The revenue cycle and self-pay management in hospitals face serious challenges in 2025. Primary concerns consist of:

Increasing self-pay balances: The self-pay market is projected to hit $15 billion by 2027, an increase from $8 billion in 2021. Much of this movement is due to the increasing number of high-deductible health plans and the rising deductibles that come with them. In 2020, the average deductible for plans offered through employers was $4,531, a 20% increase from the previous year.

Collection rates are decreasing: Hospitals collect less from their patients. The bad debt these institutions carry is mounting, with costs shifted to providers increasing. Collecting out-of-pocket bills that soar to $7,500 is proving impossible for many. Of those who do pay, nearly 60% of collections come from facilities that serve the self-pay market.

The healthcare regulatory scene is evolving, and with it comes a whole new set of compliance requirements that directly impact revenues. Risks associated with non-compliance can be devastating. Organizations can face hefty fines and the kind of reputational fallout that can take years to repair.

Compliance and cybersecurity costs: RCMs are pouring a lot of money into beefing up cybersecurity and navigating an increasingly complex regulatory landscape, driving up the already high operational costs of RCM businesses.

Recruiting, retaining, and upskilling talent is increasingly difficult in the competitive labor market that we are currently in. This is especially true for specialized high-demand skills, like those needed for Revenue Cycle Management.

Payor policy complexity: Payor policies are becoming more layered and fragmented, necessitating adaptation to multi-layered rules at every level.

Joining up and working together: This is essential interfacing with electronic medical records (EMRs). Yet, integration problems can affect the accuracy and timeliness of claims and threaten the overall efficiency of health information technology operations.

Pressures from money matters: Many hospitals are coping with diminishing profits and a heightened risk of receiving a bad credit rating, which forces them to make tough calls to bring in cash while keeping expenses low. Partnering with firms that offer percent net collections products can create a win/win solution.

To handle these problems, hospitals might look at:

  • Putting solid insurance discovery plans in place to turn self-pay accounts into revenue.
  • Forming efficient partnerships and enhancing teamwork across functions.
  • Partnering with firms that offer percent net collections products can create a win/win solution.
  • Investing in technological solutions for improved RCM processes and patient data management.
  • Establish transparent self-pay payment policies, understand financial accountability at the outset of the patient journey, and have an electronic way to segregate the large data.

Hospitals can implement these tactics to effectively maneuver through the intricate revenue cycle management and self-pay issues they face in 2025.