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Table of Content
April 2025
Principal Consultant
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The global medical terminology software market size is calculated at USD 1.17 billion in 2024, grew to USD 1.3 billion in 2025, and is projected to reach around USD 3.34 billion by 2034, increasing at a 10.94% CAGR for the forecasted period 2024 to 2034.
Medical terminology refers to the words and languages used to denote medical and healthcare procedures, conditions, processes, and treatments. It is a universal language, irrespective of diverse geographies and universities. Medical terminology software facilitates accurate and efficient management of medical terminologies. It addresses the issue of out-of-vocabulary words and improves communication in a healthcare setting. It also aids healthcare professionals in making effective clinical decisions without creating confusion. The distinctive and intricate features of biomedical and clinical terminology require more concentrated work on software.
The rising adoption of IT tools and software within the healthcare systems facilitates the adoption of medical terminology software. Favorable government policies and regulatory frameworks support the market growth. The growing demand to reduce medical errors also boosts the market. The increasing collaboration among healthcare professionals enhances the use of medical terminology software to amplify clarity and communication. Technological advancements lead to the development of more user-friendly software tools, potentiating market growth.
Integrating artificial intelligence (AI) in medical terminology software automates the data input process. AI and machine learning (ML) algorithms can analyze vast amounts of patient data and enhance the accuracy and efficiency of the software. They can significantly reduce manual errors by adapting to evolving regulatory standards using ML algorithms. Natural language processing (NLP) can revolutionize the way software is used. This technology can enable the software to comprehend and interpret human language in medical records. Advancements in NLP technology improve the understanding of medical terminology software and enhance regulatory compliance.
Increasing Number of Clinical Trials
The major growth factor of the medical terminology software market is the increasing number of clinical trials. Clinical trials are essential protocols for bringing a drug to market. They are generally conducted in three phases before market approval. This necessitates the use of medical terminology software to complete a clinical trial accurately and efficiently. It performs a wide range of functions, from planning and data collection to reporting and regulatory compliance. Moreover, Phase 4 clinical trials or post-market surveillance trials are necessary to monitor the long-term effects of a drug or medical device after it is approved for market use. This also requires the use of medical terminology software to gather additional data about adverse effects and efficacy in a more diverse population globally.
High Installment Cost
The major challenge faced by the market is the high installment cost of medical terminology software. The software may cost thousands of dollars, limiting the affordability of numerous healthcare organizations in low- and middle-income countries.
Rising Adoption of EHR
The future of the medical terminology software market is promising, driven by the rising adoption of electronic health records (EHR). EHR is an electronic system that maintains the patient's medical data, such as diagnoses, pharmacological information, and drug-disease concepts. It can inform drug discovery, treatment pathways, and real-world safety assessments. According to the Office of the National Coordinator for Health IT, more than 96% of hospitals in the U.S. have adopted EHR systems. Medical terminology software in EHR systems helps with the coding and documentation of diagnoses, treatment regimens, and other patient medical data using a standardized language. It eliminates manual errors and assists healthcare professionals in using universal medical language.
By application, the quality reporting segment held a dominant presence in the medical terminology software market in 2024. Quality reporting refers to the measurement and reporting of quality measures and outcomes data of healthcare providers or organizations. It aims to drive improvements in the quality of care by promoting awareness and encouraging providers to deliver high-quality services. The growing need for high-quality patient care and reduction in medical errors augment the segment’s growth. Several government organizations conduct quality reporting programs to gather vast amounts of data from healthcare organizations across the nation, necessitating the use of medical terminology software.
By application, the reimbursement segment is predicted to witness significant growth in the market over the forecast period. The increasing number of hospitalizations due to the rising incidences of acute and chronic disorders potentiates the need for reimbursement of their healthcare expenses. Several technical terms are used during the claiming and billing process. The use of medical terminology software reduces the burden on healthcare staff, eliminating the need for specialized claims representative in a healthcare setting.
By end-user, the healthcare providers segment will have led the global medical terminology software market in 2024. Medical terminology software enables healthcare providers to transcribe and summarize patient health data. This enables patients to read complex medical terms easily. Integrating it with EHR simplifies the documentation process of clinical notes, reducing manual errors and saving time. Technological advancements such as AI, ML, and NLP and the rising adoption of EHR systems foster the segment’s growth. Apart from the patient-physician conversation, medical terminology software can also simplify radiology and diagnostic test reports.
By end-user, the healthcare payers segment is anticipated to show lucrative growth in the market over the studied period. Medical terminology software helps healthcare payers to manage and process claims, analyze data, and improve efficiency. The increasing number of claims processing facilitates the use of this software. In India, the average health insurance claims have increased by up to 30% in the last three years. The software simplifies the task of healthcare payers, thereby ultimately increasing the speed of claims processing.
North America dominated the global medical terminology software market in 2024. Favorable government policy to use advanced IT tools and services in healthcare organizations drive the market. The increasing investments and collaborations to adopt medical terminology software boost the market. The presence of key players also contributes to market growth. 3M, Intelligent Medical Objects, and Wolters Kluwer Health are the major players that develop advanced software solutions for numerous purposes.
The U.S. government actively supports the adoption of healthcare IT systems through the Office of the National Coordinator for Health IT. The increasing healthcare spending also favors market growth. The federal government spent $1.9 trillion on healthcare programs and services in the fiscal year of 2024.
Health Canada uses MedDRA software to communicate regulatory information effectively for pre- and post-market activities involving health products. It uses MedDRA to express medical concepts in the CTD, describe adverse reactions, and code adverse reaction reports. The Canadian government has invested over $2.1 billion to develop health information technology (HIT).
Asia-Pacific is projected to host the fastest-growing medical terminology software market in the coming years. The rising geriatric population and an increasing health awareness augment market growth. The growing need for standardized medical terminology and the increasing healthcare expenditure drive the market. The increasing number of clinical trials and growing awareness about advanced tools and techniques to revolutionize the healthcare system also fuel the market. Moreover, favorable government support for providing quality healthcare and adopting digital solutions boosts market growth.
The Chinese government has launched initiatives to tackle unequal access to healthcare in various regions, enhancing health outcomes. The adoption rates of EHRs in hospitals in China have increased significantly. More than 16,000 hospitals in China have adopted EHR systems.
The Indian healthcare landscape is transforming due to favorable government initiatives, policy reforms, and technological advancements. Initiatives such as the Ayushman Bharat Digital Mission (ABDM) and the Digital Health Incentive Scheme create awareness to adopt digital solutions, potentiating the use of medical terminology software in India.
Europe is seen to grow at a notable rate in the medical terminology software market in the foreseeable future. The increasing investments, collaborations, and mergers & acquisitions promote the market. European government organizations also launch initiatives to promote and implement healthcare IT solutions for better treatment outcomes and improved patient satisfaction. The European Member States budgeted €14 billion for investments in digital health under the Recovery and Resilience Facility (RRF).
The German government launched the German Medical Informatics Initiative to strengthen the link between medical research and healthcare. A total of 120 million euros were funded for this program from 2016 to 2025. The initiative focuses on interoperability through primary IT systems in patient care, standardized templates for patient consent, and standard rules for data use.
Stacey Caywood, CEO of Wolters Kluwer Health, commented that healthcare vendors have trillions of data points to gain population health insights and advance value-based care. The company’s collaboration with Microsoft enables healthcare professionals to transform troves of data into actions and outcomes to meet current strategic objectives and power future digital health innovations.
By Application
By End-User
By Region
April 2025
April 2025
April 2025
April 2025