Revenue Cycle Management

U.S. healthcare changed considerably over the last decade, transitioning into a more technologically advanced and regulated industry. Some of the most notable drivers include increasingly more stringent regulations like President Obama’s Patient Protection and Affordable Care Act (ACA), more detailed coding systems, and evolving valued-based reimbursement and payment models.

Although these changes present challenges and increased costs for healthcare providers, they also create sizeable business opportunities for the outsourced business services (OBS) sector, particularly companies specializing in revenue cycle management (RCM). RCM is an integral outsourced service for healthcare providers because of changes in legislation and regulation, administrative operations, and consumer demographics.

Overall, the RCM industry is a relatively young segment of the OBS sector that developed over the past few decades as a result of the evolving, and expanding, U.S. healthcare market. Before that, healthcare providers were primarily small-town physicians who treated neighbors and friends for unstructured costs, and were sometimes only paid if patients recovered. Between the 1980s and 1990s, large IT management companies began deploying systems designed to help clients more effectively manage their transaction processing, billing and receivables management needs as the RCM industry slowly gained recognition and traction within the healthcare industry.

The RCM industry changed drastically since its inception when it only handled billing and collections, and basic administrative functions. Today, healthcare is a technologically advanced market that requires expertise in treating medical problems and handling administrative functions through sophisticated billing and payment processing networks, and electronic health record systems.

In 2015, the RCM industry produced about $18 billion in revenue, and is projected to grow to more than $26 billion in annual revenue by 2021 at a compounded annual growth rate of 5.5 percent.

As a result of the ongoing evolution of the healthcare industry, the RCM industry continues to grow and attract interest from financial and strategic buyers. Kaulkin Ginsberg has worked with a number of these companies over the years, serving as both a strategic and transaction advisor to board-level executives.

We understand the history of the RCM industry, continue to garner expertise within it, and have the foresight to know where the industry is heading. We are excited about the potential within the RCM industry and look forward to working with owners and executives who are committed to achieving their growth and exit objectives.

If you are interested in receiving a copy of The Healthcare Revenue Cycle Management Industry Overview, or if you would like to confidentially discuss your interests in the RCM industry, please contact a member of our strategic advisory team at hq@kaulkin.com.

 

 

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