The Medical Claims Processing Services industry has recorded average annual growth of 0.1% over the five years to 2011, reaching $3.2 billion in revenue
Los Angeles, California (PRWEB) October 27, 2011
While the shaky economy hurt the Medical Claims Processing Services industry's performance during the past five years, the latest report from IBISWorld, the nation’s largest publisher of industry research, forecasts a solid return to growth over the five years to 2016. As the economy slowly returns to growth and corporations increase their staff, the number of people covered by health insurance will inevitably grow. This positive trend will drive up the number of physicians' visits at a forecast rate of 2.5% per year.
According to IBISWorld analyst, Nikoleta Panteva, despite the recession, the Medical Claims Processing Services industry has recorded average annual growth of 0.1% over the five years to 2011, reaching $3.2 billion in revenue. “Tough economic conditions caused nationwide layoffs, severing Americans' access to employer-sponsored private insurance in 2008 and 2009,” says Panteva. “As a result, the number of physicians' visits dropped, weakening demand for medical claims processing. The industry suffered revenue drops of 2.5% and 2.2% in 2008 and 2009, respectively.” However, the aging population created demand from another downstream market, helping mitigate revenue declines during the period. As patients reach retirement age, they become eligible for Medicare, a government-provided social insurance program. The insurance coverage provided through this program helps create demand from retiring baby boomers, which has benefited the industry. Additionally, the healthcare reform that was enacted in 2010 has helped provide insurance to previously uninsured patients, allowing for an increase in doctors' visits during 2011. IBISWorld expects this reform to help drive revenue up 2.6% in 2011 alone.
Profitability in the Medical Claims Processing Services industry has remained steady during the five years to 2011, accounting for about 10.0% of industry revenue. As demand and revenue fell in the midst of the recession, industry operators took cost-cutting measures. They cut the work force from 27,636 in 2006 to an estimated 26,043 in 2011, reflecting a 1.2% average annual decline. This decline helped reduce wage costs, which dropped from 26.1% of revenue to 25.2% of revenue during the same period.
A slew of factors will likely be favorable for the industry over the five years to 2016. As national unemployment abates, more Americans will be covered by private health insurance. Meanwhile, the growing senior population will create demand via Medicare, and the 2010 Patient Protection and Affordable Care Act (PPACA) will allow more patients with pre-existing conditions to be covered by insurance. Together, these factors are forecast to help drive industry revenue up at a rate of 6.4% per year, to $4.4 billion by 2016.
For more information, download the full report from IBISWorld on the Medical Claims Processing Industry
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