How hospitals are tackling the surge of self-pay patients

Modern Healthcare – Monday, November 10, 2025
By Alex Kacik

Health systems are revamping billing and collections as more patients pay for care out of their own pockets.

A growing portion of health system revenue and uncompensated care costs is linked to patients without insurance or who have limited coverage and are known as self-pay patients. Providers are testing several strategies to try to boost self-pay collections and streamline the billing process, including asking for upfront payments, hiring patient navigators and using artificial intelligence-backed technology.

Health systems must adapt quickly because higher commercial insurance reimbursement rates are no longer a reliable lifeline, health system executives and revenue cycle experts said. Federal cuts to the Affordable Care Act insurance exchanges and Medicaid programs will exacerbate healthcare’s affordability problem, they said.

“There is a ceiling on what health systems can extract from commercial and government payers,” said Seth Cohen, president of Cedar, which develops revenue cycle management software. “The most elastic lever for hospitals to pull for financial gain and to do right by patients is improving the experience for self-pay patients.”

Historically, many hospitals have not closely tracked self-pay patient collections because they are a relatively small part of their reimbursement picture, Cohen said.

But that amount is growing. The self-pay portion of health systems’ out-of-pocket patient collections rose 11% from February 2023 to September 2025, according to Cedar data.

Patients are increasingly running into insurance coverage gaps amid the proliferation of high-deductible plans, Medicaid coverage protections that lapsed after the COVID-19 pandemic and shifting state policies.

More patients will have a harder time paying for care amid the looming expiration of Affordable Care Act exchange subsidies and impending Medicaid eligibility crackdowns. ACA and Medicaid cuts, along with corresponding payer mix changes, are expected to drive up healthcare costs, especially for employers, patients and hospitals.

“The healthcare affordability crisis is going to hit every sector of society,” said Dr. David Shulkin, senior advisor for consulting firm Alvarez & Marsal and former secretary for the Veterans Affairs Department.

Northern Light Health is bracing for a $27 million revenue decline over the next several years as a result of ACA and Medicaid changes, said James Rohrbaugh, chief financial officer of Northern Light.

“Our bad debt balance has grown, which is another element of the mounting financial pressure on already strained hospitals,” he said. “These pressure points continue to threaten the sustainability and viability of health systems.”

Cook County Health is feeling that pressure. Over the last three years, the Chicago-based safety-net system has provided more than twice the amount of free and discounted care, referred to as charity care, CEO Dr. Erik Mikaitis said. Those costs are expected to grow from an estimated $280 million in 2025 to $380 million next year as Cook County Health expects to treat more self-pay patients, he said.

Hospital uncompensated care costs, which combine unpaid patient bills, known as bad debt, and charity care, have steadily increased. UF Health Jacksonville self-pay patient visits increased 93% since 2021, leading to a 48% increase in related costs in the 12-month period ended in June, a spokesperson for the Florida health system said.

Hospitals can write off some uncompensated care, but the tax deductions pale in comparison to Medicaid and Affordable Care Act exchange reimbursement.

Health systems hope new collection and billing strategies will increase access to federal insurance programs and boost revenue.

Cook County Health hired a new vendor to improve the patient billing process and automate payment plans. The health system also is working closer with community organizations to try to head off unnecessary emergency department visits, Mikaitis said.

“We are bracing for impact and trying to plan ahead,” he said.

Northern Light, Chicago-based Sinai Health System and Rush University System for Health have increasingly offered cost estimates and upfront payment options for care. Northern Light’s point-of-service collection rate, which measures patients paying before care, increased 61% over the last year, Rohrbaugh said.

Northern Light has teamed up with banks in the Brewer, Maine, area that offer patients interest-free loans and flexible payment plans. The health system has also assigned patient navigators to each of its nine hospitals to guide patients through coverage options and financial assistance plans.

Providers also are turning to AI to try to streamline billing and collections.

Rush in July launched an AI chatbot via Epic designed to walk patients through financial questions and help them apply for financial assistance, said Blake Evans, vice president of revenue cycle at the Chicago-based system. That tool has helped decrease call center utilization and increase response times, he said.

“We need to scale these solutions through technology, automation and by leveraging our community-based providers,” Evans said. “There will be continued margin pressure for most hospitals and more payer mix shifts that will make it harder to meet our budgets, so we have to make decisions on where to invest and where not to invest.”

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