Global AI in Medical Coding Market By Component (In-house, Outsourced), By End-User (Healthcare providers, Medical Billing Companies, Payers), By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2024-2033

Report Overview

The Global AI in Medical Coding Market size is expected to be worth around USD 8.4 Billion by 2033, from USD 2.4 Billion in 2023, growing at a CAGR of 13.6% during the forecast period from 2024 to 2033.

AI in medical coding market refers to application of  artificial intelligence technologies and techniques in medical coding processes. Medical coding deals with conversion of procedures, diagnosis and services into universal standardized codes. These codes encompass several impetus including statistical analysis, research, reimbursement and billing. This process employs Natural Learning Processing, machine learning algorithms and other AI techniques in order to automate and ameliorate the coding process. Thus, analysis of medical records, extraction of relevant information and suggestion of correct codes depending on documented information is done by AI-based coding systems at ease.

The market for AI in medical coding is rapidly driven by the growing demand for medical coding software and revenue recycle management services by virtue of growing inefficiency in medical billing and revenue cycle management. The market further fosters due to high adoption rate of digital technologies, mHealth applications, and telehealth in United States.

• In 2021, an approximate of 89.1% of physician offices utilize electronic health records in U.S., according to Center for Disease Control and Prevention.

Key Takeaways

• By Component analysis, the outsourced segment occupied a remarkable market share of 72.5% in the year 2023.
• Based on end use of AI powered medical coding systems, the healthcare provider segment dominated the market capturing a large market share of 62.4%.
• The rising burden on healthcare providers related to abundant data volume coming from various medical histories and diagnosis thrives the market to a large extent.
• Complying with stringent regulatory standards forms a key barriers towards market excellence, impeding the market
• North America leads the global AI in medical coding market, while Asia-Pacific is projected to growth at a faster rate during the forecast period.

Component Analysis

Outsourced segment forms a major leader in AI in medical coding market

The market for AI in medical coding is significantly fragmented into In-house and Outsourced segments, based on component analysis. Amongst these, the outsourced segment dominated the global AI in medical market occupying a commendable market revenue share of 72.5% in the year 2023. The substantial market share signifies the use of AI in various medical coding processes. When medical coding services are outsourced to specialized vendors, it allow several healthcare professionals to gain the benefits of AI-driven coding excluding initial capital investment. Thus, this assists in the provision of cost-effective solutions, particularly for smaller healthcare settings. Hence, outsourcing coding services ensures accuracy in coding, and compliance, relieving in-house staff from coding burdens.

On the flip side, a significantly CAGR of 22.3% is projected to witness by In-house segment owing to data security and customization. Due to its ability to provide a noticeable control over the data and ensuring compliance with strict regulatory standards, many healthcare organizations prefer in-house solutions. In addition to this, in-house solutions also offer real time access to coding service, promoting quick witted turnaround times.

End User Analysis

Healthcare provider segment captures a commanding market share

Based on end use, the market for AI in medical coding is significantly fractionated into Healthcare providers, Medical Billing Companies and Payers segment.  Owing to the effective role of healthcare provider segment to implement and benefit from AI based coding services, the segment occupies a valuable market share of 62.4% in the year 2023. Focusing to ameliorate operational efficiency, declining coding error and elevate revenue cycle management, hospitals, medical centers and clinics incorporate AI based medical coding in their workflow. The incorporation allow the healthcare providers to streamline the coding process, accelerate billing process and ensure appropriate code assignments. Thus, this leads to high adoption of AI as its cuts off the cost and escalate revenue of industry.

• Approximately, 82.4% of physician offices in the U.S. were making use of electronic health records in 2021, according to Centre for Disease Control and Prevention.

On a contrary, the payers segment is anticipated to showcase faster growth rate during the prophecy period. A critical role is played by AI in healthcare revenue management and claims processing, leading the segment to hold a substantial market portion. Aiming to accurately streamline the processes, identify fraudulent activities and improve operational efficiency, many health insurance companies adopt AI driven coding systems into their sectors.

Key Market Segment

By Component

• In-house
• Outsourced

By End User

• Healthcare providers
• Medical Billing Companies
• Payers

Market Drivers

Escalating healthcare data volume

AI driven medical coding solutions has witnessed a remarkable market growth by virtue of  combination of factors. The rapid increase in healthcare data volume acts as a potent catalyst propelling the adoption of AI within complex terrain of medical coding. The healthcare sectors and institutions deals with vigorous influx of data extracted from medical records, diagnostic reports and treatment histories. This intimidating challenge doesn’t flow smoothly with the long-establised manual coding processing, necessitating the modern medical coding processes. AI based medical coding allow swift management of loaded data, appropriately examining information and apply them to diagnostic and procedural context. Thus, this not only enhances the pace but also improves coding efficiency while alleviating chances of inaccuracies.

• Approximately, 33,356,853 hospital admissions across US were reported by American Hospital Association’s Hospitals statistics in 2022, necessitating medical billers and coders in the market.

Market Restraints

Data breaches and security troubles

The major hindrance cutting off the swift flow of AI in medical coding market comprise of data privacy and security concerns. Healthcare industry deals with abundant sensitive patient data, encompassing medical chronicles and personal information. Adhering to strict regulatory privacy framework such as Health Insurance Portability And Accountability Act (HIPAA) in United States is the crucial factor to ensure safety and privacy of patient data. Data breaches and unsanctioned access even in minor lapses leads to severe legal and financial troubles towards healthcare profesionals. The built trust among patients and healthcare providers is brutally eroded, leading to declining AI adoption in healthcare sectors causing market hindrance.

Opportunities

Integration of AI based medical coding in healthcare sectors

The operations in healthcare facilities are streamlined by virtue of integrating AI into medical coding processes, lessening the time burden on healthcare professionals. Thus, with the redirection of resources towards more impactful facets of healthcare delivery, there is improvement in efficiency leading to satisfactory patient care. Apart from coding, healthcare professionals chose AI for vast healthcare applications such as diagnostics to personalized treatment plans. Thus, AI reshapes the entire healthcare landscape, providing an appropriate guidance in the era of patient centric care.

Impact of Macroeconomic factors

Inflation Likely to Influence Market Growth

With the persisting inflation, the maket for AI in Medical Coding will be affected to a considerable extent. With the increase in costs, the production costs for various AI based medical coding tools will also soar. This will greatly influence customer behavior. In addition, with the increase in production costs, businesses will likely lower their investments in the research and development efforts. This will impact innovation in the market, which in turn will influence competition and by extension maket growth.

Latest Trends

Several new advancements in the artificial intelligence based medical coding landscape has led to growth of the market. Some of the useful innovations are as follows:

Automated Coding Systems

AI based automated coding systems employ machine learing algorithm in order to scrutinize clinical documentation and assign precise medical codes automatically, assisting in reduction of errors and manual efforts.

Deep learning for Image recognition

Image recognition in medical coding employs deep learning algorithms, especially in pathology and radiology. This aids in the analysis of medical images such as MRIs, CT scans and X-Rays helping the healthcare professionals to easily diagnose and code the related information.

Interoperability

Nowadays, efficient data exchange and thriving adoption of AI in medical coding frameworks is as a result of electronic health record platforms and healthcare IT systems integrated with AI based medical coding systems, forming a factor of importance.

Regional Analysis

North America is the Most Dominating Region in the AI in Medical Coding Market

Among all the geographies considered, North America stood at the forefront of AI in medical coding market, owing to the technological advancements and ameliorated healthcare foundation. In addition, the region witnesses chronic illness abundance necessitating the advanced tools for diagnosing and treating the disease. Thus, the rising cases of chronic diseases coupled with advancements in technologies fosters the market growth in the region, occupying a significant market share of 34.7% in the year 2023.

• To exemplify, United States is alone to witness approximately 2,018,030 new cancer cases in 2022, demanding methodical medical billing procedures, according to American Cancer Society (U.S).

Asia-Pacific on the other hand is anticipated to luxuriate market growth with a CAGR of 16.4% during the foreseen period. This ascendency owes to soaring government initiatives, outsourcing opportunities, and improvement in healthcare infrastructure in Asia-Pacific region.

Key Regions and Countries

• North America
  • US
  • Canada
• Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Russia
  • Netherland
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • South Korea
  • India
  • New Zealand
  • Singapore
  • Thailand
  • Vietnam
  • Rest of APAC
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • South Africa
  • Saudi Arabia
  • UAE
  • Rest of MEA

Key Players Analysis

Developing key players are concentrated on various strategies to develop their particular companies in foreign markets. Several AI in Medical Coding market companies are concentrating on growing their R&D facilities and existing operations. Furthermore, businesses in the AI in Medical Coding market are developing a portfolio and new product expansion strategies through mergers, investments, and acquisitions. Market players are subject to intense competition from top market players, particularly those with strong brand recognition and high distribution networks. In addition, numerous key players are now concentrating on different marketing strategies, such as increasing awareness about advanced AI features, which is expanding the growth of target products.

The most prominent AI in Medical Coding market players

• Clinion
• CodaMetrix
• Diagnoss
• 3M Health informaton Systems
• Cerner Corporation
• HRS Coding
• Zydoc
• nThrive
• M-Scribe Technologies
• TruCode
• Streamline Health

Recent Developments

• In March 2023: AI powered medical coding solution was launced by a key healthcare technology company, ‘Clinion’. This advanced service especially designed for clinical trials, improves efficiency, precision and expedite the speed of medical coding in clinical trials.
• In May 2023: A partnership was established between Codametrix and Henry Ford Health to launch joint Autonomous Bedside Pro Medical Coding System. This enabled doctors to record clinical documentation in real time, scrutinized by AI algorithms to provide precise legal codes.

Report Scope