U.S. Revenue Cycle Management Market – Industry Outlook & Forecast 2023-2028

MARKET INSIGHTS

The U.S. revenue cycle management market was valued at USD 115.40 billion in 2022 and is expected to reach USD 220.45 billion by 2028, growing at a CAGR of 11.39% during the forecast period. The increasing adoption of digital technologies, such as artificial intelligence, machine learning, and blockchain, is driving the market. These technologies are being used to automate and streamline the revenue cycle process, allowing healthcare organizations to improve efficiency and reduce costs. The increasing demand for cost-effective healthcare services and the adoption of digital technologies drive the growth of the U.S. revenue cycle management market.

Revenue cycle management (RCM) is an essential process in the healthcare industry that encompasses various administrative and financial tasks to ensure the smooth flow of revenue from patient care services. It involves a patient's interaction with a healthcare provider, from appointment scheduling to payment collection. RCM is crucial in optimizing financial performance, streamlining operations, and ensuring compliance with regulatory requirements. Throughout the revenue cycle management process, monitoring and analysis of key performance indicators (KPIs) are vital. Metrics such as accounts receivable days, clean claim rate, denial rate, and collection rate provide insights into the organization's financial health and identify areas for improvement. Regularly analyzing these KPIs helps healthcare providers identify bottlenecks, implement process enhancements, and optimize revenue cycle performance.

The U.S. revenue cycle management market is constantly evolving, driven by changes in healthcare regulations, reimbursement models, and technology advancements. Healthcare organizations must stay abreast of these changes and adapt their RCM strategies and processes accordingly. Embracing innovative technologies, such as electronic health records (EHRs), revenue cycle management software, and analytics tools, can greatly enhance operational efficiency, accuracy, and compliance. Revenue cycle management is a critical function in the healthcare industry that encompasses a range of administrative and financial processes. It is pivotal in optimizing financial performance, ensuring compliance, and facilitating the efficient flow of revenue from patient care services. By implementing effective RCM strategies, leveraging technology, and adhering to industry best practices, healthcare organizations can enhance their financial stability, improve patient satisfaction, and ultimately provide high-quality care.

MARKET TRENDS & DRIVERS

Growing Demand for AI & Cloud-based Deployment
Combining AI and cloud-based deployment in RCM brings significant advantages, including improved efficiency, accuracy, scalability, cost savings, and data security in the U.S. revenue cycle management market. As healthcare organizations strive to optimize their revenue cycle operations, the demand for AI and cloud-based solutions continues to grow, transforming how RCM processes are managed and enhancing financial performance.

The RCM industry is experiencing a growing demand for AI and cloud-based deployment solutions. These technologies offer numerous benefits and are transforming how RCM processes are managed. AI-powered RCM solutions automate manual and repetitive tasks, improving efficiency and reducing the need for human intervention. AI algorithms can analyze large volumes of data, identify patterns, and make intelligent predictions, enabling faster and more accurate claims processing, coding, and denial management.

Increase in Patient Volume and Rising Demand for Health Insurance
With more patients seeking healthcare services, there is a corresponding increase in the number of medical bills and insurance claims generated. This surge in volume creates a greater need for efficient RCM processes to handle the billing, coding, and claims management workflow. As patient volume and insurance demand increase, effective RCM practices become vital to ensure optimal revenue capture for healthcare providers. RCM solutions that accurately capture charges validate insurance eligibility, optimize coding accuracy, and minimize claim denials help maximize revenue and reduce revenue leakage.

Moreover, the population of the U.S. has increased significantly over the past decade, with the Census Bureau estimating that the population will reach nearly 400 million in 2060. This population growth is leading to an increase in the number of people seeking medical care. As the population grows, the demand for health care is increasing. This results in an increase in patient volume as more people seek medical care than ever before.

Automation in Revenue Cycle Management
Automation in RCM helps healthcare organizations improve efficiency, reduce costs, accelerate revenue cycles, and optimize financial outcomes in the U.S. revenue cycle management market. By leveraging technology and automation, providers can enhance their revenue cycle operations, allowing them to focus more on delivering quality patient care. Automation in revenue cycle management (RCM) refers to using technology and software solutions to streamline and automate various processes involved in managing the financial aspects of healthcare services. Automation in RCM offers several benefits, including increased efficiency, reduced errors, improved revenue capture, and enhanced overall financial performance. Furthermore, automation enables businesses to integrate their revenue cycle management process with other key business areas, such as finance, invoicing, and customer service.

SEGMENTATION INSIGHTS

INSIGHTS BY COMPONENT
The post-cycle component segment accounted for the largest U.S. revenue cycle management market share in 2022. The post-cycle component of RCM includes activities after the patient has received care, such as processing claims, collecting payments, and managing accounts receivable. The post-cycle component of RCM is essential to the financial success of healthcare organizations. It involves various activities, including claims submission, processing, payment posting, accounts receivable management, and reimbursement analysis. These activities are necessary to ensure that the organization is paid for its services.

INSIGHTS BY DELIVERY MODE
The U.S. revenue cycle management market by delivery mode is segmented as cloud-based and on-premises. In 2022, the cloud-based segment accounted for a larger market share. Cloud-based RCM is a relatively new technology that businesses have been able to leverage for improved efficiency and cost-effectiveness. By leveraging cloud-based solutions, businesses can optimize their revenue cycle, reducing time and related administrative costs by efficiently managing customer information, invoicing, and payments. Cloud-based RCM solutions provide cost benefits, improved customer experience, and enhanced security, among other benefits. One of the greatest advantages of utilizing cloud-based RCM solutions is its cost savings. By leveraging cloud technology, businesses can save on hardware, software, and maintenance, which can connect multiple remote sites without a traditional costly onsite setup.

INSIGHTS BY SOLUTION TYPE
The U.S. revenue cycle management market by solution type categorizes as integrated and standalone. The integrated segment dominated the market share in 2022. Integrated RCM is an approach to healthcare billing that integrates all processes, from insurance claims filing to payment collection. In a nutshell, RCM is how healthcare providers efficiently process billing and payments for their care. It’s all done to maximize cash flow, reduce costs, and increase revenue. Integration is central to a successful RCM system, allowing for data from multiple parts of the healthcare organization to be collected and shared. An enterprise-wide RCM system allows departments to share patient information, process claims quicker, and avoid conflicts between departments. The primary goal of RCM is to optimize revenue and increase cash flow. But it also serves a few other purposes. First, it streamlines the bill and payment process, reducing paperwork, duplicate entries, late payments, and manual processes. Second, it helps to keep costs and billing errors to a minimum while improving patient satisfaction and experience.

INSIGHTS BY SERVICE TYPE
The ambulatory care service dominated the U.S. revenue cycle management market, accounting for over 48% in 2022. Revenue cycle management in ambulatory care is critical to ensuring a successful practice and a steady cash flow. As providers of care, collections for services must be managed in an organized and timely way. This includes the accounting aspects of private payers and payers for government programs and patient collections from coinsurance, copays, and deductibles. By properly managing the revenue cycle, organizations can reduce overhead and ensure the highest quality of patient care without compromising payment integrity. The primary RCM process in ambulatory care includes patient scheduling and registration, coding and abstracting services, claims submission, payment posting, denials management, collections, and customer service.

INSIGHTS BY END-USER
The hospital's end-user segment accounted for the larger U.S. revenue cycle management market share. RCM is an important part of the healthcare system, especially in hospitals. RCM is a critical component in hospital operations due to its ability to help hospitals track patient data, maximize efficiency, improve patient satisfaction, and ultimately increase revenue. In today’s healthcare environment of rapidly changing technology and complicated regulations, RCM enables hospitals to remain competitive while adhering to these regulations.

VENDOR LANDSCAPE

The U.S. revenue cycle management market is highly competitive. The market is characterized by rapid technological change, including the introduction of cloud-based medical billing management, integration of electronic health records usage, and increased usage of the digital medium, which has revolutionized claim denials. Vendors are also constantly developing new technologies to acquire and market new services to access a new set of consumers.

The industry is highly fragmented, with a large number of vendors offering a variety of products and services. Major U.S. revenue cycle management market players include Change Healthcare, Epic Systems Corporation, Experian, MCKESSON CORPORATION, Oracle, R1 RCM, and Veradigm. Technological advancements, industry expertise, integration capabilities, regulatory compliance, customer support, scalability, and pricing models influence the competitive landscape. As the demand for effective RCM solutions continues to rise, companies that can differentiate themselves through innovation, expertise, and customer-centric approaches are poised to succeed in this dynamic market. Epic Systems Corporation, known for its widely adopted EHR system, has established a strong presence in the U.S. revenue cycle management market. With its comprehensive RCM solutions, integration capabilities, revenue capture, and coding functionalities, price transparency tools, revenue cycle analytics, industry expertise, and commitment to interoperability, the company assists healthcare organizations in optimizing their revenue cycles, improving financial performance, and enhancing patient billing experiences.