How Automation Saved U.S. Healthcare $258 Billion in 2024

Automated eligibility checks, claims, and prior authorizations saved the U.S. healthcare industry $258 billion in 2024, according to the 2025 CAQH Index, published February 19, 2026. That is a 17.0% increase in administrative cost avoidance over the prior year, and CAQH still counts $21 billion in savings the industry has not captured yet.

The index drew on data from more than 600 provider organizations and health plans, covering 63.0% of the country's insured lives across eight standard administrative transactions: eligibility verification, prior authorization, claim submission, claim status, remittance advice, claim payment, coordination of benefits, and attachments. For a practice or billing company deciding where to spend the next automation budget, the report is the closest thing the industry has to a single scorecard on which of those transactions still run manually rather than through a direct electronic connection.

Where the savings came from

Medical administrative spending fell 9.0% industry-wide in the 2025 Index, and dental spending fell 4.0%. Both drops track a shift toward electronic transactions, though adoption still varies sharply by type. Eligibility verification is close to fully automated: the 2023 CAQH Index found 96.0% of medical eligibility checks and 82.0% of dental eligibility checks already ran fully electronically.

Prior authorization sits at the other end of that range. Electronic adoption for medical prior authorization reached 40.0% in the 2025 Index, up from 31.0% in the 2023 Index. Transaction volume kept growing at the same time: medical administrative transactions reached 55.1 billion in 2023, an 11.0% increase from 49.7 billion in 2022, according to a CAQH Index analysis published by 4sight Health.

What a manual prior authorization actually costs

A manual prior authorization request costs a provider organization $10.97 to process, versus $5.79 once the same request runs electronically, per the 2023 CAQH Index. On the payer side, the same manual request costs $3.52, compared with $0.05 when fully automated. CAQH estimates that if every medical prior authorization ran electronically, industry-wide spending on the transaction would fall by $494 million a year.

The gap between manual and electronic cost is not unique to prior authorization, but it is one of the widest among transactions many practices still handle by phone, fax, or portal upload rather than a direct electronic feed:

Source: CAQH 2025 Index, as reported by AJMC, and the CAQH 2023 Index.

The $21 billion still uncaptured

Claim status inquiries carry $2.8 billion in remaining annual savings if the industry fully automates them, per the 2025 Index. Attachments moved in the wrong direction over the past year: electronic adoption for medical claim attachments fell to 24.0% in the 2025 Index from 32.0% in the 2024 Index, and dental attachments fell to 28.0% from 37.0%. Dental claim payment moved the other way, climbing to 33.0% in the 2025 Index from 21.0% in the 2023 Index.

AI use is spreading on both sides of the transaction. More than 50.0% of health plans and more than 25.0% of provider organizations now use AI tools somewhere in their administrative workflow, according to the 2025 Index. That adoption is one factor CAQH points to behind the jump in savings, alongside continued growth in electronic data exchange.

The 2025 Index also references the 2024 Change Healthcare cyberattack, which disrupted claims and payment processing across the industry for an extended stretch. CAQH notes that organizations already running a higher share of transactions through direct electronic connections kept care and payments moving more easily during that disruption. That detail reframes automation as a resilience question for a practice, not only a cost-per-transaction question.

What the numbers mean for an independent practice

Eligibility verification is close to fully automated across the industry, so there is little cost left to recover on that transaction alone. Prior authorization is the opposite case. At 40.0% electronic adoption, most medical prior authorizations still run manually, and the $5.18 gap between the manual and electronic provider cost, $10.97 versus $5.79, applies to each one. A practice or billing company submitting 5,000 prior authorizations a year would clear roughly $25,900 by moving that volume onto an electronic workflow, based on that per-transaction gap.

Claim attachments are worth watching for the opposite reason. Adoption fell rather than rose in the most recent Index, which means a step that used to run electronically for more practices is now running by fax or portal upload for more of them. For a billing company weighing which transaction to automate first, the CAQH data points toward prior authorization ahead of attachments or claim status, since it carries the largest gap between manual and electronic cost of the three. A billing company running claim status checks and prior authorizations across several client practices multiplies that same per-transaction gap across every client on its roster, which turns a small per-claim number into a real line item on the company's own operating budget.

Sources

• GlobeNewswire, "2025 CAQH Index Shows U.S. Healthcare Avoided $258 Billion and Accelerated Automation, Interoperability and AI Adoption," February 19, 2026
• AJMC, "CAQH Index Finds $20 Billion in Cost Savings Opportunities," July 12, 2026
• 4sight Health, "The Costly Lever of Prior Authorization," by David Burda, February 14, 2024