Many hospital and health system leaders worry their revenue cycle management operations are not keeping up with the volumes and innovation imperative that current conditions require, putting overall organizational performance at risk. The 2026 RCM Benchmark Survey Report underscores the scale of the challenge: 87% say staffing shortages impact their RCM performance, and 40% say those shortages result in reimbursement and cash-flow delays.

At the same time, payer requirements continue to change, denial management is consuming significant resources, and payers are increasingly investing in AI and automation. In response, organizations are changing how they execute RCM, often by increasing automation, adding staff or outsourcing more functions.  

These efforts are necessary, but they are also fundamentally limited when treated as separate tactics.  

The survey findings point to a larger issue: RCM performance is increasingly constrained not by the absence of any single capability, but by how people, processes, technology and external resources are brought together to operate the revenue cycle.

That changes the question health system leaders should be asking. Rather than simply asking, “Do we need more staff, more automation or more outsourcing?” organizations should ask: “Are we operating the revenue cycle in a way that allows each of those capabilities to do what it does best?”

That is the opportunity emerging from the survey data. The organizations that get ahead will need to move from adding capacity wherever pressure appears to deliberately designing an RCM operating model that improves performance across the entire revenue cycle.

‍

Current constraints hamper traditional approaches

‍

Neither staff expansion and development, automation nor outsourcing can meet modern needs on its own, especially if they are treated as standalone programs with limited attention to coordination.  

• Staffing remains essential to RCM performance, but simply adding people is becoming increasingly difficult.  Hiring and training budgets are limited, hospitals and health systems frequently don’t have access to a deep prospective RCM labor pool, and churn is common. New hires take time to reach the productivity levels of the experienced staffers they are supplementing or replacing. For example, 41% or hospitals and health systems surveyed say their new hires commonly or frequently misinterpret payor requirements. The learning curve may get longer, because expanding RCM staff training and upskilling is currently a priority at only 7% of hospitals and health systems. The implication is not that organizations should invest less in their people; it is that workforce strategy needs to evolve beyond adding capacity. Organizations need to determine which work requires experienced human judgment, which can be simplified or automated, and where specialized expertise can be accessed externally.  The goal should be to put the right people on the right work, not simply to put more people on more work.  

• Automation is an important part of the answer, but technology does not eliminate the need for process design, skilled employees or effective governance. In fact, the survey findings suggest organizations are taking a more realistic view of their automation maturity. The share of organizations calling their operations highly automated fell from 34% to 7% from 2025 to 2026. That shift may reflect a growing recognition that having automation in an individual RCM process is different from having and end-to-end automated revenue cycle. Hospital and health system leaders ranked “Limited IT resources” as their leading barrier to optimizing RCM strategy, ahead of even budget. At the same time, payors are winning the AI arms race, as 84% of health insurers are already using AI, with prior authorizations and claims adjudication among their priority use cases, according to the National Association of Insurance Commissioners (NAIC). They are likely to continue out-investing hospitals and health systems in RCM automation. The question is not simply whether to adopt AI. It is where technology can actually improve the workflow and financial outcome. For example, an automated claims-quality check may identify an issue before a claim is submitted. But the organization only realizes the benefit if the workflow routes that issue to the right person, the underlying problem is corrected, and the organization learns from the issue, so it does not recur. Otherwise, technology has automated a task without necessarily improving the process. That is why automation needs to be considered alongside workforce capabilities, process design and change management.

• Outsourcing is a practical imperative in light of these staff and technology constraints. For organizations facing budget pressure, competing priorities and limited IT resources, accessing technology and specialized RCM expertise through a partner can be faster and more scalable than building every capability internally. The survey findings show that outsourcing is already standard practice for hospital and health system RCM, with nearly nine out of 10 organizations using it in some form. But widespread adoption does not necessarily mean organizations are getting the full strategic value from outsourcing. Traditional RCM outsourcing has often been transactional, with organizations outsourcing a defined volume of work to increase capacity for a particular function. That approach can be effective for managing workload, but it is less effective when the objective is to improve the underlying revenue cycle. The opportunity is to move from outsourcing work to strategically allocating work. That means determining which functions and subprocesses are best handled internally, which are best automated and which can benefit from an external partner's people, technology, scale and expertise.

‍

Align priorities to support success

‍

Current priorities may limit improvement effectiveness. More than three times more hospitals and health systems are prioritizing enhancing their automation and adopting AI-driven workflows than are prioritizing staff training and upskilling programs. Expanding automation without corresponding efforts in people and process can create new problems or scale existing ones. Employees need to understand how workflows are changing, when they should trust automated decisions, when they need to intervene and how to manage exceptions.

Leaders also need visibility into whether automation is actually improving the desired outcome. That means measuring more than the number of automated transactions. For example, an organization implementing automated claims-quality checks should ultimately want to know whether clean-claim rates improved, whether preventable denials declined and whether staff time shifted toward higher-value work. Similarly, an organization using automation in accounts receivable should measure whether the intervention improves cash performance – not simply how many accounts passed through the automated workflow. Technology should be measured by the improvement it creates, not the activity it performs.  

‍

Apply outsourcing as the strategy accelerant

‍

Outsourcing is already standard practice for health system RCM – 88% of hospitals and health systems currently outsource at least one RCM function and 65% outsource two or more – but optimizing it requires departure from the standard approach. Relationships based on transaction volumes and value propositions dependent on labor arbitrage won’t stimulate enough innovation or improvement to offset growing pressures.  

The opportunity is to move from outsourcing work to strategically allocating work. Rather than viewing an external partner simply as an extension of the workforce, organizations can use the relationship to access capabilities they may not be able to develop as quickly or cost-effectively on their own, including specialized expertise, technology, analytics and experience with process improvement.

This also changes the question organizations should ask when deciding what to outsource. Instead of starting with which function can be moved outside the organization, leaders should consider which functions and subprocesses are best handled internally, which are best suited for automation, and which could benefit from an external partner's people, technology, scale and experience.

The goal is not to outsource as much as possible; it is to create the right combination of capabilities across the revenue cycle. In that model, outsourcing becomes a strategy accelerant: a way to help an organization implement improvements faster, access capabilities it does not have internally and respond to changing RCM requirements without having to build every solution itself.

‍

What does optimized outsourcing look like?  

‍

Transactional outsourcing manages RCM work. Strategic partnership improves the overall revenue cycle. The distinction is important because organizations facing today's RCM challenges need more than additional capacity. They need partners that can help them understand why problems are occurring and what can be done differently to prevent them. Consider denial management. A traditional outsourcing arrangement may focus on how efficiently a partner works denied accounts. A strategic relationship should go further, examining why those claims were denied in the first place. Are authorization issues contributing? Are payer requirements changing? Are documentation gaps creating problems? Are coding or charge-capture processes generating avoidable denials? If those underlying issues can be identified and addressed, the organization can reduce the amount of work entering the denial process rather than simply becoming more efficient at resolving it.

The same principle applies across the revenue cycle. In a strategic model, the outsource provider still executes the work but also brings the perspective and capabilities needed to improve how the work gets done. That can include:  

• Benchmarking performance against relevant organizations and processes

• Identifying root causes rather than simply resolving symptoms

• Recommending workflow and technology changes

• Identifying opportunities for automation

• Helping prepare for payer and policy changes

• Providing specialized expertise where internal resources are constrained

• Developing outcome-oriented KPIs and SLAs

• Sharing accountability for measurable improvement

Just as importantly, a strategic partner should be willing to recommend where work should not be outsourced. The right operating model may include work performed internally, work performed by the partner and work performed through automation. The partner's role is to help determine where each approach makes the most sense based on the organization's processes, technology, workforce and goals.

That is what makes outsourcing a strategic capability rather than simply a labor solution. The value is not measured by how much work leaves the health system. It is measured by whether the overall revenue cycle performs better as a result.

‍

The best model may be a combination

‍

This is why the future of RCM is unlikely to be about choosing between people, technology and outsourcing. It will be about combining them in a way that reflects the needs of each organization and each part of the revenue cycle. People provide judgment, context and intervention where automation cannot. Technology provides scale, consistency, analytics and the ability to identify patterns that are difficult to see or manage at volume. External partners can provide specialized expertise, technology investment and scale that may be difficult for an individual health system to build internally.

Process design connects all three. When these capabilities operate independently, organizations can end up with fragmented improvements, such as a new automation tool in one area, additional staff in another and an outsourced function somewhere else, without improving the performance of the revenue cycle as a whole. A more coordinated approach starts with the workflow and determines where people, technology and external expertise can each create the greatest value.

For example, analytics may identify a recurring denial pattern, process experts can determine the underlying cause, technology can automate an intervention where appropriate, and experienced staff can manage exceptions that require judgment. An external partner may provide the specialized expertise, technology or scale needed to implement and sustain the change. The result is not simply a more efficient way to manage denials. It is a revenue cycle designed to prevent more of those denials from occurring in the first place.

The same principle can be applied across RCM. The right model may keep certain work in house because it requires organizational knowledge or close interaction with other functions, automate repetitive and rules-based activities, and use an external partner for processes that benefit from specialized expertise or scale. The objective is not to determine whether people, technology or outsourcing is the answer. It is to determine where each can contribute most effectively and how they can work together to improve the overall revenue cycle.

‍

What to look for in an effective RCM partner

‍

As organizations reconsider their RCM operating models, the criteria for evaluating outsourcing partners should evolve as well.

Health systems should look for partners with:

• Scale and scope to meet current and changing needs

• Flexible delivery models that accommodate the right mix of internal, external and automated work

• A tenured workforce with experience in relevant RCM functions

• End-to-end RCM knowledge, rather than expertise limited to a contracted task

• Demonstrated process-improvement capabilities

• AI and automation in production, not simply in pilot programs

• Technology that complements the health system's existing infrastructure

• Strong interoperability and security capabilities

• Actionable reporting that answers business questions rather than simply documenting activity

• A willingness to share accountability through performance-oriented KPIs, SLAs and commercial arrangements

‍

Moving from keeping up to getting ahead

‍

The 2026 RCM Benchmark Survey Report shows why the status quo is becoming increasingly difficult to sustain. Staffing shortages are affecting performance, payer complexity continues to create pressure, technology is changing the way both providers and payers operate, and organizations are already turning to outsourcing to address capacity and capability gaps. But these challenges also point to an opportunity. Health systems do not necessarily need to choose between more staff, more technology and more outsourcing. They need to determine how those capabilities can work together as part of a coordinated RCM operating model.

That means rethinking RCM as an integrated operation rather than a collection of individual functions. Staffing remains essential, but organizations need to deploy people where their expertise creates the most value. Automation also remains essential, but it needs to be applied to well-designed processes and supported by appropriate human oversight. Outsourcing remains an important capability, but it should increasingly be used not simply to absorb workload, but to provide the expertise, technology and scale needed to accelerate improvement.

The survey findings tell us that many organizations are struggling to keep up. Getting ahead will require a different approach, one that looks beyond individual tasks and focuses on how the entire revenue cycle performs. By bringing together people, process, technology and strategic partnership, health systems can create an RCM operation that is better equipped not only to respond to today's challenges, but also to adapt as those challenges continue to change.

‍

Download the 2026 Annual RCM Benchmark Survey Report

‍