More than a third of all hospital revenue comes directly from patients.[1] Yet $7.5 billion in patient payments goes uncollected each year.[2] COVID-19 has only amplified the issues associated with self-pay collections. Since the pandemic began, millions of individuals have lost their jobs and their employer-sponsored health coverage.[3]

While the end of the pandemic is now in sight, the financial impact is expected to continue for months or even years. A new Pew Research Center survey states, “Among those who say their financial situation has gotten worse during the pandemic, 44% think it will take them three years or more to get back to where they were a year ago – including about one-in-ten who don’t think their finances will ever recover.”[4]

Collecting from self-pay patients is about to get a lot more challenging. Are you prepared? To find out, ask yourselves these questions:

What are your current net cash recovery and bad-debt placement percentages? Low cash recovery and high bad-debt placement percentages can signal an issue within your patient access process. You may be turning accounts that are actually able to pay over to collections too soon, causing you to miss out on much needed revenue.

What portion of accounts sent to bad-debt were actually eligible for other coverage? Many health systems and provider organizations may assume that the coverage information provided by the patient is accurate and complete. But that’s often not the case. If you’re not including additional coverage discovery as part of the self-pay collection process, you could be leaving revenue on the table.

Are your billing and collection processes achieving optimal results? This is an especially important question to ask at this time. Does your team have the expertise needed to know which COVID-19-related services are covered by each commercial, private, or government payer? Every payer has its own COVID-19 coverage policies and documentation requirements. Understanding who is covered when and by whom is essential to knowing what portion of a patient’s bill is actually self-pay.

Are your payment options making it more difficult for patients to pay? Offering self-pay patients a one-size-fits-all payment plan can lead to increased bad-debt write-offs. For example, a 2019 Healthcare Consumer Study found that 49% of consumers surveyed are frustrated that their providers don’t offer digital options like online bill-pay or access to online coverage information, and 41% said they would consider switching providers to get a “better digital experience.”[5] The same survey found that one in three consumers think providers haven’t done enough to improve billing and payment processes. Understanding each patient’s payment preferences and their unique financial situation—both of which are so important at this time—enables you to offer payment options that will actually make it easier for patients to pay, before having to turn their accounts over to bad-debt collections.

Do you track hold-times, dropped calls, and customer service issues? It’s a fact that the patient experience has an impact on your bottom line and your brand reputation. Whether you manage your self-pay collections in house or through a vendor, it is important to track the quality of every patient engagement. Failing to do so could result in poor Net Promoter Scores.

Where to turn

The first step in achieving optimal self-pay collections is to perform an in-depth analysis using data mining and scoring methodologies that cross all revenue cycle processes. Few health systems and provider organizations have the expertise necessary to perform such an analysis in house, but there are resources that can do the hard work for you. Revenue cycle experts like HBCS can perform a comprehensive self-pay analysis that identifies not only problem areas, but also opportunities for improvement that can be quickly implemented.

The time to act is now

The January 2021 National Hospital Flash Report paints a grim financial picture for hospitals, most of which saw elective procedures plummet and expenses skyrocket in 2020.[6] According to the report, operating margins were down 55.6% in 2020 without funding from CARES, and down 16.6% with CARES funding.

Recovering from the financial impact caused by COVID-19 is going to take time and significant effort. Forward-thinking health systems and provider organizations understand that the best way forward is to do an honest, thorough assessment of where they are today, especially in regard to self-pay collections. Answering the six questions above is a great starting point, but an in-depth self-pay analysis can provide the greatest insight. Providers can then use that insight as the foundation for their go-forward, post-pandemic recovery strategy.


[1] https://www.forbes.com/sites/allbusiness/2017/06/28/what-we-can-all-do-about-rising-healthcare-costs/#11413a32f375

[2] https://www.pymnts.com/wp-content/uploads/2019/02/Healthcare-Payment-Plans-January-2019.pdf

[3] https://www.commonwealthfund.org/blog/2021/update-how-many-americans-have-lost-jobs-employer-health-coverage-during-pandemic

[4] https://www.pewresearch.org/social-trends/2021/03/05/a-year-into-the-pandemic-long-term-financial-impact-weighs-heavily-on-many-americans/

[5] https://cdn2.hubspot.net/hubfs/5672097/Content%20Assets/Patient%20Survey%202019/Patient_Survey_Exec_Summary_Final.pdf

[6] https://www.kaufmanhall.com/sites/default/files/2021-01/nationalhospitalflashreport_jan.-2021_final.pdf

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