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KLAS Report: Revenue Cycle Market Headed for Overhaul

November 3, 2011
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According to a new report from Orem, Utah-based research firm KLAS, the number of healthcare providers replacing their revenue cycle management system (RCM) has risen drastically. Over the next five years, nearly half of the providers KLAS interviewed for the recent study, Seismic Shift in Revenue Cycle: Market Heading toward Sole-Source Landscape?, said they plan to replace their RCM. A whopping 87 percent are planning to do so in the next three years.

There are many factors influencing this shift—from integration and single source solutions to cost and bolt-on functionality—and providers are going about their RCM buying decision processes with more than just the revenue cycle in mind.

Most providers are looking at a new RCM in terms of how it fits in with a single-source enterprise strategy, often driven by the clinical vendor. Nearly three of four providers in this study mention their CIS as influencing their decision to replace or upgrade their RCM. One in four say that Accountable Care, ICD-10, or other government initiatives were also influences. However, while fewer providers are gravitating toward the best-of-breed approach, this study found that larger development shops and those with a weak RCM are the most likely to choose go-forward plans with a best-of-breed RCM replacement.

Epic and Siemens top the list of considerations for over-200 bed providers while McKesson and MEDITECH were the most considered by community (200 and less bed) hospitals. However, large numbers of considerations are offset in some cases by similarly large numbers of a vendor’s existing RCM customers planning to replace them. The chart below shows vendors’ overall potential customer wins/losses given providers leaning toward purchasing them and potential customer replacements.

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