Hospitals' rush to swap out their revenue-cycle management (RCM) systems has slowed, with many trying to figure out whether they can make do with the systems they already own. However, the $2.4 billion hospital market for RCM software and services is expected to increase by double digits in 2014, according to Black Book research.
On Monday the group released results of two surveys: one looking at small hospitals (fewer than 250 beds) and the other at larger hospitals and health systems. More than 500 inpatient organizations responded.
"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," Black Book senior partner Douglas Brown said in an announcement.
It points to reimbursement and payment reforms, accountable care participation, ICD-10 coding challenges and physician practice acquisitions among the issues making cash flow that much more difficult.
Among the survey findings:
- Roughly two-thirds of hospitals that in 2012 predicted they would replace their core RCM solution in 24 months have yet to initiate a plan to do so. More than half have not done a formal needs assessment or begun a vendor-selection process.
- 28 percent of CFOs say multiple clinical and technology projects under way in their organizations, such as such as ICD-10, clinical decision support and physician practice EHR integration, are keeping hospitals from upgrading RCM.
- 88 percent of CFOs are seeking a best-in-breed approach regardless of the number of vendors involved, while 83 percent of CIOs favor a single-source enterprise strategy, in an effort to manage fewer vendors.
- 36 percent of CFOs are reassessing the capabilities of their current legacy, core and bolt-on RCM applications, optimistically looking for options in solutions they already own.
A recent report from Moody's Investors Service concluded that hospital expenses are outpacing revenue as for the first time in several years, and that the trend is "unsustainable"-- especially as patient volumes continue to fall.
At the same time, more than 200 small hospitals swapped out their EHR systems last year, often by joining a larger system and adopting its technology.
Black Book also recently suggested that upgrading RCM technology could save independent physician offices from acquisition.
To learn more:
- find the announcement from Black Book