U.S. Revenue Cycle Management Market Size, Share & Trends Analysis Report By End-use, By Product Type, By Component, By Delivery Mode, By Physician Specialty, By Sourcing, By Function, And Segment Forecasts, 2024 - 2030

Market Size & Trends  

The U.S. revenue cycle management market size was estimated at USD 155.59 billion in 2023 and is projected to grow at a CAGR of 10.18% from 2024 to 2030. The rapidly transforming healthcare system, including digitalization, has paved the path for implementing healthcare IT services such as Revenue Cycle Management (RCM) systems to organize and streamline healthcare organization workflows 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 can help healthcare organizations leverage the economic value and efficacy of these RCM solutions while simultaneously focusing on improving patient care.

The outsourcing of RCM by U.S. players is growing due to its increasing popularity. The market is expected to grow significantly due to the complexity and labor-intensive nature of RCM processes, the scarcity of skilled healthcare professionals, the need for cost-effective solutions, and the challenges posed by stringent regulations, financial pressures, & staff shortages in the healthcare industry. As a result, healthcare providers are increasingly opting to outsource RCM tasks to specialized companies to streamline processes, reduce costs, improve accuracy, & focus on patient care over administrative tasks. This trend is expected to continue as providers seek efficient cash flow, cost savings, and enhanced value-based care delivery.

Moreover, market players are strengthening revenue cycle platforms by integrating Artificial Intelligence (AI), electronic health records systems, and data analytics, which contributes to reducing administrative burdens, streamlining workflows, & improving revenue capture. For instance, in September 2022, AGS Health, an RCM solutions provider, launched the AGS AI Platform. This solution blends AI and automation with human-in-the-loop services and experts to maximize revenue cycle performance. This platform can enhance visibility into the day-to-day performance and operations of the revenue cycle, including productivity reports, root cause analysis, intelligent worklists, executive reporting, & customizable dashboards. The growing adoption of telemedicine and homecare offering value-based care is expected to support market growth.

Market Concentration & Characteristics

The chart below illustrates the relationship between industry concentration, industry characteristics, and industry participants. The X-axis represents the level of market concentration, ranging from low to high. The Y-axis represents various market characteristics, including industry competition, degree of innovation, level of mergers & acquisition activities, regulatory impact, product substitutes, and regional expansion. For instance, the U.S. revenue cycle management market is fragmented, with many small players entering the market and launching new innovative products. The degree of innovation is medium, the level of mergers & acquisitions activities is medium, and the threat of substitutes is low. The impact of regulations on the market is high, and regional expansion of players is low.

Several industry players launch new products to enhance their product portfolio. In July 2023, TELCOR, Inc. launched version 21.3 of TELCOR RCM. The update enabled the use of web APIs, Report Designer (expanded use), Executive Module, and other features to improve laboratory productivity & collections.

Key industry players, including the SSI Group, Inc.; eClinicalWorks; McKesson Corporation; Allscripts Healthcare, LLC; athenahealth, Inc.; NXGN Management, LLC; Epic Systems Corporation; and Oncospark, Inc., are involved in merger & acquisition activities to expand their industry presence. For instance, in December 2023, R1 RCM, Inc. acquired Acclara, a technology-driven RCM company from Providence, the largest health system, for USD 675 million in cash and a warrant to buy 12.2 million shares of R1 stock at a strike price of USD 10.52. This acquisition aimed to deliver innovative & cost-effective solutions to support healthcare providers across the U.S., enhance patient experience, maintain regulatory compliance, and minimize administrative burdens.

The impact of regulations on the U.S. revenue cycle management is high. The continuous policy changes and upgradation of regulations are expected to hinder market growth.

RCM is relatively low due to changes in regulatory frameworks, specific demands of healthcare organizations, and varying reimbursement policies across the U.S.However, with the growing adoption of digital healthcare solutions and the increasing need for efficient RCM, the market is expected to witness significant growth in the coming years.

Case Study: Revenue Cycle Optimization

Challenge: A West Coast acute care provider with over 350 beds and USD 1.1 billion NPR faced significant challenges in revenue generation & management. Decreased revenue and increased denials posed a serious threat to its financial health. The root causes included authorization backlogs, billing inconsistencies, and subpar workflow prioritization and governance. Recognizing critical performance gaps, the organization sought expert guidance to identify opportunities and implement changes aimed at enhancing net revenue & accelerating cash collections.

Solution: An acute care provider partnered with Savista, a reputable RCM firm, to address these challenges. Savista conducted a comprehensive assessment that showcased deficiencies in process standardization, visibility & confidence in metrics, and accountability. The company devised a multifaceted solution:

• Process Standardization: Savista outlined 25+ new policies and procedures to prevent denials and review unbilled accounts, ensuring consistency & efficiency across workflows.

• Enhanced Metrics Visibility: Automation of 10 daily-use dashboards provided the organization with greater visibility of performance metrics, enabling informed decision-making & proactive management.

• Accountability Reinforcement:

  Savista defined productivity metrics and Key Performance Indicators (KPIs) to hold staff accountable and ensure adherence to established standards.

Results:

The implementation of Savista's RCM solution yielded remarkable results:

• 48% Increase in Cash Collections > 365 Days: The organization observed a substantial improvement in cash collections, enhancing its financial resilience.

• 81% Reduction in Average Daily Claims on Hold: Reducing claims on hold streamlined the billing process, leading to faster revenue realization.

• USD 75.4 Million Collected in 1 Month: The organization generated significant revenue, surpassing expectations.

• USD 24 Million in Denial Recoveries: Savista's expertise in denial management resulted in substantial recovery of previously denied claims.

• 9+ Day Improvement in Days Out Authorizations: Streamlined authorization processes led to improved efficiency and reduced delays.

Analyst Perspective: RCM outsourcing services represent the transformative impact of strategic interventions in healthcare revenue management. By addressing process flaws, enhancing metrics visibility, and reinforcing accountability, there have been substantial improvements in cash flow, revenue generation, & denial management for the acute care provider. This case highlights the significance of partnering with RCM companies to navigate complex revenue cycle challenges effectively and sustainably.

Component Insights

The services segment dominated the market in 2023 with a market share of over 67.92% and is anticipated to grow at the fastest rate during the forecast period. Healthcare facilities are readily outsourcing RCM services from third-party vendors owing to the multiple advantages, such as cost-effectiveness, staffing & training, and compliance with rules & regulations. In addition, the segment's growth can be attributed to the various strategic initiatives undertaken by established market players.

The software segment is anticipated to grow significantly during the forecast period, owing to growing demand for digitalization and streamlining of operational workflows to improve patient care. The growing amount of unorganized data generated from multiple healthcare functionalities requires centralization and consolidation, which is anticipated to drive the software segment over the forecast period.

Product Type Insights

The integrated segment dominated the market in 2023 with a market share of over 71.60% and is anticipated to grow at the fastest rate during the forecast period. This can be attributed to the constant technological advancements and rapid adoption of integrated RCM solutions by healthcare organizations. Furthermore, integrated solutions provide a synchronized and streamlined platform for financial activities with a standardized data collection and analysis process, which is expected to drive the market over the forecast period. 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 accelerate administrative functions can contribute to the growth of integrated RCM solutions.

Delivery Mode Insights

The web-based segment dominated the market in 2023 with a market share of over 56.92%. 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 examples of web-based practice management solutions. The cloud-based segment is anticipated to grow at the fastest rate during the forecast period.

Cloud computing is revolutionizing the healthcare industry; it offers increased cost-effectiveness and higher flexibility to users. Furthermore, cloud-deployed solutions offer safe and secure medical data sharing & automated backend processes. Cloud-based solutions help healthcare facilities seamlessly manage electronic health records & patient portals and operate mobile applications. Cloud-deployed solutions are deployed to improve operations, enhance resource procurement, and boost infrastructure dependability.

Specialty Insights

The cardiology segment held a significant share of 6.65% in 2023 and is expected to grow at the fastest rate during the forecast period. Cardiology treatments are expensive procedures requiring RCM services; these services help enhance the procedure's effectiveness & patient care and seamlessly manage medical billing. According to an Elsevier, Inc. paper in September 2023, approximately 6.7 million U.S. adults aged 20 years and above had heart failure, and the prevalence is projected to reach 8.5 million by 2030. 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, to handle patient medical data, RCM is used for easy handling of the patient’s records.

The billing workforce must have a comprehensive knowledge of the correct codes and converters necessary in cardiology, such as various percutaneous coronary intrusions, pacemakers, & peripheral vascular methods. RCM in oncology involves strategically handling financial processes related to oncology practices to optimize revenue capture and billing efficiency. The complexity of managing healthcare reimbursements and the need for streamlined financial processes are expected to fuel the demand for RCM in oncology. Advanced technologies, such as AI and automation, have significantly improved the efficiency & accuracy of RCM processes in oncology.

Sourcing Insights

The in-house segment dominated the market in 2023 and accounted for a revenue share of over 71.86%. Its growth can be attributed to associated benefits, such as complete control of coding operations, patient information confidentiality, and accessibility of in-house medical billers. One of the major challenges in-house RCM services face is the requirement of a large 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 one of them is ineffective, jeopardizing the entire revenue cycle.

The outsourced RCM services segment is expected to grow at the fastest rate during the forecast period. Outsourced RCM services are an attractive opportunity for small, medium, and large healthcare companies as executives & providers are focused on decreasing costs & improving efficiency. In addition, the healthcare industry is observing an increase in the outsourcing of billing activities by physicians and hospitals due to mandatory implementation of the intricate ICD-10 coding structure, growing care costs, and regulatory pressure to implement electronic medical records to sustain compensation levels.

Outsourcing of RCM can lower staff responsibility and improve collection level & 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 collection percentages. Many companies are undertaking mergers, collaborations, and partnerships to improve their services. For instance, in October 2023, CPSI, a community healthcare solutions provider, acquired Viewgol, a provider of complementary outsourcing services and ambulatory RCM analytics. This acquisition aimed to accelerate offshore initiatives, with over 80% of its workforce based offshore.

Function Insights

The claims management segment dominated the market in 2023 with a market share of over 52.47%. This can be attributed to the swiftly expanding patient pool, the rising geriatric population, and the introduction of advantageous government programs related to medical insurance coverage. In addition, the adoption of risk- or value-based reimbursement models is boosting the implementation of enhanced supervision and revenue cycle prediction, particularly for high-risk & vulnerable patient groups.

The care management segment is anticipated to grow at the fastest rate during the forecast period, which can be attributed 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 & mortality in the U.S., and the monetary costs are also high. According to the CDC, in the U.S., the expenditure on treating chronic illnesses & mental health conditions is over USD 4.1 trillion, and the lost productivity cost is over USD 147 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 easing a patient’s capability to handle circumstances.

End-use Insights

The hospitals dominated the market in 2023 with a market share of over 58.44%. This can be attributed to the growing presence of renowned and well-established hospitals in the U.S. and the rising number of patient care regulatory reforms & guidelines introduced by regulatory agencies. Hospitals are focusing on implementing innovative RCM 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 expected to boost the adoption of integrated RCM systems in hospitals.

The physician and clinical services segment is expected to grow at the fastest rate during the forecast period. Its growth can be attributed to the rising number of physicians in the U.S. In physician offices and clinical services, RCM 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 segment growth. Private physician offices and clinical services are readily outsourcing RCM systems & services to address their unmet financial needs.

Key U.S. Revenue Cycle Management Company Insights

The demand for RCM has led to increased competition among companies in the U.S. market. Some key players in this market are The SSI Group, Inc.; Veradigm LLC (Allscripts Healthcare), LLC; McKesson Corporation; athenahealth, Inc.; Epic Systems Corporation; NXGN Management, LLC; eClinicalWorks; and Oncospark, Inc. The increasing industry consolidation activities by top players, such as partnerships, collaborations, mergers, acquisitions, and product launches, are anticipated to increase their market share.

Recent Developments

• In July 2023, TELCOR, Inc. launched version 21.3 of TELCOR RCM. The update enabled the use of web APIs, Report Designer (expanded use), Executive Module, and other features to improve laboratory productivity & collections.

• In June 2022, R1 RCM, Inc. acquired Cloudmed, intending to offer a leading healthcare provider RCM platform and drive digital transformation through automation & AI.

• In February 2020, Waystar Health launched Hubble, an AI/RPA-integrated platform for revenue cycle process automation. This platform helped increase revenue capture using predictive analytics and advanced machine learning algorithms. These advanced addon 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 & likelihood to pay.

U.S. Revenue Cycle Management Market Report Scope

U.S. Revenue Cycle Management Market Report Segmentation

This report forecasts revenue growth at the country level and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the U.S. revenue cycle management market report based on product type, component, delivery mode,physician specialty, sourcing, function, and end-use.

• Product Type Outlook (Revenue, USD Billion, 2018 - 2030)

  • Integrated System

  • Standalone System

• Component Outlook (Revenue, USD Billion, 2018 - 2030)

  • Software Solution

  • Services

• Delivery Mode Outlook (Revenue, USD Billion, 2018 - 2030)

  • On-Premise

  • Web-Based

  • Cloud-Based

• Physician Specialty Outlook (Revenue, USD Billion, 2018 - 2030)

  • Oncology

  • Cardiology

  • Anesthesia

  • Radiology

  • Pathology

  • Pain Management

  • Emergency Services

  • Others

• Sourcing Outlook (Revenue, USD Billion, 2018 - 2030)

  • In-House

  • External RCM Apps/Software

  • Outsourced RCM Services

• Function Outlook (Revenue, USD Billion, 2018 - 2030)

  • Product Development

  • Member Engagement

  • Network Management

  • Care Management

  • Claim Management

  • Risk and Compliances

• End-use Outlook (Revenue, USD Billion, 2018 - 2030)

  • Hospitals

  • Physician & Clinical Services