Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid


71% of Healthcare Execs Anticipate Revenue Cycle Growth in 2016

Healthcare revenue cycle executives are likely to see a bump in revenue and patient volume throughout the rest of 2016, a new report says.

By Catherine Sampson

- Healthcare revenue cycle managers are likely to have their hands full through the rest of 2016 as the industry sees increases in revenue, patient volume, and opportunities for mergers and acquisitions, according to a new report from CIT Group.

Healthcare revenue cycle executives are expecting increases in capital spending, costs, patient volume and revenue for the rest of the year.

The outlook report indicated that 71 percent of healthcare executives expect their revenues to increase this year, while 55 percent are expecting to seek out financing within the next 12 months. Almost half of the 164 respondents to the survey believed that capital spending would increase, while only 20 percent thought it would soften. Additionally, 67 percent believe volume growth will increase.   

“Our projected budget for the year reflects financial stability and profit margins of three to five percent over the previous year,” one participant said.

“We are gaining more patients as well as expanding,” another executive said.

Almost half of executives believed most of their organizational growth would stem from opening new practices. The executives said that there were more discussions around financing for investing in acquisitions in 2016 compared to 2015.

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Although executives had an optimistic tone regarding revenue, they were not as thrilled about costs, the report implied. Executives are under the impression that higher costs are negatively impacting care and that a large number of consumers may be skipping out on follow-up visits to save money. A majority of executives believed that increases in healthcare expenditures were not sustainable.

They believed that providers, insurance companies as well as pharmaceutical companies all shared a responsibility for helping to lower healthcare costs. Also, many executives said their organizations were trying to find ways to alleviate these cost issues. Many reduced costs by negotiating with insurance companies, updating technology and getting rid of some procedures.

Merger and acquisitions trends were a hot topic among executives. During the rest of 2016, 53 percent expect merger and acquisition activity in the industry as a whole to increase.  Additionally, 89 percent of participants believed mergers and acquisitions help keep revenue high.

Three out of four participants believed mergers and acquisitions would allow providers to place more attention on the provisions of care over business management. They also believed mergers and acquisitions could lead to greater efficiencies, increased revenues as well as reduced competition. However, executives were also under the impression that mergers and acquisitions usually benefit a provider but not a consumer.

Opinions varied as to what has been driving the expansion of healthcare mergers and acquisitions. A little over half of participants thought purchase price as a driver, while 46 percent held the opinion that strategy caused the expansion.

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“When considering investment and financing plans, significantly more executives are considering acquisitions than even a year ago,” the report said.

Within the last 12 months, 63 percent of executives were personally part of a merger or acquisition. Most found the experience to be “somewhat positive.” The greatest challenges for many of the mergers or acquisitions process were operations, finance and human resources. Executives were involved in various types of mergers. For example, there were vertical, market extension, horizontal and product extension mergers.  

A little over half of executives felt that companies being bought out for a merger or acquisition were valued just right, while 25 percent thought they were priced too high.

Capital spending is expected to increase because of information technology, new goods and services, new hires renovation and acquisitions, the report said.

Technology was a huge concern among executives. A majority of survey participants are expecting reliance on technology to continue. They believed that technology will continue to improve quality and reduce costs.

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“But with higher stakes, the challenge will be now to seamlessly incorporate technology industry-wide without compromising security,” the report said.

Seven in ten executives said their business already switched to an EHR system. In many cases, the systems were able to communicate with other providers. In fact, 48 percent of US physicians have the ability to share medical records electronically with clinicians outside their practice, the report said.

However, only 27 percent were actually satisfied with their EHR system. Seventy percent of executives are considering other IT investments so their EHR system will be able to communicate with providers within and outside their network.

Most of the executives in the survey believed the government should maintain some role and authority over the healthcare industry.  Most were also “relatively supportive” of the Affordable Care Act.

“In addition, executives are more open to government involvement with regulating the industry, but there is still very little consensus on how to measure success and utilize outcomes,” the report said.

Overall, trends for 2016 are expected to be similar to conditions from 2015, the report said.

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