Patient payment plans are supposed to make medical bills manageable. Instead, they’re parking roughly one‑third of collectible revenue in long‑term receivables and still failing to match what most households can afford, according to PayZen’s new “State of Healthcare Affordability: The Provider Perspective 2025” report.
Why it matters: Hospitals, health systems and the collection agencies that serve them are effectively acting as lenders, but with none of the pricing power or risk controls commercial financiers enjoy.
- When balances linger in 12‑ or 24‑month in‑house plans, collection operations carry the float, wrestle with 20‑30% default rates and watch bad‑debt write‑offs climb.
- That drag ultimately spills over to ARM companies, debt buyers and RCM vendors that depend on timely cash flow.
By the numbers:
Metric Finding Share of annual patient collections tied up in open plans 30% Hospitals capping plans at ≤ 12 months 28% Hospitals capping plans at ≤ 24 months 58% Providers offering no plans 7% Average amount consumers can pay per month $97 Systems not using third‑party financing partners 62% Lift in overall collection rate when pre‑service payments are encouraged/required 20%
(Sources: PayZen/HFMA survey of 213 health systems; PayZen 2024 patient affordability study.)
Between the lines: A typical $1 billion‑NPR hospital that allows only 12‑month plans carries nearly $6 million in extended balances, which is capital it can’t reinvest in operations or technology. Longer payment plan terms double that exposure. Consumers aren’t dodging their bills; they just can’t stretch beyond ~$1,200 on a 12‑month schedule. Without longer, interest‑free options, many accounts slide into bad debt or get sold for pennies.
What they’re saying
