New York, NY (PRWEB) November 19, 2014
The consolidation trend by end-to-end RCM outsourcing vendors is accelerating, triggering more insecurity for smaller, niche healthcare RCM solution providers. Larger, more complex RCM outsourcing vendors have filled service gaps in their offerings to meet the 20% growth demand by borderline troubled hospitals for fully integrated, end-to-end solutions, incorporating more ancillary aspects of the full revenue cycle.
“After carefully identifying and assessing their organizations’ core competencies, hundreds of hospitals have moved to outsourced RCM services over the last two years,” said Doug Brown, Managing Partner of Black Book Market Research LLC, and co-author of the bestseller, “The Black Book of Outsourcing” (Wiley Publishers). “It has been no surprise that many overwhelmed hospital leaders have realized that RCM isn’t their organization’s core competency, and have turned to large end-to-end outsourcing firms for RCM to refocus on patient care and clinical service delivery.”
Black Book estimates the market potential of RCM outsourcing to be $7.7B, with projected growth to nearly $9.9B by mid-2016. Much of the market growth is attributed to the end-to-end service vendors.
Claims reimbursement processing costs will reportedly vary from $30 to $90 per transaction, and billing paperwork will cost providers a collective total of $252 Billion in 2014, according to Black Book projections.
“In the financial services industry, business process outsourcers have reduced banking and brokerage transaction costs to less than a penny in most cases,” said Brown. “The healthcare industry also has the opportunity to leverage the economies of scale offered by RCM outsourcers, which successfully handle high volumes of encounters. RCM outsourcers also have the staff and technology expertise to integrate patient billing, collections, accounts receivables, and grievances as ICD-10, and value-based payment models present even more potential for internal inefficiencies... without capital investment for state of the art technology and staff.’
83% of hospitals over 200 beds that moved to outsource all or most of their RCM operations have attributed revenue increases of 5.3% year-to-date 2014 to a turnaround in post-outsourcing RCM proficiencies.
78% of hospitals under 200 beds that were new to outsourcing RCM also reported average revenue increases of 6.2% in 2014.
Black Book surveyed 2,250 CFOs, CIOs, business office managers, technology and financial services staffers for their outsourcing vendor perceptions and user experiences. 445 hospitals from 40 states were represented in the poll.
Current users rated two RCM outsourcing vendors as top performers in their inpatient specialty theatres of engagement. Ranking first in their respective categories for 2014 user satisfaction are:
Conifer – Hospitals Over150 Beds (includes standalone major and academic medical centers)
Optum – Hospital Systems/Chains (includes integrated delivery networks and ACOs)
Other top ranked vendors include: MedAssets, McKesson RelayHealth, Emdeon, Convergent, Xtend, HBCS, MedAssist Firstsource, and Citadel.
Key findings from the Black Book survey of CFOs and financial managers conducted from July to November 2014 also include:
82% of hospital financial leaders that changed to end-to-end RCM outsourcing vendors in the past 18 months reported that they were most worried about their former RCM system or outsourcing vendors’ inability to deliver meaningful analytics or operate outside fee-for-service payment models.
21% of hospital financial leaders that changed to RCM outsourcing also recently reported that they believe they are absolutely facing bankruptcy or closure within 4 years if state-of-the-art RCM systems (either software or outsourced services) are not implemented immediately.
90% of newly implemented RCM outsourcing clients confirmed they did not have access to capital (or board/corporate approvals) for new RCM and analytics software technology when they made the decision to outsource.
About Black Book™
Black Book Rankings, a division of Black Book Market Research LLC, provides healthcare IT users, media, investors, analysts, quality minded vendors, and prospective software system buyers, pharmaceutical manufacturers, and other interested sectors of the clinical technology industry with comprehensive comparison data of the industry's top respected and competitively performing technology vendors.
The largest user opinion poll of its kind in healthcare IT, Black Book™ collects over 400,000 viewpoints on information technology and outsourced services vendor performance annually. For methodology, auditing, resources, comprehensive research and ranking data, see http://www.blackbookrankings.com.