The following is a guest article by Inger Sivanthi, Chief Executive Officer at Droidal
Thin Margins Have Less Room for Administrative Waste
There is a version of revenue cycle management that most healthcare leaders know well. Claims go out, denials come back, teams work through the queue, and the cycle repeats. For years, this was simply how things ran. Not ideal, but manageable. Margins that were already thin are getting thinner, staffing shortages are not improving at the pace anyone hoped, and payer contracts are not getting simpler. Revenue cycle teams are being asked to do more with fewer people and tighter timelines. The administrative load has not decreased; if anything, it has grown more complicated.
What makes this moment different from similar conversations five years ago is that the pressure is now showing up in the numbers in ways that are harder to absorb. Nearly four in ten hospitals operated at a financial loss in recent reporting periods. Physician groups are not insulated from this either. When reimbursement timelines stretch and denial rates stay elevated, the downstream effect on cash flow is not theoretical. It becomes a staffing decision, a capital decision, a question of whether to expand a service line or hold steady.
Most Rework Starts Before the Claim is Ever Built
For a long time, RCM improvement conversations centered on the back end. Work the denials harder. Hire more AR staff. Build a better appeals process. That thinking made sense when the alternative options were limited. But the back end is, by definition, a corrective exercise; you are already dealing with something that went wrong.
The more useful question is where in the workflow things actually break down. For most practices, it is earlier than people expect. Incomplete demographic captures at registration. Eligibility checks that happen too late or not at all. Prior authorization requests submitted without the documentation that a payer requires the first time. These are not catastrophic failures. They are small gaps that compound.
A single prior authorization delay does not break a practice. But when 30% of your prior auths require follow-up submissions, the math on staff hours and delayed reimbursement adds up quickly. The American Medical Association has consistently reported that prior authorization remains one of the top administrative burdens physicians cite, and that delays affect patient care in ways that go well beyond the financial.
Knowing Where Denials Come From is Not the Same as Stopping Them
There is also something worth noting about how these problems have historically been addressed. A lot of RCM investment over the past decade went into software that reported on what happened rather than software that influenced what was about to happen. Dashboards improved. Visibility into denial trends improved. But the actual intervention still required a human to look at the report and act on it.
That gap between insight and action is where a lot of efficiency gets lost. The more recent shift, one that is genuinely changing how RCM teams operate, is systems that sit inside the workflow rather than alongside it. Not a report that tells you claim type X has a high denial rate with payer Y, but something that flags the risk before the claim is submitted and suggests what needs to change. The difference is subtle in description but significant in practice.
Fixing the Front End Frees Up the People Who Actually Know the Work
None of this eliminates the need for skilled RCM professionals. That framing is one of the more frustrating misconceptions in how healthcare technology gets discussed. What it does change is what those professionals spend their time on. Less time keying in information that could be pulled automatically. Less time on denials that could have been prevented. More time on the cases that genuinely need clinical judgment, escalation, or a phone call.
For practice administrators and revenue cycle leaders thinking about where to direct attention right now, the front end of the cycle is probably underinvested relative to how much it affects downstream outcomes. Getting eligibility right before the visit. Confirming authorization requirements before the procedure. Capturing documentation accurately before the claim is built. These are not glamorous fixes, but they are where a significant portion of rework originates. Margins are not going to recover through denial appeals alone. The practices navigating this period well are the ones treating the revenue cycle as a connected workflow rather than a series of handoffs and finding the points where small improvements have the longest reach.
Inger Sivanthi is the Chief Executive Officer at Droidal, focused on AI-led healthcare revenue cycle and operational automation. With deep expertise in large language models and applied AI, he has worked with healthcare organizations to drive measurable cost efficiencies through intelligent AI agents. His work emphasizes responsible and ethical AI adoption to improve healthcare and financial outcomes at scale.
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