Healthcare enterprises must focus on specialty-based RCM to improve outcomes

Health systems and hospitals in the US are under tremendous pressure with the end of the public health emergency and associated stimulus dollars. With 60–70% of US health systems operating in the red after the pandemic, specialty-based revenue cycle management (RCM) leveraging AI and offshoring is crucial. To navigate financial pressures, healthcare enterprises must adopt innovative RCM strategies to improve revenue and cost outcomes.

All segments of the healthcare provider market have increased offshoring options with Firstsource’s acquisition of Quintessence

Firstsource’s acquisition of Quintessence reflects a shift in provider buying behaviors (see Exhibit 1)—they are now embracing offshoring, as highlighted in the HFS Horizons: HCP Provider Services, 2024. Firstsource services the entire RCM value chain, covering patient access, coverage identification, pre-authorization, patient financial engagement, coding, and charge capture through onshore, offshore, and hybrid models.

Quintessence complements Firstsource’s target market with their expertise in the mid-market for ambulatory and physician practices. Through their proprietary Codessence platform, they enhance Firstsource’s offshore capabilities and coding operations using AI and workflow solutions, thereby improving the accuracy and efficiency of radiology coding. Other platforms include Reimbursessence that uses analytics for billing and denial management and Quintana that leverages robotic process automation (RPA) for billing processes. Payment Control helps with financial reconciliation, and Doctor Portal improves communications between healthcare providers (HCP) and billing teams.

Exhibit 1: Intense financial pressures on health systems and hospitals are forcing them to expand outsourcing and offshoring

Sample: 200+ senior healthcare providers and administrators; 36 service providers
Source: HFS Research, 2024

The Quintessence acquisition enables Firstsource to grow their people power to over 5,000 and expand their delivery footprint. Moreover, it gives HCP enterprises the advantage of experimenting and scaling with a mature service provider.

Making AI real for healthcare providers across the RCM value chain

The outcomes delivered by traditional RCM have been streamlined, automated, and optimized to the point of plateauing. In this cat-and-mouse game between payers and providers, each side is always trying to outdo the other—payers want to get more for their money, and providers want to get paid equitably and timely. The next chapter of RCM will be about incorporating intelligence to accelerate value in the form of speed, compliance, and experience.

Incorporating AI into traditional RCM can improve outcomes (see Exhibit 2). Despite process optimization, RCM persists in carrying out repetitive processes that lead to inefficiencies across the value chain. AI can address process opportunities smartly, eliminating time-consuming activities and tasks that create bottlenecks.

Exhibit 2: AI enablement can have a material impact across the RCM value chain

Source: HFS Research, 2024

The Bottom Line: The Firstsource acquisition of Quintessence gives healthcare enterprises more options to leverage AI-enabled RCM and offshoring.

The acquisition could help enterprises optimize their revenue cycle management as a practice-focused specialization, capturing the nuances to improve the entire life cycle. Offshoring capabilities will help healthcare enterprises improve their financial outcomes, while the AI-enabled platform-centric approach targets 60–70% of autonomous processing to overcome manual inefficiencies and reduce operational costs, in addition to enhancing financial outcomes. The benefits can be material but will depend on the efficacy of the acquisition integration.