Los Angeles, CA (PRWEB) June 09, 2012
Rising healthcare expenditure and outsourcing of business services have demand in the Document Preparation Services industry's long-term growth. However, according to IBISWorld industry analyst Andrew Krabeepetcharat, “near term growth has been hampered by poor performance in downstream markets during the recession, particularly the banking, finance and insurance industries. Growth has also been tempered by an increasing use of skilled suppliers overseas that can provide the same services at lower wage costs. These trends had a particularly devastating impact on the industry's revenue and profit performance in 2008 and 2009. As a result of declines during those years, IBISWorld estimates that industry revenue declined an annualized 0.3% to $4.5 billion in the five years to 2012.”
Poor operating conditions and falling prices have contributed to consolidation among large operators. In February 2010, Spheris, which previously provided document services to about 500 hospitals and health systems, declared bankruptcy and sold its US and Canadian businesses to current major player MModal. Although such acquisitions are not uncommon, the industry's low barriers to entry have pushed the number of small operators up. The industry’s other major player is Nuance Communications.
According to Krabeepetcharat, “in 2012, the industry is forecast to grow 5.1% as the economy slowly rebounds from the recession. Technological improvements, such as voice-to-text software, have helped reduce the price of providing document preparation services. Technology has been a double-edged sword, though, because improvements in internet technology enable document processing overseas in lower-wage countries. Increased price competition among firms has reduced profit margins during the past five years.” Fortunately for industry operators, demand for industry services is forecast to increase in the five years to 2017, with revenue forecast to grow an annualized 3.9% to $5.4 billion. Although pricing competition will continue to limit profit growth, industry operators will benefit from rising healthcare expenditure, which will fuel demand for industry services.
In coming years, solid demand for medical transcription services (MTS) is expected to continue, particularly from existing demographic trends. This relates to the aging baby-boomer generation and its increasing need for medical services, which will lead to a corresponding increase in the demand for MTSs. Reimbursement pressures from managed-care growth have fueled consolidation within the healthcare industry and the formation of various types of healthcare provider groups, from integrated delivery networks to managed service organizations. Documentation requirements have significantly increased, resulting in a rise of MTSs.
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IBISWorld industry Report Key Topics
This industry provides one or more of the following: letter or resume writing; document editing or proofreading; typing, word processing or desktop publishing; and stenographic (except court reporting or stenotype recording), transcription and other secretarial services. This industry does not include document translation services, prepress and postpress services, or document copying services..
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.