Is Medical Terminology Software Becoming the Backbone of Modern Healthcare Systems?

The global medical terminology software market size was valued at USD 1.17 billion in 2024 and is predicted to hit around USD 3.34 billion by 2034, rising at a 10.94% CAGR, a study published by Towards Healthcare a sister firm of Precedence Research.

Ottawa, Dec. 04, 2025 (GLOBE NEWSWIRE) -- The global medical terminology software market size is calculated at USD 1.3 billion in 2025 and is expected to reach around USD 3.34 billion by 2034, growing at a CAGR of 10.94% for the forecasted period.

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Key Takeaways

North America held a major share of the market in 2024.
Asia Pacific is expected to grow at the fastest CAGR in the studied years.
By application, the quality reporting segment led the medical terminology software market in 2024.
By application, the reimbursement segment is expected to grow notably during 2025-2034.
By end user, the healthcare providers segment registered dominance in the market in 2024.
By end user, the healthcare payers segment is expected to witness rapid expansion in the coming years.

What is Medical Terminology Software?

The global medical terminology software market mainly refers to the industry for providing computer programs that standardize and manage medical vocabulary, and is growing rapidly due to the critical need for accurate health data. Its benefits span applications like streamlining documentation for providers, improving patient safety by reducing errors, and enabling precise coding for insurance and reimbursement for payers. Key growth factors include the increasing adoption of Electronic Health Records (EHRs), growing government initiatives to promote health information technology (HCIT), and the integration of advanced technologies like AI and machine learning to improve efficiency and data integrity.

What are the Key Drivers in the Medical Terminology Software Market?

A prominent driver is that the implementation of EHRs and other digital health solutions has created a significant demand for standardized medical terminology to ensure accurate clinical documentation. The need for interoperability and standardization is a strong push for software that can unify medical terminology, allowing for precise data exchange between different healthcare providers and systems. Integration of artificial intelligence and machine learning is an emerging drive that can enhance efficiency and adaptability, giving companies a competitive edge.

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What are the Major Trends in the Medical Terminology Software Market?

In September 2025, Wolters Kluwer launched this GenAI-powered clinical decision support platform. Built by doctors, it provides clinicians with fast, reliable, evidence-based answers for better decision-making.
In May 2025, Ambience Healthcare unveiled an OpenAI-powered engine that showed a 27% increase in coding accuracy during pilot testing. The company plans to expand its rollout to prominent medical institutions.
In March 2025, Wolters Kluwer and Microsoft are collaborating to integrate Wolters Kluwer's UpToDate content into Microsoft's Copilot Studio. This uses generative AI to deliver personalized, evidence-based medical content within clinical workflows.

Impact of AI on the Medical Terminology Software Market

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.

What is the Emerging Challenge in the Medical Terminology Software Market?

One of the most significant challenges emerging in the medical terminology software market is the high cost associated with implementing, integrating, and maintaining these advanced systems. Healthcare providers often require substantial investments in infrastructure upgrades, staff training, system customization, and ongoing technical support to ensure that the software operates seamlessly across clinical, administrative, and billing workflows. Smaller hospitals, specialty clinics, and resource-limited healthcare settings may find these expenses difficult to manage, which slows market penetration and adoption.

Another major challenge is the increasing integration of artificial intelligence and natural language processing into clinical documentation, coding, and real-time decision support tools. While AI and NLP solutions enhance automation and improve documentation accuracy, they also raise concerns related to potential algorithmic bias and inconsistent performance across diverse patient populations.

Regional Analysis

How did North America Dominate the Market in 2024?

In 2024, North America captured the biggest revenue share of the market. The well-developed healthcare infrastructure is an early adopter of healthcare IT solutions, including medical terminology software. Supportive government initiatives and regulatory frameworks, the region in which the presence of major players in medical terminology software, such as 3M Health Information System and Intelligent Medical Object. The region is a leader in integrating advanced technologies, such as AI and machine learning, into healthcare.

For instance,

In April 2025, HIPAA also introduced stricter security rules for electronic health information (ePHI), such as mandatory multi-factor authentication and data encryption, which require robust terminology management to ensure compliance.

United States: Market Analysis

The United States represents one of the most mature and technologically advanced markets for medical terminology software due to its highly digitized healthcare ecosystem and stringent regulatory requirements. The rapid adoption of electronic health records, combined with expanding value-based care programs, has created a strong need for accurate, standardized clinical language systems that support interoperability across hospitals, payers, laboratories, and public health agencies. U.S. healthcare providers are increasingly relying on AI-enabled coding assistance, automated clinical documentation improvement tools, and advanced terminology mapping systems to reduce administrative burdens and ensure precise medical billing.

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Asia’s Rapid Growth in Medical Terminology Software Market:

Asia Pacific is anticipated to expand at a rapid CAGR during 2025-2034 in the medical terminology software market. The rapidly expanding healthcare infrastructure, with significant growth in the number of hospitals and clinics, particularly in emerging economies. Rising burden of chronic diseases and an ageing population, increasingly investing in healthcare technologies, and the growth of the medical tourism sector in countries like Singapore and India.

For instance,

In September 2024, India's Ayushman Bharat Digital Mission (ABDM) had created over 670 million digital health IDs and linked more than 420 million health records, vastly expanding the need for standardized medical terminology.

India: Market Analysis

India is emerging as a fast-growing market for medical terminology software as the country accelerates its digital transformation in healthcare through national programs and private sector investments. The expansion of electronic health record initiatives, rising demand for uniform clinical coding, and the increasing use of telemedicine platforms are driving the adoption of terminology management tools across hospitals, diagnostic centers, and health-tech companies. India’s healthcare system faces challenges linked to inconsistent documentation practices, shortage of trained medical coders, and high patient volumes, making automated terminology software an essential enabler for accuracy and workflow efficiency.

U.S. FDA and EMA: Approved Medical Terminology Software in 2024-2025

US FDA
Approval pathways	For medical software approval, such as 510(k) clearance for devices "substantially equivalent" to existing ones, and De Novo classification for new low-to-moderate-risk products.
Guidance updates	For "AI-Enabled Device Software Functions: Lifecycle Management and Marketing Submission Recommendations,"
EMA
European Union AI Act	For new regulations for AI systems.
Product Lifecycle Management (PLM) Portal	EMA continued its work on the PLM portal, which aims to improve the management of medicinal product data, including terminology.
Clinical trial software	For pharmacovigilance and clinical trials.

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Segmental Insights

By application analysis

Which Application Led the Medical Terminology Software Market in 2024?

The quality reporting segment accounted for a dominant share of the market in 2024. The growing regulatory orders and growing healthcare reimbursement models that link payments to quality metrics. Improve patient safety, thereby pushing healthcare providers to invest in robust terminology solutions. Rising need for accuracy and efficiency, emphasis on healthcare quality to improve overall patient care and outcomes.

In June 2024, Clinical Architecture partnered with Ready Computing to create a solution for consolidating and improving clinical data quality for healthcare organizations.

However, the reimbursement segment is predicted to expand at a lucrative CAGR. The increasing complexity of billing and insurance processes creates a need for automated, precise solutions that keep up with changes in reimbursement policies. Reduced administration burdens, the software assists in the navigation of frequently changing reimbursement policies.

By end-user analysis

What Made the Healthcare Providers Segment Dominant in the Market in 2024?

The healthcare providers segment held a major revenue share of the medical terminology software market in 2024. With the emphasis on patient safety and data accuracy, healthcare organization are rising to adopt and integrate the EHR system. An increase in spending on IT and software within healthcare organization is leading to the adoption of new solutions that enhance existing technologies and product offerings. By automating tasks and improving data accuracy, the software helps providers reduce costly mistakes and streamline their operations, such as clinical documentation and billing processes.

In May 2024, eClinicalWorks, a widely adopted EHR system for outpatient settings, announced the release of Sunoh.ai, an AI-powered voice assistant focused on clinical documentation for dental practices. It was designed to enhance efficiency and patient care.

On the other hand, the healthcare payers segment is estimated to expand rapidly in the predicted timeframe. Enhance claims processing and reimbursement efficiency, insurance companies use medical terminology software to standardize data, which allows them to more efficiently detect fraudulent claims. With growing regulatory complexities, payers are adopting medical terminology software to streamline their operations.

What are the Revolutionary Developments in the Medical Terminology Software Market?

In March 2025, IntelliCare (InterSystems), an AI-enabled EHR, was launched. It offers real-time encounter-note generation to reduce the administrative burden of clinical documentation.
In May 2024, Clinical Architecture and Ready Computing these companies partnered to offer a solution for integrating data from multiple sources and improving overall clinical data quality.
In March 2024, Google introduced this AI-powered tool. It is designed to assist medical professionals by providing AI-driven search and answer capabilities within the healthcare context.

Who are the Leaders of Medical Terminology Software Market?

Wolters Kluwer Health
3M
Vital
Amazon Web Services
inVerita
Athena Health, Inc.
Intelligent Medical Objects
B2i Healthcare
Hiveworx
Cerner Corp
eClinicalWorks
Clinical Architecture, LLC

Top Companies’ Info.

3M is an American multinational company that applies science and innovation to various sectors. It offers Terminology Consulting services for terminology analysis, implementation, and data mapping services. The net sales of the fourth quarter of 2024 were $6 billion, and those of the full year 2024 were $24.6 billion. (Source: 3M)
eClinicalWorks offers solutions tailored to various healthcare specialties, ensuring that every patient receives the best care possible. The full-year 2024 revenue was $1 billion, compared to $917 million in 2023.

Segments Covered in this Report

By Application

Quality Reporting
Reimbursement
Data Aggregation
Clinical Trials
Others

By End-User

Healthcare Providers
Healthcare Payers
Others

By Region

North America
- U.S.
- Canada
Asia Pacific
- China
- Japan
- India
- South Korea
- Thailand
Europe
- Germany
- UK
- France
- Italy
- Spain
- Sweden
- Denmark
- Norway
Latin America
- Brazil
- Mexico
- Argentina
Middle East and Africa (MEA)
- South Africa
- UAE
- Saudi Arabia
- Kuwait

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Towards Healthcare is a leading global provider of technological solutions, clinical research services, and advanced analytics, with a strong emphasis on life science research. Dedicated to advancing innovation in the life sciences sector, we build strategic partnerships that generate actionable insights and transformative breakthroughs. As a global strategy consulting firm, we empower life science leaders to gain a competitive edge, drive research excellence, and accelerate sustainable growth.

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