McKinsey Survey Highlights Reasons to Outsource Medical Billing Services

As the healthcare landscape shifts, revenue cycle leaders face increasing pressure to answer tough strategic questions. A recent McKinsey Survey offers useful insights, not only into the changes reshaping healthcare, but also into how to successfully use outsourced revenue cycle management services in a time of ongoing change [1]. 

This overview of their findings will be useful to your team in navigating change, evaluating automation, and positioning outsourcing in your strategic planning. 

The 2025 McKinsey RCM Buyer’s Survey profiles a revenue cycle environment under sustained strain at care delivery organizations nationwide. The findings confirm what many leaders overseeing medical billing services in the USA already observe operationally – payer friction, regulatory expansion, and rising collection costs are depressing margins faster than leaders can address via tactical adjustments. The survey puts specific numbers behind this dynamic by questioning 215 leaders at care delivery organizations (including health systems, physician groups, and pre- and post-acute care sites). 

78% of respondents attribute at least 10% of A/R lengthening to payer-related factors – pending medical records, disputed authorizations, and appeal backlogs. Escalated reimbursement issues averaged 36 days to resolve, with only 43% reaching a favorable outcome. Meanwhile, 65% of respondents anticipate negative financial impact from the One Big Beautiful Bill Act, 76% expect self-pay bad debt and uncompensated care to increase, and 85% project out-of-pocket patient share to rise. The cost to collect has increased for 45% of organizations surveyed.

These figures describe a revenue performance problem at a systemic level: slow cash flow, AR backlog, and billing inefficiencies are building simultaneously across front-end, middle, and back-end processes. 

McKinsey's conclusion aligns directly with this perspective. Organizations need integrated revenue excellence built across administrative, clinical, strategic, and technological domains, not isolated fixes targeting individual symptoms. For revenue cycle leaders evaluating medical billing services companies, the survey emphasizes the importance of a structural RCM approach that supports tactical execution.

60% of McKinsey survey respondents plan to change their outsourcing strategy over the next two years, with three-quarters of that group moving toward expanded outsourcing.

Only 6% report plans to reduce outsourcing due to technology investment – a finding that challenges the assumption that AI adoption displaces external billing partners. Care delivery organizations are deploying automation and outsourcing at the same time, concentrating investment where operational gaps carry the highest margin impact: denials management, A/R follow-up, coding accuracy, and eligibility and authorization.

Organizations are also engaging more deeply with vendors. Among organizations that exceeded RCM performance goals in the prior 12 months, 59% plan to expand with existing vendors versus 41% switching to new ones. For medical billing services in the USA, this data highlights the importance of vendor relationships. Vendors who understand healthcare dynamics and can support positive outcomes for providers through end-to-end RCM performance are key assets in today’s healthcare environment.

Medical billing services companies that layer automation onto established workflows – rather than requiring operational restructuring to accommodate parallel systems – are increasingly attractive to providers. 

McKinsey's recommendations concentrate on three priorities: 

• Establishing ROI benchmarks for automation investment.
• Institutionalizing denial prevention.
• Tightening vendor governance around measurable outcomes. 

For revenue cycle leaders evaluating medical billing services in the USA, the denial prevention finding carries the most significant operational implication.

Organizations with standardized denial prevention processes achieve a 47% appeal success rate versus 37% for those relying on ad hoc resources – a gap that compounds into significant revenue leakage at scale. The McKinsey survey also identifies a structural infrastructure problem: 64% of surveyed leaders say their organizations lack the infrastructure to prevent denials, and 47% lack the infrastructure to manage them. This imbalance signals that most organizations are still investing more in downstream appeal management than upstream prevention – precisely the gap that medical billing services companies built around integrated denial workflows can address.

McKinsey's data validates the prevention-over-recovery framework directly. Pain points accumulate upstream through inadequate pre-bill validation and unresolved denial patterns. High denial rates and rework costs that compound without systematic pattern tracking represent precisely the kind of preventable margin erosion the survey documents across medical billing services USA operations.

In terms of automation, expectations have moderated year over year in two dimensions. The volume threshold leaders consider realistic for autonomous coding dropped from 35% to 30%, and the share of leaders who believe that threshold is achievable fell from roughly half to a third.  

Revenue cycle leaders evaluating medical billing services companies for AI-enabled support should prioritize vendors who understand the nuances of healthcare. Medical billing services in the USA that integrate automation into existing workflows align most closely with where the market is heading.

3Gen Consulting specializes in helping healthcare revenue cycle leaders navigate these exact challenges. The McKinsey survey's three priorities – ROI-driven automation, institutionalized denial prevention, and accountable vendor governance – are the operational foundation of how we work with clients.

From billing and coding to revenue cycle automation to denial management, our team ensures you are equipped to maximize reimbursement, stay compliant, and adapt quickly to changes in the healthcare landscape. Contact us today to discuss how we can help you respond to payer friction, adjust to regulatory developments, and protect your bottom line. Explore 3Gen's medical billing services.