RCM Industry Expects Growth, but Struggles for Priority in Hospitals | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

RCM Industry Expects Growth, but Struggles for Priority in Hospitals

September 25, 2013
by Rajiv Leventhal
| Reprints

The $2.4 billion hospital revenue cycle management (RCM) software and services industry expects double digit increases in 2014, despite many U.S. hospitals admitting they don’t have a sustainable RCM plan in place, according to two reports released by market research firm Black Book.

The industry growth is expected because of business shifts, reimbursement and payment reforms, accountable care participation, ICD-10 coding challenges, physician practice acquisitions, collection issues, and overall declining margins, the reports say.

But roughly two-thirds of U.S. hospitals that predicted in 2012 that they would replace their core RCM solution in 24 months have actually failed to initiate a sustainable RCM plan as of Q3 2013.

Black Book released the results of two surveys: one looking at hospitals with fewer than 250 beds, and the other at larger hospitals and health systems with more than 250 beds. There were 557 hospital and inpatient organizations represented in the survey.

Other key findings of the reports include:

• Twenty-eight percent of CFOs blame the multiple clinical and technology projects underway organizationally for keeping their hospitals from upgrading to comprehensive RCM solutions.

• Hospital CFOs and CIOs wrangle with the prioritization of RCM above all other technology spends in 2014. Although 63 percent of CIOs and 88 percent of CFOs agree current RCMs need to be replaced, executive teams differ on agendas for project implementation acquisition, timing and urgency.

• In a shift from a 2010 Black Book Rankings survey, 85 percent of CFOs were amenable to implementing a one-vendor solution set following the direction of the hospital’s clinical information system selection committee. The general sentiment of 77 percent of CFO’s was they could make any RCM solution work if the hospital’s clinical staff was satisfied with the health care delivery element of the system.

• Thirty-six percent of all CFOs confirm they are reassessing the capabilities of their current legacy, core and bolt-on RCM applications, optimistically looking for options in solutions they already own.

“Shifting payment models and regulations are forcing hospital leaders to redirect previously launched budgets, priorities, and strategic plans to assess if new RCM solutions can rescue them from imminent hospital layoffs, even bankruptcies," Doug Brown, managing partner, Black Book Rankings, said in a statement. “Most hospital CFOs have no choice but to leverage next generation RCM solutions in order to keep their organizations solvent. The reimbursement challenges ahead to get paid may require several new RCM applications, and the frank reality is that a failing RCM could quickly close a marginally performing hospital for good.”

Get the latest information on Finance and Revenues and attend other valuable sessions at this two-day Summit providing healthcare leaders with educational content, insightful debate and dialogue on the future of healthcare and technology.

Learn More

Topics

News

Community Data Sharing: Eight Recommendations From San Diego

A learning guide focuses on San Diego’s experience in building a community health information exchange and the realities of embarking on a broad community collaboration to achieve better data sharing.

HealthlinkNY’s Galanis to Step Down as CEO

Christina Galanis, who has served as president and CEO of HealthlinkNY for the past 13 years, will leave her position at the end of the year.

Email-Related Cyber Attacks a Top Concern for Providers

U.S. healthcare providers overwhelmingly rank email as the top source of a potential data breach, according to new research from email and data security company Mimecast and conducted by HIMSS Analytics.

Former Health IT Head in San Diego County Charged with Defrauding Provider out of $800K

The ex-health IT director at North County Health Services, a San Diego County-based healthcare service provider, has been charged with spearheading fraudulent operations that cost the organization $800,000.

Allscripts Touts 1 Billion API Shares in 2017

Officials from Chicago-based health IT vendor Allscripts have attested that the company has reached a new milestone— one billion application programming interface (API) data exchange transactions in 2017.

Dignity Health, CHI Merging to Form New Catholic Health System

Catholic Health Initiatives (CHI), based in Englewood, Colorado, and San Francisco-based Dignity Health officially announced they are merging and have signed a definitive agreement to combine ministries and create a new, nonprofit Catholic health system.