The number of privately insured people will rise, supporting demand for industry services
Los Angeles, CA (PRWEB) November 16, 2012
Despite the recession, the Medical Claims Processing Services industry has recorded average annual growth of 0.1% over the five years to 2012, reaching $3.3 billion in revenue. Tough economic conditions caused nationwide layoffs, severing Americans' access to employer-sponsored private insurance in 2008 and 2009. 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,” says IBISWorld industry analyst Anna Son. 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 2012. IBISWorld expects this reform to help drive revenue up 2.5% in 2012 alone.
Profit has remained steady during the five years to 2012. As demand and revenue fell in the midst of the recession, industry operators took cost-cutting measures. They cut the workforce from 28,374 people in 2007 to an estimated 26,391 employees in 2012, reflecting a 1.4% average annual decline. This decline helped reduce wage costs, which dropped during the same period. A slew of factors will likely be favorable for the Medical Claims Processing Services industry over the five years to 2017. “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 preexisting conditions to be covered by insurance,” says Son. Together, these factors will likely help drive industry revenue up over the five years to 2017.
Market share concentration in the Medical Claims Processing Services industry is low. The largest player is HMS Holdings. Major players are typically large-scale insurance service providers that operate in a variety of service segments, including risk, consulting and claims adjustments. Over the five years to 2012, market share concentration has increased slowly, primarily because of HMS Holdings' aggressive acquisition streak during much of the period. The company's revenue growth has far outpaced industry growth. Over the five years to 2017, IBISWorld forecasts that concentration will become slightly diluted. As demand picks up, especially toward the latter part of the five-year period, more small players will enter the industry. This trend will increase competition for existing operators and limit the amount of revenue each company can earn. For more information, visit IBISWorld’s Medical Claims Processing Services in the US industry report page.
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IBISWorld industry Report Key Topics
This industry processes and administers medical insurance policies and claims. Businesses help doctors and other healthcare providers collect payments from insurance companies and Medicare.
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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