Keys to Enhancing Patient Revenue Cycle and Affordability Revealed in PayZen Report
Unpacking the PayZen Report on Patient Revenue Cycle
In a groundbreaking report titled State of Healthcare Affordability: The Provider Perspective 2025, healthcare fintech company PayZen sheds light on the critical gaps in the patient revenue cycle and outlines how these discrepancies impact both providers and patients alike. Conducted in partnership with the Healthcare Financial Management Association (HFMA), this latest report presents findings from 213 revenue cycle executives spanning healthcare systems with a range of net patient revenues from $50 million to over $25 billion.
The Affordability Gap
The report reveals a disconcerting reality regarding patient affordability. The disparity between healthcare costs and what patients can realistically afford is widening. Most patients are assumed to be able to manage monthly medical payments of around $97, yet the reality is stark; many can only allocate $15 to $30 per month. This mismatch leads hospitals to implement short-term in-house payment plans, which often do not meet real-world patient needs. An alarming 75% of all patient billings were reported as uncollected, and default rates for payment plans often reach as high as 30% for extended terms exceeding 12 months.
Misalignment in Billing Strategies
According to PayZen’s findings, the traditional billing practices that hospitals employ are increasingly misaligned with the financial realities faced by patients. Around 58% of healthcare providers limit in-house payment plans to just two years, and 28% cap them at one year or less. Moreover, a staggering 7% of health systems do not offer payment plans at all, further reducing access for many in need of financial assistance to manage their medical debts.
The Cost of Bad Debt
As a result of these outdated approaches, hospitals are left grappling with a significant amount of bad debt. Itzik Cohen, CEO of PayZen, emphasized that traditional systems simply do not reflect the financial capabilities of patients. As healthcare costs continue to surge, the financial burden is increasingly falling on the shoulders of those who can least afford it.
Unlocking Cash Flow Opportunities
Interestingly, the report illustrates that roughly 30% of patient collections are tied to open payment plans that could be streamlined to unlock much-needed cash flow. However, 62% of providers have not tapped into third-party financing partnerships that could ease these burdens. Implementing more patient-friendly financing solutions could enhance key revenue cycle metrics. Systems that have deployed such innovative practices are already witnessing better collections, reduced bad debt rates, and greater patient satisfaction.
Pre-service Collections: An Untapped Strategy
Another notable insight from the report pertains to the effectiveness of pre-service billing policies. Hospitals that adopt a model of encouraging or requiring pre-payments boast collection rates that surpass those of their peers. Specifically, providers that mandate pre-payments are reporting a 21% increase in collection rates prior to service and a 20% increase overall. Still, only a dismal 19% of hospitals require such payments, and an even smaller 3.8% enforce keeping a payment method on file.
The Impending Medicaid Cuts and Future Outlook
As the healthcare community braces itself for potential Medicaid cuts that may impact around 70 million Americans, these findings from PayZen's report underscore a looming crisis in healthcare access and affordability. Increased uncompensated care could further strain operational margins, exacerbating the issue of financial sustainability. However, there is a glimmer of hope; the report not only highlights challenges but also identifies pathways toward resolving them through innovative billing strategies and partnerships in financing.
Cohen’s commitment to driving technology and strategies that address patient affordability illustrates that the work of improving healthcare access is just beginning. The report underlines a harsh truth: addressing the affordability crisis is not solely a challenge for providers; it is essential for the sustainable future of the healthcare ecosystem in the U.S.
To access the entire report and further explore PayZen's comprehensive findings, visit PayZen’s Provider Perspective Report 2025.
Topics Health）
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