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New Survey Finds Patients Prefer Healthcare Payment Plans Over Other Methods of Paying

by OnPlan Health

Mature male patient looking at female receptionist using landline phone and computer at reception in dentist's clinic 


The majority want plans offered at or before time of service.

With the continued growth of high deductible health plans, patient out-of-pocket medical expenses have risen exponentially, as has provider bad debt. Of the $63.7 billion in patient responsibility each year, approximately $7.5 billion goes unpaid. In other words, more than 11% of all patient balances are never collected.

Wanting to better understand the story behind these numbers, and Flywire went right to the source: patients. The goal was to understand what influences a patient’s decision to pay, along with how the billing process impacts the patient-provider relationship. A comprehensive survey was sent to patients who had experienced either an in-patient hospital stay or a visit to an emergency room in the previous twelve months. There were 2,837 viable responses.

How Patients Pay

The vast majority of patients are willing to pay their medical bills.  In fact, 90% of survey respondents reported wanting to pay their portion of the responsibility in full.  Of the 46.1% who had checked into a hospital, 44.4% chose to use payment plans to pay their bill. Of those, 22.8% reported the hospital made no effort to collect their payment responsibility at the time of service, and just over half said they were asked only for the co-pay. Of all respondents:
  • 39.9% paid their co-pay at the time of service and the remainder when they received their bill.
  • 26.6% said they paid the entire portion of their responsibility at the time of service.
  • 16.3% reported paying a portion of the cost via a payment plan offered by the hospital.
  • 7.1% said they had no intention of paying at all.

Price as a Factor In Method of Payment

The survey also found that there is a direct relationship between a patient’s higher out-of-pocket responsibility and likelihood to sign up for a payment plan: 38.9 percent used payment plans for expenses that ranged from $50 to $250, but that figure rose to a 51.4 percent when out-of-pocket expenses reached $1,000 or greater. The average out-of-pocket portion for all survey respondents combined was $577.33. It is interesting to note that those with no plan to pay owed the highest amount at $758, and those who owed the second highest ($684) used payment plans. Not surprisingly, the lower the out-of-pocket costs, the more likely patients are to either pay at time of service or when the bill is received.

These results indicate to hospital administrators that less expensive bills may be paid without the need for payment plans, while patients with higher expenses will be more likely to seek out payment plan options. Payment plans present the best opportunity for repayment when patients are hit with more expensive bills for their treatments, putting even reluctant patients on a pathway toward resolving their medical debts.

Age and Income as a Factor

When looking at respondents in terms of age from 18 to 65+, those aged 24 to 64 had the highest out-of-pocket costs. Those with higher income levels and steady employment also experienced higher out-of-pocket costs. (This may be attributable to this segment choosing to have more elective treatments.) The research also found those with lower incomes often struggle to pay for medical expenses, even though their bills are lower. Based on the pricing factor, offering payment plans to both segments could help hospitals collect greater patient responsibility.

Payment Plan Preferences

Hospitals vary around when, how, and what portion of patient responsibility to collect. So do patients. But for those patients who want to be offered payment plans, 57.2% said they would prefer to have the offer prior to or at the time of service. Another 35.5% said they would like a payment plan offered when they receive their first bill. Only 6.9% said they don’t want to receive an offer unless they ask for one.

The survey found fees to be a significant influence in a patient’s payment plan decisions.

  • 33% of patients would choose shorter terms to reduce fees
  • 25% would avoid plans altogether due to fees
  • 25% say fees have no impact in their choice of payment methods
  • 17% would pay balances in full to avoid fees
In regard to the fee patients would be willing to pay, more than 80% of patients are willing to pay a monthly service fee ranging from $1.95 to more than $3.95.  19.9% said any fee would be unacceptable, which aligns with the motivating factor for patients who would pay balances in full to avoid fees.

Billing Preferences

Of all respondents willing to use payment plans, 63.4% said they would prefer to pay online while 22.5% said they would rather pay by check in the mail. Another 7.3% said they would like to pay by phone and 6.8% think paying in person is preferable.

As to how respondents wanted to receive their billing statements, it was fairly even. The slight majority (51.2%) said they prefer paper statements and 48.8% prefer online statements.

The Patient Experience

There is a direct correlation between the patient financial experience and patient satisfaction. Providing patients with more proactive payment options helps them make more informed decisions about their healthcare and makes it more likely they will pay. It also improves the patient experience and can positively impact loyalty. When patients know a hospital is going to do all they can to make it easier for them to pay, they may be more likely to return for future services and less likely to avoid medical care.

The Strategic Use of Payment Plans

The use of payment plans in healthcare is nothing new. However, payment plans have traditionally been a tactic of last resort or a reactive measure upon patient request. With the advancements in technology and data analytics, providers can now determine a patient’s ability to pay, ahead of any collection efforts. This allows providers to be proactive in offering payment plan options to patients who need them, at the time they are asked to pay, and at terms they can afford. While fewer than half of survey respondents reported currently using payment plans, the vast majority (89.8%) said they would be willing to use payment plans in the future. Of all the findings of the survey, that alone should be compelling enough for hospitals to consider proactively offering payment plans to their patients. And the most preferred time to offer them is at or before the time of service, or at the time they receive their first statement.  

As patient responsibility continues to increase, patients will continue to be challenged to pay their medical expenses. Without taking action, hospitals will be faced with decreasing patient satisfaction, lower cash collections, and skyrocketing costs.

Click here to check out the entire survey:  The Changing Landscape of Healthcare Payment Plans.