Skip to main content
Subscribe
  • Login
  • My Account
  • Logout
  • Register For Free
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Blogs
    • AI
    • Deals
    • Layoff Tracker
    • HLTH 2024
    • Sponsored Content: Vital Signs Blog
  • Opinion
    • Letters
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • 40 Under 40
    • Best Places to Work in Healthcare
    • Healthcare Marketing Impact Awards
    • Innovators Awards
    • Diversity Leaders
    • Leading Women
    • Best in Business Awards
    • The 2030 Playbook Conference
    • Innovations in Patient Experience
    • Leading Women Conference & Awards Luncheon
    • Leadership Summit
    • Workforce Summit
    • Best Places to Work Awards Gala
    • Diversity Leaders Gala
    • - Looking Ahead to 2025
    • - Financial Growth
    • - Hospital of the Future
    • - Value Based Care
    • - Looking Ahead to 2026
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Sponsored Video Series - One on One
    • Sponsored Video Series - Checking In with Dan Peres
  • Data & Insights
    • Data & Insights Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Skilled Nursing Facilities
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
    • Sponsored Content
MENU
Breadcrumb
  1. Home
  2. Revenue Cycle
January 16, 2021 12:00 AM

COVID-19 hastens hospitals' revenue cycle outsourcing moves

Tara Bannow
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Modern Healthcare Illustration / Getty Images

    The COVID-19 pandemic lit a fire beneath a trend that had already been heating up: hospitals hiring outside help to handle their billing and revenue collection.

    Experts who follow the industry and companies that offer revenue cycle management—the process of patient registration, billing and collecting money owed—say they’ve seen renewed interest this year from hospitals that more than ever need to collect every penny owed to them and spend less money doing it.

    While an increasingly popular way to save money, revenue cycle outsourcing can take a toll on employees who often transition to working for the billing vendor and, consequently, on a hospital’s internal culture. It’s a shift that previously just a handful of health systems would consider, said Stephanie Davis, a managing director at SVB Leerink who covers health technology.

    During the pandemic, however, “it’s really expanded to all health systems,” Davis said. “They’re arguably all struggling in some respects.”

    Annual surveys of hospital finance chiefs conducted by investment firm Baird have captured a distinct evolution toward hospitals outsourcing their revenue cycle operations. Whereas in 2016 only 5% of chief financial officers said they currently outsourced their revenue cycle, that was up to 51% in the latest survey, conducted in October 2020.

    Matthew Gillmor, a director and senior research analyst with Baird, cautioned that the surveys have a small sample size—80 CFOs participated in the latest one—and respondents differ year to year. Regardless, he said the prevailing trend is clear.

    “It’s completely flipped where to now a minority say they would not outsource revenue cycle and a majority already do or are planning to do it,” Gillmor said.

    Hospitals also appear increasingly eager to outsource the whole operation rather than only certain components of their revenue cycle. That’s a good sign for companies like Chicago-based R1 RCM and Cincinnati-based Ensemble Health Partners, that tout their so-called “end-to-end” approaches.

    R1, for example, has shared with Baird estimates that it can perform revenue cycle functions for 30% less than doing the work in-house while boosting cash collection by 4%, Gillmor said. R1 declined to comment.

    That’s enticing for hospitals, forced to put cost-cutting into overdrive this year after the pandemic sent revenue plummeting in March. The American Hospital Association estimates hospital losses will top $320 billion in 2020.

    “Conservatism has driven them to say, ‘How do I continue to reduce costs to become more efficient?’ ” said Ensemble CEO Judson Ivy. “That was there prior to COVID, but I think this really has shown the stress fractures there.”

    Some hospitals furloughed revenue cycle employees, who then chose not to return. That trend prompted inquiries to nThrive, another revenue cycle vendor, to ensure they’d have adequate coverage, said Gabby Graham, nThrive’s vice president of patient-to-payment and strategic solutions. Earlier in the pandemic, nThrive helped hospitals transition to remote work.

    For its part, Ensemble says it signed up four health systems for end-to-end contracts during the pandemic, which Ivy said was “kind of a record for us.” Ensemble’s new customers include Ballad Health in Johnson City, Tenn., Fairfield Medical Center in Lancaster, Ohio, Summit Healthcare in Show Low, Ariz., and VCU Health in Richmond, Va. Ivy noticed that the pandemic both sped up existing inquiries as well as triggered new interest.

    Patients have long expected to be able to schedule appointments and register online, but COVID has underscored the importance of having a contactless check-in process when patients enter the hospital. Rather than signing in using a clipboard or kiosk—potentially exposing the patients and registration staff to the coronavirus—lots of revenue cycle vendors offer tools that let patients check in using their phones.

    R1 RCM gets more attention from equity analysts than its privately held peers because it’s publicly traded and thus shares lots of detail about its performance quarterly. R1 has easily beat its goal of signing end-to-end customers with $3 billion in annual net patient revenue in 2020, having reached $5 billion by Sept. 30. R1’s profit was down 43% year-over-year in the quarter ended Sept. 30, 2020

    Related Article
    Momentum grows to outsource hospital tech functions in 2021
    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Revenue Cycle survey results
    Payer processes, federal policies challenging hospitals: RCM firms
    merger-arrows-money_i.png
    R1 RCM to buy artificial intelligence software firm Cloudmed
    Most Popular
    1
    UnitedHealth Group to cut Medicare drug plan commissions
    2
    Best Places to Work in Healthcare - 2025 (alphabetical list)
    3
    GE HealthCare debuts new MRI for cardiac and oncology imaging
    4
    Here are new state healthcare laws taking effect in 2025
    5
    Investors welcome a maturing digital health market
    Sponsored Content
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Help Center
    • Advertise with Us
    • Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2025. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Blogs
      • AI
      • Deals
      • Layoff Tracker
      • HLTH 2024
      • Sponsored Content: Vital Signs Blog
    • Opinion
      • Letters
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • 40 Under 40
        • Best Places to Work in Healthcare
        • Healthcare Marketing Impact Awards
        • Innovators Awards
        • Diversity Leaders
        • Leading Women
        • Best in Business Awards
      • Conferences
        • The 2030 Playbook Conference
        • Innovations in Patient Experience
        • Leading Women Conference & Awards Luncheon
        • Leadership Summit
        • Workforce Summit
      • Galas
        • Best Places to Work Awards Gala
        • Diversity Leaders Gala
      • Virtual Briefings
        • - Looking Ahead to 2025
        • - Financial Growth
        • - Hospital of the Future
        • - Value Based Care
        • - Looking Ahead to 2026
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Sponsored Video Series - One on One
      • Sponsored Video Series - Checking In with Dan Peres
    • Data & Insights
      • Data & Insights Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Skilled Nursing Facilities
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing
      • Sponsored Content