The global Healthcare EDI Market is valued at USD 2.56 billion in 2017, and is expected to reach to USD 3.77 billion by 2022 growing at a CAGR of 8.1% during the forecast period (2017 to 2022), as per a report by MarketsandMarkets.
Why increase in outsourcing of EDI services presents an opportunity?
EDI outsourcing is the process of having a third party manage a part or the entire process of using EDI to exchange data with trading partners. Growing healthcare costs are increasingly pressurizing the healthcare industry to provide quality care at lower costs by minimizing wastages at each stage. Healthcare revenue loss in American hospitals, due to self-pay billing issues, is as high as 20% to 30%.
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Additionally, according to a Ponemon Institute survey in 2014, of 577 healthcare professionals, the U.S. physicians and hospitals have shown an inability to use the latest mobile devices and internet services to deliver patient care. As a result, U.S. hospitals absorb an estimated USD 8.3 billion annually, while struggling with security and privacy concerns arising from the mainstreaming of social media at a time when federal rules allow for steep fines when it comes to violating patient privacy. For hospitals, this makes the outsourcing of billing and claim services to EDI service providers an attractive proposition.
This has resulted in an increased adoption of HCIT solutions and outsourcing of non-core healthcare delivery services such as administration, claims management, billing, and reimbursements to a third-party vendor. Hospitals are looking to outsource their application maintenance services as well as their application integration and development for electronic medical records (EMR), customer relationship management (CRM), revenue cycle management (RCM), billing system, and so on. For this, hospitals prefer private IT vendors to provide the requisite technology and expertise to support IT infrastructure and services. This increase in outsourcing EDI services in healthcare provides opportunities for various clearinghouses and healthcare EDI vendors to contribute to the market.
How hesitancy to switch from conventional methods poses a challenge?
According to the CAQH Index, 2016, the healthcare industry continues to make modest progress in terms of the full adoption of electronic transactions. The adoption of electronic transactions varied across types of transactions, increasing by 1% to 8%. Only 6% of healthcare claim attachments were submitted to medical health plans electronically (using the ASC X12N 275 transaction standard), with the remaining sent via fax, mail, or email.
This lag in the adoption of healthcare EDI by providers continues to be a significant challenge for healthcare EDI industry. While the use of electronic transactions for eligibility & benefit verifications and claim status inquiries is increasing rapidly, the use of manual transactions, particularly telephone calls, is not declining as rapidly. For instance, participating medical and dental health plans alone fielded over 106 million telephone calls for these types of inquiries in 2015. The hesitation to switch to electronic data interchange, due to budgetary constraints and preference for conventional methods, has slowed the growth of the market; this is expected to continue in the coming years.
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