Half of Hospital Bills Go Unpaid: Who’s Paying the Price?

The cost of healthcare continues to soar, placing an ever-growing financial burden on patients and healthcare providers alike. Hospitals are increasingly going unpaid for services, while patients are facing undue financial strain due to soaring healthcare costs. For hospitals and health systems, uncollected bills pose significant financial challenges, while patients are often forced to make difficult decisions about their care due to affordability concerns. This results in a broken healthcare system in need of a solution that allows hospitals to be paid for their services, while not placing an undue burden on patients who just need care.

Patient Financial Responsibility Quick Facts

• The rise of HDHPs: In 2023, over 40% of working age people were enrolled in high-deductible health plans, which increase the likelihood of unpaid bills. 

• Uncompensated care costs: Since 2000, hospitals of all types have provided almost $745 billion in uncompensated care to their patients, with a sharp increase over previous years. 

• The point-of-service challenge: Fewer than 40% of patients can pay their medical bills in full at the time of service, making flexible payment solutions critical. 

• Transparency matters: Billing clarity is a top priority for patients. Providers with clear, upfront pricing are more likely to collect payments and retain patient trust. 

The Growing Medical Debt Crisis  

Recent studies highlight a troubling reality: hospitals collect only a fraction of what they bill patients. Worse still, the problem is compounding. According to industry data, more than half of hospital bills are never paid in full. This shortfall is largely driven by the rise of high-deductible health plans (HDHPs), which may be more affordable, but shift more financial responsibility onto patients. Many patients are uninformed in their choices, thus unprepared for these out-of-pocket expenses, leading to an increased burden of medical debt.  

Compounding the issue are outdated billing practices that confuse patients and delay payments. To fix this problem, transparent and patient-centered billing processes have become critical for healthcare providers to maintain financial stability. At the same time, patients must contend with the growing need to budget and save for even routine healthcare expenses – an overwhelming and even impossible task for many, especially in the face of rising inflation and economic uncertainty. 

Medical Bills Hit Hard, Insurance or Not 

Insurance is no longer the safety net it once was. According to a recent Kaiser Family Foundation survey, nearly half of insured adults report worrying about paying their monthly health insurance premium. Additionally, around 75% say they are at least somewhat worried about affording unexpected medical bills. For those enrolled in HDHPs, the financial strain is exacerbated. A 2024 study found that the percentage of workers with deductibles over $2,000 has nearly doubled in the last 10 years, leaving many families to drain their savings and take out loans to cover unexpected surgeries. This problem extends to hospitals bottom line as well, with about 53% of hospital’s total bad debt write-offs in 2023 coming from patients with some form of insurance. These are not isolated incidents as medical debt remains the leading cause of bankruptcy in the United States, underscoring the profound toll of rising healthcare costs on everyday Americans. 

Changing Regulatory Environment and Patient Financial Responsibility 

While the Affordable Care Act (ACA) improved access to insurance, its limitations are increasingly evident. Discussions about healthcare reform dominated the political landscape throughout 2024. Critics argued that rising premiums, deductibles, and out-of-pocket maximums are eroding the ACA’s promise of affordability. Proposals for Medicare for All and state-level reforms are gaining traction as policymakers and voters alike search for solutions to make healthcare costs more manageable. 

For healthcare providers, the shifting regulatory environment adds another layer of complexity. New compliance requirements around billing transparency and debt collection practices are reshaping how hospitals approach patient financial responsibility, and providers must adapt quickly to avoid penalties, stay in compliance, and remain competitive. 

What To Do Now? Support Patients with Financial Flexibility

It’s becoming increasingly clear to hospitals and health systems that improving the patient financial experience is no longer optional – it’s essential. Not only for the benefit of their patients, but for their own economic stability. Providers benefit from offering patients affordable ways to pay their medical bills, and in some instances, is the only way their care will be compensated. Studies show that offering patients affordable, flexible payment options can significantly improve collections while also enhancing patient satisfaction and loyalty. It should come as no surprise that when given the option, 100% of patients prefer zero-interest on extended repayment terms when seeking financing for their unpaid medical bills.  

As the #1 patient financing solution (voted by Black Book), CarePayment helps hospitals and health systems bridge the gap between rising costs and patients’ ability to pay. Our always zero-interest payment plans let patients spread out medical expenses, easing financial burdens and ensuring timely access to care. By adopting modern solutions like CarePayment, providers can improve their financial health while ensuring patients receive the care they deserve. Contact us today to learn more about CarePayment’s award-winning zero-interest patient financial engagement.