At A Glance
Automation can reduce administrative costs in healthcare by replacing repetitive manual work with standardized electronic workflows. The strongest opportunities are in eligibility verification, claims management, denial prioritization, patient payments and revenue cycle reporting.
Key takeaways:
- Administrative complexity is driving significant costs for hospitals. Combined with staffing shortages, it can contribute to payment delays, denials and rework.
- Healthcare automation can reduce rework and manual touchpoints across eligibility, claims, denials, patient payments and reporting.
- Providers should use automation to support staff and standardize routine work, while keeping staff involved in exceptions and high-stakes decisions.
According to the American Hospital Association, hospitals spent an estimated $43 billion in 2025 trying to collect payments insurers owed for care already delivered, including nearly $18 billion to overturn claims denials. For revenue cycle managers, the pressure is building as manual administrative tasks like insurance eligibility verification, claims management and payment processing consume staff time and increase administrative costs.
The 2024 CAQH Index estimates that the healthcare industry can save $20 billion in annual savings by transitioning to fully electronic administrative workflows. Automating key revenue cycle management (RCM) workflows can improve efficiency, accuracy and cash flow, while easing staff stress and supporting timely patient access. A practical approach is to target high-volume, rules-based work where manual effort creates delays and rework.
What are administrative costs in healthcare?
The Centers for Medicare & Medicaid Services reported that U.S. health spending reached $5.3 trillion in 2024, with government administration and nonmedical insurance expenditures accounting for 7% of the total. Administrative costs cover the resources needed to manage the nonclinical aspects of care. These resource requirements can be substantial in a complex system with multiple payers, fragmented data systems and growing regulatory demands. Add persistent staffing shortages and increasing patient volumes to the mix, and it’s easy to see how costs can spiral out of control — especially when relying on inefficient systems. This is where automation can make a difference.
What is the role of automation in healthcare?
Automation can reduce manual errors and speed up workflows, which may help shorten payment cycles. It can free staff capacity for work that requires judgment, communication or patient support. Some tools use rules-based processing, while others use artificial intelligence (AI) or machine learning to identify patterns, route work or recommend the next action.
However, many providers are not fully capitalizing on automation’s potential. Experian Health’s latest State of Claims 2025 report shows that only 56% of respondents believe their organization’s current claims technology is sufficient to meet RCM demands. The report also found that 68% say submitting clean claims is more challenging than a year ago, while 90% of claim denials are reworked with at least some human review before resubmission. How can providers tap into the benefits of automation to reduce administrative costs without losing appropriate oversight?
Benefits of automation and how it can reduce administrative costs in healthcare
Automating healthcare administration can help teams handle routine work with less manual effort.
| Potential benefits include: |
| – Fewer errors in billing, coding and claims management: Automated checks can identify missing or incorrect information before submission. Catching issues earlier can help reduce avoidable denials and rework. |
| – Less time to get paid: Automated processes can speed up claim submissions, insurance eligibility verification and payment collections. This may support more predictable cash flow and reduce the time staff spend chasing updates and payments. |
| – More support for limited staff capacity: Automation can handle repetitive tasks such as data entry, payment reminders and reporting. Teams can then focus more on work that requires human judgment, communication or patient support. |
| – Improving efficiency in every corner of the revenue cycle: Automating routine tasks can make the entire billing and revenue cycle more efficient, allowing teams to handle more work in less time without adding the same level of manual effort. |
| – A clearer patient financial experience: Automation can make it easier for patients to understand their bills, set up payment plans and pay their balances online. Clear self-service options can also reduce the need for follow-up calls and help patients manage what they owe. |
How can providers implement automation in healthcare?
When it comes to reducing administrative costs, selecting the right parts of the workflow to automate matters. Here are five possible use cases to consider:
1. Streamline insurance eligibility checks
“Checking if my insurance was accepted was a fast and friendly process. The staff even helped clarify which insurance was the right one for me since I had multiple cards.” This is what one patient at Providence Health said after the health system switched to automated insurance eligibility verification. Insurance Eligibility Verification connects to more than 900 eligibility payers and automatically checks patients’ coverage and plan-specific benefits information in real time. This reduces the manual effort required by staff and can help prevent the delays and denials that lead to additional administrative costs. After implementing automated eligibility checks, Providence found $30 million in coverage and reduced potential denials by $18 million over five months.
2. Automate claims submission
One option is to use automation to prefill patient data, reducing inconsistencies and typos that can occur with manual input. Organizations can also combine automated steps to populate, check and track claim submissions. ClaimSource® can automate claims editing and submission in a single application.
3. Improve denial management
Denials remain a major challenge for providers. As payer rules and claim requirements change, revenue cycle teams need faster ways to identify high-risk claims before submission and decide which denials to work on first.
Patient Access Curator™ works within registration workflows to verify and correct patient and coverage data, including eligibility, coordination of benefits and insurance discovery, and payer sequencing before claim creation. Catching these issues earlier can reduce rework and help prevent avoidable denials.
Experian Health’s AI-powered denial management solution, AI Advantage™, can help providers identify and prioritize high-value denials. The tool also learns from an organization’s historical claims data and trends in payer behavior to flag claims at risk of denial.
4. Accelerate patient payments
On the patient side, automation can send reminders about outstanding balances, offer payment plan options and support fast, secure payment processing. Simplifying patient billing can make it easier for patients to understand and manage what they owe, while reducing the need for follow-up calls. Experian Health’s State of Patient Access 2026 survey found that 63% of patients said a payment plan would make them more confident about paying healthcare costs.
5. Generate better financial reports
Another use case for automation is generating timely revenue cycle performance reports. With advanced data and analytics, staff no longer need to spend hours compiling information, while managers get faster, more reliable information to inform strategic decisions. Experian Health’s healthcare data analytics solutions turn operational and financial data into actionable insights that can help teams identify potential revenue leakage and monitor performance.
What is the future of healthcare automation?
Automation can help reduce administrative effort and related costs by taking on repetitive, time-consuming tasks. Choosing solutions that support integration and interoperability can improve data sharing across platforms and services, reducing errors and delays.
An Experian Health survey of 200 healthcare decision-makers, conducted in October 2025, found that 63% had introduced AI in some capacity, while only 15% had fully integrated it into standard RCM operations. As these tools evolve, RCM leaders may find more opportunities to minimize manual intervention, but responsible adoption also depends on clear governance, reliable data, security controls and human oversight.
FAQs
Healthcare administrative tasks that are high-volume, repeatable and rules-based are often the best candidates for automation. These are typically activities that require staff to complete the same steps across large numbers of patients, claims or transactions.
Common examples include eligibility and benefits verification, claim edits, claim status inquiries, payment reminders, work-queue routing and routine reporting. Automation can also support repetitive data-entry and follow-up activities across the revenue cycle. Automating these activities can reduce manual effort and give staff more time to focus on exceptions, complex cases and patient needs that require human judgment.
Automation can help prevent avoidable claim denials by checking eligibility, patient information, coding and payer requirements before a claim is submitted. It can also support denial management by organizing work queues, identifying patterns and prioritizing claims for follow-up, helping staff focus on more complex cases while reducing preventable errors and manual review.
Learn more about how Experian Health’s automated Revenue Cycle Management solutions can help reduce administrative costs in healthcare and support more resilient revenue cycles.
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