Administrative Burden in the Revenue Cycle Drives Costs


Countless healthcare cost monitoring efforts have revealed that healthcare spending in the U.S. significantly exceeds spending in many other wealthy countries.1While there are several factors contributing to the increased spending in healthcare in the U.S., the highly fragmented and complicated payment structure proves to be a leading contributor, resulting in substantial administrative costs.2

U.S. Healthcare Administrative Costs Surpass Other Wealthy Countries

According to the Journal of the American Medical Association (JAMA), administrative costs related to private and public insurers totaled eight percent of U.S. healthcare expenses, which is increased to 14% when including billing and insurance follow-up activities.3Clearly, establishing effective methods of reducing these administrative burdens would greatly decrease healthcare costs, and significantly boost operating efficiency.

To combat the rising administrative burden, healthcare providers should look to automate much of the insurance follow-up process. By eliminating the time and resources wasted following-up on claims and patient billing, providers are gaining efficiencies and reducing costs. As reported in Modern Healthcare’s recent article, “Why does the U.S. spend so much more on healthcare? It’s the prices”, most hospitals and physician practices have full-time staffers who focus solely on patient billing, insurance, and claims follow-up.3The article describes a four-physician family medicine practice with three such staff members, who spend a considerable amount of time writing letters and calling insurance companies.3Larger providers experience similar administrative burdens, as hospitals and health systems may have hundreds of staff members solely responsible for handling collections and back end billing/follow-up. The amount of valuable time spent on these activities combined with the costs of claims follow- up and other interactions with payors are prohibitively burdensome on the healthcare system as a whole.

Automating the Claim Follow-Up Process

In order to reduce these administrative burdens and reduce costs, U.S. healthcare providers must modify their methods of billing and working with insurance payors, primarily through the use of technology and automated services. MedX has developed technological solutions to these administrative burdens by providing accelerated, actionable claim status information that mimics remittance data on average 30 days in advance of the actual payor remittance files. Through MedX’s myClaimStatus solution, providers are offered daily actionable reports for follow-up staff, thereby reducing the administrative burden of working claims manually. Furthermore, myClaimStatus removes promise pay claims from existing work queues, allowing your staff to work by exception, weeks earlier in the process. myClaimStatus effectively eliminates the time staff spends on web portals or on the phone with payors. By automating claim status follow-up, this revenue cycle management service maximizes provider workflow and boosts staff efficiency.



  1. “How Does Health Spending in the U.S. Compare to Other Countries?” The Henry J. Kaiser Family Foundation, 16 May 2017,
  2. Reinhardt, U E, et al. “U.S. Health Care Spending in an International Context.” Health Affairs (Project Hope)., U.S. National Library of Medicine,
  3. Meyer, Harris. “U.S. Healthcare’s World-Leading Spending Is Driven by High Prices, Not Greater Utilization.” Modern Healthcare,