Revenue Cycle Management – The Right Choice for Your Health Care Needs
The revenue cycle management market was valued at US$140.220 billion in 2022 and will increase to US$288.287 billion by 2029. Over the forecast period, this market is estimated to increase at a compound yearly growth rate of 10.87%.
The financial procedure of tracking patient care cycles from registration and appointment scheduling to final balance payment using medical billing software used by healthcare organizations is referred to as revenue cycle management (RCM). Patient registration, medical programming, insurance eligibility & verification, payment, and AR management, as well as claim processing, are all part of revenue cycle management. Patients, billing agencies, healthcare professionals, and insurance payers are the four most important RCM components.
According to analysts, the increasing demand for revenue cycle management owing to the increasing demand for proper healthcare revenue management will be the driving force behind the market’s robust growth over the forecasted timeframe.
Advanced RCM solutions are in high demand due to the fast-rising era of digitalization in healthcare. In healthcare settings, the growing number of various data silos and disorganized workflows is paving the way for market growth and development. As the healthcare industry continues to evolve at a rapid pace, the necessity for good healthcare infrastructure systems has evolved. The demand for effective management systems in hospitals, as well as the medical area, is propelling the revenue cycle management market forward. According to a study published in the American Journal of Medicine in 2020, around 80% of medical billings in the United States featured at least one inaccuracy, driving up the demand for revenue cycle management. Due to rising patient volumes and the digitalization of administrative, clinical, and financial data, the volume of electronic data created in the healthcare business has reached terabytes. In hospitals and healthcare facilities, this needs the deployment of proper revenue cycle management software. AI’s potential to optimize clinical and non-clinical procedures, hence eliminating a slew of problems for patients, providers, and the health industry as a whole, is propelling its adoption in the field. Integrating Artificial Intelligence with RCM can result in several significant improvements in the overall management of the healthcare infrastructure. During the forecast period, the use of RCM in conjunction with AI is likely to boost the revenue cycle management market. To expand market share, market participants use a variety of techniques such as mergers, acquisitions, collaborations, partnerships, and expansions. Cerner Corporation, for example, announced the sale of Cerner RevWorks, its RCM outsourcing business, to R1 RCM Inc. in June 2020. This is expected to aid in the integration of both firms’ technological platforms and expand R1’s RCM capabilities. As a result, the aforementioned factors are projected to drive the market throughout the forecast period.
Revenue cycle management’s market expansion could be hindered by issues like high maintenance costs.
Maintaining revenue cycle management systems up to date comes at a high price. IT support and maintenance services, which include adapting and updating software to meet changing user needs and maintaining a functioning IT infrastructure, are also recurring expenses. This accounts for a sizable chunk of the entire ownership cost. Furthermore, establishing bespoke interfaces for device integration after the sale necessitates additional testing and validation to assure solutions’ integrity and completeness. As a result, the overall cost for healthcare providers will increase even more. Due to the high expenses of replacing existing systems with RCM solutions, small healthcare facilities, particularly in developing countries, are unwilling to do so.
The claims and denial segment of the revenue cycle management market is expected to develop at a swift speed.
The assessment of the denial procedure is part of claims and denial management. The root cause analysis for the claim being refused by the insurer is done by solution providers of denial and appeal management. This entails going over the patient’s paperwork and resubmitting the claim. Third-party solution providers are frequently used by hospitals and medical care institutions that lack expert personnel. These firms, which have a thorough understanding of and familiarity with insurers’ provider standards, contact insurers with explanations and payment requests. A big portion of hospital revenue is being lost as more healthcare institutions come under more scrutiny and the number of healthcare claims rises. According to the US Justice Department, cases involving healthcare fraud and false claims in the United States recovered more than US$ 2.6 billion in 2019, up from US$ 2.5 billion in 2018 and US$ 2.1 billion in 2017. Furthermore, BKD CPAs & Advisors announced a new service in November 2020 geared at assisting clients in identifying and avoiding insurance denials. Annually, avoidable insurance claim denials might cost a company 3 percent or more of its net revenue. Companies that provide claims denial and appeal services have become more significant to hospital facilities as their acceptability has grown. As a result, these facilities will contribute to the market’s growth over the forecast period.
The cloud-based segment of the revenue cycle management market is estimated to grow at a significant pace.
Due to enhanced flexibility and cost-effectiveness for end-users, the cloud-deployed category is expected to develop at the fastest rate in the coming years. Medical data sharing has become simple and secure thanks to cloud-based solutions. It streamlines backend procedures and makes it possible to create and secure telehealth apps. In addition, cloud-based solutions save healthcare organizations money by allowing them to deal with electronic health records, patient registries, big data analytics, and mobile applications without incurring additional costs for server maintenance. To improve resource procurement, infrastructure dependability, and operations, cloud-based technologies have been developed.
During the projected period, the hospital segment followed by the physician’s office is expected to grow at a fast-moving pace in the revenue cycle management market.
In terms of market value and share, the hospital segment is expected to dominate. This segment’s dominance is due to an increase in patient admissions, which results in more revenue for hospitals. Hospitals use this solution to efficiently manage the revenue collection process, resulting in the segment’s growth during the study period. According to a poll conducted by AKASA in 2021, more than 78.0 percent of hospitals in the United States are employing this service. Furthermore, RCM services are heavily employed in the Physician’s back office. Practice management systems are being used more in medical offices in the United States, as per the Association for Service Management International. Physicians and their personnel, including nurses, consultants, and management staff, use these technologies regularly to help their units run well. The market for revenue cycle management is likely to be driven by the growing focus on expanding number of physicians and other health care facilities across the area.
During the forecast period, the revenue cycle management market in North America is predicted to have a dominating share.
The expanding presence of physician’s offices in the United States accounts for a high revenue portion of the market. Regulatory reforms, such as the ICD-10 modifications in 2015, have resulted in information technology in healthcare systems, with a considerable increase in demand for healthcare IT services including revenue cycle management systems to improve efficiency and care delivery. Furthermore, the region’s market benefits from the existence of major, well-known healthcare institutions and well-established treatment centers, as well as the growing demand to reduce healthcare costs and favorable regulations.
Covid-19 Insights
The emergence of the COVID-19 pandemic has had a significant impact on RCM’s medical market expansion. During the pandemic, the increasing pace of activity in the healthcare and medical sectors enhanced market demand for revenue cycle management solutions. As of February 2022, more than 420 million COVID-19 cases had been identified throughout Europe, the Asia Pacific, the Americas, Africa, and Oceania, according to WHO data. The daily increase in COVID cases in hospitals & healthcare facilities enhanced the need for proper and improved management of medical infrastructure, resulting in increasing demand for RCM solutions in the medical area.
