Time Consuming Administrative Processes Cost Healthcare $39 Billion Annually

Recent reports from TIME and Harvard magazines as well as the Council for Affordable Quality Healthcare (CAQH) show that approximately one-third of healthcare spending across the U.S. is related to healthcare administration rather than the actual patient care being provided. Seem impossible? Not to those who understand the burdens of paperwork, record-keeping and payment coordination that goes on behind the scenes.

Healthcare administrative costs in the U.S. are the highest among all other developed countries. So what can be done to help better manage those expenses? According to, a February 2019 report from McKinsey and Company attributes high U.S. administrative expenses to two factors: 1) the number of providers and payers that interact to process administrative information and 2) arduous reporting requirements from agencies such as the Centers for Medicare and Medicaid Services (CMS).

CAQH agrees, reporting in their 2020 CAQH Index that $372 billion is spent on administrative complexity and $39 billion, or 10 percent of that total, is spent conducting administrative transactions. The report, which includes data related to the medical and dental industries, points out that, of that $39 billion, the medical industry could save $13.3 billion by transitioning to fully electronic administrative transactions.

Even though we’re in the year 2021 where technology has been pushed to the forefront and innovations like telehealth are on the rise, many healthcare organizations are still mired in manual, often paper-related administrative processes. Tangible opportunities for healthcare providers to save money by automating processes related to insurance verification, authorizations, claim submission and adjudication, and payment processing exist and should be explored.

In an industry where cost-cutting to drive revenue remains a focus as much as providing optimal patient care, leaders have to push forward with technology innovations or risk leaving money on the table. Ask us how Vyne Medical can help automate administrative workflows for your organization.



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