- The global healthcare revenue cycle management outsourcing market is slated to significantly increase, with its valuation rising from just $11.7 billion in 2017 to $23 billion by the end of 2023, a new market report shows.
The authors of the report, The Market Reports, project the growth in the global healthcare revenue cycle outsourcing management market to increase at a compound annual growth rate (CAGR) of 11.9 percent from 2017 to 2023.
Healthcare revenue cycle management outsourcing should become a more attractive option for healthcare organizations of all sizes as providers and executives focus on reducing costs and increasing efficiencies.
In fact, 80 percent of hospitals in a recent Black Book survey said they were vetting or considering full revenue cycle management outsourcing by 2019. About 18 percent of the over 700 hospital leaders surveyed also reported already fully outsourcing their revenue cycle management functions.
Respondents said their organizations are looking to outsource more functions to realize cost efficiencies, reduce spending, and focus on value-based care initiatives.
“In today’s challenging circumstances, outsourcing the administrative functions to third-parties seem to be a reasonable solution. This will not only help physicians focus on their core task by freeing up their time and resources but will also improve their practice’s revenue,” the market report stated.
Outsourcing healthcare revenue cycle management functions may help healthcare organizations improve several key performance indicators (KPIs).
“Practices and hospitals that have outsourced their revenue cycle management function to third-party experts have experienced significant improvement in their collection rates, denial resolution efficiency, patient satisfaction rates, and revenue,” the report continued.
Healthcare organizations are also considering outsourcing more revenue cycle management functions to access data analytics tools through third-party vendors, the authors added.
“Revenue management analytics is gaining traction in the healthcare industry due to its ability to align the activities and documentation of front-end physician practice managers and administrators and the back-end central billing office,” the market report stated. “Analytics is helping in delivering insightful results and streamlining operations as well as improving patient collections, workflows, and patient care.”
The global healthcare revenue cycle management outsourcing market will likely remain fragmented, the market report added.
With no one clear market leader, key players in the market include a range of different health IT companies and products. According to The Market Reports, key players during the period will include Conifer Health Solutions, nthrive, optum360, Change Healthcare, McKesson RelayHealth, Parallon, MedData, MedAssist, The SSI Group, Availity, Accretive Health, GeBBS Healthcare, and Cerner.
Many of these revenue cycle management outsourcing companies also earned top spots in the recent Black Book survey. Conifer, Parallon RCM Point, and Relay Health were popular among large hospital chains and health systems, while small hospitals preferred Xtend Navient, TruBridge, and MediRevv.
R1 RCM Inc. and Cerner RevWorks also scored top points for end-to-end revenue cycle management outsourcing among physician practices and groups.
While the global healthcare revenue cycle management outsourcing market is currently fragmented, the authors predict greater consolidation as the period goes on.
“The industry is expected to remain innovation-led, with frequent acquisitions and strategic alliances adopted as the key strategies by the players to increase their industry presence. Market stays in mature period with a clear concentration,” the market report stated.
The healthcare revenue cycle management market has already shown symptoms of the acquisition bug. Notably, Navicure and ZirMed announced their intentions to merge in September 2017. The $750 million deal combined the products from both health IT companies by November that year.
More recently, health IT company Cognizant acquired Bolder Healthcare Solutions, a revenue cycle management vendor for hospitals, physician practices, and other specialist organizations.
Revenue cycle management company R1 RCM Inc. also announced in February 2018 that it will acquire Intermedix Corp in a $460 million deal. Intermedix Corop provides revenue cycle management, practice management, and analytics solutions to physicians and emergency medical services.
But current healthcare revenue cycle management outsourcing vendors can use the shrinking market to their advantage, authors of the market report stated.
“Meanwhile, optimize product mix and further develop value-added capabilities to maximize margins,” they wrote. “Manufacturers can take advantage of this situation by reinforcing their production units and supply-chains to avoid any delay in production turn-around-times (TAT) and supply-lead-times.”