Growth Opportunities Hospital RCM

Stax evaluated a new business opportunity in the hospital revenue cycle management (RCM) market for a healthcare consultancy firm

The Situation
  • A healthcare consultancy firm hired Stax to vet a new business concept in the hospital RCM market; the rationale being a combination of tighter regulation, increasing Medicare/Medicaid claims, and revenue leakage.

  • The Client’s proposed solution was to be the one-stop-shop for hospital systems to fulfill their RCM optimization requirements. Acting as a strategic partner, they would design and implement outcomes-oriented improvements through both services and technology.

The Assignment
  • To carry out a web survey and expert phone interviews with CFOs and revenue cycle SVPs/VPs at mid-sized and large hospitals along with extensive secondary research to assess the RCM market and gather insights on potential competitors.

The Benefits
  • Stax findings highlighted a clear growth pathway for the Client’s proposed solution within hospital systems and large independent hospitals with an immediate opportunity of ~$XX M.

The Finding
  • The proposed solution garnered pockets of strong interest, particularly among lager hospital systems, where Stax estimated ~25% would be willing to sign up and spend around $XXX K within the first year.

  • Among the top issues hospitals’ wanted addressed by a strategic partner were preventing and minimizing uninsured denials and bad debt, and expediting collections and accounts receivable (AR).

  • Those not as likely to partner mentioned limited budget as a constraint, and shared a perception that an external solution would replace jobs of their corporate counterparts.

  • From a competitive standpoint, the Client had strong awareness and reputation among its target customers. However, they were behind Epic and McKesson who were top-of-mind in part due to the extensive reach of their electronic health records (EHR) and patient administration system (PAS) platforms.