Assessment of the US Revenue Cycle Management Market, Forecast to 2022

How Value-Based Care is Transforming the Ecosystem
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Published: 31 Oct 2017

Revenue cycle management (RCM) refers to myriad administrative and clinical functions around the capture, management, and collection of patient service revenue. The RCM process starts with admission (patient access) and continues through to accounts receivable (payment and collections). A variety of RCM solutions (e.g., IT applications and services) are deployed to help healthcare providers perform different functions. The objective of this research service is to present a comprehensive analysis of the US RCM market with respect to trends, revenue growth potential, and the dynamics at play for RCM information technology (IT) and services deployed by hospitals and physician practices through 2022. Additionally, the report will • analyze market forces impacting adoption of RCM IT and service solutions among hospitals and physician practices • evaluate existing and emerging regulatory objectives centered on providers’ financial risk management initiatives • highlight best practices in the areas of design and deployment of an integrated financial workflow that supports value-based care • assess the outlook of outsourced or shared service-based RCM operating models • identify 5 major growth opportunity areas related to RCM • estimate the revenue potential of the total US RCM market (software applications and services), and include breakdowns by hospitals and physician practices, from 2016 to 2022 • shortlist vendors that propose best-in-class solutions for hospitals and tphysician practices This study is segmented into major functional segments of RCM, • Patient access • Registration and charge capture • Billing and collection In terms of end-user adoption, this study classifies the buyer market in two broad provider categories: • Hospitals • Physician practices The market projection ($ value) is stratified based on the following overarching RCM product segments: • IT (software applications) • Services Market Background The shift in population demographics coupled with the rise of risk or value-based reimbursement models is driving the need for better prediction and management of revenue cycles, especially for high and at-risk patient populations. The prevalence of legacy RCM IT systems, which do not optimally support the goal of building a broader but coordinated and enterprise-wide financial ecosystem, is restricting providers from achieving the desired results around healthcare cost and collection. Most US-based providers still grapple with low operating margins, resulting from poor accounts receivable (A/R) performance and high average denial volumes. Many health systems attribute this inefficiency to their suboptimal knowledge and implementation of value-based RCM pathways that require significant investments in RCM IT. The need for efficient claims processing, which in turn results in optimized collection of risk-based revenue, supports adoption of value-based financial management solutions. Most providers that embrace alternative payment models acknowledge the need to deploy progressive scheduling, billing, and analytics technology modules capable of digitizing the entire RCM ecosystem. This view results from the growing adoption of payer contracts with specific provisions for efficient claims management, in addition to the need for integrating new capabilities that will meet the increasing financial responsibility of patients with coinsurance and large deductibles. Overall, the top unmet market needs driving adoption of next-generation RCM solutions among health systems in US are: • Comprehensive regulatory compliance and financial risk mitigation • The ability to collaborate with payers to customize revenue cycle workflows • Elimination of preventable operational expenses, attributed to claims processing • Automated identification of hidden patterns and root causes of claim denial • Optimized collection of payments, rebates, and incentives for patient services • Real-time reporting of financial and operational performance at an enterprise level As a result, new growth opportunities involving external RCM solutions have gained precedence among many hospitals and physician practices. Most of them are willing to invest in advanced RCM capabilities that can streamline financial performance cost effectively by paving the way for seamless payer-provider communications pertaining to financial risk management. These end users are likely to prioritize procurement of RCM solutions from external IT vendors based on implementation evidence and cost/benefit benchmarks. Hence, going forward, they are expected to rely on RCM vendors with proven expertise in optimizing financial performance through comprehensive patient access, error-free claims preparation, automated billing workflows, and robust RCM analytics. Vendors with solutions that can complement providers’ incumbent value-based payment arrangements and RCM IT ecosystems are expected to thrive in this market.



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