The rising administrative challenges healthcare faces

Published on: July 20, 2021

The healthcare industry is rapidly growing. It’s estimated that the global healthcare budget will reach $15 trillion USD by 2030. This expansion means an increased demand for healthcare administrators and managers capable of big-picture thinking and tackling challenges in ways that will help scale operations.

Calculations show that administrative costs add up to 34% of total healthcare costs in the US. On any given day, healthcare administrators must deal with a host of issues like increased costs, regulatory changes, bottlenecks, security issues, and the disruption caused by new technologies.

Ignoring this rapid growth is not an option for most healthcare providers. To remain viable in today’s world, they need to adapt to a quickly changing environment. This blog sets out the common administrative challenges healthcare faces and offers insights into how to best approach some of the industry’s most pressing concerns.

The current administrative challenges healthcare faces

1. Managing data is paramount to future-proofing healthcare

It’s expected that by 2025, 36% of the world’s data volume will be generated by the healthcare industry—a projection that will see healthcare surpass manufacturing, financial services, media and entertainment. The image below shows how the growth of healthcare data stacks up against other industries.

CAGR of healthcare industry data versus other industries

With this data explosion, healthcare administrators need to collect, interpret, and use this data in meaningful ways if they’re to survive. Data comes from so many different places that administrators will need to concern themselves with data management best practices, particularly when it comes to the financial side of things.

Primarily, they will need to invest in cloud-based solutions that allow complete visibility of data and advanced real-time reports so they can take advantage of this wealth of information. Too often, valuable insights get buried in a complicated network of spreadsheets or old systems that cannot produce the reports and tools necessary in an industry undergoing rapid growth.

For healthcare providers with multiple facilities, check out our blog on improving data management.

2. Handling financial concerns and the rising cost of healthcare

According to the American College of Healthcare Executives’ annual survey of issues confronting hospitals, financial challenges were the leading concern of hospital CEOs. Many point to the rising cost of healthcare due to the increase in insurance premiums and pharmaceuticals. However, financial concerns for the average clinic or hospital run much deeper than that.

The scope of concerns covers everything from consolidating financials across multiple health care units to managing medical billing, and denial and negotiating reimbursements. Robust financial management is vital. Most healthcare providers will require a digital transformation as the sheer scale of complexity would be impossible to handle manually.

Many are under pressure to expand and scale operations to serve the growing demand for services, which only adds to the complexity of their financial management. For instance, consolidating financial statements across multiple healthcare facilities is more involved than completing the period end report for one hospital.

For those with multiple healthcare units, check out our guides to financial consolidation:

  1. The common financial consolidation challenges
  2. Best practices for financial consolidation

3. Negotiating leases for medical facilities as operations scale

Healthcare administration guide CTA


As the demand for healthcare facilities surges, it’s no surprise that many healthcare providers will find themselves moving to new premises. Given the specialized nature of clinics and hospitals, finding a suitable space can be a costly venture. When your focus is on healthcare, the administration involved in managing and negotiating leases may come as an unwelcome complication.

Our blog on how to successfully negotiate medical facility leases sets out the best practices for healthcare providers looking to scale. It should give your administration team an idea of some of the challenges involved, such as tenant improvement allowances and exclusivity clauses.

4. Adequate security and privacy for sensitive data

Security is a growing concern of many healthcare providers. According to research, healthcare is particularly vulnerable to data breaches. Between February and May 2020, 132 breaches were reported in the US in large part due to the chaos introduced by COVID-19 that enabled scammers to take advantage while the industry struggled with a global crisis. It’s worth taking this risk and what it means for the future seriously, particularly given the amount of sensitive data stored by healthcare providers.

When it comes to protecting the financial health of your organization as you scale and grow, it’s worth investing in systems and solutions that boast advanced security options that protect you and your patient’s information. All accounting should take place in a highly secure environment that can store data and protect against threats.

If you manage multiple healthcare units or are expanding, here are five steps to help you reduce and assess security risks.

5. Automating and streamlining healthcare supply chains

The supply chain is at the heart of the administrative challenges healthcare faces. Effectively managing inventory is perhaps one of the most pressing challenges administrators face today. For a quick overview of how significant this challenge is, see the common inventory issues detailed in the image below.

supply chain management issues | administrative challenges healthcare

Luckily, none of these issues are too difficult for today’s technology. It’s possible to solve each of these challenges by simply implementing the right software. If you’re not sure if supply chain management is a concern for your facility, check out our guide to diagnosing and fixing inventory issues, which will help you step back and take stock of any growing inventory concerns or bottlenecks.

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