Self-pay collections are the process that healthcare providers use to collect payment directly from patients for services not covered by insurance or other third-party payers.
The $20 copay era is over. High-deductible health plans (HDHPs) and waves of coverage loss mean patients are now your fastest-growing payer class. If you’re still treating patient balances as an afterthought, your bad debt may be growing faster than you realize.
What Are Self-Pay Collections?
Self-pay collections cover any payment collected directly from patients instead of insurance companies: deductibles, co-pays, co-insurance, and services for uninsured patients.
Unlike insurance claims, which often follow standardized billing processes, self-pay collections depend on individual patient circumstances.
Do they understand what they owe?
Can they afford it?
Will they respond to outreach?
This variability makes collecting patient balances significantly harder than insurance reimbursement—and requires a personalized approach. That includes how you communicate charges, what payment options you offer, and how you follow up when balances go unpaid.
Why Self-Pay Collections Matter
Three big reasons:
1. It’s Critical to Financial Performance
Patient responsibility was once 1-2% of a provider’s revenue. Today, it could be 10% or more—driven by a 65% increase in HDHP enrollment and a 69% rise in out-of-pocket spend over the past decade.
And patient responsibility continues to shift.
Across our health system partners, almost 40% of patient out-of-pocket dollars now come from uninsured patients—up 11% year-over-year.1 Since uninsured patients have dramatically lower collection rates than insured patients, this mix shift means your balance-after-insurance accounts need to perform better just to maintain last year’s cash flow.
At the same time, healthcare providers operate on margins of 2% or less (on a good day). In other words, there’s no buffer left to absorb unpaid patient bills and bad debt. Every dollar you don’t collect directly threatens your financial viability.
% Patient Responsibility Without Insurance Across Cedar Partners
2. It Can Be Expensive to Operate
Revenue cycle teams are under constant pressure to cut costs, and patients are often the most expensive payer to collect from on a per-dollar basis.
Manual phone calls, mailed paper statements, self-pay teams chasing balances that may never be recovered—these activities drive up your cost to collect. Add in the array of vendors potentially touching an account (early-out vendors, bad debt collections), and costs quickly erode your collection yield.
Optimizing self-pay collections means collecting more while spending less to do it.
3. It Makes or Breaks Your Patient Experience
The patient-provider relationship is more financial than ever before, which means your billing process isn’t just a back-office function—it’s a patient experience issue. A confusing statement or aggressive collection call can undo months of excellent clinical care.
According to Cedar’s 2024 consumer study, 38% of patients have switched healthcare providers due to a negative billing experience. Put differently, 4 in 10 of your competitors’ patients are up for grabs if you get self-pay collections right. That’s your opportunity.
Challenges in Collecting Patient Balances
Self-pay collections are hard because of challenges on both sides. Patients don’t understand their bills and can’t afford to pay them—and providers struggle to maintain consistent engagement throughout the payment journey.
Literacy: “Why Do I Owe a Balance?”
Patients often aren’t prepared for the cost. When someone believes insurance covers everything, a bill for their deductible doesn’t feel like an obligation. It feels like a mistake.
The core problem: many patients don’t understand the details of their health plans or benefit designs. They don’t know what a deductible is or why coinsurance is different from a copay, and indecipherable CPT codes, professional vs. facility fees, and other jargon make things worse.
The outcomes are predictable. Our research found patients who don’t understand their medical bills are three times more likely to delay payment. It shows up operationally, too: 94% of inbound calls to billing call centers are confusion-driven, not to actually make payment.2
Affordability: “I’m Sorry, How Much?”
Many can’t afford the cost. And we’re not just talking about the uninsured population—especially since growth in deductible spending (+230%) has far outpaced household income (+22%) over the past fifteen years.
Here’s what that gap means in practice: a patient with a HDHP who’s living paycheck-to-paycheck and just received a four-figure emergency room bill has about the same capacity to pay as someone with no insurance.
And the trend is accelerating. Expired ACA enhanced subsidies and recent federal Medicaid reforms are expected to result in significant coverage churn. That means more patients will either experience periods of uninsurance or cycle on and off plans with high deductibles—potentially leading to cost-shifting that could impact commercially-insured patients on employer plans.
Growth in Major Household Expenses vs. Income Since 2010
Engagement: “I’ll Deal With It Later.”
Beyond literacy and affordability, engagement matters. Different patients prefer different channels, and providers need to meet them where they are.
The good news? Progress is being made.
According to Cedar research, 90% of patients now receive bills through their preferred channels.3 Healthcare providers have invested heavily in patient financial experience, and those investments are working.
Keeping them engaged through payment? That’s where the opportunity lies: 49% of patients say they don’t receive regular billing reminders, and 36% say they arrive at inconvenient times. Without consistent, well-executed follow-up, medical bills get deprioritized.
High-friction billing support compounds the problem. 45% of patients don’t reach out for help when they’re confused about their bill. And when they do? They wait on hold, re-explain their situation, and navigate phone trees that lead nowhere.
Understanding Self-Pay Collections Performance
Given these challenges, the natural question is: are we making progress?
At the highest level, you measure self-pay collections by evaluating how much you’re collecting from what patients owe. Once you have that number, the next question becomes: how do we stack up?
We’ve reviewed hundreds of collection rates across healthcare providers, and we’ve found that comparing yourself to industry benchmarks is rarely useful. Regional economics, payer mix, patient demographics, and operational setup vary so much that cross-organizational comparisons can be misleading.
Just to give you a sense of how wide the variance can be, here’s what post-visit collection rates look like across Cedar clients in 2024:4
Balance-After-Insurance Patient Collection Rates
| Provider Type | Low | Median | High |
|---|---|---|---|
| Health Systems | 41.5% | 61.4% | 82.4% |
| Medical Groups | 64.7% | 67.0% | 90.2% |
| Clinician Services Providers | 23.5% | 49.0% | 71.2% |
Uninsured Patient Collection Rates
| Provider Type | Low | Median | High |
|---|---|---|---|
| Health Systems | 4.9% | 16.7% | 35.7% |
| Medical Groups | 4.9% | 17.3% | 57.6% |
| Clinician Services Providers | 2.9% | 7.8% | 10.6% |
These organizations all use Cedar’s optimized patient financial experience platform, albeit with different configurations depending on their unique needs. But the variance proves the point: even with the same technology, local context matters more than any industry average.
Instead of attempting to benchmark against arbitrary industry averages, measure your own performance consistently over time. That’s how you identify what’s working, what’s not, and where to focus improvement efforts.
Strategies to Improve Self-Pay Collections
There’s no single fix for self-pay collections. But organizations that consistently outperform focus on five operational priorities:
1. Establish Clear Collection Policies
Ambiguous financial policies breed confusion and conflict. Your collections policy shouldn’t be dense legal text buried in intake forms. It should be a communication tool that sets clear expectations before care is delivered.
A strong collections policy specifies when payment is due, what payment methods you accept, when accounts move to third-party collections, and whether you request a card on file for balances under a certain threshold. These details remove “nobody told me” from future conversations.
2. Train Staff on Financial Conversations
One of the biggest barriers to time-of-service collections is the knot in your staff’s stomach when asking for money. Without clear scripts, teams will unconsciously avoid conflict by mumbling balances or skipping the ask entirely.
Start with timing and language. Shift financial conversations to check-in, before the clinical encounter. Replace weak questions (“Do you want to pay today?”) with presumptive asks: “The visit today is $150. How would you like to take care of that?” The question isn’t if they’ll pay, but how.
Staff also need objection-handling scripts. “I forgot my wallet” → “We can take a card over the phone or send a secure payment link.” When affordability is the issue, pivot from collecting to counseling—connecting patients to payment plans or financial assistance.
3. Optimize Digital Payment Systems
Most healthcare providers already have online bill pay and electronic statements. But having digital payment infrastructure doesn’t mean you’re using it most effectively.
The gap between baseline and optimized digital payment performance is significant.
According to our 2024 PFX Benchmarks, providers that use a leading EHR’s billing tools see median digital payment rates around 52%. With Cedar’s platform, which continuously tests and optimizes across the entire billing and payment funnel, the median jumps to 79%.
That 27-point delta isn’t about adding features. It’s about reducing friction at every step. Are reminders sent too early or late in the day? Does the checkout process force patients through unnecessary screens? Are you re-engaging patients who abandon their carts? Small improvements compound.
What separates modern platforms from legacy tools is their ability to create truly personalized experiences. AI systems can help analyze individual circumstances—balance size, payment history, engagement patterns—alongside de-identified data from similar patients to determine the right message, channel, and option for each person.
That’s the future of self-pay collections, and top performers are already investing in these capabilities.
4. Fit Payment Plans to Monthly Budgets
Payment plans are one of the most powerful tools for self-pay collections—when done right. According to Cedar’s 2024 PFX Benchmarks, top performers see 95% recovery rates on payment plans, far exceeding typical collection rates on patient responsibility.
The key is offering options that fit monthly budgets. Cedar research shows roughly half of patients (47%) can only afford under $100 per month. That means providers should ensure there’s an option that patients can always afford, across different balance tiers.
But it’s not just about offering the right options. Well-timed, contextual nudges—”Your $850 balance qualifies for a $75/month plan”—and low-friction enrollment workflows can materially increase plan uptake. If signing up for a payment plan requires calling your billing office during business hours, most patients will never do it.
5. Enable Self-Service Billing Support
Digital tools can get patients engaged and to checkout. But when they’re confused about what they owe or why, they need support—and how you deliver that support can determine whether they complete payment.
Self-service tools reduce the burden on your call center while improving the patient experience.
For example: AI-generated bill summaries can answer common questions proactively in payment portals: Why didn’t insurance cover this? Why am I receiving multiple bills for one visit? When patients do call in, AI voice agents can handle lower-complexity billing questions 24/7. And when escalation to human agents is necessary, context should transfer seamlessly so patients don’t start from scratch.
It’s about meeting patients where they are, with the answers they need, delivered in the most efficient way possible—so they can confidently pay their bills.
It Pays to Care
Self-pay collections take work. Clear policies, empowered staff, optimized digital tools, accessible payment plans—none of it happens without investment.
But the biggest gains don’t come from chasing balances harder at the end of the process. They come from designing the experience around how patients actually understand, afford, and engage with their bills.
As patient responsibility continues to grow, self-pay collections will increasingly reflect the quality of the financial experience behind them. For providers, that experience is no longer a nice-to-have—it’s the difference between recoverable revenue and inevitable write-offs.
- Percentage of patient responsibility without insurance coverage across Cedar provider partners as of July 2025 ↩︎
- Based on the analysis of 6,000 patient billing calls across three Cedar provider partners, identifying primary reasons for patient inquiries. ↩︎
- Based on a survey of 4,100 consumers across 34 states on their attitudes and experiences with the healthcare financial experience in the U.S; November-December 2025. ↩︎
- Self-pay patient collection rates across Cedar provider partners in 2024. ↩︎
