The burden of “Administrative Costs” in healthcare and how to reduce them?

ProMantra: Pioneering Administrative Cost Reduction in Healthcare

The healthcare industry is a complex ecosystem, dedicated to enhancing patient care and overall health outcomes. However, behind the scenes, administrative costs in healthcare can be a significant burden on the system. In this article, we will explore what administrative costs in healthcare are, why they matter, and how to effectively reduce them with the support of ProMantra.

What Are Administrative Costs in Healthcare?

Administrative costs in healthcare refer to the expenses associated with managing the non-clinical aspects of healthcare delivery. These costs cover a broad spectrum of activities, such as healthcare administration, medical billing and coding, revenue cycle management (RCM), and more. Administrative costs encompass a wide range of functions, including:

  • Healthcare Administration: This includes the management of healthcare facilities, staff, and regulatory compliance. It also involves coordinating and streamlining various healthcare processes to ensure efficient operation.

  • Medical Billing and Coding: The process of translating medical procedures and diagnoses into standardized codes for insurance claims and billing. Accuracy in billing and coding is crucial for revenue optimization.

  • Revenue Cycle Management (RCM): The financial process that encompasses the identification, collection, and management of patient service revenue. RCM includes everything from scheduling and insurance verification to medical billing and final payment.

  • Claim Denials: When healthcare claims are rejected or denied by insurance companies, providers are forced to invest resources in appeals and resubmissions. This is a significant driver of administrative costs.

  • Accounts Receivable (AR) Cycle: Managing outstanding payments, following up on claims, and reconciling accounts are all part of the AR cycle. Delays in AR cycle management can lead to reduced cash flow and increased administrative costs.

The Significance of Administrative
Costs in Healthcare

Administrative costs play a critical role in the healthcare system for several reasons:

  1. Resource Allocation: Healthcare providers need to allocate valuable resources, such as staff and technology, to manage administrative tasks. This allocation diverts resources away from patient care and clinical services.

  2. Financial Impact: Administrative costs can represent a substantial portion of a healthcare organization’s budget. Inefficient administrative processes can lead to financial strain and reduced profitability.

  3. Patient Experience: When administrative tasks are not streamlined, patients may face delays in receiving care, and insurance claims can be confusing. This can lead to a poor patient experience.

  4. Compliance and Regulation: Healthcare is subject to numerous regulations and compliance requirements. Ensuring adherence to these regulations adds complexity to administrative tasks and costs.

How to Reduce Administrative Costs in Healthcare with ProMantra

Reducing administrative costs in healthcare is a goal that can benefit both healthcare providers and patients. With the support of ProMantra, here are some strategies to achieve this:

  1. Prior Authorization Automation: Automating the prior authorization process with ProMantra can significantly reduce the time and effort spent on administrative tasks. Utilizing Prior Authorization Software streamlines the process and minimizes delays in obtaining approvals for medical procedures and services.

  2. Efficient Billing and Coding with ProMantra: Ensuring accurate and efficient medical billing and coding practices with ProMantra can reduce the administrative burden associated with claim denials and resubmissions. ProMantra’s expertise in this area ensures optimized revenue cycles.

  3. Streamlined RCM with ProMantra: ProMantra offers streamlined revenue cycle management services, from insurance verification to claims submission and payment reconciliation. Outsourcing RCM to ProMantra experts can reduce administrative overhead and optimize financial operations.

  4. Technology Integration with ProMantra: Implementing integrated technology solutions, such as Electronic Health Records (EHR) and Practice Management Systems (PMS), can automate various administrative tasks, including appointment scheduling, patient information management, and billing, with ProMantra’s support.

  5. Reduce Manual Processes with ProMantra: Identify and eliminate manual administrative processes that can be automated, such as appointment scheduling, appointment reminders, and claim status tracking, with the assistance of ProMantra.

  6. Effective AR Management with ProMantra: ProMantra’s AR management services help healthcare providers promptly follow up on claims and manage accounts receivable efficiently to ensure timely payment. This not only enhances cash flow but also reduces the aging of accounts receivable.


Administrative costs in healthcare represent a significant burden on the system, diverting resources from patient care and reducing profitability. With ProMantra’s support, healthcare providers can reduce these costs and improve the overall healthcare experience for both providers and patients. Reducing administrative costs is not just a financial imperative; it’s also a crucial step towards delivering better patient care and optimizing financial operations in healthcare. ProMantra’s expertise and services are invaluable in achieving these goals.

Overall, by leveraging Promantra’s revenue cycle management solutions, healthcare organizations can aim to reduce their administrative costs by up to 50% and in turn improve their financial performance.


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