Healthrise Delivers Semi-Captive Offshore Model as Health Systems Seek Greater Control Over Revenue Cycle Operations

The end-to-end delivery structure gives hospitals direct oversight of offshore workflow, governance and automation while preserving offshore cost, efficiency and scale

Key Facts (At-a-Glance):

• The Healthrise Perspective: In semi-captive offshore revenue cycle operations, the firm owns recruitment, hiring, onboarding, HR and team management while the health system retains control of workflow, performance metrics and operating priorities. Unlike traditional outsourcing models, the offshore team operates within the health system’s operating model—not the vendor’s operating model. Retained health system leaders continue to direct strategy, workflow priorities, training expectations and performance standards.
• Market Drivers: Hospitals spent an estimated $43 billion in 2025 trying to collect payments insurers owed for care already delivered. Administrative costs now account for more than 40% of total expenses hospitals incur in delivering care to patients.
• Strategic Advantage: Semi-captive structures give health systems direct operational control, stronger workforce retention and lower attrition at roughly one-third to one-fourth of comparable domestic labor costs, with productivity benchmarked against existing onshore teams. The model also enables health systems to retain institutional knowledge, including workflow expertise, operational relationships, payer insights and AI learnings, allowing capabilities to improve over time rather than being lost through vendor turnover.
• Media Coverage: Healthrise’s semi-captive offshore model has been featured in Yahoo Finance, Business Insider, and Benzinga.

What is driving health systems to reconsider offshore revenue cycle models

The financial pressure on U.S. hospitals has made offshore performance variability harder to absorb. Hospitals spent an estimated $43 billion in 2025 trying to collect payments insurers owed for care already delivered, including costs tied to prior authorization, claims denials, repeated documentation requests and changing billing and coverage rules, according to the American Hospital Association’s Costs of Caring report.

Administrative costs now account for more than 40% of total expenses hospitals incur in delivering care to patients, according to Strata Decision Technology. Operating margins remain compressed at 1% to 3% across much of the industry. At that margin, inconsistent offshore performance is not a vendor management problem. It is a financial risk.

What a semi-captive offshore model is and how Healthrise delivers it

A semi-captive model separates workforce ownership from operational ownership. Healthrise handles recruitment, hiring, onboarding, HR and the day-to-day management of the offshore team. The health system owns the workflow design, performance standards, training cadence and operating priorities. Unlike traditional outsourced models, the health system—not the vendor—owns the operating model that guides how work is prioritized, measured and improved.

Through retained onshore leaders, health systems directly govern offshore operations by setting strategy, defining workflow changes, establishing training expectations and maintaining accountability for performance outcomes.

The offshore team runs as a functional extension of the health system, with the transparency and accountability of an internal department and the cost structure of an offshore operation, typically one-third to one-fourth of comparable domestic labor costs with productivity benchmarked against existing onshore teams. The offshore team operates within the health system’s workflows, priorities and performance framework while Healthrise manages the workforce infrastructure required to support scale.

This structure allows the health system to build and retain institutional knowledge over time. Workflow expertise, operational relationships, payer insights and process improvements remain connected to the organization rather than being lost through vendor turnover or contract transitions.

“Health systems are learning that offshore scale alone is not enough,” said Marcos Bonafede, Chief Operating Officer of Healthrise. “If the operating model lacks governance, workflow consistency and clear accountability, it can create the same fragmentation it was intended to solve. The value of a semi-captive model is that it gives health systems greater control over how work is managed, measured and improved while still preserving the scale and efficiency they need.”

How this model solves the attrition problem in offshore operations

In traditional offshore arrangements, the vendor controls the talent pipeline. When turnover runs high, the health system absorbs the productivity loss and has no operational lever to fix it. Because Healthrise owns recruitment, hiring and HR in the semi-captive structure, health systems can retain strong performers, promote staff into expanded roles and adjust team size as priorities shift, all within the existing engagement. Attrition stops being a vendor’s problem the health system has to manage around and becomes something the health system can actually control.

The benefit extends beyond workforce stability. Stable teams develop deeper understanding of the health system’s workflows, priorities and revenue cycle challenges, creating operational knowledge that strengthens performance and continuous improvement over time.

“The Healthrise offshore team has delivered enormous value to our organization. We faced a significant backlog due to an underperforming vendor, and they successfully cleared the transactional backlog,” said David Worthy, Vice President of Ambulatory Services for Franciscan Missionaries of Our Lady Health System (FMOLHS). “Their flexible model, combining offshore resources with onshore management, offered continuous support and expertise.”

Why the semi-captive model matters for AI and automation strategy

Industry estimates suggest that up to 30% of revenue cycle inefficiencies originate in upstream processes such as documentation gaps, eligibility errors and charge capture breakdowns. Automation deployed on top of fragmented, inconsistently governed offshore workflows tends to inherit those inefficiencies rather than resolve them. A semi-captive model provides the governance layer that makes AI investments in revenue cycle operations actually land.

That governance layer comes from involving health system operational leaders directly in identifying automation opportunities, defining AI protocols and redesigning workflows. By grounding AI initiatives in real operational needs and frontline insights, organizations can create solutions that continuously improve alongside their processes.

Because AI learnings and workflow improvements are developed within the health system’s operating environment, these capabilities become part of the organization’s long-term operational knowledge rather than remaining tied to a vendor relationship.

“AI exposes gaps that vendor contracts can paper over for years,” said David Farbman, Chief Executive Officer of Healthrise. “When you start connecting workflow, data and automation across an offshore operation, you find out quickly whether the model actually has governance or just the appearance of it.”

About Healthrise

Healthrise is a healthcare consulting and technology firm that provides revenue cycle management, electronic health record optimization and strategic advisory services to hospitals and health systems across the United States. Founded in 2012, the company partners with organizations to improve financial and operational performance through customized, data-driven solutions. Healthrise has supported more than 25 health systems and managed over $35 billion in net patient revenue, helping clients strengthen long-term sustainability and care delivery. For more information, please visit www.healthrise.com.

Release Summary

• Hospitals spent an estimated $43 billion in 2025 trying to collect payments insurers owed for care already delivered, according to the American Hospital Association’s Costs of Caring report.
• Administrative costs now account for more than 40% of total expenses hospitals incur in delivering care to patients, according to Strata Decision Technology.
• Healthrise delivers a semi-captive offshore model in which the firm owns workforce functions and the health system owns workflow, performance and operating priorities.
• Unlike traditional outsourcing models, the offshore team operates within the health system’s operating model—not the vendor’s—allowing retained health system leaders to maintain direct oversight of strategy, workflow improvements, training priorities and performance expectations.
• Semi-captive offshore operations deliver comparable productivity to domestic onshore teams at roughly one-third to one-fourth of the cost.
• Because Healthrise owns recruitment, hiring and HR, health systems can retain strong performers, adjust team size and reduce attrition without renegotiating vendor contracts.
• The model also allows health systems to retain institutional knowledge, including workflow expertise, operational insights and AI learnings, creating capabilities that improve over time rather than being lost through vendor turnover.
• Up to 30% of revenue cycle inefficiencies originate in upstream processes where governance and workflow consistency are prerequisites for successful automation.
• Fragmented offshore vendor environments make the coordination required for effective AI deployment structurally difficult to achieve.
• By involving health system operational leaders in AI protocols, automation initiatives and workflow redesign, semi-captive models help ensure technology investments are grounded in real operational needs and continuously improved alongside the organization.
• Healthrise has supported more than 25 health systems and managed over $35 billion in net patient revenue since its founding in 2012.

Frequently Asked Questions

What is a semi-captive offshore model?

A delivery structure in which a third-party operator owns the offshore workforce functions including recruitment, hiring and HR while the health system retains control of workflow, performance metrics and operating priorities. The offshore team functions as an extension of the health system’s organization rather than as a standalone vendor operation.

How does semi-captive differ from traditional offshore outsourcing?

Traditional outsourcing gives the vendor control of both the workforce and the operating model. A semi-captive model gives the health system direct operational control while the operator manages workforce functions. This allows the health system to maintain ownership of strategy, workflow improvements, performance expectations and continuous improvement initiatives.

What does Healthrise own in the semi-captive structure?

Recruitment, hiring, onboarding, HR and day-to-day team management.

What does the health system own?

Workflow design, performance metrics, training priorities and operating cadence. The health system also maintains governance over strategic priorities, workflow changes, performance expectations and ongoing operational improvements through retained leaders.

What is the cost profile?

Roughly one-third to one-fourth of comparable domestic labor costs, with productivity benchmarked against the health system’s existing onshore teams.

How does the model address attrition?

Healthrise owns the talent pipeline, so health systems can retain strong performers, promote staff into expanded roles and adjust team size without being subject to vendor turnover cycles. Because knowledge remains embedded within the health system’s operating environment, stable teams build deeper expertise in workflows, payer challenges and organizational priorities over time.

Why does this matter for AI deployment?

Revenue cycle automation requires consistent workflow governance across the full operation. Fragmented vendor environments make that consistency structurally difficult. A semi-captive model provides the governance layer that allows AI to work as intended. By connecting AI initiatives to health system operational leaders, workflow expertise and performance data, organizations can develop automation strategies that address real operational challenges and continuously improve over time.

What is Healthrise?

A healthcare consulting and technology firm headquartered in Farmington Hills, Michigan, providing revenue cycle management, EHR optimization and strategic advisory services to hospitals and health systems across the United States.