Can We Lower Healthcare Costs Outsourcing to the Philippines?

Executive Summary

Healthworks Collective is committed to examining practical ways the U.S. healthcare system can control spending without lowering standards of care, including the growing use of outsourced medical and administrative services in the Philippines. It is a topic that blends economic pressure, global labor trends, and patient access into a single conversation that affects nearly every household.

There are few sectors where Americans feel rising costs as directly as they do with hospital bills, insurance premiums, and out-of-pocket expenses. Keep reading to learn more.

Why U.S. Healthcare Providers Are Looking Overseas

A report by the Peter G. Peterson Foundation states that U.S. healthcare spending reached $4.9 trillion in 2023, averaging $14,570 per person. It is difficult for families to absorb those figures when wages and household budgets do not rise at the same pace. There are only so many ways hospitals and insurers can respond, and labor expenses sit near the top of the list. It is within this financial pressure that overseas staffing models, particularly in the Philippines, have gained serious attention.

A report by the Centers for Medicare and Medicaid Services shows that U.S. health care spending grew 7.2 percent in 2024. It is a growth rate that outpaces inflation and places long-term strain on both public programs and private insurers. There are concerns that without structural changes, similar increases will continue year after year.

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Healthcare changes: What to expect in the next decade

A study of hospital operations shows that almost 75% of hospitals with more than 300 beds outsource IT services, with even higher adoption among smaller facilities. You can already see how technology roles such as billing support, electronic records management, and appointment systems have shifted away from on-site teams. It is not limited to software maintenance, as many providers also rely on overseas staff for coding, claims processing, and patient scheduling. There are clear cost differences between domestic and Philippine technical labor markets that make these choices financially attractive.

You can trace much of this trend to the Philippines’ long history of English-language medical training and U.S.-aligned clinical standards. It is common for Filipino nurses, coders, and support specialists to hold certifications recognized by American healthcare systems.

You can also see how time zone differences extend operational hours for hospitals without increasing domestic payroll. It is possible for overnight administrative backlogs in the U.S. to be cleared while American offices are closed.

There are broader economic effects as well, including the ability for providers to redirect savings into equipment upgrades or rural clinic access. It is this redirection of funds, rather than staff replacement alone, that often determines whether outsourcing lowers patient costs or merely reshuffles internal budgets.

You can expect this model to keep expanding as insurers negotiate tighter reimbursement schedules and hospitals search for predictable operating costs. It is no longer a temporary experiment but a permanent feature of modern healthcare finance.

You can measure the real success of healthcare outsourcing by whether patients notice slower billing cycles or reduced coverage gaps. There are signs that lower administrative overhead can support more stable pricing when paired with careful quality control. It is this balance between savings and service reliability that will shape how far U.S. providers continue to rely on Philippine healthcare support networks.

It is likely that future debates about American healthcare affordability will focus less on whether outsourcing should happen and more on how it should be regulated and monitored. You can expect patient advocacy groups and hospital associations to push for transparency in how savings are passed along to consumers. There are already calls for clearer reporting on which services are handled overseas and how patient data is protected in the process.

You can view the Philippines not as a distant technical vendor but as a long-term partner in the financial structure of U.S. medicine. It is this partnership, when carefully managed, that has the potential to ease cost pressure without changing how patients experience care at the bedside.

Healthcare outsourcing to the Philippines has evolved from a cost-reduction tactic into a proven operating model used by leading US healthcare organizations for over two decades. Major payers such as UnitedHealth Group, Mayo Clinic, Cigna, and Blue Cross Blue Shield rely on Philippine delivery—both captive and third-party—for patient access, revenue cycle operations, and administrative support. Today, the services most successfully outsourced include patient scheduling, eligibility verification, revenue cycle management, denial management, prior authorization support, selective medical coding, and non-clinical healthcare customer service. When governed correctly, healthcare outsourcing to the Philippines delivers sustainable 50–60% cost-savings while protecting revenue integrity, regulatory compliance, and patient data.

Why healthcare outsourcing success is now about precision—not scale

For more than two decades, healthcare outsourcing to the Philippines has quietly evolved from early experimentation into a stable, large-scale operating model used by some of the most sophisticated healthcare organizations in the United States. What has changed in recent years is not whether outsourcing works, but how precisely healthcare leaders now approach what they outsource, how they govern it, and which services consistently deliver results without increasing regulatory or patient-data risk.

In 2026, healthcare executives are no longer asking if the Philippines can support healthcare operations. That question has already been answered. The real question is far more disciplined: which healthcare services have proven, repeatable operating models that protect revenue integrity and patient data at scale?

The answer is narrower—and more deliberate—than many assume.

Two Decades of Proof: Why the Philippines Is a Healthcare Outsourcing Mainstay

The Philippines’ role in global healthcare operations is not new. Large US healthcare organizations began building Philippine delivery models in the early 2000s, long before healthcare outsourcing became a mainstream strategy.

UnitedHealth Group operates one of the world’s largest healthcare captive centers in Manila, employing more than 20,000 Filipino professionals across claims processing, revenue cycle operations, customer support, analytics, and administrative services. Other healthcare organizations that have been outsourcing to Manila include Mayo Clinic, Cigna, and Blue Cross Blue Shield. They relied on third-party BPO providers in the country for administrative and member-support services for many years.

This longevity matters. Healthcare providers of this scale do not sustain offshore delivery models for decades unless quality, compliance, and economics consistently hold up under regulatory audits, payer scrutiny, and operating-model shifts.

As Ralf Ellspermann, CSO of PITON-Global, notes: “When you see healthcare organizations operating large Philippine delivery centers for over a decade, that’s not experimentation—that’s validation. It proves offshore healthcare delivery works when governance, compliance, and service selection are done correctly.”

Why Healthcare Outsourcing Carries Higher Stakes Than Other BPO Models

Healthcare outsourcing operates in a category apart from most other outsourcing verticals.

In retail or telecom, failures lead to customer dissatisfaction or brand erosion. In healthcare, failures can disrupt cash flow, trigger regulatory enforcement, expose protected health information (PHI), and, in some cases, influence downstream clinical decisions.

PHI is among the most tightly regulated data categories under US law—more protected than financial data and more sensitive than standard personally identifiable information. Medical histories, mental-health records, substance-use treatment data, genetic information, and HIV status carry lifelong consequences if mishandled.

“Healthcare outsourcing isn’t just another BPO vertical—it’s an entirely different risk category,” says John Maczynski, CEO of PITON-Global, a leading BPO advisory firm. “It’s the only industry where a single data incident can trigger federal investigations, where coding errors can affect downstream clinical decisions, and where regulatory non-compliance can threaten an organization’s license to operate.”

Because of this, not all healthcare services should be outsourced—and successful organizations are highly selective.

The Healthcare Services That Are Actually Working Offshore

1. Patient Access and Front-Office Operations

Patient access remains the most commonly and successfully outsourced healthcare function today.

Philippine teams routinely support appointment scheduling, patient intake, insurance eligibility and benefits verification, referral coordination, and patient reminders. These services are interaction-heavy, operationally scalable, and highly measurable.

When teams are trained in US healthcare terminology, payer logic, and HIPAA workflows, offshore performance consistently matches or exceeds onshore benchmarks for administrative interactions.

2. Revenue Cycle Management (RCM) Support

Revenue-cycle outsourcing has matured well beyond basic billing.

Philippine providers now support charge entry, claims submission, payment posting, denial management, and AR follow-ups by payer category—operating as embedded extensions of US RCM teams.

High-performing programs show faster denial resolution, improved clean-claim rates, and reduced days in AR without increasing audit exposure.

“Processing volume means nothing if it increases denials or delays reimbursement,” Maczynski explains. “Revenue protection has to be engineered into the delivery model from day one.”

Table 1: Healthcare Functions by Outsourcing Risk Profile

3. Medical Coding (Selective and Audited)

Medical coding can be outsourced successfully—but only when done surgically.

The Philippines now has a deep pool of ICD-10, CPT, and HCPCS-certified coders supporting inpatient and outpatient volumes. Successful organizations typically outsource coding for specific specialties or overflow volumes while retaining US-based coding leadership and enforcing layered QA and audit review.

Coding is not outsourced indiscriminately—it is governed tightly.

4. Prior Authorization and Utilization Support

Prior authorization is one of the fastest-growing outsourced healthcare services due to its administrative burden and payer complexity.

Offshore teams manage documentation preparation, submission tracking, payer follow-ups, and status monitoring. Clinical decision authority remains onshore, protecting medical judgment while reducing turnaround times.

5. Health Information Management and Documentation Support

Non-clinical HIM services are now routinely outsourced, including records indexing, abstraction, release-of-information processing, and chart-completion tracking. These functions benefit from the Philippines’ strong compliance culture and structured workflows.

6. Healthcare Customer Service (Non-Clinical)

Healthcare customer service has expanded well beyond basic inquiries.

Philippine teams now support billing questions, payment plans, explanation-of-benefits clarification, patient-portal navigation, and post-visit follow-ups—particularly for non-clinical interactions where empathy, clarity, and process knowledge matter most.

What These Roles Actually Cost: US vs. Philippines

Contrary to outdated assumptions, the most successful healthcare outsourcing programs do not rely on extreme labor arbitrage. Leading organizations pay above-market Philippine wages to attract experienced healthcare talent and reduce attrition.

The benchmarks below reflect a 10–15% wage premium in the Philippines, resulting in sustainable 50–60% cost savings.

Table 2: Annual Fully Loaded Cost Comparison (Healthcare Roles)

Case Study: How a US Health System Stabilized Revenue Without Increasing Compliance Risk

Organization
Mid-sized US multi-hospital health system (6 hospitals, ~420 beds)

Challenge
Administrative costs and staffing shortages pushed days in AR to 58 days and denial rates to 13%. Leadership sought offshore support under strict HIPAA governance.

Philippines Scope
Patient scheduling, eligibility verification, payment posting, AR follow-ups, denial management, and prior-authorization documentation. Clinical authority and final payer escalation remained US-based.

Results (After 12 Months)

• Days in AR reduced from 58 to 42
• Denial rate reduced from 13% to 8.9%
• First-pass claim acceptance improved by 13 points
• Cost per transaction reduced by 54%
• Zero HIPAA incidents or audit findings

As Maczynski notes: “This wasn’t about speed or headcount reduction. It was about disciplined service selection, phased rollout, and governance that respected healthcare’s risk profile.”

How Programs Mature Over Time

Table 3: Typical Healthcare Outsourcing Maturity Path

PITON-Global’s Role in Healthcare Outsourcing

Since 2001, PITON-Global has served as an independent outsourcing advisory firm focused on healthcare and regulated services. The firm has successfully assisted healthcare organizations—including hospitals, revenue-cycle companies, payers, and digital-health platforms—in outsourcing front- and back-office operations to the Philippines.

PITON-Global does not operate BPOs and does not sell outsourcing services. Its role is advisory: helping healthcare leaders determine which services to outsource, which providers have genuine healthcare specialization, and which delivery models hold up under audit and regulatory scrutiny. The firm’s healthcare BPO advisory, guidance, and supplier sourcing services are provided entirely free of charge and come with no obligation.

The Strategic Takeaway

Healthcare outsourcing to the Philippines is no longer experimental.

Patient access, revenue-cycle operations, medical coding, prior authorization, HIM support, and healthcare customer service are already being delivered successfully today—at scale—across the US healthcare system.

The difference between success and failure is not location.
It is service selection, governance discipline, and execution rigor.

In healthcare, the most expensive mistake is not outsourcing.
It is outsourcing the wrong services—or outsourcing them the wrong way.