcare industry's credibility and efficiency.

Market Dynamics

Global Healthcare Fraud Analytics Market Drivers

Rising Incidents of Healthcare Fraud

The healthcare industry has long been troubled by the persistent issue of healthcare fraud. The proliferation of fraudulent activities within the healthcare sector has emerged as a prominent catalyst for the use of healthcare fraud analytics solutions. Fraudulent activities encompass a range of deceptive practices, such as making false assertions, engaging in identity theft, and perpetrating billing scams.

According to the United States Sentencing Commission, during the fiscal year of 2022, 431 individuals were identified as healthcare fraud offenders, constituting approximately 8.4% of the overall number of offenses related to theft, property damage, and fraud. There has been a 1.4% increase in the population of individuals convicted of healthcare fraud since the fiscal year of 2018. Thus, a surge in healthcare fraud is driving the global healthcare fraud analytics market.

Growth in Health Insurance Sector

Due to the government closure and the coronavirus pandemic, the demand for health insurance has soared. In addition, 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. Moreover, with the escalating prevalence of chronic diseases worldwide, there is a corresponding increase in the demand for health insurance.

According to McKinsey & Company, the health insurance sector demonstrated continuous growth, emerging as the most rapidly expanding segment. It experienced a growth rate of 6.9 percent in 2018 and 5.9 percent in 2019. Moreover, health insurance accounted for around 26 percent of worldwide insurance premiums in 2019. The rise of healthcare insurance recipients has led to a corresponding increase in the possibility of fraudulent activities, underscoring the necessity for a dependable system for detecting and preventing such fraud, thereby boosting the global market.

Global Healthcare Fraud Analytics Market Restraint

Lack of Standardization

The healthcare sector exhibits a deficiency in standardized data formats and interoperability standards. Consistent data formats and non-uniformity in data gathering pose significant challenges in developing comprehensive and effective fraud detection algorithms. According to research conducted in 2018 by the US Department of Health and Human Services, deficiencies in national Medicaid data may impede the efficacy of fraud detection in the public sector. Similarly, according to the OIG, Medicaid data is frequently inaccurate and insufficient, influencing the process of detecting fraudulent claims and causing the waste of billions of dollars due to FWA. These factors restrict the market's expansion.

Global Healthcare Fraud Analytics Market Opportunities

Technological Advancements

Technological advancements, particularly in AI, machine learning, and data analytics, have improved the capabilities of fraud detection systems. These technologies reduce financial and administrative expenses by detecting and preventing fraud faster and more precisely than conventional methods. Healthcare organizations are utilizing these technologies to analyze massive datasets and detect patterns that predict fraudulent activity.

For instance, AI helps the Indian government's health scheme tackle fraud. In July 2023, the Health Ministry data viewed by The Hindu revealed that a penalty of INR 9.5 crores was recovered, 5.3 lakh Ayushman cards were disabled, and 210 hospitals were de-empanelled as a result of information about fraud obtained through an anti-fraud initiative based on artificial intelligence and machine learning safeguarding the world's largest government-run insurance scheme, the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY). Thus, leveraging AI can help enhance fraud detection and prevention, which is expected to create opportunities for vendors operating in the healthcare fraud analytics market.

Regional Analysis

Based on region, the global healthcare fraud analytics 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 fraud analytics market shareholder and is expected to expand substantially during the forecast period. The dominance of the North American region can be attributed to the escalating healthcare expenditures, the presence of advanced healthcare infrastructure, the expanding adoption of healthcare IT, and an increase in fraud cases. For instance, the Department of Justice in the U.S. has recently unveiled criminal charges against 138 defendants, consisting of 42 doctors, nurses, and other licensed medical professionals. These charges have been filed across 31 federal districts within the United States. The accused allegedly engaged in multiple healthcare fraud schemes, collectively leading to an estimated loss of approximately USD 1.4 billion. The charges pertain to an estimated USD 1.1 billion in fraudulent activities carried out through telemedicine. Moreover, USD 29 million in COVID-19-related healthcare fraud, USD 133 million connected to drug rehab centers, sometimes called "sober homes," and USD 160 million connected to additional cases of healthcare fraud and the illegal distribution of opioids market across the country were also targeted. Such factors are anticipated to boost regional market growth.

In North America, 60% of adults 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 the 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 annually. These characteristics have increased the adoption of medical insurance across North America, thereby boosting regional market growth.

Europe is witnessing considerable growth due to the increasing frequency of hospitalizations, medical expenditure, and advancing healthcare infrastructure. Similarly, 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. For instance, in 2018, hip replacement surgeries performed in Germany were recorded at 311 per 100,000 inhabitants. This will lead to increased demand for insurance coverage, increasing the probability of fraudulent activities, thereby boosting the healthcare fraud analytics market in the region.

Furthermore, several policies, funding programs, directives, and regulations of the European Commission (EC) have been implemented to strengthen the digitalization of healthcare systems over the past decade. In April 2018, the European Commission (EC) made an exclusive announcement regarding its intention to advance the digitalization of health. The digitization of the healthcare system can lead to more data breaches and, subsequently, heightened fraud in the healthcare sector. This is expected to augment the regional market expansion.

The Asia-Pacific region is predicted to expand rapidly due to the rising implementation of technologically enhanced solutions. With technological advancements, healthcare fraud is also surging in the region. For instance, according to the Insurance Fraud Survey 2023 conducted by Deloitte, almost 60% of insurance companies in India are experiencing a significant surge in insurance fraud, particularly within the life and health insurance domains. This is expected to boost market growth in the region.

Additionally, there has been a surge in healthcare expenditure, especially in emerging economies like India and China. For instance, according to the Economic Survey 2022–23, healthcare budgeted expenditures by the Indian government approached 2.1% of GDP in FY23 and 2.2% in FY22, up from 1.6% in FY21. The proportion of expenditures allocated to healthcare services has increased from 21% in FY19 to 26% in FY23, according to the same survey. All these factors together contribute to the growth of the Asia-Pacific regional market.

Segmental Analysis

The global healthcare fraud analytics market is bifurcated into solution type, deployment model, application, and end-user.

Based on the solution type, the global healthcare fraud analytics market is segmented into descriptive, predictive, and prescriptive analytics. 

The descriptive analytics segment is the highest contributor to the market. Descriptive analytics is a field within the realm of analytics that pertains to analyzing and interpreting historical data to gain insights and provide a concise summary of past events and occurrences. The primary objective of this approach is to offer a comprehensive understanding of the dataset by analyzing its patterns, trends, and properties. The principal objective of descriptive analytics is to provide insights into the question, "What happened?" Statistical measurements are employed to quantify and summarize the data.

Common descriptive statistics encompass measures such as the mean, median, mode, standard deviation, and range. Visualization tools, such as charts and graphs, are frequently employed in the field of descriptive analytics to communicate data in a visually accessible manner. Visual representations are effective tools for facilitating users' understanding of patterns and trends in data, as they enable rapid comprehension.

Based on the deployment model, the global healthcare fraud analytics market is divided into on-premises and cloud-based. 

The on-premises segment is the largest contributor to the market. In healthcare fraud analytics, the term "on-premises deployment" pertains to the integration of the analytics solution within the tangible infrastructure of the healthcare company, as opposed to utilizing cloud-based or external services. Healthcare data is frequently characterized by its sensitive nature and is subject to stringent privacy restrictions. The implementation of on-premises deployment enables enterprises to exert more control over security measures and guarantee adherence to industry requirements. On-premises solutions may be more suitable for organizations due to their ability to meet unique requirements or procedures, enabling enhanced customization.

Based on application, the global healthcare fraud analytics market is divided into insurance claim review, pharmacy billing issues, payment integrity, and others. 

The insurance claim review segment is the largest contributor to the market. Within healthcare fraud analytics, "insurance claim review" pertains to the systematic examination and analysis of insurance claims to detect fraud, wastefulness, or misconduct within the healthcare sector. Claim review methods are utilized by insurance companies, government organizations, and other healthcare payers to identify anomalies and verify the legitimacy and necessity of healthcare services for which they are providing payment. The primary aspect contributing to the dominance of the insurance claims sector is the increasing prevalence of health insurance among individuals, leading to a concomitant rise in false claims. The segment is additionally subdivided into post-payment review and prepayment review.

Based on end-users, the global healthcare fraud analytics market is bifurcated into public and government agencies, private insurance payers, third-party service providers, and employers.

The public and government agency segment dominates the global market. The significant variables contributing to the substantial proportion include the increased patient volume in government hospitals and the heightened susceptibility of government institutions to fraudulent operations, primarily in developing countries where technologically modern infrastructure is lacking. The Centers for Medicare and Medicaid Services (CMS) in the USA, the National Health Service (NHS) in the UK, the Australian Digital Health Agency (ADHA) in Australia, the National Health Insurance Service (NHIS) in South Korea, and the European Medicines Agency (EMA) - European Union are a few of the public and government agencies that use healthcare fraud analytics to detect patterns, anomalies, and trends that may indicate potential fraudulent behavior.

Recent Developments

• May 2023: Teradata and FICO announced that they are set to introduce integrated advanced analytical solutions that target supply chain optimization, insurance claims, and real-time payment fraud. Integrating data, analytics, and insights within a unified environment facilitates the efficient creation of solutions to address various use cases in sectors like finance, healthcare, retail, manufacturing, and travel.
• June 2023: Jack Henry™ introduced Payrailz® Fraud Monitor, an AI-powered, cloud-native component of the Payrailz Digital Payments Platform. This feature detects fraudulent activities in real-time, beginning with the initiation of payment transactions.