The demands on revenue cycle management (RCM) today are unrelenting. Healthcare providers are navigating ongoing regulatory shifts while financial constraints and growing patient volumes place immense pressure. The average internal cost of running an RCM operation has increased from 4% to 5%, even with the advances in technology and automation. To be successful, providers must maintain efficiency while delivering quality care.
With this current landscape, RCM must be built for adaptability; one-size-fits-all solutions no longer cut it. Instead, scalability—the ability to flex and grow as needs evolve—is the foundation for long-term sustainability in healthcare. Why? Because a truly scalable RCM model does more than save costs, it enables improvement in collections and allows providers to focus on what they do best: caring for patients.
But how can healthcare organizations create future-ready RCM models that sustain growth while freeing caregivers to focus on patients? Nearly two decades of experience in the field have taught us that scalability requires three key components.
1. Designing an RCM function for Clients of Different Sizes and Specialities
What works for a small private practice won’t work for larger healthcare systems. Small providers often need straightforward, cost-effective RCM solutions. They are looking for intuitive tools and a partner that respects their scale. On the other hand, larger systems must seamlessly integrate across departments and regions and require robust technology and streamlined workflows.
Best practice: The cost to collect (usually ranging from 3% to 7% of net collections) should not be determined by the size of the client. It is a measure of the complexity of RCM functions for that specialty. The best practice is to start with a cost to collect target and build a model that works for the client.
Scalability in RCM requires a modular approach to fit the needs of different organizations while ensuring the model can expand or shrink with them. Pair this approach with flexible technology, like cloud-based platforms, and you’ve got the makings of a system that evolves with your organization, no matter its size or complexity.
Lean operations allow healthcare providers to reduce costs without compromising service quality. Data-driven insights pinpoint areas of improvement while simultaneously allowing organizations to focus on those that deliver the best ROI, whether by reducing denials, optimizing staffing models, or improving cash flow. Lean operations ensure providers adapt quickly to change. By analyzing workflow and resource allocation, organizations can maximize productivity and minimize staffing waste
2. Leveraging a Global Delivery Model and Minimizing Overhead Costs
Balancing onshore and offshore resources is a critical component of scalability. Aligning the right team to the right task is an effective way to optimize costs and maintain high standards. High-touch functions might be best suited for onshore teams, while offshore resources handle routine, high-volume tasks like claims processing and data validation more efficiently. This approach ensures efficiency, quality, and compliance.
Best practice: Ignore the traditional definitions of offshore functions. The skill set has evolved significantly to leverage offshore resources for RCM functions traditionally performed onshore
Having teams across time zones allows around-the-clock support, ensuring faster turnaround times and enhanced responsiveness without overburdening onshore staff. Additionally, a global approach to resource allocation ensures that healthcare organizations’ RCM runs continuously. Offshore teams can handle billing, claims processing, and data updates overnight, but can also manage reporting and client management functions in certain cases. Meanwhile, onshore expertise remains critical for high-touch patient interactions or complex problem-solving tasks.
When done right, this balance creates a scalable, efficient operation that’s cost-effective and high-performing. Claims and payments move faster without bottlenecks caused by time delays. \Decision-makers have access to real-time insights, enabling faster, more informed decisions, and providers across different regions can stay in sync, ensuring no gaps in patient care or financial workflows.
3. Enabling Process Optimization and Automation within Specific RCM processes
A scalable RCM model isn’t just about adding resources; it’s about optimizing processes and eliminating inefficiencies. Streamlining processes and implementing automation in the right areas are keys to achieving this.
Best practice: Scalability requires consistency. If the same process is executed in 15 different ways across different teams, inefficiencies multiply. Organizations must be willing to challenge unnecessary variances and standardize workflows, which enables automation.
The transition from RCM vendors to partners is also key. Healthcare systems and provider practices are now actively looking to consolidate RCM vendors and engage in strategic discussions on technology investments.
Process streamlining: Standardization also simplifies automation efforts, making it easier to integrate AI-driven tools and machine-learning models that enhance efficiency.
Automation: Automation is an enabler to RCM functions, not a disruptor. Manual processes slow down revenue cycles, increase errors, and drive-up operational costs. Automation transforms RCM by streamlining repetitive tasks like claims processing, eligibility verification, denial management, and first-level patient communications. AI tools can analyze claims for errors before submission, reducing denials, while automated workflows improve turnaround times. These technologies don’t replace human expertise. They enhance it, allowing teams to focus on higher-value tasks.
Best practice: The unspoken benefit of automation is not reducing costs but generating higher cash collections. A global delivery model can help reduce 30% of RCM costs but can also help improve net collections by about 5% on an average claim basis.
Conclusion: Cornerstone of Future-Ready RCM
RCM needs to move beyond being a back-office function. When done right, it is a growth engine—a way to future-proof operations while giving providers the breathing room to focus on patient care. As the healthcare industry evolves, scalability will remain the foundation of effective revenue cycle management. By building adaptable, efficient, and resource-optimized models, organizations can survive the inevitable regulatory changes, financial pressures, and shifting patient needs.
The takeaway is simple: scalability is not just about handling growth; it is about efficiency. In our dynamic healthcare environment, this is the future we should all be building toward.
About Arvind Ramakrishnan
Arvind Ramakrishnan, CEO and board member of Knack RCM, has spearheaded the company’s transformative growth, optimizing performance and expanding market reach. He previously served as COO of Conifer Health Solutions, spearheading key initiatives that led to significant revenue and EBITDA growth.
