Revenue Cycle Management Software Investments On The Rise
Providers are looking for software to address labor shortages, inflation, and other major challenges, and revenue cycle management solutions are at the top of their investment lists.
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By - Healthcare providers are doubling down on software investments and they are putting their money on revenue cycle management solutions to address key challenges, according to a new report from KLAS and Bain & Company.
The “2022 Healthcare Provider IT Report: Post-Pandemic Investment Priorities” reveals that about 45 percent of providers accelerated software investment over the past year after a slowdown during the height of the COVID-19 pandemic. Meanwhile, only 10 percent of providers have decelerated spending on software in the last 12 months.
Providers are seeking solutions to address labor shortages, inflation, and organizational changes, such as mergers and acquisitions and leadership changes.
“Covid-19–era staffing shortfalls and burnout among physicians, nurses, and other clinicians, as well as IT and office personnel, continue to plague providers,” the report states. “These shortages led to a pandemic-era spike in wage inflation, which has been further exacerbated by rising wages and product cost inflation in the broader economy over the past 12 to 18 months.”
“As a result, providers are looking to software solutions to boost productivity and automate tasks, with the ultimate goal of stronger financial outcomes and higher-quality patient care,” the report continues.
Providers believe software can help them overcome these top challenges. Software is now a top five strategic priority for nearly 80 percent of provider organizations, while software ranked in the top three priorities for almost 40 percent of provider organizations.
Over the next year, an overwhelming majority of organizations (over 95 percent) anticipate making new software investments. A third of those organizations say the investment will be significant.
The report indicates that revenue cycle management will see the bulk of provider software investment.
Providers interviewed by KLAS and Bain for the report cited revenue cycle management as their top provider investment priority over the next year, followed by security and privacy, patient intake/flow, clinical systems, and telehealth.
“Providers of all types cited RCM [revenue cycle management] as a top priority for the next year, pointing to a broad set of specific priorities, including revenue integrity, charge capture, and complex claims, and underscoring a robust set of RCM needs across the provider ecosystem,” the report states.
Researchers explain that revenue cycle management software will be vital in the current economic environment considering how solutions can drive cash collections and address the “labor-intensive nature of revenue cycle processes.”
Smaller provider organizations can especially benefit from revenue cycle management software investment as they navigate complex payer contracts and work to catch up with larger health systems that have already invested in revenue cycle management solutions, according to the report.
Larger health systems will continue to invest in business process outsourcing and the adoption of enhanced revenue cycle management software modules, such as artificial intelligence and complex claim capabilities, researchers say.
However, finding the right investment may be a challenge for providers. Over half of providers are struggling with a large number of offerings in the market, the report shows. Many providers also invested in clinical and operational solutions during the pandemic and are now overwhelmed with their technology portfolio, which hinders them from staying current on new offerings in the market.
To overcome the challenges of software investment, almost three-quarters of providers (72 percent) say they plan to tap existing vendors with proven solutions before considering offerings from new vendors.
Another 71 percent are looking to their EHR vendors for new solutions before looking at other companies.
“While provider tech stacks have become larger and more sophisticated, EMRs remain the single most critical software solution for most providers. Our research shows that many providers are taking a second look at new or enhanced offerings from their EMRs in areas such as telehealth,” the report states.
Researchers point out that EHR vendors have expanded their offerings to providers. Epic, for example, has “aggressively pursued product adjacencies to elevate its value proposition beyond core EMR,” which has included revenue cycle management capabilities.
