The data: Nearly half of health systems and physician groups say they’re behind on their 2022 revenue goals, per a June R1 RCM survey of 205 health system CFOs and VPs shared with Insider Intelligence via email.
How we got here: Health systems have yet to fully recover from the financial fallout brought on by the pandemic.
US health systems said their gross operating margins and revenues rose from April to May this year (compared with May 2021). However, they were still significantly lower than pre-pandemic levels, per Kaufman Hall’s June 2022 National Hospital Flash Report.
Digging deeper into the data: Part of the problem is the healthcare labor shortage—it’s a major cost.
Labor shortages mean health systems are doling out higher pay and seeing fewer hours worked. That’s leading to elevated costs and affecting health systems revenues, per Kaufman Hall.
What’s next? Many health execs want to either outsource their revenue cycle management duties or adopt new software to keep up with their revenue goals for the second half of the year.
Startups to watch: RCM entrants like R1 RCM and Olive are supplementing admin staffing challenges with tech that finds new revenue streams for health systems.
R1 RCM recently acquired competitor CloudMed in a $4.1 billion deal, which primes it to become a top player in the healthcare RCM market.
Similarly, AI company Olive offers a suite of RCM solutions to over 900 US hospital partners.