Executive Summary:

There is a healthcare affordability crisis. More than half of Americans have received an unaffordable healthcare bill. With so many struggling to fit healthcare into tight budgets, many patients do not pay. It’s no surprise then, that many revenue cycle leaders rely on collection agencies to receive critical patient payment dollars. However, the magnitude of reliance on collection agencies may surprise you.

Patientco analysis reveals that there is more than $26.5 billion of healthcare related debt impacting patient credit reports today. Further, this reflects only the reported portion of the total patient debt residing with collection agencies. 

As a result, the US healthcare system finds itself #1 for all the wrong reasons. Healthcare is the #1 source of collection calls, #1 reason for negative credit histories, and the #1 cause of personal bankruptcy.

The Current Healthcare Environment:

The negative impact of healthcare related debt did not happen overnight. Additionally, there is no single, easy solution to the challenge of healthcare affordability.

In an environment of growing deductibles and rising patient liability, leading Health Systems should carefully examine opportunities to reduce their reliance on collection agencies: It dilutes patient loyalty and customer experience initiatives.

While not a silver bullet, the following three strategies will help your Health System maintain, or grow, payment rates while subjecting far fewer patients to the negative collection agency experience.

Three Key Strategies:

1. Address Healthcare Affordability

Americans are concerned with the affordability of healthcare. Even with a booming economy, 44% of Americans report they do not have $400 to cover an unexpected expense, yet average health insurance deductibles top $2,000 per year. 

Many view this trend as unsolvable since deductibles are largely set by payers and the employers purchasing coverage. While that is true, what if healthcare leaders viewed affordability through a different lens?

Instead of affordability being binary, can a patient pay or not, what if it were conditional? Take buying a home for example: Very few Americans could afford to buy a home if they had to pay all at once. According to Zillow, the median home in the U.S. is $231,700. However, an entire industry exists to support paying for a home over time to help make home ownership affordable. The same principle applies to healthcare affordability. In an era of high deductibles, flexible payment options equal affordability for patients.

2. Increase Flexibility

Healthcare is notorious for poor flexibility, especially when it’s time to pay. Confusing bills

are the norm with limited and often antiquated bill pay options. However, no two patients are the same. Each has unique preferences and financial considerations when receiving financial communications and paying bills.

It is important for revenue cycle leaders to make it easy for patients by catering to their individual needs and offering self-service options that put patients in control. Patientco data reveals more than +90% of patients opt-in to digital communications. Additional analysis reveals that patients with billed balances under $400 often pay in full, but for higher balances, the majority choose payment plans or financing.

Payment rates increase significantly when patients are given the flexibility to choose the communication and payment options that fit their needs.

3. Offer a Great Experience

Patient experience is ripe for improvement in the shifting healthcare landscape. Patients are bringing expectations from other industries such as retail, banking, and technology companies such as Amazon and Google. Why? Because these companies deliver a personalized experience through machine learning.

While many healthcare leaders are left scratching their head as to how a health system can operate like a tech company, it’s easier than it may seem.

Consider how machine learning can be used to tailor patient communications and payment options to suit the unique needs of every patient. The data exists to personalize the experience just like Google and Amazon, but health systems have to prioritize using it, or partner with organizations equipped to leverage their data.

Given these factors, what can your Health System do to stop healthcare from being #1 for all the wrong reasons?

  1. Expand Patient Financial Access.

For years, Health Systems have focused on patient access, making it easier for patients to get care. Expanding patient financial access should receive the same investment. This includes self-service payment options, payment plans, and patient financing options.

  • Use Data to Offer Flexibility.

Use data to segment patients, understand behaviors and preferences, and offer tailored communication and payment options. A proactive approach to payment communications, payment options, and financial offers will drive more payments and improve patient financial satisfaction.

  • Adopt a Consumer-First Mindset.

In today’s health economy, Health Systems who put consumers at the center of every decision will reap benefits in ROI.


Charles Darwin is often credited with saying “It is not the strongest or the most intelligent who will survive but those who can best manage change.” The good news is that revenue cycle leaders can keep healthcare from being #1 for all the wrong reasons. However, in a traditionally slow-to-change industry, it will require directly challenging two things: How your organization leverages technology to approach patients as consumers and how that improves their financial experience.

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