LONDON--(BUSINESS WIRE)-- Technavio analysts forecast the healthcare revenue cycle management (RCM) market in the US to grow at a CAGR of close to 13% during the forecast period, according to their latest report.
The research study covers the present scenario and growth prospects of the healthcare revenue cycle management market in the US for 2016-2020. To calculate the market size, the report considers revenue generated from the sale of RCM solutions that include software suites that are stand-alone and integrated solutions and services (consultation, outsourcing, training, and maintenance).
Technavio ICT analysts highlight the following three factors that are contributing to the growth of the healthcare revenue cycle management market in the US:
Increase in healthcare needs of older adult population
The demand for emergency or outpatient care centers has grown steadily in recent years, partly due to the aging demographic in North America. This trend should result in increased demand for air and ground (emergency or non-emergency) transports. In 2015, most emergency department visits were from patients aged 65 and more.
In 2011, the first of the baby boomers — people born after World War II, approximately between the years 1946 and 1964 — reached the age mark of 65 years. This group represented 25% of the US population. This marked the beginning of the next wave of an aging population. As these baby boomers' average life expectancy increases, the number of people aged 65 and more will rise in the US.
According to Amrita Choudhury, a lead analyst at Technavio for research on enterprise application, “The growth in older population will result in more people to be insured under the US federal government Medicare program. This rising number of patients will lead to increased business for healthcare organizations and increased adoption of healthcare RCM solutions in the years to come.”
Rise in recovery audits due to changing healthcare regulations
The healthcare sector operates at a very low margin, mostly fluctuating between 3% and 5%. Healthcare service providers are under constant pressure triggered by the changing government regulations in the healthcare space. As a result, they are experiencing an increase in the cost of operations, and their revenues are squeezed. In addition, the providers' revenue is under continuous scrutiny and audit by recovery audit contractors. These contractors are third-party service providers hired by the Centers for Medicare and Medicaid in order to identify illegal payments under fee-for-service Medicare. Due to the continuous audits, the providers' revenue is being squeezed further. To reduce the negative revenue effect of recovery audits, healthcare providers are increasingly outsourcing their RCM process to third-party vendors. Organizations adopt and invest in RCM solutions to keep the revenue cycle process updated as well as to maintain the audit report.
Increased need to minimize revenue leakage
With the expansion of the healthcare service portfolio, healthcare providers' revenue cycle is getting more complex. To remain competitive in the market, healthcare service providers must take care of their revenue leakage resulting from several factors such as incorrect claims and mismanagement of older records. The loss in revenue impacts the business productivity of healthcare providers. “As it is very hard for the providers to focus on these issues along with the maintenance of healthcare services, the demand for RCM in the healthcare sector is rising to increase the business productivity and to remain competitive in the market,” adds Amrita.
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