What is BPO in the medical industry?

Late last year, as many of us were reflecting on the year that was, global consultancy Deloitte instead gazed into its crystal ball to predict what was around the corner for the medical sector. After riding a roller-coaster of budget constraints, workforce pressures and pandemic hangover in recent times, hospital and health executives would have been hoping for positive news but Deloitte Healthcare Sector Leader Tina Wheeler soon set them straight.

M_BlogT_What is BPO in the medical industry

“You’ve got rising labor costs, higher interest rates and of all these financial pressures,” she told Chief Healthcare Executive magazine1, highlighting that many hospitals were continuing to wrestle with operating margins just above the break-even point.

Fortunately, Ms Wheeler also provided them with a way to ease their pain.

“Hospitals need to figure out, health systems in particular and maybe even payers … what are they good at and what areas would they want to consider outsourcing,” she explained.

“Everything from rev cycle, billing, claims, finance, HR, clinical administration, supply chain – all of things can be entirely or partially outsourced … (and) that’s a huge trend that we see (in 2024).”

Studies have found that more than 90% of U.S. hospitals have already outsourced at least one of their processes2, which is not surprising given the extensive benefits that flow from such strategic partnerships. Partnering with BPOs in medical has long helped providers stay ahead of competitors and a key reason the global healthcare outsourcing market is tipped to reach $312 billion by 20253.

To assist healthcare providers in their ongoing battle to balance quality patient care with fiscal responsibility, this comprehensive guide to BPO in medical will provide readers with insights into the benefits of the strategy, roles that can be outsourced and why the Philippines is the destination of choice for many hospitals and services.

Hospital outsourcing market size 2022 to 2032

Source: Healthcare outsourcing to balloon to $380Bn in 2024 – study - Outsource Accelerator

What is BPO in the medical and healthcare industry?

BPO in the medical and healthcare industry refers to the implementation of a Business Process Outsourcing strategy to improve hospital or healthcare performance. By assigning certain tasks to external providers or individuals, healthcare executives and managers can address challenges such as talent shortages, budget constraints or productivity concerns. Roles that can be supported by specialist third-parties include medical transcription and billing, customer support, human resources and IT.

Medical processes and services that can be outsourced to BPO providers

The medical BPO industry can manage a range of clinical and administrative roles including:

  • Medical coding and billing: the processing of medical records is a key foundation of any hospital or health service but it is by no means a simple exercise. Medical coding and billing require a specific skills set and keen eye for detail, with inaccuracies and delays taking an enormous toll on health providers. Avoid such heartache by outsourcing these functions to quality BPO providers that have the resources to perform such duties efficiently and accurately and, in turn, speed up the revenue cycle.
  • Healthcare IT solutions: like all industries, the medical sector is increasingly reliant on technology and it is essential that such solutions are supported by highly qualified IT personnel. BPO providers that specialize in tech support are a vital resource for many hospitals and health services, while external medical-IT consultants can help implement solutions such as Electronic Health Records (EHR) and other platforms that benefit care coordination.
  • Medical claims: insurance is a hugely important part of the medical sector, with hospitals and health providers’ very existence often reliant on the swift and accurate processing of claims. Any delay can be extremely costly and with potentially thousands of claims to be processed each day, it can be the most overwhelming of administrative tasks. For that reason, many health CFOs are investing in BPO providers that blend skilled professionals and advanced technologies to ensure the efficient and effective processing of large volumes of insurance claims.
  • Medical transcription: every minute clinicians do not need to spend on admin duties is an extra minute they can spend on patient care, hence why physicians, surgeons and general practitioners relish partnering with BPO providers that support medical transcription. Along with wasting their precious time, extensive transcription responsibilities can result in physician burnout and the risk of potentially costly mistakes. A better option is to outsource this important service to specialist agents who are committed to transcription excellence.
  • HR and other admin: the modern hospital or health service is essentially a business and thus needs to tackle all the administrative functions that any busy organization encounters. This is where BPO providers truly shine. From managing a medical service’s HR needs to overseeing the management of payroll, quality outsourcing partners are well versed in ensuring the smooth running of back-office procedures so clinical staff on the frontline can deliver. Best of all, they do so at a fraction of the cost of in-house staff.

6 medical services to outsource

Benefits of outsourcing healthcare processes

Outsourcing in the healthcare sector can deliver multiple benefits including:

  1. Improved patient care: the wellbeing and care of patients lies at the heart of the medical sector, which is why administrators should aim to relieve clinicians of as many repetitive administrative duties as possible. Partnering with a BPO provider ticks this box as they take responsibility for non-core and often time-consuming tasks and allow physicians, nurses and allied health professionals to increasingly focus on their patients.
  2. Better scalability: hospitals and health services are familiar with the need to balance periods of peak demand (eg: flu season) with quieter times of the year. BPO providers are an excellent resource for walking this tightrope as they allow services to scale their staffing numbers up or down without disrupting workflows. This scalability is also a financial winner as it gives administrators the flexibility to reduce wage bills during slower periods.
  3. Improved revenue collection: in the never-ending battle to balance budgets, medical BPO firms ease the load by tracking patient service revenue from the start of treatment to the last bill payment. As experts in tracking and following up partially paid accounts receivable, investigating unpaid balances and navigating the insurance claims process, they help improve accuracies, boost approvals and payments and ultimately increase revenue.
  4. Sustainable growth: while the acute strain from labor shortages, inflation and the global pandemic are set to ease in 2024, respected consultancy McKinsey & Co says health-system margins continue to lag behind their pre-COVID financial performance4. Outsourcing’s ability to cut overheads and labor expenses by up to 70% is crucial in helping hospitals and health services achieve sustainable growth, which is all the more appreciated when budgets are tight.

Reasons to partner with BPO providers in the Philippines

As one of the world’s leading outsourcing destinations, the Philippines is an obvious choice for hospitals and health services looking to implement a BPO strategy.

  • Remote work expert: the BPO sector has benefited from the rise of cloud technology, with offshore teams able to collaborate seamlessly with their in-house colleagues. This is particularly so for health-related tasks as many repetitive and time-consuming administrative duties such as medical coding, billing and transcription can be easily completed by BPO teams.
  • 24/7 support: few institutions epitomize the ‘open-all-hours’ ethos more than hospitals, which makes the presence of support teams in different time zones a huge boost for health executives. Just as people want to be able to shop online whenever they choose, patients now expect to be able to book appointments and make inquiries at whatever time suits them. Employing offshore admin staff helps make this service a reality for healthcare providers without breaking budgets to pay overtime or penalty rates. Creating coding teams that blend in-house and offshore staff is also a great way to process data and claim around the clock and ensure faster returns.
  • Data security and compliance: HIPAA compliance and other regulations play a crucial role in protecting the privacy, security and integrity of protected health information, which is why any BPO partnership needs to be rooted in an unwavering commitment from outsourcing providers to adhering to such standards. The Philippines prides itself on hosting a BPO sector that is committed to complying with other nations’ health standards and employing data security technology that maintains the highest levels of patient confidentiality.
  • Work ethic: with so many moving parts, the healthcare industry is built on a foundation of teamwork and it is essential for newcomers to meet the standards set by their colleagues. This is one area where the Philippines outsourcing sector thrives, with the nation having a reputation for nurturing hard workers who take immense pride in their integrity, professionalism and work ethic. Going the extra mile is a given for the vast majority of healthcare staff and it is reassuring to know their offshore counterparts in the Philippines are equally committed.


While outsourcing has long been a game-changing strategy across multiple sectors, many healthcare executives are only now starting to realize its full potential. BPO in the medical industry is set to have an increasing impact on patient care, staff productivity and financial bottom lines in coming years and the sooner hospitals and health services look outside their own organizations for support, the sooner they will be achieving better outcomes.

Technology will never fully replace face-to-face consultations but telehealth is undoubtedly here to stay. Discover how telehealth has become ‘the new normal’ and the role outsourcing is playing in bolstering services.