Executive Summary

The global Medical Coding Market size was projected to be US$ 21.65 billion in 2023. By the end of 2024, the industry is likely to reach a valuation of US$ 22.42 billion. During the forecast period, the global market for Medical Coding Market is expected to garner a 7.9 % CAGR and reach a size US$ 40.86 billion by 2034.

The growth of the market is being driven by technological development in medical fields and the increasing demand for a universal language. The increasing number of coders is expected to lead to more career opportunities and a growing interest in the field. The increasing utilization of medical coding by hospitals and healthcare institutions is expected to drive the demand for medical coding services in the market from 2020 to 2025.

The increasing development and digitalization of healthcare infrastructure have led to a growing need for medical coding. In addition, the increasing use of digital information records and billing systems has led to a higher demand for medical coding worldwide.

Medical coding plays a crucial role in the communication of medical information within health organizations and hospitals worldwide. The global medical coding industry is experiencing significant growth in developed countries. However, to enhance the efficiency and effectiveness of healthcare experiences and procedures worldwide, continuous adjustments are necessary. Based on the Hospital Statistics 2022 report from the American Hospital Association (AHA), it was found that there were approximately 33,356,853 admissions recorded across hospitals in the United States in 2018. Due to the demand in the industry, there is a significant need for medical billers and coders. This is expected to contribute to the growth of the medical coding market.

Medical coding is responsible for transforming various aspects of healthcare, such as diagnoses, treatments, services, and equipment, into standardized alphanumeric codes. It involves assigning the correct codes, extracting data from the supporting documentation, and generating a claim that insurance companies will reimburse. It investigates the prevalence of illnesses among individuals. The data collected offers valuable insights into national health trends, enabling government entities at both the federal and state levels to effectively allocate resources towards addressing critical health issues and implementing initiatives aimed at prevention and treatment for the affected population. Due to its wide range of applications, it is extensively utilized in hospitals and diagnostic facilities across the globe.

In addition, there is a growing need for a coding and billing solution that is more efficient and user-friendly. Medical coding also promotes consistent documentation across different medical facilities. Medical coding companies help organizations analyze the frequency and efficacy of treatments within their facility. This holds significant importance for large medical facilities, such as tertiary-care hospitals. Anticipated market growth will be fueled by a series of frequent launches. As an example, in March 2021, Athenahealth introduced the Athena One Medical Coding Solution, an EHR coding solution designed to alleviate clinician coding-related tasks and ultimately alleviate clinician burnout.

On the other hand, the market growth may face obstacles due to the ever-evolving regulations, concerns about data security, and the shortage of skilled IT professionals in the healthcare sector.

Definition

Medical coding involves the coding of medical data and documents, such as physician's notes and test findings, to protect against fraudulent use. Medical coding involves the transformation of medical documentation and records into universally recognized alphanumeric numbers and codes.

 The primary responsibility of a medical coder is to convert the information provided by the doctor, such as diagnostic data, prescriptions, or reports of a patient's condition, into codes. A medical coder is responsible for ensuring the accuracy and validity of medical codes used in each document.

Trend

The International Classification of Diseases (ICD) Segment is Expected to Show Healthy Growth Over the Forecast Period

The segment related to the International Classification of Diseases (ICD) is projected to have a substantial market share throughout the forecast period. ICD facilitates global communication among health professionals by providing a standardized language for sharing information. This comprehensive database serves as a valuable resource for tracking global health trends and statistics. It encompasses a vast array of information, including over 17,000 distinct codes for various injuries, diseases, and causes of death. Additionally, it features an extensive collection of more than 120,000 terms that can be easily categorized and analysed. With the help of code combinations, a vast number of clinical situations can now be accurately coded, totalling over 1.6 million. The International Classification of Diseases (ICD) serves as a valuable diagnostic tool for various purposes including epidemiology, health management, and clinical applications. It is diligently maintained by the World Health Organization (WHO). Therefore, the growing occurrence of chronic illnesses and the advancements in ICD technology are anticipated to drive the expansion of this sector.

Based on the January 2022 update from the British Heart Foundation (BHF), it is estimated that there are approximately 4 million males and 3.6 million females in the United Kingdom living with heart and circulatory diseases. Given the significant occurrence of cardiovascular diseases, the demand for diagnostic codes provided by the ICD is set to fuel the expansion of this market segment.

In addition, as the ICD continues to improve, its usage is anticipated to increase due to the enhanced information provided by the newer versions. As per a February 2022 update by the WHO, the new version of ICD, ICD-11, became effective from February 2022. ICD-11 has been completely digitized and now features a more intuitive interface and the ability to support multiple languages, which helps minimize the risk of mistakes. The database has been compiled and updated with input from over 90 countries and extensive involvement of health-care providers. This has allowed for the transformation of a system that was once imposed on clinicians into a versatile clinical classification and terminology database. It now serves a wide range of purposes, including recording and reporting statistics on health.

In October 2021, the CMS released an update regarding the national emergency caused by the COVID-19 outbreak. As a response, the CDC's National Centre for Health Statistics incorporated six new diagnosis codes into the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM). Therefore, there are expectations of future growth in this segment.

Drivers

Rising Demand for Coding Services

Medical coding involves the conversion of various types of medical information, such as patient records, physician notes, prescriptions, lab results, procedures, and diagnoses, into standardized alphanumeric codes. These codes are used for billing purposes with third-party payers, such as insurance companies. Medical coding and billing play a crucial role in the healthcare system, facilitating efficient communication between healthcare providers and insurers. Medical coding is a system that categorizes medical procedures and treatments, making it easier for physicians and insurance companies to understand.

 In the current environment, there is a growing emphasis on establishing accurate patient care records, streamlining the medical billing process, expediting physician payments, and identifying areas in healthcare that require more attention. One of the essential healthcare professionals is a medical coder, who plays a vital role in ensuring the accurate and efficient transmission of medical data between healthcare providers and insurance companies. During the projected timeframe, there is an expectation of a significant increase in the number of patients and hospital admissions due to the growing prevalence of chronic diseases such as cancer. This surge in medical records will result in a substantial amount of data.

Restraints

Security of Data Questions

The issue of healthcare cybersecurity poses a substantial risk. IT professionals must consistently address healthcare data security issues due to the ethical responsibility to assist patients and the potential harm caused by healthcare security breaches, in accordance with U.S. HIPAA laws. Hospital network security is a major IT concern due to the sensitive medical data stored in EHRs. Electronic health records (EHRs) and medical coding play a crucial role in facilitating effective communication among insurance companies, doctors, and other healthcare professionals. This streamlines care coordination and resolves insurance concerns.

Medical specialists have the opportunity to innovate and adapt to better serve the needs of patients. The interconnectedness of modern healthcare presents significant IT security risks. This industry is a highly sought-after target for hackers and cybercriminals due to its widespread usage. The importance of healthcare data security cannot be overstated. It is imperative for medical organizations to be diligent in establishing online safeguards, as a comprehensive understanding of the risks and safeguards is essential. The potential consequences and financial implications of healthcare data breaches jeopardize the confidentiality of millions of individuals' personal health records. There are several security risks associated with medical coding, which have been hindering the growth of the market.

Opportunities

Implementing the ICD-11

Medical coding is a vital component of the ever-evolving healthcare industry. Nevertheless, the sheer volume of codes and diagnosis standards has experienced a significant surge, reaching hundreds of thousands. Given the rapid growth in code assignment accuracy, the utilization of AI (Artificial Intelligence) has become indispensable. Considering the numerous advantages of the ICD-11 compared to the ICD-10, the implementation of the former will greatly benefit the market being studied. In addition, the ICD-11 offers improved setup and usability, with the added convenience of being accessible both online and offline. The latest generation of ICD-11 is incredibly user-friendly, surpassing its predecessors. Not only does it offer a more cost-effective coding solution, but it also ensures highly accurate data capture for superior output quality. The utilization of modern technology is the primary factor behind this. The innovative design and digital format ensure seamless integration with the existing IT infrastructure.

The healthcare sector has experienced significant changes as a result of increasing costs, regulatory adjustments, evolving business models, expanding workforce needs, and a continued focus on providing value-based patient care. These changes have brought existing technologies up to date and accelerated the adoption of new ones. The advancement of artificial intelligence and other emerging technologies has the potential to drive the development of medical coding. In addition, the market's future growth is expected to be driven by cloud services and affordable outsourcing of medical coding services.

Challenges

Lack of awareness regarding hazards

The absence of well-trained personnel or skilled professionals will hinder market expansion. Having a solid foundation of training and expertise in this field is essential for comprehending the intricacies of deciphering codes. As a result, it requires specialized expertise. It requires extensive experience and can be quite demanding. As a result, the lack of experienced professionals, particularly in emerging and less developed economies, directly impedes market expansion.   

This report offers comprehensive insights into the medical coding market, including recent developments, trade regulations, import-export analysis, production analysis, value chain optimization, market share, impact of domestic and localized market players, emerging revenue opportunities, changes in market regulations, strategic market growth analysis, market size, category market growths, application niches and dominance, product approvals, product launches, geographic expansions, and technological innovations in the market.

Impact of COVID-19

The COVID 19 pandemic has significantly affected the significance of medical coding and patient management. As an example, in March 2020, CMS issued an announcement regarding two healthcare common procedure coding system codes.

These codes can be used by labs to bill for COVID-19 diagnostic methods, including those developed in-house following the new United States Food and Drug Administration (USFDA) guidelines. Therefore, the pandemic has led to various market changes that have been analyzed. These changes are expected to have a long-term impact on the global medical coding market.

Segmentations

By Classification System

The global medical coding market is divided into two main categories: the international classification of diseases (ICD) and the healthcare standard procedure code system (HCPCS).The segment related to the international classification of diseases (ICD) is projected to be the primary driver of market growth, with an anticipated compound annual growth rate (CAGR) of 11.97% throughout the forecast period. The World Health Organization (WHO) recognizes the significance of ICD in tracking global health trends and statistics. It serves as the standard for reporting diseases and medical conditions worldwide. It is widely recognized as the standard for diagnostic classification in both clinical and academic settings. For the purpose of sharing and comparing health information, ICD provides a comprehensive and hierarchical system that allows for easy storage, retrieval, and analysis of data. This system encompasses a wide range of diseases, disorders, injuries, and other health conditions, enabling comparisons between hospitals, regions, backgrounds, and countries, as well as within specific locations over time. Thanks to the ICD, indexing medical records becomes a breeze, medical reviews are easier to complete, and exciting possibilities for medical care are now within reach.

There has been a significant increase in the utilization of ICD as a medical code. It has been more than a century since the initial introduction of the International Classification of Diseases (ICD) codes in the field of medicine. They were recently implemented in the United States to report diagnoses on claims for medical services. As the medical community progresses, the ICD has also been periodically revised. Due to heightened consumer awareness of advanced hospital solutions, private healthcare insurance providers experienced a boost in market penetration. Market growth is expected to be driven by the rise in medical coding outsourcing firms.

 Healthcare Common Procedure Code System (HCPCS)

• Current Procedural Terminology (CPT)
• International Classification of Diseases (ICD)
• Current Procedural Terminology (CPT)

Based on components

The global medical coding market is divided into two categories: in-house and outsourced. The outsourced segment dominates the market and is projected to experience a significant growth rate of 11.39% throughout the forecast period. Organizations across the country are increasingly relying on outsourcing as a valuable resource. There are numerous advantages to this, such as faster completion times, improved precision, and coders with official certification. Outsourcing services can help alleviate the responsibility of keeping the staff up-to-date on the latest rules and regulations. In addition, companies that offer third-party coding services adhere to ICD-10 guidelines and implement security measures that comply with HIPAA regulations, ensuring high quality. Outsourcing has led to a significant reduction in the direct and indirect costs associated with medical coding. As a result, many companies find that outsourcing to a medical coding company is often the most economical choice. In addition, increased competition among outsourcing firms will help to lower the budget. In recent years, there has been a growing trend towards outsourcing.

The company responsible for training the internal staff members in coding within its health organization is referred to as the in-house medical coding. Internal medical coders ensure accessibility and maintain quality control. However, not all healthcare service providers have the resources to employ medical coders in-house. A formal infrastructure and potentially expensive equipment are required. There are advantages and disadvantages to using in-house medical coding. One of the key benefits of in-house coding is the improved communication it enables between the doctor, the coder, and the rest of the office staff. Utilizing in-house coding enables effective communication, particularly when dealing with intricate coding. In addition, it has been found that resolving billing issues internally can lead to faster and more efficient solutions, saving a significant amount of time. Ensuring patient confidentiality is crucial, and in-house billing provides control over patient records to achieve this.

• Outsourced
• In-House

By End User

The global medical coding market is bifurcated into hospitals and diagnostic centres. The hospital segment is the highest contributor to the market and is expected to grow at a CAGR of 11.43% during the forecast period. Modern technological equipment is available in hospitals for the treatment of many different diseases. The likelihood of getting sick increases significantly as people age due to the rising conditions in the world and the aging population. Hospitals remain the most common locations for people to receive medical care. With chronic illnesses like cancer and others becoming more common, hospitals are becoming the primary settings for treating them, so more people are anticipated to be admitted as inpatients. Medical coding has become increasingly important for hospitals to receive payments from insurance companies and governments. Additionally, hospitals have recognized the value of healthcare IT systems in addressing issues related to the industry, such as inconsistent healthcare quality and rising healthcare costs. Further, the market is expanding due to the use of big data analytics to support and promote such research activities. The adoption of IT has also aided the development of the medical coding industry in hospitals.

The diagnostic centres are where various disease identification and diagnostic tests are carried out. They typically have top-notch machinery, and the outcomes of these laboratories are reliable. Diagnostic laboratories are found to be essential in terms of both the quality of care and the financial performance of the healthcare system. The increasing use of information technology in healthcare and the rising incidence of various diseases worldwide are the main factors fueling the growth of the market under study. To maintain contact with their referring clinicians, laboratories have begun to use healthcare IT solutions like revenue cycle management (RCM) solutions.

• Hospitals
• Diagnostic Centres
• Others

Geography Chapter

North America is the most significant revenue contributor and is expected to grow at a CAGR of 11.04% during the forecast period.

The United States is experiencing significant market growth due to various factors such as technological advancements, a robust healthcare infrastructure, a growing geriatric population, and an increase in chronic disease rates. These factors are expected to drive demand in the country. Heart disease is responsible for one in seven deaths in the United States, as reported by the American Heart Association Research Report 2018. In 2018, coronary heart disease was the primary cause of death from cardiovascular disease in the United States, accounting for 43.8% of cases. This was followed by stroke at 16.8%, heart failure at 9.0%, high blood pressure at 9.4%, diseases of the arteries at 3.1%, and other cardiovascular diseases at 17.9%. Prestige Revenue Management is a leading medical billing company in the US, providing medical professionals, including doctors, with seamless insurance claim processing. The company offers affordable medical billing services across the country, using cutting-edge tools and technologies in the industry.

Europe is expected to grow at a CAGR of 10.62% during the forecast period

With the increase in the elderly population, the demand for coding services and the need to streamline hospital billing processes, the medical coding market in Germany is experiencing significant growth. It is a legal requirement in Germany for the attending hospital doctor to document and categorize all admissions, whether inpatient or outpatient.

The organization's computerized health information system can be enhanced with the incorporation of the latest health data extracted from the chart, utilizing the German Coding Guidelines (DKR). In the coming years, the market is expected to be influenced by legal regulations related to coding in the country.

Company Landscape  

The competitive landscape of the medical coding market offers comprehensive information about the various competitors in the industry. The information provided includes an overview of the company, its financials, revenue generation, market potential, investment in research and development, new market initiatives, global presence, production sites and facilities, production capacities, company strengths and weaknesses, product launches, product range, and application dominance. The data points provided above only pertain to the companies' focus on the medical coding market.

Recent Market Developments

• April 2022: Ochsner Health's emergency department adopted Nym health's medical coding technology to empower revenue cycle management.
• April 2022: XpertDox entered into an exclusive partnership with Urgent Care for Children USA (UC4C) to provide XpertCoding. It is a fully automated, turnkey solution that delivers medical coding efficiency and accelerates the revenue cycle across all of UC4C's clinics in Alabama and Tennessee.

Company Profile

The founder, Ray Dolby, was a visionary scientist and inventor. Driven by his passion for music and his expertise as an engineer, he was determined to enhance the listening experience. And with that simple inspiration, along with extensive hours of experimentation, he developed a solution—a solution that was refined and practical, incredibly advanced, and completely focused on the artist's vision. Despite its global expansion, Dolby Laboratories remains true to the values instilled by its founder, Ray Dolby. Here, the world of scientific analysis intersects with the realm of creativity. And the world of high technology extends well beyond computer programming.

Established in 1965 and based in San Francisco, Dolby has become a prominent worldwide pioneer and creator of cutting-edge audio, imaging, and voice technologies for various platforms including cinema, home theatres, PCs, mobile phones, and games. We offer a range of cutting-edge products such as Dolby Digital Plus, TrueHD, Dolby Voice, Dolby Atmos, and Dolby Vision. Today, a large number of individuals from various parts of the world contribute their skills and enthusiasm to create the most engaging technological experiences.

Conclusion:

The medical coding market has experienced substantial changes, driven by advancements in technology and the ever-changing healthcare regulations. Over the past few years, the combination of artificial intelligence and machine learning technologies has significantly improved the effectiveness and precision of medical coding procedures. The integration of technology has not only accelerated coding procedures but has also led to enhanced compliance and reimbursement outcomes for healthcare providers.

The ever-evolving healthcare regulations have created a growing need for proficient medical coders. Understanding coding systems and meeting regulatory requirements have become essential for healthcare entities to receive accurate reimbursement. Due to this, there has been a significant increase in demand for skilled individuals who can effectively handle the changing coding environment.

The COVID-19 pandemic has significantly sped up the shift towards remote work, impacting various industries including medical coding. Remote work opportunities have become increasingly common, offering flexibility for professionals and contributing to the growth of the remote workforce. At the same time, there was a growing trend among healthcare providers and payers to outsource their medical coding services to expert firms in order to streamline the coding processes.

Education and certification programs have been instrumental in addressing the need for skilled medical coders. The focus on acquiring certifications and relevant education has increased, showcasing the industry's dedication to upholding a strong level of coding accuracy and compliance.

Several commercial adaptations in the market:

• In March 2023, Informed DNA®, a prominent applied genomics solutions company, unveiled its latest offering, Informed GENOMICS™, a clinical guidance and decision support solution for genomics.
• In August 2022- Nuance Communications, Inc. reports that numerous leading healthcare systems have adopted their Patient Engagement Solutions to enhance patient experiences across the entire patient journey. Organizations have the option to utilize Nuance's advanced intelligent engagement technology for effective patient engagement through various voice and digital channels. This is made possible by a unified, cloud-based communications platform.

The global reach of the medical coding market is becoming more apparent, as healthcare systems around the world undergo digital transformation and expansion. As we move forward into 2024, it is crucial for stakeholders in the medical coding industry to stay updated on the latest trends, regulatory changes, and technological innovations. The ever-changing nature of the market highlights the importance of constantly adapting and learning within this crucial healthcare field.