Increase in Patient Self Pay Increases Collection Risks

There is a major trend that is happening in healthcare that is going to impact the economics of healthcare in a major way. This trend is the increase in Patient Self pay. There are a number of factors which are causing more patients to pay for their medical expense including lost jobs and employers dropping health insurance coverage. I’ve heard a number of people predicting the move to a patient focused payment model with high-deductible insurance plans. In fact, this New York Times article says “The share of employees enrolled in high-deductible plans surged to 13 percent in 2011 from 3 percent in 2006, according to Mercer Consulting.”

Personally I think this is a great thing for healthcare since I’ve long been a proponent that any healthcare reform needs to put the consumer (patient if you prefer), not the insurer or the government at the center of the healthcare financial system. However, this change also poses a risk for practices and hospitals since the risk inherent in collecting self-pay balances rises in parallel with this increase in patient self pay.

How then are EHR vendors and revenue cycle management companies dealing with this shift to patient self pay?

This certainly won’t be a comprehensive list of ways that revenue cycle management can help with patient collections, but it will show a few ways technology can help now and in the future.

EHR software can integrate a Patient Pay Estimator to provide patients a close approximation of their final bill which helps a practice collect payment before they leave. The software physicians use to estimate the patient total for an office visit are going to have to get better and more accurate. I don’t have the numbers in front of me now, but I’ve seen multiple studies that illustrate well how the key to good patient collections is to get the money while they’re present. Once the patient leaves your office your ability to collect from that patient drops dramatically.

I know I’ve been to a lot of doctors where I get to the front desk and they don’t know what to charge me. Far too often they just say, don’t worry about it, we’ll send you a bill in the mail. If they just had the right information available to them, they could collect the money on the spot and not have to worry about collecting it from me later. An EHR can really facilitate this process if it has a good patient liability estimator built into the EHR.

In the cash or check world, it was much harder to set up budget plans or recurring payment. Now there are more and more systems out there where you can store a person’s payment information and set up the recurring payment to happen automatically. This will likely be a key trend going forward.

I’ve even seen some of the larger EHR vendors who have programs that offer financial assistance. In fact, the really large EHR vendors have whole financing divisions that can assist patients who have financial issues related to their healthcare. I wonder how deeply these financing options can be integrated into EHR software, but I could see it as a big advantage to have it as an integrated part of the payment workflow. I’m always amazed at how quickly you can be approved for a credit card or financing a car. I expect this type of financing will be pushed down throughout the various layers of healthcare. Will it become a differentiating factor in a large EHR vendor versus a small EHR vendor?

Another interesting idea to stem the patient payment problem is to accept prepayments. Meaningful Use is bringing the patient portal and PHR software back to the forefront of many EHR implementations. If you have patients filling out the paperwork for their office visit, why not collect the co-pay at the same time? Pre-payment could become a really great way to avoid revenue cycle management issues on the back end.

I’d love to hear other people’s thoughts related to patient payment and revenue cycle management trends. What can be done to help avoid the patient self pay collections issues?

About the author

John Lynn

John Lynn

John Lynn is the Founder of, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference,, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.


  • Hi John,

    This is a very important topic in healthcare and the reason I wrote “The Smart Manager’s Guide to Collecting at Check-out” in 2009. The most advanced practices are setting up credit card on file programs and eliminating statement billing to patients. The patient’s charges are closely estimated at check-out and paid by credit card, then any remaining balance or refund due to the patient is transacted through the credit card when the EOB arrives.

    I will be offering a webinar in late May to teach medical practices how to establish a credit card on file program and will be publishing a second edition of my book to include the program.

    Great article!

    Mary Pat

  • Mary Pat,
    I’d heard about the credit card on file programs. I’d been meaning to write about them. Thanks for the reminder.

  • Quest is asking clients for credit cards “just in case” insurance doesn’t pay, or there is a patient portion due. Then they follow-up with a snail or email letter stating whether the card was charged. It doesn’t feel right as a client, but I understand where they are coming from….

  • Heather,
    I heard someone compare it to a hotel which takes your credit card and charges you after the fact. I think that practice is going to get more and more common.

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