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The US healthcare RCM outsourcing market size is estimated to increase by USD 4.04 billion with a forecasted CAGR of 13.64% between 2023 and 2028. The growth of the healthcare revenue cycle management (RCM) market depends on several key factors, including a growing mandate toward medical process transparency, rising demand for sophisticated healthcare information system medical solutions requiring periodic upgrades, and improvement in health protection administrative processes. RCM encompasses and integrates all the activities from the pre-registration of a patient to the final invoicing and follow-up activities pertaining to a visit to a hospital or an individual doctor, with the market size calculated based on revenues generated from outsourced RCM services, including maintenance, implementation, and subscriptions, but excluding software licenses, hardware, and revenue from resellers and third-party service providers, with the overall market segmented according to the type of service.
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The market is a significant sector in the healthcare industry, offering integrated and standalone solutions for eligibility verification, payment remittance, and various services during the Pre-Intervention, Intervention, and Post-Intervention stages. These services include Back-End Services, Middle Services, and Front-End Services, catering to the needs of healthcare service providers. Non-clinical solutions, such as administrative costs and components, are essential for compliance with regulations, ensuring patient care, and managing medical practices. Professional accounting companies offer medical billing, electronic health record, insurance assurances, AR collections, and cash flow management. Advanced technology plays a crucial role in minimizing billing errors and improving efficiency. Healthcare service providers increasingly opt for cloud-based solutions to reduce costs and enhance flexibility.
The growing mandate toward healthcare process transparency is notably driving the market growth. One of the primary catalysts driving the adoption of healthcare Revenue Cycle Management (RCM) outsourcing services in the United States is the growing requirement for transparency regarding expenses and costs associated with the entire healthcare journey, spanning from patient admission to discharge. Patients in the US are becoming increasingly informed about their rights and responsibilities. From the perspective of health protection providers, offering heightened process transparency fosters trust and loyalty among their consumers and end-users.
However, this produces a positive patient and end-consumer experience that can serve as a competitive advantage in the market. By implementing these RCM solutions, health protection organizations can attain more significant levels of process and cost transparency through automated patient management capabilities and methodologies. Consequently, the escalating demand for transparency in the processes stands as a pivotal driver during the forecast period.
Increasing consolidation in the market is an emerging trend shaping the market growth. A prominent trend observed in the US healthcare Revenue Cycle Management (RCM) outsourcing market is the rising prevalence of mergers and acquisitions (M&A) activities. However, this trend is not unique to this RCM outsourcing sector alone; it permeates the broader US market, characterized by a multitude of companies fiercely vying for market share while offering RCM outsourcing services in the healthcare domain. This intense competition has created a fertile ground for consolidation, leading to an uptick in M&A transactions. In this fiercely competitive landscape, every vendor relentlessly seeks operational, financial, and strategic advantages.
Moreover, the trend of increasing consolidation is anticipated to persist in 2023, with the market witnessing a flurry of end-to-end RCM solution providers achieving efficiency and cost-effectiveness by integrating all facets of the RCM cycle. Consequently, M&A activities are swiftly emerging as a valuable means for companies to attain scale, foster growth, and enhance profitability in the highly competitive market during the forecast period.
Offshore outsourcing intensifying competition in the market is a significant challenge hindering market growth. The primary impediment to the growth of these RCM outsourcing market in the United States is the increasing opportunities for offshore outsourcing for health protection providers. This competition is largely driven by India and China, which have a large IT services sector and relatively low labour costs. As globalization continues, there is a growing acceptance and expansion of offshore outsourcing components across various industries in the United States. This is further supported by the need for operational effectiveness and the regulated industries in these advanced economies.
In addition, the offshore outsourcing RCM companies in emerging economies offer greater scope for cost-effectiveness, as their man-hours labour rates are significantly lower than those of their US counterparts. As such, these offshore elements are expected to lead to an industry-wide price war as they are expected to hinder market growth during the forecast period.
The market share growth by the back-end service segment will be significant during the forecast period. This segment dominates due to mission-critical processes such as account receivable, billing, and compliance requirement services within this segment. In this segment, denials management and accounts receivable management are the most demanded services, while compliance need is the most important service considering the dynamic rate of the health protection industry transformation.
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The back-end service segment was the largest and was valued at USD 1.19 billion in 2018. This sector encompasses critical and labour-intensive processes related to the collection, billing, and follow-up activities of health protection providers, directly influencing their financial performance. In the United States, healthcare consumers are actively engaged and seek greater sophistication and transparency in pricing. One of the most significant challenges facing health protection providers is the collection of payments from patients or end consumers, primarily due to significant shifts in payment models and methods. The emergence of electronic wallets, online payments, virtual currencies, as well as cash-back and discount options, has made payment collection one of the top-requested services within RCM outsourcing. Given that the backend processes entail labour-intensive tasks such as handling patient inquiries, resubmitting claims, and processing refunds, these functions are often outsourced to specialized RCM companies. This outsourcing helps reduce instances of inadequate follow-up, billing errors, errors in cash posting, delays in timely submissions, and billing discrepancies, ultimately playing a pivotal role in enhancing a healthcare provider's bottom line, which will increase segment growth during the forecast period.
Hospitals stand as one of the key end users within the dynamic and evolving U.S. landscape. Given their role in managing intricate and multifaceted operations encompassing patient registration, billing, claims processing, and revenue collection, the importance of Revenue Cycle Management (RCM) outsourcing services cannot be overstated. Hospitals often turn to specialized service providers, including insurance companies and pharmaceutical firms, for outsourcing RCM services. This strategic move allows hospitals to focus on their core mission of delivering high-quality care by entrusting tasks such as coding, claims submissions, and payment reconciliations to external experts. Beyond operational efficiency, outsourcing RCM offers hospitals several additional advantages. It keeps them abreast of the latest regulations and coding standards, grants access to cutting-edge technologies and analytics, which can unveil revenue trends and payer behaviour, and facilitates informed decision-making to bolster their financial performance. Consequently, these factors collectively contribute to the growth of the market during the forecast period.
The Market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Market in Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
3M Co. - The company healthcare RCM outsourcing such as revenue cycles which automate coding and reduce burdens on clinical staff.
Change Healthcare Inc.??????. - The company offers healthcare RCM outsourcing under the brand name nThrive.
Clearlake Capital Group L.P.-The company offers business office outsourcing which provides access to expert resources and technology to help expedite cash flow and maximize reimbursement and collections.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
A Comprehensive Overview Healthcare Revenue Cycle Management (RCM) outsourcing refers to the practice where healthcare organizations delegate their revenue cycle processes to third-party service providers. This market encompasses various services such as eligibility verification, payment remittance, and claim processing. Two primary RCM models exist: Integrated and Standalone. Integrated RCM involves outsourcing all administrative and clinical functions, while Standalone focuses on specific areas like claim processing or payment management. RCM solutions can be On-premise or Cloud Based, catering to the needs of various healthcare facilities, including Rural Hospitals, Community Hospitals, and Large Hospitals. Disease prevalence and geriatric population growth are significant factors driving the demand for RCM services. Medical billing companies offer modernization through Integrated HRCM software, facilitating patient scheduling, claims processing, and healthcare service providers' compliance with healthcare laws.
Moreover, big data analytics and AI applications streamline administrative functions, reducing administrative costs and improving patient care. Non-clinical solutions like back-end services (pre-intervention and post-intervention), middle services (claims processing), and front-end services (patient care and medical practice) are essential components of RCM outsourcing. Compliance regulations and financial methodologies are critical considerations for healthcare organizations when selecting an RCM vendor. In conclusion, the Healthcare RCM market is a dynamic and evolving landscape, influenced by factors such as claim volumes, clinical functions, administrative functions, and healthcare laws. The future of RCM outsourcing lies in the integration of advanced technologies and the ability to adapt to the changing needs of healthcare organizations. Healthcare Revenue Cycle Management Outsourcing is transforming how academic medical centers and small hospitals handle their claims and denial management. By leveraging medical coding and billing services, institutions can streamline administrative components and enhance operational efficiency. Medical Billing Outsourcing offers specialized support for hospital outpatient elective care, ensuring accuracy and reducing errors in the billing process. Financial methods and non-clinical solutions play a crucial role in managing the revenue cycle, optimizing processes, and improving overall financial performance. The adoption of these academic medical centers services allows for a more focused approach to patient care while effectively managing claims and denial management. As the industry evolves, integrating these solutions will be vital for maintaining financial health and operational excellence in healthcare settings.
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Market Scope |
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Report Coverage |
Details |
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Page number |
136 |
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Base year |
2023 |
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Historic period |
2018 - 2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 13.64% |
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Market growth 2024-2028 |
USD 4.04 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
11.73 |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
3M Co., CareCloud Inc., Change Healthcare Inc., Clearlake Capital Group L.P., DrChrono Inc., EdgeMED Healthcare LLC, Epic Systems Corp., Firstsource Solutions Ltd., Greenway Health LLC, MedData Inc., NextGen Healthcare Inc., Optum Inc., Parallon Business Solutions, Quest Diagnostics Inc., R1 RCM Inc., Tenet Healthcare Corp., The SSI Group LLC, Vee Technologies Pvt. Ltd., Veradigm LLC, and Vizient Inc. |
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Market dynamics |
Parent market analysis, Market forecasting , market forecast , Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
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Customization purview |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Service
7 Market Segmentation by End-user
8 Customer Landscape
9 Drivers, Challenges, and Opportunity/Restraints
10 Competitive Landscape
11 Competitive Analysis
12 Appendix
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