U.S. Revenue Cycle Management Market Size, Share & COVID-19 Impact Analysis, By Structure (In-house and Outsourced), By Type (Software and Services), By Function (Claims & Denial Management, Medical Coding & Billing, Clinical Documentation Improvement (CDI), Insurance, and Others), By End-User (Hospitals, Physicians Office, and Others), and Country Forecast, 2023-2030

The U.S. revenue cycle management market size was worth USD 64.13 billion in 2022 and is projected to grow at a CAGR of 10.7% during the forecast period.

Revenue cycle management (RCM) is a healthcare process implemented to maintain a complete record of patient expenses from admissions to discharge. This process streamlines the business operations of healthcare organizations. It facilitates various functions, such as patient insurance eligibility verification, medical coding & billing, clinical documentation, electronic health records, and claims & denials management.

The increasing need for process improvement in healthcare systems, revenue loss due to billing errors, and growing government funding to boost the adoption of revenue cycle management solutions are a few factors driving the U.S. revenue cycle management market share.

However, in 2020, the market was negatively affected due to a significant loss of operating revenue in healthcare settings. Furthermore, a decrease in non-COVID-19 patients was observed in healthcare settings, impacting the market growth.

LATEST TRENDS

Shift Toward Outsourcing Revenue Cycle Management for Financial Performance Improvement Drives Market Growth

Rapid surges in-patient admissions and increasing complications during operating revenue management in healthcare settings are accelerating the adoption of revenue cycle management. However, the shift toward an outsourcing model provides significant benefits compared to the in-house model in medical billing & coding, managing claim denials, and others.

Moreover, implementing machine intelligence is a cost-effective way to reduce errors in the outsourcing model compared to the in-house model. For instance, according to the data published by Change Healthcare in 2022, 98% of U.S. hospitals will be using artificial intelligence across the revenue cycle by the end of 2023. These benefits help healthcare facilities to adopt the outsourcing model.

DRIVING FACTORS

Growing Need to Manage Unstructured Healthcare Data Aids the Market Growth

In the healthcare industry, the volume of data produced has expanded to terabytes and petabytes, mainly due to rising patient volumes and the digitalization of financial information. For instance, according to the data published by the American Hospital Association in 2023, there were around 33,356,853 admissions in U.S. hospitals in 2022, which increased to 34,011,386 in 2023. This creates a vital need for using revenue cycle management solutions.

In addition, the sheer diversity of data in healthcare and the growing usage and prominence of healthcare information technology tools are other significant factors contributing to the U.S. revenue cycle management market growth.

RESTRAINING FACTORS

Rising Security Concerns to Restrain Market Growth

The increased use of automated technologies, such as electronic healthcare records (EHRs), offers greater reach and healthcare delivery but has high-security concerns. However, the security concern regarding protecting patients’ confidential data limits the market's growth. For instance, in the U.S., the cost of data breaches in healthcare increased by 25.5% in 2021 to USD 9.23 million from USD 7.13 million in 2020, according to a report by Binary Stream Software Inc. These interruptions are hampering the adoption rate in the market in the country.

The number of U.S. hospitals increased from 6,093 in 2022 to 6,129 in 2023.

SEGMENTATION

By Structure Analysis

Based on the structure, the market is divided into outsourced and in-house.

The in-house segment dominated the market in terms of revenue in 2022 owing to rapid growth in the number of patient admissions supporting the in-house model's adoption rate. For instance, per the data published by the American Hospital Association (AHA) survey, nearly 33.0 million hospital admissions were registered in 2021.

Furthermore, the outsourced segment is projected to grow at the fastest CAGR over the forecast period owing to the shift from in-house models to outsourcing models in nations, including the U.S., India, Germany, the U.K., and others.

By Type Analysis

Based on type, this market is classified into services and software.

The software segment held a larger share in 2022 due to the launch of advanced software to improve efficiency for healthcare providers and payers. Furthermore, the growing need to manage unstructured healthcare data due to increasing patient volume also influences segmental growth.

• For instance, in September 2022, Advata, Inc., an analytics software company, launched Advata Smart AR, a new revenue cycle management product to improve staff experience and productivity in healthcare.

In addition, the services segment is projected to grow fastest during the projected period. The demand for RCM services, such as outsourcing, medical coding, billing services, and others is growing due to certain advantages, including an active focus on quality patient care, decreased coding and billing errors, and timely reimbursement. Hence, due to the abovementioned factors, the segment is projected to have the fastest growth rate.

By Function Analysis

Based on function, this market is classified into claims & denial management, clinical documentation improvement (CDI), medical coding & billing, insurance, and others.

The claims & denial management segment accounted for a highest U.S. revenue cycle management market share due to the introduction of advanced solutions to reduce claims rejections.

• For instance, in October 2021, Dolbey launched Fusion Reclaim, a denial management module for their healthcare revenue cycle solutions, to assist and track the denial process.

Moreover, the medical coding & billing segment accounted for the second-highest market share in 2022 and is projected to maintain its position over the forecast period. Financial management complexities associated with the end-users are projected to drive the demand for medical codes and billing services.

By End User Analysis

Based on end user, this market is segmented into hospitals, physician’s office, and others.

The hospitals segment held a larger share in 2022 owing to the increasing patient admissions, generating higher revenue for hospitals. Furthermore, the higher market share is mainly attributed to the effective RCM processes and technologies that provide healthcare providers with streamlined workflows, improved financial performance, and a better overall patient experience.

Moreover, the physician’s office segment is expected to grow fastest during the forecast period.  The gradual rise in the number of physicians in the country fosters the market adoption rate and supports this segment's growth.

KEY INDUSTRY PLAYERS

Regarding the competitive landscape, the U.S. revenue cycle management market is fragmented with several key players including Epic Systems Corporation, Optum Inc., R1 RCM, Inc., and others. In 2022, Epic Systems Corporation accounted for the highest revenue share in the market, owing to the adoption of EHR and RCM systems in its product portfolio. Moreover, the company provides end-to-end services focusing on production, efficiency, and budget needs.

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

LIST OF KEY COMPANIES PROFILED:

• Allscripts Healthcare, LLC (Veradigm LLC) (U.S.)


• Cerner Corporation (U.S.)


• Conifer Health Solutions, LLC (U.S)


• Epic Systems Corporation (U.S)


• GeBBS Healthcare Solutions (U.S)


• MEDHOST (U.S)


• McKesson Corporation (U.S)


• Medical Information Technology, Inc. (MEDITECH) (U.S)


• Optum Inc. (U.S.)


• R1 RCM, Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• May 2023 – TA Associates Management, LP, a private equity firm, signed a definitive agreement to invest in Alpha II, LLC, a leading provider of RCM technology solutions to healthcare providers. The investment supports Alpha II’s expansion of revenue cycle management software solutions.


• October 2022 – Inovalon, a cloud-based software solutions provider, launched RCM Intelligence to improve the quality and performance of claims processing.


• October 2022 – NYM, a leader in information technology services, announced the expansion of its product portfolio by offering its medical coding engine to radiology departments across the U.S.

REPORT COVERAGE

The U.S. revenue cycle management market report provides a detailed analysis of the market. It focuses on key aspects such as a statistical overview of hospital admissions and new product launches.  Additionally, it includes key industry developments such as mergers, partnerships, & acquisitions and the impact of COVID-19 pandemic on the market. Besides this, the report also offers insights into the market trends and highlights key industry dynamics. In addition to the aforementioned factors, it encompasses several factors that have contributed to the growth of the market over recent years.

Report Scope & Segmentation