Revenue Cycle Management (RCM) Market

Market Overview

The global revenue cycle management (RCM) market size was valued at USD 249.75 billion in 2022. It is estimated to reach USD 586.5 billion by 2031, growing at a CAGR of 12.4% during the forecast period (2023–2031).

Healthcare systems worldwide use revenue cycle management (RCM) to monitor patient payments from their initial appointment or contact with the system until their final balance is paid. It is a typical component of healthcare management. It is a type of software used for financial activities like medical billing, keeping track of patients and data, scheduling appointments and registrations, and keeping track of final payments and remaining balances in certain cases.

Revenue cycle management combines the clinical part of the healthcare sector with the business part, thereby combining administrative data such as insurance provider details, personal information, and patient name with the treatment type and other concerned healthcare data. Healthcare providers can outsource their revenue cycle management to businesses that handle this complex process with professional agents and proprietary technologies to organize healthcare provider revenue cycles because the revenue cycle process is complex and subject to regulatory supervision.

Market Dynamics

Market Drivers

Positive Government Reforms

Government reforms play a crucial role in boosting the usage and adoption of systems such as revenue cycle management (RCM). For example, the Affordable Care Act (ACA) implemented in the United States concentrates on expanding health insurance coverage for low-income individuals. The expanding insurance coverage is expected to increase the number of reimbursements as well as denials that need to be managed through revenue cycle management. Therefore, the demand for systems that can manage reimbursement processes efficiently is expected to increase.

In addition, several government organizations worldwide are undertaking initiatives to facilitate health data exchange and improve the efficiency of healthcare systems. For instance, the NHS Five Year Forward View, issued in 2014, emphasizes harnessing technology to improve care delivery and reduce lacunae in healthcare. The initiative by NHS to ensure a paperless healthcare system by increasing the adoption of HIT systems by 2020 is also likely to expedite the market over the forecast period.

Technological Advancements

The adoption of systems such as revenue cycle management solutions by healthcare organizations is likely to increase as they increase the efficiency of the healthcare delivery process, which leads to higher ROI. The utilization of the latest technologies, such as AI, in medical billing, revenue cycle management, patient access, etc., has also led to the increasing adoption of advanced solutions in the industry. For instance, as per the article published in M-Scribe Medical Billing in 2019, the utilization of AI in the billing process and outsourcing process is proving to be beneficial in enhancing the accuracy of billing and enhancing staff management. However, reforms in medical coding systems increase the need to train healthcare personnel. The recent advancements in training will help further boost product adoption.

Market Restraint

Lack of Professionals

Healthcare facilities face challenges regarding resource allotment and management, rising costs, and insurance claims management. This increases the need for skilled professionals with technical knowledge to manage the HIT systems deployed at these facilities. However, the revenue cycle management system is a recent development in the field of healthcare IT. Hence, a shortage of skilled professionals can efficiently manage this system. This system aids in managing billing and reimbursements and data analysis across the care continuum. Skilled professionals are required to manage these arrays of complex functions. Therefore, the lack of skilled professionals hampers the market expansion.

Market Opportunities

Increasing Outsourcing of Revenue Cycle Management

Outsourcing healthcare IT services has increased due to various factors, such as the absence of skilled labor, shortage of resources, and rising healthcare costs. Primary services outsourced by healthcare organizations include coding stipulations, key performance monitoring, follow-up of claims, and ensuring data accuracy. The increasing healthcare burden and a large amount of patient data generation can lead to errors in medical billing and other processes. Hence, outsourcing can help reduce these errors, thereby providing smooth functioning of all the aspects of revenue cycle management.

Additionally, the major advantages of outsourcing revenue cycle management are the availability of skilled and trained professionals, cost-effective and efficient services, and compliance with required rules and regulations. These advantages have led to increased adoption of outsourcing services in recent years. For instance, as per the 2020 article published in Med USA, around two-thirds of healthcare organizations utilize outsourcing services for their revenue cycle management needs. Hence, increasing adoption will likely create market growth opportunities during the forecast period.

Regional Analysis

The global revenue cycle management (RCM) market is bifurcated based on region into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. 

North America Dominates the Global Market

North America is the most significant global revenue cycle management (RCM) market shareholder and is anticipated to exhibit a CAGR of 10.61% during the forecast period. The North American RCM market is expected to grow robustly over the forecast period. Factors such as rising healthcare costs, growing government initiatives to implement RCM systems, and increasing adoption of HIT systems will likely favor market growth in this region. The focus of the U.S. healthcare system has shifted from fee-for-service care models to the delivery of value-based care. Governing bodies have initiated several measures with this objective in mind. For instance, by the end of 2016, the U.S. Secretary of Health and Human Services (HHS) wants to direct 30% of Medicare payments to alternative payment models, and by the end of 2018, it wants to be 50%. This has supported the growth of Accountable Care Organizations (ACOs), bundled payments, and other means of improving health outcomes while reducing costs. This will boost the growth of the RCM market in North America.

Europe is estimated to exhibit a CAGR of 10.3% over the forecast period. RCM market in Europe is the second largest global market and is witnessing lucrative growth due to supportive government policies. For instance, the European Commission's Digital Single Market Strategy makes it easier for consumers and businesses to access online services and goods across the continent, fostering the ideal environment for the growth of digital networks and services and maximizing the potential for economic expansion in Europe. In addition, the EU portrayed the eHealth action plan 2014-2020, which includes strategies for eHealth development in Europe. These initiatives are expected to accelerate the healthcare IT market in Europe, which is anticipated to facilitate the growth of the RCM market. The increasing volume of patient data, advancements in technological know-how, and rising demand for efficient and quick healthcare processes will also impact the market positively.

In Asia-Pacific, high unmet healthcare needs and a rise in government spending on healthcare are expected to bolster the RCM systems market. For instance, as per the Deloitte report titled 2015 Healthcare Outlook, China, the healthcare expenditure in China is growing at an estimated 11.8% annually and is likely to reach USD 892 Million by 2018. Similarly, in the Deloitte Healthcare Outlook 2019, Asia-Pacific countries are evolving and investing in digitalization. For example, Australia launched My Health Record, which uses patient data to link into personalized health records across different healthcare value chains.

On the other hand, Japan has significantly implemented EHR, but due to different hospital systems, the data cannot be aggregated at the national level, thereby limiting the overall development of healthcare IT in Japan. Most of this spending will likely be directed toward healthcare reforms introduced by the Chinese government. As a result of the growing healthcare expenditure and the need to increase the efficiency and quality of healthcare delivery, the demand for RCM systems is expected to increase over the forecast period.

The Latin American RCM market is driven by the growing adoption of HIT in Brazil. In addition, growing life expectancy, increasing awareness about health, and rising demand for technologically upgraded RCM software for better service delivery to patients are expected to boost market expansion throughout the forecast period. The Latin American market has witnessed an upsurge in connected devices, improved HIT infrastructure, and increased IoT investment over recent years. As per a report by Tata Consultancy Services on IoT, IoT adoption grew at an impressive rate in Latin America in 2014, leading to revenue growth of 18.3% across varied sectors. In addition, Latin American companies are known to invest 0.23% of their revenue in improving IoT capabilities. This indicates a positive environment for the growth of HIT systems in Latin America, which includes RCM systems.

Segmental Analysis

The global revenue cycle management (RCM) market is segmented by product, type, delivery mode, and end-user.

Based on the product, the global revenue cycle management (RCM) market is bifurcated into software and services. 

The software segment is the most significant contributor to the market share and is anticipated to exhibit a CAGR of 11.1% over the forecast period. The inorganization of data collected from patients and other healthcare entities is one of the major drawbacks of maintaining hard copies and spreadsheets. In addition, the increasing amount of data in recent years due to the digitalization of processes and streamlining for better patient care has led to adopting solutions; hence, healthcare analytical software solutions are used frequently and gaining traction. For instance, as per the data published by Health Catalyst, 90% of healthcare organizations use data and analytical software to improve quality and revenue cycle management.

Furthermore, the software is sold individually and can be installed in healthcare facilities. Owing to government reforms and a rise in the demand for technologically advanced Healthcare IT solutions, this segment is expected to witness the launch of various new products and improved versions of existing software. The rising demand for revenue cycle management software has also led to various growth opportunities in the market for established players and startups.

Based on type, the global revenue cycle management (RCM) market is divided into standalone and integrated. 

The integrated segment dominates the global market and is estimated to exhibit a CAGR of 11.7% over the forecast period. The growth in the integrated segment can be majorly attributed to various changes, such as the preference for volume-based payments instead of value-based payments. Another reason contributing to the growth of this segment is that integrated solutions provide a coordinated and streamlined format of various financial activities via a single platform, resulting in a uniform data collection and analysis process. Systems of this type are also known to unify end-to-end services with back-and-front data flow. These systems provide seamless access to clinical data from EHRs and similar databases. For instance, according to a news article published by Cerner Corporation in 2020, fully integrated EHR systems provided by the company are proving beneficial and improving the revenue cycle systems at the San Juan Regional Medical Center. Hence, the rising adoption of integrated systems will likely fuel market growth during the forecast period.

Based on delivery mode, the global revenue cycle management (RCM) market is bifurcated into web-based, cloud-based, and on-premise. 

The web-based segment is the highest contributor to the market share and is anticipated to exhibit a CAGR of 11.2% over the forecast period. This web-based service can be used over the Internet and does not require additional storage or hardware. Unlike on-premise software, web-based software is installed off-site and supervised by a third party. In addition, providers generally charge an annual or monthly fee based on usage. Web-based software is affordable, as there is no need to buy hardware or add-on software.

Additionally, it offers a rapid return on investment and ease of deployment. Hence, the web-based practice management software segment accounted for the largest market share. Increasing adoption of web-based solutions will likely fuel the overall market growth. Advanced HIMS, Simplex HIMES, e-Hospital Systems, and athenaOne are some web-based practice management solutions available.

Based on end-user, the global revenue cycle management (RCM) market is segmented into diagnostics laboratories, physician offices, hospitals, and others. 

The physician offices segment owns the highest market share and is anticipated to exhibit a CAGR of 10.7% during the forecast period. Physicians and their staff, such as nurses, consultants, and office managers, routinely use revenue cycle management systems to assist in the smooth functioning of their units. The rising focus of various healthcare institutions and organizations toward implementing these systems and increasing the number of physicians is likely to boost market growth. For instance, the Association of American Medical Colleges is one such example striving toward increasing the number of physicians in the region. Such instances are beneficial in fueling the market growth.

Ambulatory practice management systems, used in outpatient settings, permit providers to initiate laboratory tests, referrals, electronic orders for medications and treatments, insurance eligibility verification, radiographic imaging, and admissions. Furthermore, Agency for Healthcare Research and Quality is one such organization that is providing funding opportunities to several projects for studying and increasing the visibility and adoption of these systems in ambulatory settings, and this is expected to boost their demand and usage over the forecast period.

Recent Developments

• May 2023- Aspirion, a prominent technology-enabled healthcare revenue cycle management ("RCM") supplier for complex claims and revenue integrity, announced the acquisition of FIRM Revenue Cycle Management Services, Inc. ("FIRM RCM"), a dependable partner for hospital systems in the recovery of denied, unpaid, and inadequately paid medical insurance claims.
• March 2023- eClinicalWorks®, the largest ambulatory cloud EHR, announced that Satori Healing, LLC had chosen eClinicalWorks and Healow to enhance patient satisfaction and Revenue Cycle Management (RCM) services.