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4 Reasons Health Systems Pursue Revenue Cycle Partnerships

Analysis  |  By Jay Asser  
   October 05, 2022

A new report compiles survey responses from healthcare leaders to better understand revenue cycle strategy.

Reducing costs and improving efficiency are among the driving factors for why health systems seek out revenue cycle partnerships, according to a report from The Health Management Academy.

Sponsored by revenue cycle management company R1 RCM, Vetting the Right Revenue Cycle Partner includes 40 quantitative survey responses and eight qualitative interviews among C-suite executives, as well as vice presidents and directors in finance and revenue cycle management roles at leading health systems.

The report states that 83% of health systems outsource some revenue cycle components but maintain internal oversight of most of their revenue cycle functions, with challenges like budget constraints hampering further investing in revenue cycle partnerships.

Meanwhile, the survey finds 10% of health systems use end-to-end partnerships, with an additional 36% in modular partnerships answering they would consider investing in a future end-to-end solution.

Health system pursue revenue cycle partnerships because of four key reasons, according to the report:

  1. Improve financial performance: From accelerating cash flow, to minimizing denials, revenue cycle partnerships first and foremost serve to increase operational efficiency, reduce costs, and improve revenue.
  2. Drive standardization to increase efficiency: Standardization, such as automating workflows, can eliminate variation across the organization.
  3. Optimize the patient experience: Partnerships that can support tailored digital interfaces can give patients more price transparency and digital self-service processes.
  4. Create a sustainable workforce: With the labor shortage presenting a major problem for health systems, revenue cycle partnerships that support automation can relieve administrative burden and extend staffing capabilities.

These reasons, leading to improved outcomes, are what's driving investments in revenue cycle partnerships.

The report states: "There is near-consensus across health systems that relying on manual processes prone to human error or stop-gap technologies only solves specific RCM pain points. Furthermore, internally built technologies have struggled to keep up with the complexities of RCM or technology leveraging automation and artificial intelligence (AI). This recognition ultimately results in those health systems abandoning their own solutions and 'do-it yourself' mindset"

Jay Asser is an associate editor for HealthLeaders.


Improving financial performance, driving standardization to increase efficiency, optimizing the patient experience, and creating a sustainable workforce are what's driving investment in revenue cycle partnerships.

83% of health systems outsource some revenue cycle components, while 10% use end-to-end partnerships.

Automation can strengthen revenue cycle strategies across the board.

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