The revenue cycle management market currently valued at $20.5 billion is estimated to reach $40.4 billion by 2021, at a developing CAGR of 12.0% from 2016 to 2021, according to a new report from MicroMarketMonitor. Revenue cycle management starts when a patient enters the hospital, thereby automating business processes and leading to speedy follow ups, which encompasses patient and payer follow-ups.
Errors in revenue cycle management results in between a 3% to 5% loss of revenues in hospitals/clinics. Therefore, it is imperative hospitals optimize their revenue cycle management processes to stay solvent, maintain requisite cash flow, and keep revenue figures stable.
Key Market Drivers
The report identified the following key revenue cycle market drivers:
1. consolidation of healthcare providers
2. reduction of overall healthcare cost in this region
3. decreasing reimbursements.
High Cost of RCM Systems Impacting Market
Despite these key market drivers, limited investment in healthcare IT and high cost of RCM systems has significantly impacted the revenue cycle management market over the last few years. The report reveals the adoption rate for RCM solutions is low among medical organizations, due to their high costs and the significant investments involved in hardware, software, and staff training. These factors lead to a large unmet demand for new RCM solutions for providers.
Integrated vs. Standalone RCM Solutions
The report identifies two types of revenue cycle management solutions: integrated revenue cycle management and standalone revenue cycle management. Standalone billing and practice management systems are declining as medical practices move towards integrated, end-to-end systems that unite front and back office data flows, provide seamless access to clinical data from EHRs, and rationalize and streamline the entire RCM process. As a result, web and cloud-based RCM solutions are growing at double digit CAGR from 2016 to 2021.
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