Revolution in the Revenue Cycle: Outdated Technology is Finally Evolving to Meet the Demands of a Completely New Environment

revenue cycle

There finally seems to be movement in the development of revenue cycle technology after years of stagnation. The heavy focus on clinical technologies, as organizations moved to capitalize on incentives such as Meaningful Use, has limited work on the revenue cycle in recent years, and many practices still use systems that are designed for fee-for-service. In many cases, revenue cycle management technology is considered years out of date, with some systems only capable of basic claims processing.

But the industry is shifting, with the demand for pay-for-performance and bundled payments increasing, and reimbursements for volume falling. To effectively manage their revenue streams, organizations must evolve to keep pace. This means that payment reform is coming.

In a recent article in Healthcare IT News[1], HIMSS Analytics Senior Director of Research Jennifer Horowitz stated, “The writing has been on the wall for a long time. Because we’ve had such an unnatural market with the clinical applications, and the amount of focus there, at some point (providers) are going to have to focus on the revenue side. They’re just not going to be able to accommodate what they need to do anymore.”

The Executive Director of HIMSS Analytics, John Hoyt, pointed out in the same article that one of the big changes that is set to occur is that billing processes will start to consolidate. “That’s where we’re headed, “ he said.” I know healthcare is local, but that doesn’t mean billing is. There’s no reason you can’t go to your local hospital and have the bill generated from Minot, N.D., just like your MasterCard bill is.”

Hoyt pointed out that to accomplish this kind of consolidation, standardization will be needed in coding. But with that standardization, an organization can have one central billing office, or outsource their billing altogether.

Where are we right now?

The same article revealed data that shows an even split between organizations that are ready to move forward with changes to their revenue cycle management, and those that are still in a holding pattern. A cited report from Black Book referenced that 40 percent of hospital CFOs surveyed felt that heir organization had been so damaged by “misjudged EHR, HIE and patient portal expenses,” that they decided to postpone acquisition of new revenue cycle software until at least 2016. However, another 41 percent of CFOs surveyed said their hospitals were in good shape and that these organizations would be moving ahead with “next generation” revenue cycle management tools.

All of this activity is moving the industry in general. Once again, according to a recent Black Book survey, the market for end-to-end RCM outsourcing could reach $10 billion by 2016. According to Black Book: “overwhelmed hospital leaders have realized that RCM isn’t their organization’s core competency.”

We’re still in a transition period, with momentum building towards the level of RCM revolution that we have seen in clinical technologies in recent years. But with the pressure to change growing, and the focus shifting off of clinical incentives such as Meaningful Use, there should be great things to look forward to on the revenue side in the near future.


[1] Mike Miliard, “Revenue Cycle Headed for a ‘New World': The Writing has been on the Wall for a Long Time,” Healthcare IT News, (January 5, 2015),


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