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Revenue Cycle Management (RCM) Market Size, Share & COVID-19 Impact Analysis, By Structure (In-house and Outsource), By Type (Software and Services), By Function (Claims & Denial Management, Medical Coding & Billing, Clinical Documentation Improvement (CDI), Insurance, and Others), By End-User (Hospitals, Physician’s Office, and Others), and Regional Forecast, 2022-2029

Region : Global | Format: PDF | Report ID: FBI100275

 

KEY MARKET INSIGHTS

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The global revenue cycle management (RCM) market size was valued at USD 105.86 billion in 2021. The market is projected to grow from USD 115.64 billion in 2022 to USD 246.40 billion by 2029, exhibiting a CAGR of 11.4% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a slower growth of 1.8% in 2020 as compared to 2019.


Today’s healthcare systems face major challenges such as increasing complexity, rising treatment costs, and growing patient consumerism, among others. These market dynamics pose enormous stress on large hospitals and clinics, driving them to transform into revenue cycle management (RCM) operations. This factor is defined as a process that hospital designs and implements to maximize patient revenue and its collection speed. Several regulatory mandates for the application of Electronic Health Records (EHR) in healthcare settings and preference toward integrated EHR/RCM software for the smooth workflow are surging the demand for this service globally.


Additionally, the increasing number of claims denials and the rising administrative cost for the management of the denied claims are fostering the demand for this service in the study period.



  • For instance, according to a survey by Change Healthcare in 2020, it was stated that the U.S. hospitals experienced a remarkable hike of 23.0% for claim denials in 2020 as compared to 2016. Thus, increasing demand for this service among hospital administrations is bolstering the adoption rate and supporting the market growth.


COVID-19 IMPACT


Significant Loss of Operating Revenue in Healthcare Settings During Pandemic Negatively Affected the Market Growth


The outbreak of COVID-19 had a negative impact on the global revenue cycle management market growth. Several key market players, including TH Medical, and CERNER CORPORATION, witnessed a significant decline in the revenue from their RCM services.


For instance, CERNER CORPORATION generated a revenue of USD 5,505.8 million in 2020, a decline of 3.3% compared to USD 5,692.6 million in 2019.


Additionally, postponement of elective surgeries and a significant decrease in the number of non-COVID-19 patients impacted the revenue of the majority of the hospital significantly during the pandemic. For instance, according to the data by Bloomberg Quint, in 2021, it was stated that U.S. hospitals witnessed a loss of around USD 122.00 billion during the pandemic.


Along with this, the increasing trend for telemedicine service amidst the COVID-19 pandemic is resulting in a number of complications while managing insurance coverage. Also, many ICD-10 codes were introduced for COVID-19 in patients. This factor resulted in various challenges for maintaining new billing guidelines for COVID-19 patients and affecting the revenue cycle management in the healthcare settings. This factor may hinder the product adoption and growth rate of the market during the COVID-19 pandemic.


However, uplifting the lockdown, an increase in the number of non-COVID-19 patients in 2021, and the introduction of advanced software to manage revenue supported the market growth in 2021. Also, the key players operating in the market experienced a significant increase in revenue and returned to their pre-pandemic level in 2021. For instance, CERNER CORPORATION generated a revenue of USD 5,764.8 million in 2021, an increase of 4.7% compared to USD 5,505.8 in 2020.


LATEST TRENDS


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Preferential Shift toward Outsourcing Model to Improve Financial Performance


An increasing number of patient admission and rising complications during the management of operating revenues in the healthcare settings are surging the demand and adoption of revenue cycle management. However, a preferential shift is observed in many healthcare facilities from in-house service to outsourcing service due to certain distinct advantages offered by outsourcing this service. The outsourcing model offers a significant improvement of the operational workflow compared to the in-house model while managing claim denials, medical billing & coding, and others.


Also, the implementation of artificial intelligence and machine learning to reduce recurrent errors in a claim denial is cost-effective in the outsourcing model compared to the in-house model. For instance, according to the data published by Change Healthcare LLC in 2022, 65.0% of the U.S. hospitals and other healthcare facilities are using AI in their revenue management. These benefits of this model encourage healthcare facilities to adopt the outsourcing model.


DRIVING FACTORS


Regulatory Mandates for Adoption of EHR/EMR to Assist Market Growth


The introduction of Electronic Health Records (EHRs) revolutionized healthcare organizations in collecting, analyzing, and reporting patient data. However, according to an article by QWay Healthcare, Inc., in July 2021, 31.0% of the U.S. healthcare providers were using manual claim denial procedures and experiencing a huge amount of delay and recurrent errors while managing the claim denials. Therefore, to reduce operational delay and manual errors, a rising number of healthcare administrations are adopting the EHR/EMR systems.


Eventually, in accordance with the EHR/EMR system, healthcare facilities are focusing on improving workflow of the revenue cycle management procedure. This factor may boost the demand for this service. Further, increasing healthcare spending and technological advancements in the software are fueling the adoption rate and fostering the market growth during the study period.


For instance, in July 2021, Access Healthcare introduced echo, an artificial intelligence and Robotic Process Automation (RPA) platform for introducing automation in the procedure.


RESTRAINING FACTORS


Risks Associated with Healthcare IT Solutions and Budgetary Constraints to Restrain the Market


Distinct advantages of the service and advancement of these systems are fueling the demand for this service. However, limited IT infrastructure and budget constraints play a crucial role in hindering the market growth.


For instance, according to an article by HIT Consultant Media in 2021, it was reported that 60.0% of a surveyed population consider budget constraints as the root cause of not implementing AI and other advanced technology in the revenue management service.


Furthermore, rising security concern while protecting the confidential data about patient and healthcare facilities is limiting the demand for this service during the study period. For instance, according to a report by Binary Stream Software Inc., in 2021, it was stated that the cost of healthcare data breaches increased from approximately USD 7.13 million in 2020 to USD 9.23 million in 2021 in the U.S. These ambiguities are restricting the adoption rate of this service and subsequently restraining the growth of the market.


SEGMENTATION


By Structure Analysis


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Ongoing Shift toward Outsource Model to Boost Segmental Growth


Based on structure, the market is segmented into in-house and outsourcing. The outsource segment is anticipated to witness the fastest growth due to the shifting trend from in-house to outsourcing model in major countries such as the U.S, the U.K., India, and others. Also, the major cost difference between the software and hardware for the in-house and outsource model is responsible for strong CAGR growth. For instance, according to an article published by Advanced-Data Systems in March 2021, it was estimated that the cost of in-house software and hardware is around USD 8,000.0. But in the case of the outsource segment, the total service cost is around USD 500.0.


The in-house segment holds the lion’s share owing to higher adoption of this service by hospitals to stabilize clinical and financial performance. Also, an increase in the number of patient admissions supports the in-house model's adoption rate. According to the American Hospital Association (AHA) survey, more than 33.0 million hospital admissions were recorded in 2021. Also, the developing hospital infrastructure and health insurance policies in emerging nations are also propelling the increased demand for these solutions. For instance, America’s Health Insurance Plans (AHIP) implemented RCM solutions with an aim to lower patient out-of-pocket costs and streamline the financial encounter.


By Type Analysis


Introduction of Technologically Advanced Software Led to Hold Highest Market Share


Based on type, the market is segmented into software and services. The software segment dominates the market owing to the launch of advanced solutions to help improve RCM at hospitals, physician’s facilities, and others. Additionally, in light of the COVID-19 pandemic, several companies have generated lower revenues, which has encouraged them to consult financial advisors to have effective measures. For instance, in May 2020, Objective Capital Partners announced to serve as a financial advisor to RCM Technologies. The company advised them to adopt shareholders' rights plan, which is intended to protect and control the company's service.


The services segment is anticipated to emerge as the fastest-growing category during the forecast period. Certain advantages, including timely reimbursement, active focus on quality patient care, and reduction in the error while billing and coding are attributable to the growing demand for RCM services such as outsourcing, medical coding and billing services, and others.


By Function Analysis


Launch of Advanced Solutions to help Claims & Denial Management Service Segment Hold Major Shares


On the basis of function, the market is segmented into claims & denial management, medical coding & billing, Clinical Documentation Improvement (CDI), insurance, and others. Claims & denial management segment holds the dominant position owing to the launch of advanced solutions that reduce claim denials. For instance, in September 2021, Aspirion introduced a secure business intelligence client platform, Aspirion Intelligence, to monitor complex claims revenue cycle performance and reduce claim denials. The medical coding & billing segment holds the second position, followed by the clinical documentation improvement segment. The high growth rate of this segment is attributable to the increasing demand for medical coding and billing services, owing to the complexities associated with the financial management of the end-users.


By End User Analysis


Rising Adoption of RCM in Hospitals May Enhance Segmental Growth


Based on end-user, the market is categorized into hospitals, physician’s office, and others. The hospital segment dominated the market in 2021 in terms of market value and share. The dominance of this segment is attributable to the rising patient admissions, thus generating higher revenue for hospitals. Hospitals adopt this solution to effectively manage a revenue collection process, thereby contributing to the segment's growth during the analysis period. For instance, according to the survey done by AKASA in 2021, it was stated that more than 78.0% of hospitals in the U.S. are using this service.


The physician’s office segment is likely to grow at a faster rate during the study period. The primary reason for this is the gradual increase in the number of physicians globally. For instance, according to Statista, it was estimated that the total number of physicians in the U.S. was around 1.1 million in 2020, which was a significant increase from the past years. Also, according to the American Medical Association, it was reported that approximately 49.1% of the total patient care physicians worked in physician offices in 2020. This prominent increase in the number of physicians in the physician offices is fostering this solution's adoption rate and supporting this segment's growth.


REGIONAL INSIGHTS


The market in North America stood at USD 57.96 billion in 2021. This region accounted for the major market share in the global market due to the presence of leading players. Further, the higher usage of the software/service in the U.S. will help augment the regional market’s growth. Moreover, the launch of innovative solutions by the major players in this region also contributes to the growth of the market in North America. For example, in January 2020, a leading player, R1 RCM, launched the R1 Professional platform to expand its geographical reach. Also, the company, in collaboration with Intermountain Healthcare, launched an innovation center to carry these technology innovations.


Europe accounted for the second position in value in the global market. The provision of growth opportunities for start-ups to develop effective financial technology is propelling the region's adoption and launch of the service mentioned above. For instance, Chelsea and Westminster Hospital NHS Foundation Trust opened new doors for start-ups to develop innovative financial management solutions. This factor is likely to boost the European market in the coming years. In addition, the majority of healthcare companies are constantly focusing on increasing investment in the development of information technology infrastructure. This factor also supports the growth of the market in this region during the study period. For instance, according to an article published by MobiHealthNews, it was stated that the total value of European health tech companies increased from USD 8.00 billion in 2016 to USD 41.00 billion in 2021.


Asia Pacific is expected to emerge as the fastest-growing region during the forecast period, owing to increasing awareness among hospitals about the advantages of RCM service. Their rising adoption rate is responsible for the higher growth of the region.


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Furthermore, Latin America and the Middle East & Africa are likely to witness considerably slower growth, owing to the gradual penetration of advanced solutions into the healthcare financial management systems.


KEY INDUSTRY PLAYERS


Innovative Solutions & End-to-end Service to Clients to help Players Gain Top Position


The market structure is fragmented, with several players operating in the market of revenue cycle management. Epic Systems Corporation accounts for the major share in the market. This company provides end-to-end service that focuses on efficiency, production, and budget needs. Also, the adoption of this company’s EHR and RCM system is assisting the company to sustain its dominant position.


For instance, in February 2020, Advent Health, a Florida-based health system of 50 hospitals, announced a partnership with Epic Systems to adopt its integrated EHR and RCM system for physician practice, ambulatory, urgent care, home health, and hospital facilities.


Other prominent players operating in the market are Allscripts Healthcare, LLC, Cerner Corporation, Conifer Health Solutions, LLC, GeBBS Healthcare Solutions, Inc., MEDHOST, McKesson Corporation, Medical Information Technology, Inc. (MEDITECH), Optum Inc., and R1 RCM, Inc.


LIST OF KEY COMPANIES PROFILED:



KEY INDUSTRY DEVELOPMENTS:



  • October 2021: R1 RCM, Inc. announced that American Physician Partners extended its R1's revenue cycle management services partnership until 2031 to continue growth in emergency medicine.

  • May 2021 – Optum, Inc. collaborated with Bassett Healthcare Network to provide revenue cycle management services to Bassett's clinics and improve patient care in Central New York.            


REPORT COVERAGE


An Infographic Representation of Revenue Cycle Management Market

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The global revenue cycle management market research report provides a detailed analysis and focuses on crucial aspects such as leading companies, applications, disposable types, and distribution channels. Also, the report offers insights into the market the current trends, and highlight the vital industry developments. In addition to the factors mentioned above, the report encompasses various factors that have contributed to the growth of the market in recent years.


Report Scope & Segmentation


























































  ATTRIBUTE



  DETAILS



Study Period



2018-2029



Base Year



2021



Estimated Year



2022



Forecast Period



2022-2029



Historical Period



2018-2020



Unit



Value (USD billion)



Segmentation



By Structure, Type, Function, End User, and Region



By Structure




  • In-house

  • Outsource



By Type




  • Services

  • Software



By Function




  • Claims & Denial Management

  • Medical Coding & Billing

  • Clinical Documentation Improvement (CDI)

  • Insurance

  • Others



By End User




  • Hospitals

  • Physician’s Office

  • Others



By Region




  • North America (By Structure, By Type, By Function, By End User, and By Country)

    • U.S. (By Structure)

    • Canada (By Structure)



  • Europe (By Structure, By Type, By Function, By End User, and By Country)

    • U.K. (By Structure)

    • Germany (By Structure)

    • France (By Structure)

    • Italy (By Structure)

    • Spain (By Structure)

    • Scandinavia (By Structure)

    • Rest of Europe (By Structure)



  • Asia Pacific (By Structure, By Type, By Function, By End User, and By Country)

    • China (By Structure)

    • Japan (By Structure)

    • India (By Structure)

    • Australia (By Structure)

    • Southeast Asia (By Structure)

    • Rest of Asia Pacific (By Structure)



  • Latin America (By Structure, By Type, By Function, By End User, and By Country)

    • Brazil (By Structure)

    • Mexico (By Structure)

    • Rest of Latin America (By Structure)



  • Middle East & Africa (By Structure, By Type, By Function, By End User, and By Country)

    • GCC (By Structure)

    • South Africa (By Structure)

    • Rest of Middle East & Africa (By Structure)





Frequently Asked Questions

Fortune Business Insights says that the global market size was USD 105.86 billion in 2021 and is projected to reach USD 246.40 billion by 2029.

In 2021, the North America market value stood at USD 57.96 billion.

The market will exhibit steady growth at a CAGR of 11.4% during the forecast period (2022-2029).

The in-house segment is expected to be the leading segment by structure in this market during the forecast period.

Adoption of integrated EHR/RCM system among the healthcare facilities will drive the market growth.

Epic Systems Corporation, Cerner Corporation, and R1 RCM, Inc. are some of the leading players in the global market.

North America dominated the global market in 2021.

Increasing complexities in the revenue management process and advanced healthcare IT solutions are expected to drive the adoption of the solution.

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