The healthcare revenue cycle management (RCM) outsourcing services market in the U.S. seems ripe for disruption and consolidation. The macro factors include:

• Contraction in the number of hospital locations and hospital systems
• Speedy erosion in the number of small, independent physicians’ practices
• Increasing complexity in reimbursement models and processes
• Increasing experience and scale of off-shore service vendors
• Decreasing costs of managing RCM operations RPA followed by broader AI and digitalization technologies.

The landscape of RCM platform and outsourcing vendors is highly fragmented and provider organizations considering outsourcing have numerous options. Becker’s Hospital Review listed 110 software and/or services vendors in this space in 2016 and expanded that list to over 160 vendors in October, 2017. Will the RCM outsourcing market become the target of a well-capitalized player or set of players, and if so, will technology be a primary driver of RCM industry consolidation?

Some vendors in the RCM industry certainly appear to have advanced down this line of thinking. Recently I spoke with Anurag Jain, Chairman of Access Healthcare, an India-based RCM BPS vendor, about the disruption and consolidation that he and his company anticipate. Jain believes that if the appropriate automation can be overlaid on standardized, optimized processes and people management systems, then the opportunity to take cost out of U.S. RCM far outstrips the capacity of his own company (and, he implied, the capacity of many of his competitors) to meet that opportunity through organic growth. As a result of this opportunity, Jain foresees a major capital infusion into the U.S. RCM outsourcing industry, with consolidation being one of the consequences.

Jain is excited about this prospect because he believes his company has the people, process, and technology capabilities to create a platform for such consolidation. Regarding Jain’s own company, privately held Access Healthcare recently announced that it had acquired privately-held Pacific BPO. According to Jain, as of August 31, 2018, operations of the combined entity will mobilize over 11,000 employees and 19 delivery centers in the U.S., India and the Philippines to serve over 70 customers, with the combined entity now commanding estimated revenues of $140m.

Another indication that an acceleration of industry-wide consolidation is in the air is the news that UnitedHealth is one of a number of companies looking to acquire Tenet’s Conifer business. What if Conifer is indeed acquired by UnitedHealthcare Group, and then grafted onto its subsidiary, Optum? Conifer manages $1.6bn in RCM outsourcing revenue with about 14,000 employees. Overall, Optum revenues are $91bn, and Optum’s RCM business employs 7,700 people. The scale and potential efficiencies of a combined Conifer/Optum RCM business could precipitate further consolidation. The fact that United (and Optum) are interested in acquiring Conifer indicates that Tenet, CHI, and United all see opportunity in consolidating the U.S. RCM outsourcing market, and this indicates that Access Healthcare may be one of the pioneers in a broader industry restructuring.