Most provider groups are not optimized to manage patient billing, and it’s breaking the bank. The problem often starts with the EHR systems that they have adopted, which are designed with insurance reimbursement as the priority, not the patient experience in mind.
For decades, providers operated in a world where the vast majority of their revenue came from insurance reimbursements. For most provider groups, patient billing was an afterthought. If a patient didn’t pay—or didn’t realize they owed at all—it was often easier to write off the balance than chase down a payment.
That world no longer exists. However, most provider groups are still processing patient collections with practice management systems that were never designed to handle the complexity of patient billing.
How did we get here? Three key trends have converged to fundamentally change how providers manage an increasing pool of collections from consumers. Together, they are creating a perfect storm that demands technology that integrates with practice management systems to meet modern patient expectations commonplace in other facets of their daily lives.
The rise of patient responsibility
The most seismic shift is the increase in patient financial responsibility. High-deductible health plans now account for over half of all plans, meaning patients are shouldering a much larger share of their health care costs out of pocket. What was once a marginal revenue stream has ballooned to represent at least a fifth of a typical practice’s revenue—and they’re only able to collect about half.
Though it’s been a slow-moving transformation, the consequences have become unmanageable. Once accustomed to relying on insurance payments, providers now find themselves lacking the tools and processes needed to efficiently collect payments from patients. Yet, the majority of provider groups still use practice management systems that were built for insurance billing. For patients, the experience is cold and opaque.
This change-up has caught many providers off guard and, critically, left them bereft of insight on what will and won’t work when it comes to collecting patient payments. These insights—how close a bill is sent to date of service, which patient populations prefer text or email to paper statements, and which messaging yields the best results—are essential to encouraging timely payment.
Without the ability to gather this data and glean insights from it, providers risk not only significant revenue loss, but the possibility that frustrated patients will become former patients.
The rise of health care consumerism
As patients take on more of the financial burden of their care, they’re becoming more discerning health care consumers. Billing is no longer a back-office concern; it’s a vital part of patient satisfaction with the health care experience. Studies show that up to 50 percent of patients are willing to switch providers over billing frustrations; they are not unwilling to ‘shame’ a provider on social media either.
This is a dramatic departure from the not-so-distant past, when patient billing interactions were often limited and transactional. Now, billing is a critical touchpoint in the care journey that can overwhelmingly define a patient’s perception of their care. Providers that provide a transparent billing experience are trusted and better positioned to retain patients and their families. Health care bills are complex, rife with codes, medical terminology, and abbreviations that may make sense to the providers sending them, but are less than clear to the average health care consumer.
It’s also critical to keep patient preferences in mind in order to capitalize on collections and provide an accommodating payment experience. Omnichannel billing cycles that combine email, text, and paper statements, for example, have been shown to recover 70 percent of patient payments in the first 15 days.
The boiling effect of administrative burden
As patient billing has become more complex, administrative tasks have multiplied. Staff find themselves fielding endless phone calls from confused patients, manually processing paper statements and creating individual invoices, and tracking down overdue payments. It’s a merry-go-round that nobody wants to ride.
This burden can have sweeping, disruptive impacts across organizations. Every minute a staff member spends on individual billing inquiries—many of which are routine questions that could easily be automated—is another minute they’re not spending on more complex claims and patient engagement.
Many of these challenges are the result of incremental changes that have either gone unnoticed or unaddressed for too long. Provider groups that continue to operate exactly as they did a decade ago are subjecting themselves to financial drain of a much greater magnitude in the decade ahead. The cumulative effect on resources and morale is too significant to simply ignore and hope for the best.
It’s time to unbundle practice management systems from the patient billing experience.
To thrive in this new environment, providers need to adopt a more strategic, consumer-friendly approach to patient billing. This starts with acknowledging that the practice management systems providers are accustomed to are incongruent with the billing experience patients expect. The patient billing experience of 2025 demands automation, transparency, and functions that help patients easily comprehend and pay their bills.
Clear, concise billing statements that distill information, offer follow-up options, and provide multiple payment options are three table-stake strategies that help providers meet patients where they are. Adopting solutions that move providers away from an “any means necessary” playbook employed by debt collectors, and toward a system that provides collaborative billing support is essential. The majority of billing questions can be resolved quickly and seamlessly with the right tools, reducing call volumes and freeing up staff to focus on patient care.
Perhaps most critically, providers must come to embrace the fact that patient billing can no longer be approached as a secondary concern. It is a core part of the health care experience, and a primary driver of providers’ financial performance. Those that invest in modernizing their billing operations now will be better positioned and prepared to build stronger, longer-lasting relationships with their patients in the years to come.
Blake Walker is a health care executive.
