U.S. Revenue Cycle Management Market Size, Share & Trends Analysis Report By End User, By Product Type, By Component, By Delivery Mode, By Physician Specialty, By Sourcing, By Function, And Segment Forecasts, 2022 - 2030

Report Overview

The U.S. revenue cycle management market size was valued at USD 126.1 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 10.3% from 2022 to 2030. The rapidly transforming healthcare system and adoption of digitalization are paving a path for implementing healthcare IT services such as revenue cycle management (RCM) systems to organize and streamline workflows of healthcare organizations using synchronized management software solutions. RCM solutions are an integration of payment models, reimbursement guidelines, codes, and third-party payers. Medical services are facing complex challenges in billing and precise payment, which is anticipated to drive the demand for innovative RCM solutions. The availability of advanced innovative RCM solutions offered by renowned third-party service providers enables the healthcare industry to leverage the economic value and efficacy of these RCM solutions while simultaneously focusing on improving patient care.

The growing trend for outsourcing healthcare RCM solutions is majorly driven by value addition, business prospects, and finances. The healthcare industry is rapidly growing and evolving in the U.S. owing to the growing healthcare expenditure, rising number of well-established healthcare facilities, increasing healthcare IT spending, advancing healthcare IT infrastructure, and increasing emphasis on the patient-provider relationship. According to Centers for Medicare and Medicaid Services estimates in 2020, U.S. healthcare spending was recorded at USD 12,350 per capita and accounted for 19.7% of the country’s GDP.

Healthcare systems are implementing digital processing for reimbursements, codes, and claims management, which is driving market stakeholders to accommodate factors such as growth in risk-sharing, execution cost limits, and value-centric reimbursement structures. Healthcare organizations are demanding workflow optimization solutions, which, in turn, is expected to accelerate the market growth. Growing favorable government support and regulatory reforms are anticipated to support growth.

Outsourcing of revenue cycle management systems and services is driving the adoption rate of these solutions. Furthermore, the advantages associated with outsourcing RCM services are cost-effectiveness, adherence to existing regulations and guidelines, planning and staffing, training, and maintenance. Since the implementation of RCM systems and services requires certain skill sets and resources, healthcare facilities are readily outsourcing these services from third-party vendors. Moreover, the RCM market is undergoing regular advancements with value-added features such as data analytics and integration of artificial intelligence and machine learning algorithms in the existing product offerings. For example, predictive analytics will present unique data analysis and understanding. For instance, it is possible to understand a patient’s ability to pay the bill on a particular day if an email is sent at a predefined time. In addition, it is possible to predict reimbursement trends depending on past trends. It is possible to depend on analytical tools to determine RCM workflow, which can help the staff prioritize claims and generate good returns.

COVID-19 U.S. revenue cycle management market impact: an increase of 17.2% market growth between 2019 and 2020

Moreover, market players are focusing on strengthening revenue cycle platforms through cloud-deployed models. The growing adoption of telemedicine and homecare offering value-based care is expected to support market growth. For instance, in February 2020, a veteran healthcare employee announced the launch of HealthRev Partners, which is completely focused on consultative-style revenue cycle management for hospice and home health agencies across the U.S. The company seeks to advance traditional RCM practices by offering a more consultative, modern approach by directly managing complex, daily billing, and coding processes by closely working with clients for improving operational efficiency. These improvements have a direct impact on security and financial success, with no high costs related to consulting services.

The U.S. healthcare industry is constantly progressing and adopting advanced technological solutions. Healthcare organizations’ revenue cycle managers need to identify opportunities to improve productivity, efficiency, patient fulfillment, and enhance financial and operational outcomes of the organization. Some of the identified opportunities to improve effectiveness include the creation and implementation of high-quality care practices, improved profit collection rates, minimized organizational overhead and vendor supervision time, enhanced patient satisfaction, and better account receivable outstanding timeline. The adoption and implementation of RCM solutions face a major restrain in the availability of skilled IT professionals. Some other challenges hindering adoption are rising costs, insurance claims management, and adequate resource allotment and management. Moreover, the Covid-19 pandemic created instabilities and uncertainties in workforce requirements for different RCM functions. The existing healthcare systems and current staffing model were disrupted due to the pandemic and remote working.

The ongoing pandemic had a dramatic impact on several sectors of the healthcare industry and caused disruptions in the normal functioning of the existing healthcare systems. Healthcare organizations’ sustainability was challenged due to a decline in revenue earnings. Due to the sharp increase in patient volume, there was a significant impact on healthcare expenses and medical billing complexities, which directly contributed to a surge in demand for outsourced revenue cycle management solutions across the U.S. The growing demand for RCM systems and services drove market players to integrate value-added features such as remote coding services, payer connect, reporting, audit, and analytics to serve the growing demand.

Component Insights

The services segment dominated the market in 2021 and accounted for a revenue share of over 65.0%. Healthcare facilities are readily outsourcing RCM services from third-party vendors owing to the multiple advantages such as cost-effectiveness, staffing and training, and compliance to rules and regulations. The services segment is anticipated to register the fastest growth rate over the forthcoming years owing to various strategic initiatives undertaken by established market players. For instance, Cerner Corporation divested its RCM outsourcing business to R1 RCM Inc. in 2020 to integrate the technological platform and capabilities of the two companies.

Similarly, in October 2019, SOC Telemed announced the completion of the pilot stages and beta testing of its RCM service that has been in use since January 2019, by deploying at strategic partner hospitals around the U.S. The company’s RCM service is focused on the billing of telemedicine services and its related financial liability from the hospital. This service aids in effectively capturing the available revenue for clinical partners, to ensure the sustainability of their telemedicine program through cost reduction.

Some of the RCM services offered to healthcare organizations are medical coding, medical billing, patient management solutions, and others. The software segment is expected to grow steadily owing to the growing demand for digitalization and streamlining of operational workflows to improve patient care. The growing amount of unorganized data rising from multiple healthcare functionalities requires centralization and consolidation, which is anticipated to contribute to the growth of the software segment.

Product Type Insights

The integrated system segment dominated the market in 2021 and accounted for a revenue share of over 70.0% owing to the constant technological advancements and widespread adoption of integrated RCM solutions by healthcare organizations. The integrated solutions segment is anticipated to register the fastest growth rate over the forthcoming years. Integrated solutions provide a synchronized and streamlined platform for financial activities with a standardized data collection and analysis process.

Integrated systems are end-to-end systems enhancing an organization’s data sharing and interoperability capabilities. Integrated solutions enable the healthcare workforce to enhance productivity, minimize costs, and increase net operating margins. Lastly, the growing need to reduce human errors and speed up administrative functions contributes to the growth of integrated RCM solutions.

Delivery Mode Insights

Web-based delivery mode dominated the market in 2021 and accounted for a revenue share of over 55.0%. Web-based solutions are being increasingly implemented since these solutions can be installed off-site and do not require additional hardware or storage. Affordability and rapid deployment are some of the benefits offered by web-based solutions. athernaOne, e-Hospital Systems, Simplex HIMES, and Advanced HIMS are some examples of web-based practice management solutions.

The cloud-based segment is anticipated to register the fastest growth rate over the forthcoming years. Cloud computing is revolutionizing the healthcare industry and offers increased cost-effectiveness and higher flexibility to users. Furthermore, cloud-deployed solutions offer safe and secure medical data sharing and automate backend processes. Cloud-based solutions enable healthcare facilities seamlessly manage electronic health records, and patient portals, and operate mobile applications. Lastly, cloud-deployed solutions are developed to improve operations, enhance resource procurement, and improve infrastructure dependability.

End-user Insights

The hospitals segment dominated the market in 2021 and accounted for a revenue share of over 55.0%. The growing presence of renowned and well-established hospitals in the U.S. and a growing number of patient care regulatory reforms and guidelines introduced by regulatory agencies are driving the hospitals segment. Hospitals are focusing on implementing innovative revenue cycle management solutions by collaborating with vendors to transform the reimbursement scenario, which is anticipated to boost segment growth. Moreover, the growing demand to optimize hospitals’ workflow to improve efficiency and productivity is driving the adoption of integrated RCM systems in hospitals.

The physician and clinical services segment is anticipated to register the fastest growth rate over the forecast period owing to the growing number of physicians in the U.S. In physician offices and clinical services, revenue cycle management systems are used by nursing staff, office managers, and consultants to ensure the smooth functioning of the healthcare facility. Moreover, the Covid-19 pandemic increased the demand for remote monitoring and physician consultations, which is anticipated to contribute to the segment growth. Private physician offices and clinical services are readily outsourcing RCM systems and services to address their unmet financial needs.

Physician Specialty Insights

The others segment dominated the U.S. market in 2021 and accounted for a revenue share of over 70.0% owing to the growing insurance coverage policies for various applications, which directly impact the demand for revenue cycle management solutions in different healthcare specialties. For example, substance abuse billing is the area where addiction/rehab centers face challenges due to loss in revenue and rescheduled payments. Numerous drug rehabilitation hubs and psychiatric organizations are shutting down due to the rapidly changing regulations and insurance policies.

The cardiology segment is anticipated to register the fastest growth rate over the forthcoming years. Cardiology treatments are expensive procedures and require RCM services as it enhances the procedure effectiveness, patient care, and seamlessly manages medical billing. According to the Centers for Disease Control and Prevention estimates, approximately 6.2 million American adults have heart failure and in 2019, heart failure was the underlying cause of 874,613 deaths. The rising prevalence of cardiovascular diseases directly increases the workload burden on healthcare providers and healthcare payers, which is expected to drive the segment. Thus, in order to handle the patient medical data, RCM is used for easy handling of the patient’s records. The billing workforce must need to have a comprehensive knowledge of the correct codes and converters necessary for cardiology methods like various forms of percutaneous coronary intrusions, pacemakers, and peripheral vascular methods.

Sourcing Insights

The in-house segment dominated the U.S. market in 2021 and accounted for a revenue share of over 70.0% owing to the multiple benefits associated with in-house sourcing such as maintaining complete control of entire coding operations, patient information confidentiality, and accessibility of in-house medical billers. One of the major challenges faced by in-house RCM services is the requirement of a lot of medical staff to handle the patient’s medical data. Healthcare providers need to employ trained billers and coders, which can result in backlogs if a single of them is ineffective, jeopardizing the entire revenue cycle. The outsourced RCM services segment is anticipated to register the fastest growth rate over the forecast period. Outsourced RCM services have become an attractive opportunity for small, medium, and large healthcare companies as executives and providers are focused on decreasing costs and improving efficiency.

In addition, the healthcare industry is observing an increase in the outsourcing of billing activities by physicians and hospitals due to mandatory execution of the intricate ICD-10 coding structure, growing care costs, and a national decree to implement electronic medical records to sustain compensation levels. Outsourcing of RCM lowers staff responsibility and improves collection level and pace by decreasing denials. In addition, the contracted companies generally deliver on-demand details regarding everyday finances. However, these services can be expensive, with fees centered on subscriptions or percentage of collection. Many companies are entering into partnerships to improve their services. For instance, in April 2018, Cognizant purchased Bolder Healthcare Solutions—an RCM vendor for physician practices, hospitals, and other professional organizations. In addition, R1 RCM Inc. acquired Intermedix Corp. in February 2018. Intermedix Corp offers practice management, RCM, and analytics solutions to emergency medical facilities and physicians.

Function Insights

The claims management segment dominated the U.S. market in 2021 and accounted for a revenue share of over 50.0% owing to the rapidly growing patient pool, increasing geriatric population, and the emergence of favorable government initiatives pertaining to medical insurance coverages. The change in population demographics, along with the increase in risk or value-based reimbursement model, is driving the need for improved prediction and supervision of revenue cycles, especially for high- and at-risk patient populations. Many U.S.-based providers still struggle with low operating margins, due to poor accounts receivable and growing average denial numbers. On average, providers pay USD 25 to rework each claim that is refused. Under the U.S. health plan, the average number of claims processed is 1 billion and it covers roughly 100 million individuals. Around 10% to 20% of the overall claims are refused or need recycling because of ineffective claim management.

The care management segment is anticipated to register the fastest growth rate over the forecast period owing to the increasing demand for virtual health applications to handle healthcare emergencies. The growing prevalence of chronic disorders is a major concern. Chronic conditions result in the highest morbidity and mortality in the U.S., and the monetary costs are also high. Annually, in the U.S., the expenditure on treating chronic illnesses is nearly USD 3 trillion and the lost productivity cost is over USD 1 billion. These health consequences and high costs are largely avoidable as some chronic conditions can be avoided or controlled to lower their impact. Mobile health apps can change the healthcare business by enhancing a patient’s capability to handle circumstances in a considerably easy manner.

Key Companies & Market Share Insights

The key players in the U.S. market are focusing on devising numerous business strategies such as innovative product development, geographic expansions, technological collaboration, partnerships, and mergers & acquisitions. For instance, in February 2020, Waystar Health launched Hubble, an AI/RPA integrated platform used for revenue cycle process automation. Through this platform, revenue capture is increasing using predictive analytics and advanced machine learning algorithms. These advanced add-on integrations automatically recognize missing charges, coding variances, and DRG anomalies based on an organization’s past billing practice. The Hubble platform enables a seamless financial experience for patients and helps determine patients’ ability and likelihood to pay. Some prominent players in the U.S. revenue cycle management include:

• NXGN Management, LLC

• athenahealth, Inc.

• McKesson Corporation

• OncoSpark, Inc.

•  Epic Systems Corporation

• The SSI Group, Inc.

• AllScripts Healthcare LLC

• eClinicalWorks

U.S. Revenue Cycle Management Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the country level and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2030. For the purpose of this study, Grand View Research, Inc. has segmented the U.S. revenue cycle management market report on the basis of end user, product type, component, delivery mode, physician specialty, sourcing, and function:

• End-user Outlook (Revenue, USD Billion, 2016 - 2030)

  • Hospitals

  • Physician & Clinical Services

• Product Type Outlook (Revenue, USD Billion, 2016 - 2030)

  • Integrated System

  • Standalone System

• Component Outlook (Revenue, USD Billion, 2016 - 2030)

  • Software Solution

  • Services

• Delivery Mode Outlook (Revenue, USD Billion, 2016 - 2030)

  • On-premise

  • Web-based

  • Cloud-based

• Physician Specialty Outlook (Revenue, USD Billion, 2016 - 2030)

  • Oncology

  • Cardiology

  • Anesthesia

  • Radiology

  • Pathology

  • Pain Management

  • Emergency Service

  • Others

• Sourcing Outlook (Revenue, USD Billion, 2016 - 2030)

  • In-house

  • External RCM Apps/ Software

  • Outsourced RCM Services

• Function Outlook (Revenue, USD Billion, 2016 - 2030)

  • Product Development

  • Member Engagement

  • Network Management

  • Care Management

  • Claims Management

  • Risk and Compliances