Hospitals look for RCM talent, turn to RCM software to address labor costs

The news: Revenue cycle management (RCM) is a hot area in health tech—several hospital systems are seeking talent in this area, per Becker’s Hospital CFO Report.

Trendspotting: There’s an emerging need for RCM software and talent amid the Great Resignation.

For example, Sutter Health signed a 10-year agreement with R1 RCM to have the software vendor manage the health system’s RCM services.

  • R1’s software could help Sutter afford labor costs and address rising inflation.
  • Sutter expects to save an estimated $400 million in costs over the next 10 years.

Northwell Health in New York is also investing in RCM tech. It recently signed a 10-year partnership with clinical AI solutions company Clinithink.

Hospitals are contending with dire labor shortages.

  • Atlanta’s Piedmont Hospital System is offering $30,000 sign-on bonuses to lure new nurses.
  • Meanwhile, only 8% of execs said they had sufficient staffing for their RCM departments, per Kaufman Hall’s June 2022 National Hospital Flash Report.

Zooming out: Nearly half of health systems and physician groups are behind on 2022 revenue goals, per a June R1 RCM survey.

Health systems’ revenues have yet to recover from pre-pandemic levels, per the Kaufman Hall report. In fact, labor costs were higher in May 2022 compared with the previous month.

Why it matters: Billing tech could help address hospitals’ revenue shortfalls.

RCM software can help health systems provide additional employment opportunities in RCM and address healthcare labor shortages. In the case of Sutter Health, R1 will take over about 1,150 of the hospital system’s revenue cycle positions with comparable pay.

For context, R1’s tech platform uses automation to optimize hospital revenue cycle workflows. It can also speed up hospital payments and make payments more accurate. In addition to Sutter Health, R1 has also signed on with several other healthcare systems, including Ascension, Intermountain Healthcare, Penn State Health and VillageMD.

Tackling the labor shortage as well as cost management will require not only investments in RCM but also adoption in data analytics to help manage resources and budgets, per Forbes.