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The US healthcare RCM outsourcing market size is estimated to increase by USD 2,930.4 million between 2022 and 2027. The market size is forecast to grow at a CAGR of 11.49%. The growth of the market depends on several factors, including a growing mandate toward medical process transparency, rising demand for sophisticated medical solutions requiring periodic upgrades, and improvement in health protection administrative processes.
Healthcare revenue cycle management (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. In this report, to calculate the market size, we have considered revenues generated from outsourced RCM services. The market size includes revenue generated from maintenance, implementation, and subscriptions. Services such as consultation, installation, training, and maintenance are included in the report. The report excludes revenue generated from software licenses and hardware. The revenues generated from resellers and third-party service providers are also excluded from the calculation of market size. The overall market is segmented according to the type of service.
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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 2022, 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 the 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 1,078.53 million in 2017. 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 report forecasts market growth by revenue and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
The Market is witnessing substantial growth due to factors like disease prevalence, an aging population, and the need to reduce operating costs. With the integration of big data analytics and AI applications, outsourcing firms are revolutionizing revenue cycle management (RCM) processes. From denial prediction to insurance pre-certification and coding, integrated systems streamline workflows and enhance efficiency. However, stringent regulations and laws necessitate compliance measures, driving demand for outsourcing services. Outsourcing firms offer specialized solutions like HRCM software, patient scheduling, and electronic health record applications, catering to the diverse needs of healthcare providers. Despite technology costs and legislative regulations, this RCM outsourcing market continues to expand, providing valuable support to healthcare organizations worldwide.
US Healthcare RCM Outsourcing Market Scope |
|
Report Coverage |
Details |
Page number |
131 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 11.49% |
Market growth 2023-2027 |
USD 2,930.4 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
11.19 |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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, 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, Vizient Inc., and MedData Inc. |
Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
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 Trends
10 Vendor Landscape
11 Vendor Analysis
12 Appendix
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