Hospitals and other health care providers have been outsourcing their revenue cycle management responsibilities at an increasing rate over the past few years. According to survey results by BlackBook Research, more than half of hospital CFOs believed that outsourcing Revenue Cycle Management (RCM) was good for efficiency and financial health. In addition, 93% of small organizations expressed frustration with finding internal staff for RCM. Does that mean outsourcing will continue to be a trend? That's hard to tell.
Differing Opinions Regarding RCM Outsourcing
Not all industry experts agree about whether or not the trend of healthcare companies outsourcing their RCM functions will continue at the current rate. While a vast majority of providers know that the practice is a smart move in certain situations, many, especially larger hospitals, are looking for long-term internal solutions using software. End-to-end RCM outsourcing is popular with smaller organizations who lack proper staffing, and a mix of internal and external solutions seems to be the status quo for many mid-size providers. Like many other aspects of healthcare, costs are going to be the primary motivator.
Outsourcing as a Temporary Measure
One reason that experts can't agree about the future of outsourcing is the uncertain future of large healthcare providers catching up technologically with electronic health record systems. Due to major legal and technical changes in the last decade, investing in new systems has been prohibitively expensive, making outsourcing a financially attractive option. In fact, 80% of CFOs said that outsourcing was a smart idea until new RCM software was implemented. As providers build up their EHR infrastructure and make investments in software in the next coming years, it's not clear whether they will continue to use outsourcing at the current rate.
Signs That Outsourcing Will Continue
Some recent news suggests that the trend toward RCM outsourcing is still strong. Intermountain Healthcare acquired a big stake, both in terms of funding and staffing, in R1 RCM, one of the largest revenue cycle management companies in the United States. Their goal is to cut internal expenses and capitalize on the growing outsourcing market. Another provider, Tenet Healthcare, has decided to divest itself from its revenue cycle management operations altogether in an effort to cut expenses. In the period of 2014 through 2019, Expert Consulting predicts that the RCM outsourcing market will have increased at a compound annual growth rate of 17.55%.
While outsourcing revenue cycle management is clearly a benefit, the future is not completely predictable. One thing seems for certain: organizations that have gaps in their RCM staffing or resources can improve their revenue by outsourcing. Smaller organizations are likely to continue taking advantage of third-party services while larger providers will use a mix of internal staffing and outside services. According to Orbis Research, overall growth in the market is expected to be about 13% per year.