Your insurance premium just went up. Your out-of-pocket costs increased. Your local clinic closed down a department. You’re waiting longer to see specialists.
You probably blame your insurance company. Or the healthcare system in general. But there’s a hidden cost driver that almost nobody talks about: the time it takes to get new doctors credentialed and ready to see patients.
It sounds bureaucratic and boring. But it’s actually a major reason your healthcare costs are rising.
The Problem Nobody Talks About
Here’s how most people think about healthcare costs: expensive surgeries, expensive drugs, expensive equipment, expensive hospital stays. That’s what makes the headlines.
But there’s a quieter cost killer: idle providers.
Imagine a health system just hired a new physician. She passed her background check. She has her license. She’s ready to start seeing patients tomorrow. But she can’t bill insurance yet. Why? Because she’s stuck in credentialing—the process of getting approved by each insurance company to be on their network.
This process is supposed to take 30-60 days. In reality, it often takes 60-120 days. Sometimes longer.
During those months, the physician is on payroll. But she’s not generating revenue. The hospital is losing money every single day she’s not seeing patients.
Now multiply that by dozens of providers. A health system with 100 new providers cycling through credentialing at any given time is losing serious money.
We’re talking hundreds of thousands of dollars in lost revenue per provider.
Where the Money Goes
Here’s the financial reality that gets buried in healthcare budgets:
A typical outpatient physician generates $250,000 to $500,000 in annual revenue for a health system. But that’s annual. Daily? About $700-$1,300 per day.
If credentialing delays keep a provider from billing for an extra 30 days, the health system just lost $21,000 to $39,000 in revenue from that one provider.
Now imagine a 50-provider clinic that’s trying to scale. If they have credentialing delays, they’re looking at hundreds of thousands of dollars in lost revenue across their entire organization.
But here’s the thing: healthcare organizations don’t just absorb this loss. They recover it somewhere. And patients are the ones footing the bill.
How These Costs Get Passed to Patients
When healthcare organizations lose revenue, they have a few options: accept lower margins, cut costs, or raise prices.
Most do all three.
Insurance premiums rise. Insurance companies contract with health systems and physician networks. When those providers are slow to onboard and generate revenue, the negotiation changes. Health systems demand higher reimbursement rates to offset credentialing delays and lost revenue. Insurance companies pass those costs to employers and patients through higher premiums.
Out-of-pocket costs increase. Hospitals and clinics raise copays, deductibles, and out-of-pocket maximums to recover lost revenue. You notice this directly when you get a bill.
Services get cut. Some organizations can’t absorb the losses, so they reduce services, cut clinic hours, or close departments. This affects your access to care. Fewer providers mean longer wait times for appointments.
Rural and underserved areas suffer most. Smaller health systems and rural clinics have tighter margins. When they lose revenue because new providers are stuck in credentialing delays, they can’t afford to wait. Rural clinics close. Rural communities lose access to care. Patients either travel hours to see a doctor or go without.
Staff burnout increases costs. When health systems can’t onboard providers fast enough, the existing staff gets overloaded. Overworked providers quit. Burnout drives turnover. High turnover means higher hiring and training costs, which again get passed to patients.
The Real Numbers
Let’s put actual numbers on this.
A healthcare organization brings on 50 new providers in a year. That’s a reasonable growth rate for a growing health system or digital health company.
Traditional credentialing process: 90-120 days average.
Let’s say 100 days on average, and a provider generates $1,000 per day in billable revenue.
● 50 providers x 100 days delay x $1,000 per day = $5,000,000 in lost revenue annually
That’s a staggering number. And it’s conservative. Some organizations lose more.
Now, a health system losing $5 million annually has to offset that. They can’t just accept it. So they raise rates, cut services, or request higher reimbursement from payers.
A 500-bed health system with this credentialing problem might increase insurance premiums by 5-10% just to offset credentialing-related losses. For a family of four, that could mean $200-$400 more per month in premiums.
Why This Matters to You
If you’re healthy, you might think this doesn’t affect you. But it does.
Longer wait times. Delayed provider onboarding means fewer providers available. Fewer providers means longer wait times for appointments. You want to see a specialist? Expect a longer wait.
Less choice. Smaller networks mean fewer providers to choose from. You’re stuck with whoever’s available, whether they’re a good fit or not.
Higher costs. As shown above, credentialing delays get baked into your insurance premiums and out-of-pocket costs.
Reduced innovation. Digital health companies, urgent care networks, and new healthcare models want to expand to serve you. But credentialing complexity slows them down. That innovative virtual care option you want? It might not be available in your area because the company couldn’t scale fast enough.
Rural healthcare collapse. Rural areas are hit hardest. When small rural clinics can’t onboard providers fast enough, they close. Rural communities lose access to care entirely.
What’s Actually Happening
The credentialing problem is worse than most people realize because it’s fragmented across hundreds of insurance companies, state medical boards, and federal agencies (DEA, Medicare).
Each payer has different credentialing requirements. A provider needs to get credentialed separately by Aetna, Blue Cross, United, Cigna, Medicare, Medicaid—sometimes 10+ different entities with different forms, different requirements, different timelines.
Each state has different licensing requirements. Multi-state health systems have to navigate 50 different state medical board systems.
The DEA, Medicare, and state boards all have separate data systems. Getting information from all of them and ensuring consistency is a nightmare.
Healthcare organizations are doing all of this manually. Spreadsheets, phone calls, faxes, emails, follow-ups. It’s 2024 and credentialing is still happening via fax in some places.
This complexity is baked into the cost. And you’re paying for it.
What Needs to Change
Here’s what would actually fix this:
Faster credentialing processes. Healthcare organizations need to be able to onboard providers in days, not months. This requires automation, better data integration, and streamlined workflows.
Multi-payer coordination. Insurance companies could coordinate on credentialing requirements instead of each doing their own thing. Standardized requirements would reduce complexity.
Better data systems. State medical boards, DEA, Medicare, and payers need better data systems that can integrate with each other. Information should flow automatically, not manually.
Regulatory simplification. Some credentialing requirements are outdated or duplicative. Regulators could streamline requirements while maintaining quality and compliance.
Technology investment. Healthcare organizations and payers need to invest in automation and AI-powered credentialing systems that handle complexity at scale.
Some of this is actually happening right now. And it’s changing the economics of healthcare provider networks.
How Some Healthcare Organizations Are Solving This
A few forward-thinking healthcare organizations have started deploying automated credentialing systems that dramatically speed up the process.
One digital health company was previously using traditional credentialing methods. Over two years, they struggled to get providers credentialed efficiently. The delays were costing them money and limiting their ability to expand. They switched to an automated credentialing system and saw their time-to-credentials drop from 60-120 days to just 2 business days.
What changed? Instead of manually filling out forms for each payer (remember, each payer has different requirements), the system pulls provider data automatically from multiple sources—state medical boards, DEA, CAQH, and others. It maps that data to each payer’s specific requirements and submits applications in parallel across multiple payers simultaneously. The entire process that used to take months now takes days.
The result: providers go live and start billing almost immediately. The health organization recovers revenue faster. Patients get access to more providers sooner.
Another organization—a virtual-first dermatology company operating across 31 states—faced a similar challenge. Traditional credentialing meant they couldn’t expand fast enough. Multi-state expansion is complex: every state has different licensing requirements, and every payer has different credentialing timelines. When they deployed automated credentialing, they could expand into new states in weeks instead of months. More states, more providers, faster access for patients.
These aren’t isolated cases. Healthcare organizations that have invested in credentialing automation are seeing massive improvements:
● Onboarding timelines: 60-120 days down to 2-7 days
● First-pass approval rates: 50-60% up to 80-90% (meaning fewer rejections and rework)
● Revenue recovery: Weeks faster on average per provider
● Scalability: Ability to onboard 10x more providers without proportional staff increases
When providers get credentialed faster, the financial benefits flow back to the organization. And when organizations recover revenue faster, they have less need to raise prices on patients.
What This Means for You
The organizations solving this problem are getting a competitive advantage. They can scale faster. They can expand into new markets faster. They can offer better provider networks with shorter wait times.
These organizations are also working with credentialing partners that meet the highest quality standards. Organizations like Assured have NCQA certification which means their credentialing processes have been audited by the gold standard for healthcare quality. When credentialing is automated, it still needs to be accurate and compliant. The best organizations ensure that automation doesn’t sacrifice quality.
The gap is growing between healthcare organizations that solved the credentialing problem and those that haven’t.
Organizations that fixed this are:
● Expanding into new markets (more providers available to you)
● Reducing wait times (faster appointments)
● Growing revenue (less pressure to raise prices)
● Scaling services (new clinics, new specialties in your area)
Organizations still stuck with manual credentialing are:
● Limited in growth (fewer new providers)
● Accepting longer wait times (because they can’t onboard fast enough)
● Losing revenue (which gets passed to patients through higher costs)
● Unable to expand to new areas (including rural communities)
The market is shifting. Smart organizations are solving this problem. And their patients benefit.
The Bottom Line
You’re paying more for healthcare because of credentialing delays. Not directly (you don’t see a “credentialing delay surcharge” on your bill), but indirectly through higher premiums, higher out-of-pocket costs, longer wait times, and reduced access.
This is a solvable problem. It requires technology, process improvement, and coordination. Some healthcare organizations are solving it. But most haven’t yet.
Until they do, credentialing delays will continue to drive healthcare costs up, wait times up, and access down.
The next time your insurance premium increases or you wait months for an appointment, remember: some of that cost and frustration traces back to a problem that has nothing to do with clinical care and everything to do with bureaucracy.
And that’s exactly the kind of problem that should be fixable.
