Hospitals lose billions yearly due to revenue cycle inefficiencies

Hospitals in the United States lost tens of billions of dollars in 2025 due to inefficiencies in what finance teams call the middle revenue cycle, a critical but often overlooked phase of healthcare billing where clinical care is translated into reimbursable claims, according to a new analysis of industry data.

The middle revenue cycle, also referred to as the clinical revenue cycle, encompasses documentation, coding, utilization review, and payer communication during patient care. Failures in this phase do not always appear immediately but surface weeks later as denied claims, underpayments, or unexplained revenue leakage, the analysis found. By the time these issues are detected, the opportunity to correct them has often passed, leaving hospitals with little recourse but to absorb the financial loss or invest heavily in appeals.