Revenue Cycle Management Market: Growth, Size, Share, and Trends

Market Growth Outlook Summary

The global revenue cycle management market growth forecasted to transform from USD 49.6 billion in 2023 to USD 84.1 billion by 2028, driven by a CAGR of 11.1%. The growth of this market is majorly attributed to the growing regulatory requirements & government initiatives to boost the adoption of RCM solutions, increasing patient volumes, and the growing need to manage unstructured healthcare data. However, the deployment of RCM software and the associated infrastructure requires significant investments, owing to which the adoption of RCM is low among small healthcare organizations. This, along with a dearth of skilled personnel, is expected to challenge market growth in the coming years.

Revenue Cycle Management Market Trends

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Revenue cycle management Market Dynamics

Driver: Growing need to manage unstructured healthcare data

In the last few years, the volume of electronic data produced in the healthcare industry, primarily due to rising patient volumes and the digitization of administrative, clinical, and financial information, has expanded to terabytes and petabytes. This generates an imperative need to use revenue cycle management solutions. According to industry experts, by using natural language processing (NLP) and optical character recognition (OCR) technology, organizations can transform unstructured data from files, such as medical records, scanned documents, and audio recordings, into structured and normalized data. Other significant factors contributing to this trend are the sheer diversity of data in healthcare and the rising prominence and usage of HCIT tools.

Restraint: Deployment costs include licensing and subscription costs, hardware infrastructure, customization costs, and implementation services cost.

Cost of licensing and implementation is substantially high. Moreover, the price associated with maintaining revenue cycle management software has also significantly increased. Furthermore, IT support and maintenance services, including modifying and upgrading software per changing user requirements and maintaining an efficient IT infrastructure, represent a recurring expenditure. This accounts for a large share of the total cost of ownership. Also, post-sale custom interface development for device integration requires additional verification and validation to ensure solution accuracy and completeness. In 2021, many healthcare providers and their revenue cycle management (RCM) departments faced challenges. Operational costs outpaced revenue growth leading to months and quarters in the red. At the end of 2022, the American Hospital Association anticipated that between 53% and 68% of hospitals would be in deficit, compared to 34% in 2019. This further increases the total cost of ownership for healthcare providers. As a result of the high costs involved, small healthcare facilities, especially in emerging countries, are reluctant to replace their legacy systems with RCM solutions.

Opportunity: Growing demand for AI & cloud-based deployment

The combination of data and artificial intelligence (AI) has the potential to improve outcomes and reduce costs by applying machine learning algorithms and predictive analytics to reduce drug discovery times, provide virtual assistance to patients, and reduce the diagnosing time for ailments by processing medical images. The adoption of AI in healthcare is rising due to its ability to optimize clinical as well as non-clinical processes, thereby solving a variety of problems for patients, providers, and the overall healthcare industry. According to MarketsandMarkets estimates, AI in Healthcare market is predicted to grow at a double-digit rate. AI has experienced high demand for RCM solutions to overcome the load on human resources. Manual and redundant tasks that occur during patient access, coding, billing, collections, and denials can be automated with the help of AI. AI integrated with RCM can perform these functions more accurately by imitating intelligent human behavior through algorithms that find patterns and plan future actions to produce a positive outcome.

Challenge: Issues related to data security and confidentiality

The increased use of automated technologies such as EHRs, healthcare integration, and health information exchanges have helped expand the healthcare privacy and security landscape. Electronic patient data exchange offers greater reach and efficiency in healthcare delivery but has high-security risks due to the broader access. The Anthem Inc. Data breach, Ransomware attack, and Accellion FTA Hack have been the most significant cyberattacks in recent years, jeopardizing USD 47.76 million patient records altogether, causing USD 81.5 million loss. Concerns over the security of proprietary data and applications form a significant challenge to the growth of the market.

Revenue Cycle Management Market Ecosystem

The aspects present in this market are included in the ecosystem market map of the overall revenue cycle management market, and each element is defined with a list of the organizations involved. Products and services are included.  The manufacturers of various products include the organizations involved in the entire process of research, product development, optimization, and launch. Vendors provide the services to end users either directly or through a collaboration with a third party.

In-house research facilities, contract research organizations, and contract development and manufacturing companies are all part of research and product development and are essential for outsourcing product development services.

Source: Secondary Literature, Interviews with Experts, and MarketsandMarkets Analysis

By product & services segment, the outsourcing services segment of revenue cycle management industry is expected to grow at the highest growth rate during the forecast period

The outsourcing services segment of revenue cycle management market is expected to grow at the highest CAGR during the forecast period among the product & services. RCM services are outsourced to improve financial performance, navigate complex regulatory landscapes, access specialized expertise, leverage advanced technology, and focus on core healthcare operations. Outsourcing RCM allows organizations to optimize revenue cycles, enhance financial outcomes, and streamline processes in a rapidly changing healthcare environment. Therefore, due to the above-mentioned benefits, the segment is predicted to have a significant growth rate.

The on-premise segment is expected to account for the largest revenue cycle management industry share by delivery mode.

The on-premise segment accounted for the largest share of the revenue cycle management market in 2022. On-premise RCM software provides organizations with greater customization and flexibility. Since the software is deployed locally, it can be tailored to specific workflows, processes, and reporting requirements. This allows organizations to align the RCM software more closely with their unique needs, providing a more personalized and efficient solution thereby, elevating the segment share.

By end user, the healthcare providers segment is expected to account for the largest revenue cycle management industry share.

Healthcare payers and providers are the two segments of the global revenue cycle management market based on end users. The healthcare providers segment accounted for the largest market share 2022. The significant market share of this sector can be ascribed to the effective RCM processes and technologies that provide healthcare providers with improved financial performance, streamlined workflows, enhanced compliance, and a better overall patient experience. By leveraging RCM solutions, healthcare organizations can optimize revenue cycles, increase efficiency, and allocate resources more effectively to deliver high-quality patient care. The aforementioned factors have positively impacted segmental growth.

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During the forecast period, the Asia Pacific region had a substantial growth rate in the revenue cycle management market. The regional growth can be attributed to the rising penetration of digital healthcare technologies along with improving infrastructure. Moreover, medical tourism is increasing especially in the South East Countries that has further elevated the regional market growth to a certain extent.

The major players in the global revenue cycle management market are R1 RCM (US), Oracle (US), Optum (US). Other prominent players in the market include AdvantEdge Healthcare (US), McKesson Corporation (US), Change Healthcare (US), 3M (US), Experian plc (Ireland), Conifer Health Solutions (US), Veradigm (US), GE Healthcare (US), Cognizant (US), athenahealth (US), SSI Group LLC (US), and Huron Consulting Group (US).

Revenue Cycle Management Market Report Scope

The research report categorizes the revenue cycle management market to forecast revenue and analyze trends in each of the following submarkets:

By Product & Services

• Solutions
  • Patient Access Solutions
    • Eligibility Verification Solutions
    • Pre-certification & Authorization Solutions
    • Other Patient Access Solutions
  • Mid-Revenue cycle Solutions
    • Clinical Coding Solutions
    • Clinical Documentation Improvement Solutions
    • Other Mid-revenue cycle Solutions
  • Back-end Revenue cycle Solutions
    • Claims Processing Solutions
    • Denial Management Solutions
    • Other Back-end Revenue cycle Solutions
  • Outsourcing Services
    • Patient Access Outsourcing Services
    • Mid-revenue cycle Outsourcing Services
    • Back-end Revenue cycle Outsourcing Services

By Delivery Mode

• On-premise Solutions
• Cloud-based Solutions

By End User

• Healthcare Providers
  • Inpatient Facilities
    • Hospitals
    • Others
  • Outpatient Facilities
    • Physicians Practices
    • Ambulatory Surgical Centers (ASCs)
    • Hospital Outpatient Facilities
    • Diagnostic & Imaging Centers
    • Other Outpatient Facilities
• Healthcare Payers

By Region

• North America
  • US
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • Rest of Asia Pacific
• Latin America
• Middle East and Africa

Recent Developments of Revenue Cycle Management Market

• In 2023, Optum partnered with Owensboro Health to manage revenue cycle and information technology and improve patient outcomes and safety.
• In 2022, the R1 RCM announced 10-year end-to-end RCM partnerships with Scion Health, Sutter Health, and St. Clair Health to streamline workflow standardization and improve patient access platforms.
• In 2022, McKesson signed a definitive agreement to acquire Rx Savings Solutions to offer medication therapy more affordable and increase medication adherence to improve outcomes.

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