A look at current healthcare finance IT priorities.

Technology occupies a pivotal role in healthcare’s drive for major improvements in financial condition, productivity, patient experience and equitable health access. This brief provides a snapshot of several technologies generating high interest and activity in the industry’s finance and revenue cycle management (RCM) functions.
 

Digital Transformation (DT)

A host of technologies aim to “digitally transform” healthcare across the clinical and administrative realms. Organizations confirm both the urgent need for transformation and the ongoing barriers to the full realization of its benefits:

• 89% of healthcare executives call DT a leading priority, but 3 in 4 consider it incompletely planned or resourced.footnote ^[1]
• 96% of surveyed finance leaders report that DT is a major emphasis for 2025–2026, but under 11% have fully implemented comprehensive solutions.footnote ^[2]
• 50% of hospitals and health systems have formulated a digital plan that is actively monitored by the financial team, while 27% don’t review their plan closely, and 23% lack a plan altogether.footnote ^[3]
   

Automation

Organizations see automation as a source of cost reduction, streamlined payments processing and effective supplier management. Healthcare’s still-prevalent manual processes are ripe for automation. Respected estimates place the savings from adoption of fully electronic transactions at nearly 5% of the cost attributable to healthcare administrative complexity.footnote ^[4] That’s a sizeable sum with administrative costs now running at 40% of total hospital expenses for care delivery.footnote ^[5]

Various payments functions represent principal targets for investment in automation technology. RCM is the top IT investment sector over the coming two years for 37% of leaders.footnote ^[6] The North American RCM system market is roughly $62 billion in 2024 and growing at a 12% annual clip.footnote ^[7] Robotic Process Automation, software bots that perform human tasks in financial processes, is projected to show global healthcare compound annual growth of 26% through 2032.footnote ^[8] Frustration is one factor fueling these expenditures: just over half of RCM leaders express disappointment with their automation technology.footnote ^[9]
 

Artificial Intelligence

Artificial intelligence (AI) is a potentially transformative technology, and healthcare has witnessed little diminution of enthusiasm for identifying tangible applications. Once again, finance and RCM rank highly on leadership’s list of important uses, with 12% already implementing AI in RCM and an equal percentage planning further investment in the next year.footnote ^[10]

Cost savings are a compelling goal for healthcare AI. One study that evaluated “specific AI-enabled use cases that employ today’s technologies, are attainable within the next five years, and would not sacrifice quality or access” concluded that wider adoption could reduce industry spending by $200–$360 billion annually.footnote ^[11]

AI has yet to see widespread integration with existing workflows or achievement of desired financial objectives (Figure 1).footnote ^[12]

 

Figure 1
View PDF of Figure 1^[PDF]

AI challenges include:

• Information needed for AI is “unstructured, spread across multiple data sources, and stored in varying data structures.”^[13] footnote [13] Under half of polled healthcare IT executives characterized “more than 75%” of their data as accurate and reliable, and even fewer deemed it complete and timely.^[14] footnote [14]

• Some are sounding notes of caution about the eventual returns on AI, questioning the breadth of tasks that Generative AI will be able to impact and whether AI costs will decline sufficiently to make large-scale automation work.^[15] footnote [15]
   

Digital Payments

The drivers impelling growing use of digital payments in healthcare — convenience, cost-savings, support for telehealth — appear firmly in place. Updates on selected digital payment rails show the momentum:

• ACH. This option remains popular, registering 126 million healthcare transactions in the second quarter of 2024, a gain of 2.8% over the same period in 2023.^[16] footnote [16] Same-day transfers are growing rapidly, up 47% year over year across industries. Commerce Bank is in the top 50 nationwide institutions for volume of ACH origination and receipt.^[17] footnote [17]

• Mobile and Real-Time Payments. Mobile devices are fast becoming the preferred vehicle for a host of payments. Half of surveyed patients said they prefer to engage with their healthcare providers via a mobile platform.^[18] footnote [18] So-called e-money payments, including mobile wallets, will reach 28% of $2.3 trillion in global non-cash transactions by 2027.^[19] footnote [19] Speed is highly valued as witnessed by a survey finding that 25% of consumers would pay up to 1.7% of the transaction to obtain funds immediately and almost 35% of small and mid-sized businesses would pay fees to receive instant payments.^[20] footnote [20] Banks are also offering “real-time treasury services” that facilitate swift transactions to improve cash management.^[21] footnote [21]

• Buy Now, Pay Later (BNPL). The ability to pay for purchases digitally over a few interest-free installments has shown appeal, and 29% of consumers told a 2023 poll that they had used BNPL over the past twelve months.^[22] footnote [22] Concerns have surfaced that BNPL may encourage some to take on too much debt.

• AI-Influenced Payments. Expect to see AI power new levels of intelligent payment routing, real-time credit decisioning, smart payment reconciliation, and other transactions.^[23] footnote [23]
   

An additional consideration: cybersecurity

A critical priority that may divert some attention from advanced technologies and digital transformation efforts is cybersecurity. Healthcare continues to be buffeted by security issues:

• 333 data breaches involving more than 500 records in the first five months of 2024.^[24] footnote [24]
• $1.3 billion in 2023 total industry ransom payments.^[25] footnote [25]
• $11 million in average hospital and health system data breach costs per incident in 2023.^[26] footnote [26]

Healthcare cybersecurity spending is projected to grow over 16% annually to reach $57 billion by 2030.^[27] footnote [27] The industry devotes 8.1% of total IT budgets to cybersecurity, second-to-last among studied industries.^[28] footnote [28]

Technology’s momentum in healthcare finance is building. However, the frustrations and concerns articulated by leaders underscore the urgency to accelerate progress in the promising technologies featured in this brief.

CommerceHealthcare® solutions are provided by Commerce Bank.

Disclosures: