Economic Brief

ECONOMIC BRIEF: Medical Billing Industry

Economic Brief: Medical Billing Industry

By Jane Doe

ECO100

Professor: Dr. Bernie East

October 23, 2018

Introduction

This economic brief addresses several important characteristics of the Medical Billing Industry (NAICS – Sector 54, Subsector 541618). It describes the goods and services that this industry provides other sectors of the economy, namely the Health Care and Insurance Industries. It also discusses the Medical Billing Industry’s market structure, its projected future employment, and the over sight of government in this market.

Industry Goods and Services

The medical billing and coding field is well on its way to becoming a billion-dollar industry. Professionals in this field are in high demand by hospitals, clinics, and other medical facilities because it is their job to translate complex medical records into understandable and standardized codes that are then used to bill patients and insurance companies. They are also responsible for collecting payment from patients, determining their medical history, and transcribing this information into shorthand that can be understood by the necessary parties. (1)

Market Structure and Characteristics

The US Heath Care system has been rapidly transformed by automation, outsourcing, and overhauls to the medical billing industry. These changes have contributed to the rise of medical billing giants like Athenahealth, eClinicalWorks, McKesson, and others. (2) While the dominance of these firms suggests an oligopoly market, there is still room for home-based firms and mid-sized firms. (3) As suggested by Sculley (nd), with the right combination of people, smaller firms can pass on reduced costs to clients by being agile and flexible in this ever-changing market. (2)

Microeconomic Relationships, Market Outcomes, and/or Trends

One notable trend in the Medical Billing Industry is a potential increase in demand for qualified medical billers and coders. According to the Bureau of Labor Statistics (BLS), “the number of positions in the field of medical records and health information technicians — which includes medical billers and coders — will increase 13% between 2016 and 2026. This industry’s growth rate is faster than the national average for all occupations, and approximately 27,800 new positions will be added by 2026.” (4) One of the factors contributing to this growth is an aging population that requires health information technicians and health care service providers. See chart of BLS information below. (5)

How Government Intervention May Impact the Industry

The government may impact this industry through the False Claims Act of 1863 which allows any whistleblower to earn money from exposing cases of fraud against the federal government. Under the False Claims Act, anyone who exposes fraud against the federal government is entitled to a percentage of the damages owed by the offending party to the federal government. Because the US federal government spends billions of dollars on various healthcare programs, (i.e. Medicare, ACA, etc.) some of the highest payouts to whistleblowers were the result of exposing fraud in this industry. One relevant case involved eClinical Works which agreed to pay $155 million to resolve a False Claims Act lawsuit that alleged it gave customers kickbacks for publicly promoting its products. (6) Government oversight in this industry is necessary and helps reduce health care costs by reducing fraud.

Reference Page

1. Aslam, S. (2018). Medical Billing and Coding: The State of the Industry. Retrieved from https://www.meditec.com/blog/med-billing-coding-industry/

2. Sculley, M. (nd). Medical Billing Companies Share How They’ll Compete with Major Competitors. Retrieved from: https://www.practicesuite.com/practicemanagement/medical-billing-companies-share-theyll-compete-major-competitors/

3. Addessi, F. (2018). How to Start a Home-Based Medical Billing Service. Retrieved from https://www.thesimpledollar.com/how-to-start-a-home-based+medical-billing-service/

4. MB&CC (nd). Retrieved from https://www.medicalbillingandcoding.org/qnas/the-coder-is-in-demand-medical-billers-coders/

5. Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Medical Records and Health Information Technicians, on the Internet at https://www.bls.gov/ooh/healthcare/medical-records-and-health-information-technicians.htm (visited October 29, 2018).

6. Sullivan, T. (2017). eClinicalWorks to pay $155 million to settle suit alleging it faked meaningful use certification. Retrieved from: https://www.healthcareitnews.com/news/eclinicalworks-pay-155-million-settle-suit-alleging-it-faked-meaningful-use-certification

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