U.S. healthcare systems are entering a new phase of financial constraint. Margin pressure driven by federal policy changes, increased labor costs, and shifting reimbursement models is pushing leaders to revisit their cost structure with renewed urgency. According to recent analyses by Kaufman Hall, over 60% of health system executives have named cost reduction as their primary operational goal in 2024 — surpassing even growth-oriented strategies.
In this environment, it’s common for health systems to evaluate cuts to resource-intensive care programs. Behavioral health, trauma, and specialty services (which carry high staffing, compliance, and infrastructure costs,) are frequently considered first. Yet these programs often serve the most vulnerable patients and reflect the core mission of healthcare organizations.
The question for leadership isn’t just what to cut. It’s what else can be optimized first.
The administrative infrastructure few see, but everyone feels
Much of the operational burden in healthcare is hidden behind the clinical front lines. Processes like medical credentialing, licensing, payer enrollment, and provider monitoring are foundational to care delivery — but they are often fragmented, manual, and costly.
Take credentialing, for example. Many health systems still manage it through spreadsheets, siloed teams, and outdated portals — leading to delays, duplicated effort, and misalignment across departments. Credentialing timelines can stretch 60 to 90 days; payer enrollment often takes even longer.
Every day a provider is waiting to get cleared is a day they can’t see patients or generate revenue. These delays not only defer patient access but also create backlogs that frustrate patients seeking care and push back revenue recognition at a time when every margin point matters.
Compliance risk adds another layer of operational strain. Staff-driven renewal cycles and inconsistent privileging workflows introduce gaps that can trigger audit flags, reimbursement hold-ups, and reputational risk.
While these inefficiencies may not be visible on a single budget line, their cumulative impact is significant. The cost of outdated provider operations compounds month over month, resulting in unrecovered margin and underutilized staff capacity.
Back-office operations remain one of the most under-leveraged areas for cost containment. Consider a deeper look these system-wide trends:
- Credentialing and payer enrollment delays cost health systems an estimated $10,122 per provider, per month, in deferred revenue and access limitations (MGMA).
- Administrative complexity contributes to 25% of U.S. healthcare spending, with provider data and compliance management among the most labor-intensive categories (JAMA).
- Many health systems rely on four or more systems to manage provider onboarding workflows, leading to duplicative effort, lost time, and limited visibility (Kaufman Hall).
A new lens for operational efficiency
Rather than scaling back care, we’ve seen leading health systems reevaluate the operational infrastructure that supports it. Provider operations which encompasses licensing, credentialing, enrollment, and compliance, have long been treated as necessary overhead, but few organizations have systematically modernized these workflows.
Centralizing and automating provider operations with AI-powered infrastructure presents a major opportunity: reduced administrative overhead, faster time-to-care, and improved visibility into risk and compliance. When systems eliminate manual processes, they often unlock thousands of staff hours per year and materially accelerate revenue capture.
AI can automatically validate and reconcile provider data across multiple sources — like state licensing boards, the National Practitioner Data Bank, and payer directories — reducing manual data entry errors and accelerating verification timelines.
For example, instead of staff manually cross-checking credentials line by line, an AI-enabled system can flag discrepancies in real time, auto-fill known fields, and route only exceptions to human reviewers. This can shrink those average credentialing cycles from 60–90 days to just a few weeks, helping providers start seeing patients, and generating revenue, sooner.
More importantly, these efficiencies can help preserve access to programs that serve the most vulnerable — without adding pressure to frontline teams or cutting direct patient services.
What this moment demands
Budget pressure is real — but cutting care isn’t the only lever. In today’s environment, leaders must make difficult trade-offs. Doing so with clarity means understanding not just what’s expensive, but what’s inefficient.
Operational burden deserves more scrutiny. Not because it’s easily visible, but because reducing it doesn’t require compromising clinical outcomes. It requires questioning how work gets done, and what it truly costs. At Medallion, we’re helping healthcare organizations reduce administrative overhead so they can protect the programs that matter most. Explore our unified platform here. Or download our recent guide, Built to Withstand the Shift, for a deeper look at how leaders are navigating this moment.
