Revenue cycle management market

Market Size and Trends

The global revenue cycle management market is estimated to be valued at USD 156.68 Bn in 2024 and is expected to reach USD 343.12 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 11.8% from 2024 to 2031.

The market is expected to witness high growth owing to the rising number of healthcare claims and increasing pressure to reduce healthcare costs. With growing digitization of healthcare processes, the demand for automated revenue cycle management solutions is expected to increase. Key players in the market are focusing on offering cloud-based integrated revenue cycle management (RCM) solutions to provide improved workflow, maximize revenue recovery, and enhance patient experience. The adoption of artificial intelligence and analytics is also expected to change the revenue cycle management landscape and deliver higher return on investment for healthcare providers over the coming years.

Shift to value-based reimbursement models

As healthcare costs continue to rise and insurance companies seek to rein in expenses, there is a gradual shift away from fee-for-service models towards value-based reimbursement models. These newer models tie hospital and provider reimbursements to the overall quality and efficiency of care rather than just sheer volume. This is putting pressure on providers to optimize their revenue cycle processes to minimize billing errors, denials, payment delays, and bad debts. Revenue cycle management solutions help providers extract maximum reimbursements from payers by ensuring flawless claims submission, denials management, and efficient payment posting. These solutions help providers stay on top of intricate reimbursement rules and regulations so they comply with value-based programs and optimize revenues from both private and public payers. The transition to bundles and episodic payments also increases the need for RCM tools that can track performance across the entire patient encounter.

Market Concentration and Competitive Landscape

Increasing regulatory compliance requirements

Healthcare regulations in the U.S. are becoming more and more complex each year with rules around billing codes, eligibility checks, timely filing, Electronic Remittance Advice/Explanations of Payment  (ERA/EOP) compliance, etc. Staying on top of this regulatory maze is challenging for most providers. Non-compliance can result in denied claims, penalties, and audits. At the same time, the root issue of rising healthcare costs is forcing the government to tighten oversight on revenues and wasteful spending. To address fraudulent and abusive billing practices, agencies like CMS, OIG, and ONC are empowering patients with tools to verify bills and dispute inaccurate charges. Revenue cycle solutions automate frequently changing rulesets so billing happens flawlessly the first time without errors or rebilling. They help providers integrate with various payer clearinghouses, submit standardized transactions, and address issues pre-emptively before audits. With regulations showing no signs of slowing down, optimization of the revenue cycle is important for hospitals to remain compliant and face less scrutiny from regulatory bodies.

Market Challenges: Stringent regulations and compliance requirements

The revenue cycle management market faces several challenges. Hospitals and healthcare providers struggle with inefficient and outdated revenue cycle processes, leading to losses in potential revenue. Stringent regulations and compliance requirements add complexity that traditional systems have difficulty addressing. Security of patient health information is also a major concern, as more data is digital but cyber threats continue to evolve. Care teams have less time dedicated to revenue-generating activities as administrative workload rises. New payment models will require agile systems to track performance and enable value-based reimbursement.

Market Opportunities: Emergence of cloud-based models

Cloud-based RCM solutions allow for flexibility and scalability as service capacity can be increased or instantiated rapidly without major investments in new infrastructure. This enables organizations to adapt quickly to changing market dynamics and scale processes up or down as needed. The cloud model also reduces upfront capital costs since infrastructure is sourced on-demand and costs are operationalized. This makes cloud RCM affordable for even small and medium sized healthcare facilities. Importantly, cloud solutions ensure 24/7 access to RCM systems from any location via an internet connection. This supports distributed and remote workforces as well as telehealth services that have grown rapidly during the pandemic.

Insights, By Type: Growing demand for unified and streamlined workflow

Type segment is sub-segmented into standalone and integrated. Integrated segment is anticipated to hold 58.2% of the market share in 2024. Integrated revenue cycle management platforms consolidate key functions such as patient access, billing, and payment posting into a single interconnected system. This unified approach streamlines workflows, reduces manual handoffs, and provides a holistic view of the revenue cycle in real-time. By integrating disparate systems and databases, integrated RCM solutions eliminate data redundancy and reconcile information automatically across different stages. This brings significant cost savings through economies of scale by reducing administrative overhead and headcount needed for repetitive reconciliation tasks. It also improves billing accuracy since charges are processed, coded, and transmitted seamlessly within the same environment. As patient volumes and service lines increase, additional modules and users can be added to the core system with relative ease. This flexibility supports long term growth plans of provider organizations. Integrated RCM also eases regulatory compliance as integrated clinical and financial data enables end-to-end audit trails and compliance with changing reimbursement rules.

Insights, By Deployment: Ubiquity Drives the Momentum of the Cloud Segment

Deployment segment is sub-segmented into cloud and on premise. The cloud segment is estimated to contribute the highest share of the revenue cycle management market and is projected to hold 69.1% of the market share in 2024. A majority of new revenue cycle implementations today are cloud-native given widespread high-speed internet connectivity and evolving regulatory support for data hosting in collaborative third party environments. Cloud models eliminate infrastructure expenses related to hardware, servers, maintenance and regular software upgrades which traditionally created high barriers for smaller practices to invest in on-premise systems. Transitioning Capital Expenditure to an Operational Expenditure model via software-as-a-service makes technology investment progressively affordable. Advanced cloud platforms also harness the benefits of virtualization, parallel processing, and artificial intelligence to drive unparalleled analytics capabilities. Real-time business intelligence dashboards equipped with powerful search tools and configurable workflows elevate user experience on the cloud. Integration of cloud-based RCM systems with third party applications spanning patient engagement, practice management and telehealth further augments care coordination.

Insights, By Component: Sophisticated Rule Configuration Drives Momentum in the Software Segment

Component segment is sub-segmented into software and service. Software segment is estimated to contribute the highest share of the revenue cycle management market and is projected to hold 83.8% of the market share in 2024. Advanced artificial intelligence driven coding algorithms and clinical documentation improvement modules embedded in RCM software not only enhance revenue capture but also optimize the revenue cycle itself. Powerful charge description master management, contract management, and claims processing engines streamline financial operations. Integrated electronic remittance advice and electronic funds transfer further accelerate cash posting and reconciliation. Sophisticated rules engines at the core of leading RCM software allow clients to model revenue cycle specific scenarios, payment validations, denial management routines as well as exception handling protocols without writing code. Templatized interfaces accelerate onboarding of health plans and facilities while also expediting updates across the board as policies evolve. Configurable compliance checks and auditing rules empower self-audits and proactive issue resolution.

Regional Insights

North America has established itself as the dominant region in the global revenue cycle management market and is anticipated to hold 39.7% of the market share in 2024. The presence of major RCM solution providers and various initiatives taken by healthcare organizations and the government are helping drive significant growth. The U.S. accounts for the largest share due to high healthcare spending and presence of advanced healthcare IT infrastructure. Many hospitals and physicians' offices are adopting RCM solutions to improve efficiency and cash flows. Moreover, favorable regulations such as the HITECH Act have incentivized the adoption of digital solutions.

Asia Pacific is considered as the fastest growing regional market. Rapid economic development, rising medical tourism, and improvements in the healthcare infrastructure across countries like India, China, and Japan are fueling market growth opportunities. With growing concerns around rising healthcare costs, governments and private players are promoting efficient revenue management practices. This has resulted in greater integration of RCM solutions across the vastly expanding Asia Pacific healthcare industry. The growing geriatric population base needing long-term care is another key factor spurring adoption of RCM solutions.

Market Report Scope

Key Developments

• On January 3, 2024, Med-Metrix, LLC, a leading provider of technology-enabled Revenue Cycle Management solutions, and VHC Health signed an exclusive 15-year RCM partnership that covers all of VHC Health's revenue cycle functions. VHC Health is a not-for-profit, Magnet-designated health system and member of the Mayo Clinic treatment Network that provides high-quality treatment in Washington, U.S.
• On January 2, 2024, Veradigm Inc., a leading provider of healthcare data and technology solutions, announced the acquisition of Koha Health, a full-service revenue cycle management company. With this acquisition, Veradigm Inc. expands its offerings and expertise as a leading provider of revenue cycle services in the ambulatory healthcare industry.
• In November 2023, the Healthcare Financial Management Association (HFMA) announced a strategic alliance with FinThrive, Inc., a healthcare revenue cycle management software-as-a-service (SaaS) provider, to co-launch a peer-reviewed, five-stage Revenue Cycle Management Technology Adoption Model (RCMTAM) designed to assist health systems in leveraging industry benchmarks to assess their current state of RCM technology maturity and developing best-practice plans to optimize revenue cycle outcomes
• In June 2022, Olive, the automation company pioneering the Internet of Healthcare, unveiled its Autonomous Revenue Cycle (ARC), the company's flagship Revenue Cycle Management (RCM) set of solutions. Olive's ARC revolutionizes RCM by using intelligent automation to eliminate manual tasks, allowing healthcare organizations to focus more on patient care while also reducing employee burnout.

*Definition: The revenue cycle management market consists of software, services, and platforms that help healthcare organizations efficiently manage the complex billing and payment processes associated with patient care. It covers tasks from patient registration through claims adjudication, billing, and follow-up. The goal is to streamline revenue generation from payers while improving affordability for patients. Revenue cycle management solutions help providers collect payments faster, reduce denials and administrative costs, and improve the patient financial experience.

Market Segmentation

• Type Insights (Revenue, USD BN, 2019 - 2031)
  • Standalone
  • Integrated
•  Deployment Insights (Revenue, USD BN, 2019 - 2031)
  • Cloud
  • On Premise
•  Component Insights (Revenue, USD BN, 2019 - 2031)
  • Software
  • Service
•  Function Insights (Revenue, USD BN, 2019 - 2031)
  • Appointment Scheduling
  • Claims & Denial Management
  • Medical Coding & Billing
  • Network Management
  • Others
•  End User Insights (Revenue, USD BN, 2019 - 2031)
  • Hospitals
  • Clinics
  • Ambulatory Surgical Centres
  • Diagnostics & Imaging Centres
  • Others
• Regional Insights (Revenue, USD BN, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Key Players Insights
  • Athenahealth
  • Experian Health
  • Cerner
  • GE HealthCare
  • Coronis
  • Epic Systems
  • Conifer Health Solutions
  • eClinicalWorks
  • Change Healthcare
  • Optum
  • Waystar
  • McKesson Corporation
  • R1
  • Experian Health
  • Veradigm LLC
  • CareCloud Corporation
  • Access Healthcare
  • AdvantEdge Healthcare Solu