Administrative Burden in U.S. Healthcare: A Focus on Rural Systems and Workforce Sustainability

Overview

Administrative burden refers to the documentation and reporting responsibilities placed on clinicians by both organizational policies and external regulatory requirements.¹ These non-patient care activities have become a structural vulnerability in the U.S. healthcare system – contributing to workforce burnout, increased costs, and reduced time for patient care. While some reporting duties are essential to the goals of value-based care, the volume and complexity of current requirements have grown to the point where they interfere with patient outcomes and may ultimately undermine the very systems they are meant to improve.² In rural settings, where staffing is lean, resources are limited, and digital infrastructure is uneven, this burden is even more destabilizing. What was once considered a backend operations issue now poses a direct threat to the resilience of rural healthcare and the broader system’s ability to serve aging, medically complex populations. Reducing administrative burden, especially in rural systems, is critical to stabilizing the workforce, protecting patient access, and reducing system-wide costs. This brief outlines practical strategies for reform: public-private partnerships, standardized documentation requirements, shared infrastructure, and AI-powered automation.

One of the most pressing system-wide contributors to administrative burden is the duplication of data entry across fragmented platforms. Providers must often input the same information multiple times to meet the documentation requirements of Medicare, Medicaid, commercial insurers, and regulatory agencies, each of whom have different formatting and compliance standards. This fragmented system increases staff workload, drives reporting errors, and erodes time available for patient care. As innovation accelerates across states, health systems, and technology firms, addressing this challenge is essential – especially in rural communities where the stakes are highest and capacity is most constrained.

While Rios Partners’ annual Health of Health Index provides a broad view of trends shaping U.S. healthcare, this brief focuses specifically on administrative burden as a key vulnerability particularly in rural settings. Though rural systems are the focal point, the challenges and solutions discussed here have far-reaching relevance: administrative burden has been identified by CMS, HHS, and the U.S. Surgeon General as a system-wide crisis.³ Addressing it in rural contexts can surface scalable interventions that strengthen the healthcare system as a whole. This brief identifies three critical pressure points for targeted intervention within administrative burden:

Clinician burnout and cognitive overload: Administrative tasks are directly contributing to record-high burnout rates and threatening the sustainability of the healthcare workforce.
Structural vulnerabilities in rural care delivery: Rural hospitals, already operating under constrained resources, face compounded risk due to fragmented digital systems and complex regulatory compliance.
Data and technology gaps: A lack of standardized rural data and inequitable access to AI-powered tools is undermining both policy design and care outcomes.

U.S. Hospital Administration Expenditures

Healthcare administrative costs cover a wide range of activities, from billing and insurance to regulatory compliance, quality assurance, customer service, marketing, staff training, and technology management. Research estimates that administrative costs account for approximately 25% of total U.S. healthcare expenditures – far exceeding that of other high-income countries like Canada (12%), the Netherlands (19%) and England (15%).⁴ In 2023, the U.S. spent $57.4 Billion on hospital administration – a 23% increase compared to 2018, and a 6.3% increase from just the previous year.⁵ Between 2003 and 2023, U.S. hospital administration expenditures more than doubled—from $25.4 billion to $57.4 billion.⁶ Administrative costs have also grown faster than clinical service expenditures over the past decade⁷, driven largely by billing complexity, fragmented reporting requirements, and redundant documentation systems. This imbalance risks diverting critical resources away from frontline care – such as staffing, equipment and direct care services- and instead funnels them into duplicative administrative processes. For under-resourced settings, especially rural and safety-net providers, this trade-off can be unsustainable: every dollar spent on billing complexity or compliance infrastructure is a dollar not spent on direct patient care. Over time, this can not only undermine care delivery but also accelerate clinician burnout.

Despite these trends, administrative support systems and documentation platforms have not kept pace. Compared to international peers, U.S. healthcare professionals spend significantly more time on non-clinical tasks. Danish general practitioners, for example, spend almost less than half the time their U.S. counterparts do on electronic recordkeeping, due to centralized systems and national health data strategies.⁸

Figure 1. US Health Expenditures by Hospital Administration

Burnout Crisis and the Cost of Administrative Overload

a stack of newspapers sitting on top of a window sill

Since 2018, administrative overload has consistently ranked as the top contributor to physician burnout.⁹ In 2023, 62% of physicians cited clerical and documentation demands as their primary source of dissatisfaction. This burden is not merely a time issue; it is a core threat to the sustainability of the clinical workforce. Burnout has become so pervasive that the U.S. Surgeon General issued a 2022 advisory naming clinician burnout as a public health crisis, warning that attrition and declining morale could endanger the entire healthcare delivery system if left unaddressed.¹⁰ Despite near-universal adoption of electronic health records (96% of hospitals; 78% of office-based practices¹¹), clinicians consistently report that EHRs increase after-hours work, reduce time with patients, and add to mental fatigue.¹² Much of this stems from EHRs being optimized for billing and compliance- not for clinical care delivery. As a result, even tech-forward clinicians spend hours “pajama charting” after hours or during weekends to catch up on documentation.¹³

Physicians are spending an average of 15.6 hours per week on administrative duties—nearly two full clinical days lost to non-clinical work¹⁴

In addition to reducing time at the bedside, administrative burden imposes a cognitive load that impairs decision-making. High administrative multitasking has been linked with diagnostic inaccuracies and reduced professional satisfaction.¹⁵ In cognitive science, this phenomenon is known as “decision fatigue:” a state in which excessive small tasks reduce a person’s ability to make high-stakes judgments, like determining a diagnosis or triaging a patient. The downstream effects are serious: clinicians facing burnout are more likely to report medical errors, lower patient satisfaction, and intentions to leave the profession altogether. In 2024, more than 1 in 4 physicians said they were considering an early exit from clinical practice due to chronic stress and lack of support.¹⁶The impact is not limited to physicians. Nurses, physician assistants, and behavioral health providers are also experiencing rising burnout rates.¹⁷ Reducing administrative burden is not a secondary priority; it is a prerequisite for workforce stability, care quality, and patient safety.

Rural Healthcare: A Critical Inflection Point

Nearly 60 million people live in rural areas across the U.S.—about one in five Americans—where hospitals often serve as critical lifelines. Rural areas are typically defined as those located outside of metropolitan statistical areas (MSAs), including micropolitan regions with urban clusters of 10,000 to 49,999 people, as well as more remote, noncore communities. There are rural hospitals across 48 states and constitute most hospitals in 17 of them.¹⁸ In states like Montana and Nebraska, over 70% of hospitals are rural.¹⁹ Rural hospitals are not only providers of care but also function as essential economic anchors and community hubs. In 2020, rural hospitals supported one in every 12 rural jobs in the U.S. as well as $220 billion in economic activity in rural communities.²⁰ Yet these providers often operate under severe constraints:

Lower patient volume but higher per capita need: Rural hospitals serve smaller populations overall, but those patients tend to be older, sicker, and more likely to suffer from chronic conditions²¹– creating disproportionately high demand relative to available resources.
Fewer than 25 beds in ~½ of rural hospitals: Nearly half of rural hospitals have 25 or fewer beds²² – compared to the national average of 275²³– which limits their capacity to manage patient surges, provide specialized care, or ensure continuity in emergencies.
High reliance on Medicare and Medicaid reimbursements: Rural hospitals rely heavily on lower-paying public programs like Medicare & Medicaid which constrain their revenue and limits financial flexibility.
Limited staff and IT infrastructure for meeting growing administrative mandates: Rural hospitals struggle to recruit and retain healthcare and IT staff, and limited budgets often prevent them from implementing essential cybersecurity measures, leaving them vulnerable to cyberattacks.²⁴

In many rural systems, physicians wear multiple hats—as generalists, administrators, and care coordinators. When one clinician departs due to burnout or administrative fatigue, entire communities can lose access to obstetric care, behavioral health services, or even routine primary care. Administrative burden in this context doesn’t just increase costs: it threatens the sustainability of essential health infrastructure. The close-knit nature of rural communities can also place added emotional strain on clinicians, who often have longstanding personal ties with their patients. This emotional proximity, while a strength of rural care, can heighten stress when administrative work interferes with patient time.²⁵

Along with this, administrative complexity doesn’t always scale with hospital size. Under CMS’s Inpatient Quality Reporting (IQR) Program, many small rural hospitals paid under the Inpatient Prospective Payment System are required to meet the same quality data submission standards as large urban academic centers—despite significant differences in capacity and administrative resources.²⁶ This uniform reporting model places a disproportionate strain on smaller institutions, regardless of geography. The uneven distribution of technological resources further exacerbates the burden. Larger hospitals—typically with greater financial resources and dedicated technical staff—are more likely to adopt and evaluate AI models that streamline documentation and compliance.²⁷ A 2024 survey found that 87% of administrators in hospitals with fewer than 50 beds reported being unable to afford new or replacement technology due to financial constraints—highlighting how smaller hospitals, both rural and urban, often lack the infrastructure, funding, and workforce to adopt solutions that could ease administrative burden, thereby deepening the digital and operational divide.²⁸ This suggests that institutional scale, rather than location alone, plays a critical role in determining whether a facility can effectively manage administrative demands.

Regulatory fragmentation compounds these challenges, particularly for under-resourced providers. Rural hospitals, operating with leaner staff and tighter margins, are disproportionately affected by the duplication of data entry required across Medicare, Medicaid, and private insurer systems. What is merely inefficient for a large health system becomes a critical vulnerability in smaller settings, where each diverted staff hour directly impacts patient care delivery. EHR mandates under the 2009 HITECH Act formally began compliance enforcement in 2024, adding new reporting pressure on providers who already face staffing and funding challenges. At the same time, evolving Medicaid policy—particularly the potential for states to take on increased responsibility for eligibility determinations and work requirements—could create additional administrative layers, compounding the burden on providers least equipped to manage it.²⁹

The fragmentation of digital systems and regulatory policies in the U.S. amplifies rural workload and undermines care access. While the U.S. healthcare market is uniquely complex, global examples highlight alternative approaches to reducing administrative strain. In Denmark and New Zealand, rural clinics are integrated into national platforms with unified billing and clinical documentation.³⁰ Physicians there spend less than half as much time on administrative tasks compared to U.S. counterparts,³¹ thanks to centralized infrastructure and streamlined compliance expectations. While these models may not translate directly to the U.S. context, they highlight the potential impact of greater coordination, interoperability, and administrative simplicity. If administrative burden continues to rise without corresponding rural support, we risk not just inefficiency—but systemic collapse in the areas least equipped to absorb it.

Data Deficit: Seeing the Problem Clearly

Most existing research aggregates hospital experiences without accounting for critical factors like size and location, making it difficult to determine whether burdens arise more from geographic remoteness or institutional scale. MedPAC, for instance, has noted that smaller facilities—regardless of location—struggle to absorb compliance costs.³² Despite the urgency of the issue, there is a notable lack of national data or standardized metrics capturing administrative burdens in rural settings. We lack visibility into core indicators such as:

Time rural clinicians spend on documentation and compliance
Cost burden of EHR adoption and maintenance at low-volume sites
Administrative staffing ratios relative to patient load
Burnout rates attributable to regulatory complexity in rural settings
Disparities in AI or automation adoption

Without these metrics, policymakers and system leaders must rely on anecdotes or internal audits – leaving the rural administrative burden under-quantified and under-addressed.

While some academic and workforce research centers—such as the Center for Health Workforce Studies (CHWS) at SUNY Albany and NORC at the University of Chicago—have begun exploring administrative burdens in rural care, these efforts remain fragmented and underfunded. There is a growing opportunity for industry, academic institutions, and public agencies to align around a shared research agenda—one that prioritizes actionable data on staffing, documentation time, and compliance costs. As part of this effort, stakeholders could re-examine what reporting is actually required and what current reporting could be eliminated or streamlined. . In parallel, health systems can continue to explore automated reporting solutions that can generate compliance and quality reports directly from EHRs and other digital tools – which can significantly reduce clinician workload, standardize data collection, and improve visibility across rural sites. Health Workforce Research Centers or Area Health Education Centers could serve as valuable conveners in this space, helping to build a common evidence base that informs scalable policy and sparks private-sector innovation.

The Case for AI and Automation

A robotic hand reaching into a digital network on a blue background, symbolizing AI technology.

Artificial Intelligence tools offer one of the most promising avenues for reducing administrative burden system-wide. AI tool usage among physicians jumped from 38% to 68% between 2023 and 2024, with documentation support leading the list of use cases.³³ 57% of physicians surveyed said that AI’s greatest potential lies in reducing administrative work—not clinical diagnostics or imaging.³⁴ Some top-ranked tools include:

Abridge, Nabla, Augmedix – for real-time note generation
Nuance – Dragon Ambient eXperience – for ambient scribing
DocuSuite – for multi-system document consolidation

In January 2025, President Trump signed Executive Order 14179, titled “Removing Barriers to American Leadership in Artificial Intelligence.” This order seeks to remove restrictive policies that hinder AI development, particularly in sectors like healthcare.³⁵ By focusing on enhancing America’s leadership in AI free from ideological bias, the order is poised to streamline the adoption of AI solutions in fields burdened by excessive administrative tasks, including healthcare. The order directs federal agencies to revise policies to foster innovation, potentially making it easier for healthcare providers, particularly those in rural areas, to adopt AI technologies that reduce the time spent on documentation and other administrative duties. With AI tools already showing promise in reducing non-clinical workload, such as through real-time note generation and ambient scribing, the executive order further supports the move toward more efficient healthcare operations.

Yet, the same cost and staffing limitations that challenge rural hospitals also make AI adoption difficult. While federal support—through shared services, grant funding, or technical assistance—can play a role, other creative pathways are emerging Health systems could extend AI infrastructure to rural affiliates; commercial payers could offer incentives tied to administrative efficiency; and philanthropic or impact investment capital could seed regional pilots.³⁶ This suggests that well-aligned public-private partnerships could deliver both operational savings and improved care access.

Figure 2. AI Solutions to Reduce Administrative Burden in Healthcare

Call to Action: Reimagining Healthcare from the Admin Layer Out

Reducing administrative burden is no longer just a regulatory challenge – it is an operational imperative. With clinician burnout at crisis levels and rural care systems increasingly strained, it’s clear that change is needed. While there is no single solution, both policymakers and industry leaders -including health systems, payers, and digital health innovators – have an opportunity to explore new models and collaborate on more sustainable approaches. The administrative layer should be reengineered to restore clinical capacity, reduce cognitive load, and protect access to care. Some initial concepts to inform discussion include:

Integrate tools to automate reporting: Many EHR systems already capture the necessary data—tools should focus on real-time report generation, ambient dictation, and workflow-integrated compliance.
Redesign contracts that reward simplicity: Value-based care models could be designed to also reduce paperwork.
Extend enterprise infrastructure to rural and low-resource partners: Share access to AI documentation tools, EHR platforms, and billing systems.
Build Rural Health IT Hubs or Consortiums: Establish regional shared-services platforms offering EHR, billing, and AI-driven documentation solutions to reduce costs and modernize rural healthcare infrastructure.
Invest in tools built for real-world workflows—not compliance checkboxes: Prioritize user-centered design and seamless integration.
Pilot “low-burden” care models: Let clinicians experience shifts with minimized documentation—through AI support, team-based workflows, or integrated data access—and build the case for transformation from those results. CMS’s Data at the Point of Care pilot offers a precedent of reducing admin tasks through seamless claims data integration.³⁷
Standardize Federal Reporting Requirements: Align Medicare, Medicaid, and private insurer documentation standards to eliminate duplicative and conflicting requirements, reducing unnecessary administrative load on providers – especially those in small or rural systems.
Establish a National Rural Administrative Burden Data Consortium: Build a coordinated initiative through CMS, HRSA, and academic partners to systematically collect, analyze, and publish standardized data on rural administrative burden, driving evidence-based policy reform.
Streamline State-Specific Quality Reporting: Harmonize and simplify state quality reporting systems with federal frameworks to minimize extra documentation demands on already stretched rural systems.

From Burden to Breakthrough: Industry Prompts to Redesign Healthcare Administration

Successful transformation requires creativity and leadership from every level of the healthcare system. Real change will require joint leadership from both the public and private sectors to reimagine how documentation is designed, delivered and measured. Each contributes to the current burden—and each must be part of the solution. Public mandates and private platforms often intersect in ways that compound complexity; solving this will demand alignment, not silos. For example, commercial insurers alone account for up to 30% of documentation-related workload for some practices.³⁸ To spark that shift, we offer the following prompts—not as prescriptive solutions, but as provocations for leaders to reconsider the assumptions, systems, and incentives that shape documentation in U.S. healthcare.

Reducing administrative burden is not simply about saving time—it’s about protecting clinicians’ cognitive bandwidth, keeping rural health systems viable, and restoring the human connection in care delivery. For the 60 million Americans who rely on rural providers, the burden of bureaucracy could soon outweigh access to care. Imagine a rural clinic where a single nurse-practitioner spends 70% of their day with patients – not portals. That future is possible, but only if we design for it now.

As a part of Rios Partners’ continued engagement on this topic, we are soliciting perspectives from industry leaders to continue to expose the depth of concern of this topic. If you’d like to share your perspective, email us at healthofhealth@riospartners.com.

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