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.”
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