New Report Provides Research Data and Exclusive Insights on "The Current and Future State of Healthcare Sector Revenue Cycle Management - Market and M&A Trends"

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Jun 04, 2024, 08:35 ET

Continued sector investment and M&A will reshape the vendor landscape to be driven by artificial intelligence (AI), replacing ineffective EMRs and legacy tools

BALTIMORE, June 4, 2024 /PRNewswire/ -- Healthcare consultancy Sage Growth Partners and Harris Williams, a global investment bank specializing in M&A and private capital advisory services, have released a new industry report – "The Current and Future State of Revenue Cycle Management – Market and M&A Trends" – to provide the healthcare market with a better understanding of revenue cycle management and revenue cycle processes.

Although healthcare organizations focus on financial stability and put revenue cycle investments among their top strategic priorities, revenue cycles are not being fully optimized for success. Healthcare leaders are dissatisfied with their electronic medical records (EMRs) and acutely interested in more innovation.

These are some of the findings compiled in the report, which is based on independent research conducted in Q4 2023, including a survey of 115 C-Suite executives, CIOs, and finance, IT, and operations professionals.

"Our new research examines the current state of revenue cycle management, factors that are negatively impacting hospital and health system revenue cycles, and market trends that these organizations should expect," said Dan D'Orazio, Sage Growth Partners' CEO. "Ultimately, we are seeing that the revenue cycle presents an appealing opportunity for M&A and other growth initiatives for investors in the coming years."

The survey also reveals that 77% of respondents outsource some or all of their revenue cycle, and more than a third (36%) believe that their current revenue cycle vendor is only "somewhat effective."

Among other key findings in the report:

Of those surveyed, 43% say their revenue cycle has improved since 2019, while 21% say it has gotten worse.
88% indicated workforce/staffing is the top factor contributing to the worsening of revenue cycles, followed by a decline in overall financial climate (63%) and operational process challenges (58%).
Approximately half say that AI/automation would have a "high positive impact" or "very positive impact" on the revenue cycle.
Participating healthcare leaders believe investing in the revenue cycle, technology, and operational process improvement is effective in driving impactful changes.

"Overall M&A activity in the sector has been strong during the last three years, with more than 200 platform and add-on transactions completed reshaping the vendor landscape," said Dan Linsalata, a managing director in the Healthcare & Life Sciences Group at Harris Williams. "This demonstrates that investors value the operational improvements and tangible ROI that outsourced vendors can deliver in a complex and critical workflow."

Tyler Bradshaw, a managing director in the Healthcare & Life Sciences Group at Harris Williams, added, "The U.S. healthcare revenue cycle market was worth roughly $140 billion in 2023. Over the next 10 years, the market is expected to continue to grow in low double digits, which is a powerful illustration of the market's potential."

The full report can be found here.

About Sage Growth Partners
Sage Growth Partners is a healthcare growth strategy and marketing firm with deep expertise in market research, go-to market strategy, and marketing communications. Founded in 2005, the company's extensive domain experience ensures that healthcare organizations thrive amid the complexities of a rapidly changing marketplace. Sage Growth Partners serves clients across the full healthcare spectrum, including GE Healthcare, Medecision, ProgenyHealth, Kyruus; Best Buy Health, New Jersey Brain and Spine, the National Minority Health Association, and Philips Healthcare. For more information, visit sage-growth.com.

About Harris Williams
Harris Williams is a global investment bank specializing in M&A and private capital advisory services. Clients worldwide rely on us to help unlock value in their business and turn ambitious goals into reality. We approach every engagement with boundless collaboration, pooling expertise and relationships across industries and geographies. For over 30 years, our clients have trusted us to think strategically, execute precisely, and deliver superior outcomes to help them grow. Harris Williams is a subsidiary of the PNC Financial Services Group, Inc. (NYSE: PNC).

Harris Williams LLC is a registered broker-dealer and member of FINRA and SIPC. Harris Williams & Co. Ltd is a private limited company incorporated under English law with its registered office at 8th Floor, 20 Farringdon Street, London EC4A 4AB, UK, registered with the Registrar of Companies for England and Wales (registration number 07078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. Corporate Finance Advisors GmbH is registered in the commercial register of the local court of Frankfurt am Main, Germany, under HRB 107540. The registered address is Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany (email address: hwgermany@ harriswilliams.com). Geschäftsführer/Directors: Jeffery H. Perkins, Paul Poggi. (VAT No. DE321666994). Harris Williams is a trade name under which Harris Williams LLC, Harris Williams & Co. Ltd and Harris Williams & Co. Corporate Finance Advisors GmbH conduct business.

For More Information
John Gonda
616-309-4888
[email protected]

SOURCE Sage Growth Partners