Irregular Debt Payments to Drive the Revenue Cycle Management Market
The Revenue Cycle Management market size was valued at $112.914 billion in 2020 and is anticipated to increase at a Compound Annual Growth Rate of 10.73% over the predictive period to reach $230.465 billion by 2027. The process of determining, collecting, and controlling an organization’s income from consumers based on the services delivered is known as revenue cycle management. A successful revenue cycle management process is critical for a healthcare institution's financial survival and capacity to continue providing high-quality treatment to its patients. The revenue cycle begins when a patient schedules an appointment and concludes when money is received successfully. A human mistake can result in lost income owing to coding complexity, misunderstanding, medical billing problems due to identical data, and incomplete information or misspellings. Moreover, receiving timely payments might be difficult due to the ever-changing healthcare rules and reimbursement structures. These services can efficiently be offered by revenue cycle management.
Growing Investments in the Healthcare Sector
In recent years, the healthcare industry has experienced remarkable growth. Advancements in technologies like automated medical procedures, robotic surgeries, non-invasive surgeries, and other facilities have led to a better expansion of the healthcare sector. Moreover, the increasing healthcare expenditure and initiatives from the government have also led to growth in the healthcare industry. The rate of electronic data created in the healthcare business has grown to terabytes and petabytes, owing to increased patient loads and the digitalization of organizational, clinical, and financial data. This necessitates the implementation of revenue cycle management software. These factors have led to significant development in the healthcare industry.
According to data released by the American Medical Association, the United States spent about US$4.1 trillion on healthcare services in 2020, which was an increase of 9.7% in spending. This increased spending was due to the increasing number of COVID-19 infection cases during the time. The COVID-19 pandemic resulted in most major countries developing their healthcare infrastructure, which has led to an increase in investment costs in the healthcare sector. Most developed and developing countries have started to implement revenue cycle management systems to efficiently process patient information and payment procedures. Moreover, the pandemic led to an increase in telehealth solutions, which led clinics to adapt to cloud-based revenue management systems.
With the increasing advancements in healthcare technology and equipment, healthcare costs have also increased significantly. Implementation of certain government policies has also resulted in increased medical bills. These factors have led to inflation in medical bill costs. The amount of a medical bill might be unexpected, and it can vary greatly depending on the patient and provider. Uninsured and out-of-network patients are usually charged fees that are significantly higher than those paid by in-network insurers, despite the fact that the uninsured may have limited financial resources. According to a report published in February 2022 by the Consumer Financial Protection Bureau (CFPB), the total amount of medical debt in the United States as of June 2021 amounts to about US$ 88 billion. In reality, this debt is a lot more than this amount, since not all medical debts are reported to consumer reporting companies. Moreover, medical debt accounted for about 58% of all third-party debt collection tradelines in 2021, making it the most significant debt collection tradeline on credit reports.
The increasing cases of irregular or non-payment of fees have resulted in a complicated scenario for the healthcare sector. Financial officers and employees face immense complications in fund collection, assortment, and database management. This has led to an increase in demand for the revenue cycle management, due to their outstanding financial management and risk reduction abilities.
North American Region to Lead the Market
The North American region is expected to hold the largest market share in the revenue cycle management market throughout the forecast period. The market is predicted to grow as a result of factors such as rising innovations in healthcare technology and infrastructure. The increasing patient volumes in healthcare facilities have led to an increase in demand for proper healthcare revenue management. Rising healthcare costs in the United States are forcing industry participants, such as providers and consumers, to adjust by adopting value-based compensation systems, expanding risk sharing, and instituting cost controls. The revenue cycles of hospitals and health systems have been significantly affected by these market factors. The ability of RCM to prevent billing errors and financial losses, while also maintaining a proper patient database, has had a significant impact on healthcare facilities. Increasing government support and initiatives have also led to an increase in demand for the revenue cycle management market.
The emergence of the COVID-19 pandemic caused a worldwide economic downturn. Most companies suffered considerable losses since most countries imposed lockdown and social distance policies. This also affected the lifestyle and well-being of the population. However, owing to the increasing infection cases, the healthcare sector grew significantly. Government initiatives and increased spending in the sector also led to an increase in the healthcare sector. This also resulted in a positive influence on the revenue cycle management market. Revenue cycle management systems played a vital role in database management, bookkeeping of funds, checking appointments and payments, insurance-related services, reviewing revenue shortfalls, error detection, and other important tasks. Revenue cycle management systems have since reported an increase in demand, due to their efficiency and multitasking abilities. Moreover, as countries have started to relax their COVID-19 regulations, the healthcare sector had reported an increased patient volume. Hence, the revenue cycle management market is anticipated to rise significantly in the coming years.
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