Underestimating Billing Costs


Carriers don’t really understand the cost of their billing operations, and as a result they underestimate their actual expenses.


“We came to the conclusion that carriers typically underestimate the total cost of running a billing operation.”


Ann Weaver, MphasiS


In a survey, a dozen insurance carriers reported the costs for running their billing operations. One carrier reported costs that were very much higher than the rest. That carrier, as it turned out, was the only one that had thoroughly analyzed all of the costs underlying their billing operation. It became apparent that all of the other carriers were underestimating the cost associated with running a billing operation.


Copyright © 2012 by A.M. Best Company, Inc. All rights reserved. No part of this report may be reproduced, stored in a retrieval system or transmitted in any form or by any means; electronic, mechanical, photocopying, recording or otherwise.


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