Hospital finance leaders know margins are going to stay under pressure. Elevated labor costs and ongoing supply chain volatility are no longer temporary hurdles; they’re starting to look like the new baseline.
According to the latest Kaufman Hall Flash Report, hospitals closed out 2025 with a median operating margin of just 1.3%. At the same time, boards’ and executive teams’ expectations remain high. The push to improve financial performance without growing headcount has only intensified. For most organizations, that pressure lands on efficiency, and in 2026, efficiency means automation.
Where should finance teams start?
The debate over whether automation belongs in revenue cycle is largely over, and the focus now is on deciding where to start. Deloitte’s 2026 U.S. Healthcare Outlook shows that 80% of health system executives expect AI and automation to add significant value in back-office functions like revenue cycle. Buy-in isn’t the issue. The challenge is figuring out which process to tackle first and which ones will deliver results in a reasonable timeframe, especially ones that patients will actually notice.
The instinct is usually to target high-visibility initiatives first, like prior authorization or eligibility. Those are important problems but they are also minefields. They involve multiple departments, conflicting priorities and clinical teams that don’t always see eye-to-eye with the back office. Even a well-executed project can take a year or more to show a measurable return, and most of that work is invisible to patients interacting with the billing office.
Meanwhile, one of the most straightforward automation opportunities remains untouched: patient refunds.
Still mailing checks in 2026?
In many health systems, the refund workflow hasn’t changed much in the past decade. Staff continue to review credit balances, verify mailing addresses and print and mail thousands of paper checks. When a patient calls to ask where their money is, someone has to track down the answer manually.
Individually these steps may seem minor, but at scale, they become a meaningful operational burden. For a mid-sized health system, this translates to a significant waste of high-value staff time and capital on a purely transactional process.
The Association for Financial Professionals estimates that issuing a paper check costs between $2.01 and $4.00 per payment, several times higher than digital alternatives which average around $0.40. Some organizations stick with checks because of the perceived benefit of holding onto funds a bit longer to earn interest. Labor, postage and reconciliation quickly erase any gain, making the real opportunity the elimination of the process altogether.
The patient experience impact is easy to underestimate. Press Ganey’s 2025 research found that patients don’t separate their clinical experience from their financial one; it’s all the same experience to them. Waiting weeks or months for a paper check when digital payments are instant almost everywhere else doesn’t just feel outdated, it chips away at the goodwill built during care.
The business case for refunds
Unlike more complex clinical workflows, refund processes are relatively easy to quantify. Most finance teams already know their monthly volume and the per-transaction cost tied to printing and postage.
That makes the ROI easier to prove than many other automation efforts. Digital disbursements lower administrative costs, speed up payments and result in fewer “where is my money” phone calls. It also frees staff to focus on work that actually impacts financial performance.
Starting somewhere
For all the focus on AI in healthcare, the same Deloitte report found that nearly half of organizations are still in experimentation mode, 18% haven’t started at all and only about a third have gotten it to scale. Most teams aren’t lacking urgency, they’re lacking a starting point that won’t take 18 months to show anything.
It’s a pattern I’ve seen play out repeatedly. The organizations actually making real progress on automation aren’t starting with the most ambitious item on the roadmap, they start with processes that are well-defined, easy to measure and directly visible to patients. Refunds check all three boxes.
Getting money back to patients faster is something people notice right away. It shows up in satisfaction scores and brand loyalty. That’s the case Dash Solutions makes, and in a margin environment this tight, it’s hard to argue with.
The post The Margin Pressure Solution: Why Automating Patient Refunds Is a Smart Place to Start appeared first on Becker's Hospital Review | Healthcare News & Analysis.
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