Market Sizing is the process of quantifying the addressable opportunity for a product by counting the relevant providers, procedures, and procedure volumes in a market — most reliably using CPT and claims data. It translates clinical activity into a dollar-and-unit estimate of opportunity.
The most defensible method is bottom-up sizing built on healthcare claims data: count the procedures that represent demand for your product, then apply realistic capture assumptions.
Market Sizing is the backbone of go-to-market strategy and fundraising. A vague “billion-dollar market” claim invites skepticism; a bottom-up estimate that counts specific CPT procedures performed by identifiable providers is auditable and persuasive. It shows investors exactly which clinicians and procedures comprise the opportunity.
Operationally, market sizing also guides resource allocation — how many reps to hire, which segments to prioritize, and where the white space is large enough to justify investment.
Bottom-up market sizing counts the actual providers and procedures relevant to a product — usually via CPT and claims data — then multiplies by realistic price and capture assumptions. It produces a defensible, auditable market estimate grounded in real clinical activity rather than broad top-down guesses.
Market sizing is the overall process of estimating opportunity, while TAM (Total Addressable Market) is one specific output — the full demand if you captured 100% of the market. Sizing typically produces TAM along with the narrower SAM and SOM layers.
Identify the CPT or procedure codes that represent demand for your product, count those procedures across the relevant providers and geographies, then apply pricing and penetration assumptions. Claims data anchors the count in real performed procedures.
Because it's auditable. A claims-based size names the specific procedures and provider counts behind the number, so investors can verify the logic rather than trust a top-down estimate. It signals rigor and reduces perceived market risk.