Mar 18, 2022 | Blogs

Hospital Debt Collection Best Practices

It is no secret that even before the pandemic, patients were struggling to pay their medical bills.[1] And this is not related to any single, specific factor. While it’s true that the uninsured traditionally struggle the most when it comes to hospital debt in collections, those with coverage are also impacted.

In fact, 46% of insured individuals say they have trouble affording their out-of-pocket medical costs while 27% say they have trouble paying their deductible.[2] This can make hospital bill collections more challenging than ever.

The problem, however, goes even beyond the mere act of collecting patient payments. This is because when patients can’t pay they have to make difficult decisions about their healthcare. According to the Kaiser Family Foundation, half of adults in the U.S. skipped care in the past year due to costs while 29% chose not to take their medications as prescribed for the same reason.[3] It is clear to see how this sets up a domino effect of hospital debt pileup.

When patients don’t receive the care they need when they need it, or they’re noncompliant with their medication, their conditions can worsen, which only leads to further problems, both related to their health and their finances. For instance, this scenario, in turn, drives up additional hospitalizations and trips to the emergency department, which can also cause poorer outcomes, higher costs, and lower patient satisfaction rates.

Today, providers collect less than 25% of patient responsibility on average.[4] Think of how far that other 75% would go towards improving a hospital’s operating margin.

The bottom line is that to achieve optimal hospital bill and debt collection practices, organizations have to make it easier for their patients to pay for the care they need. There are several ways to do this.

  • Provide patient responsibility estimates prior to or at the time of service
  • Check each patient’s propensity to pay
  • Provide charity care information when appropriate and help them navigate the application
  • Offer flexible payment plans based on each patient’s unique situation and preferences

Of the four options above, offering payment plans holds the greatest value for optimizing hospital bill collections. One of the first considerations is whether to finance the payment plans in-house or partner with a third party. Research conducted by Eliciting Insights found that 94% of hospital leaders believe third-party loan programs are an effective way to improve patient cash collections.[5]

What to look for when choosing a third-party loan partner:

  • 0% interest, no fees, 3-year terms
  • Ability to roll up balances from other family members
  • Option of adding future medical costs to existing loan
  • Payments that fit within a patient’s budget
  • Customer portal for digital account access and easy payments

Recourse vs Non-recourse

It is important to note that not all hospital debt collections practices have to be facilitated in the same way. For example, you may also want to consider a non-recourse lender as opposed to a recourse lender. What’s the difference between recourse and non-recourse? As a matter of fact, quite a lot.

In the event a patient goes into default, a recourse lender sends the account back to the hospital. This means hospitals have to keep a contingency account to cover that likelihood. In other words, they lose access to capital while increasing the complexity and cost of reconciliation.

With a non-recourse lender, hospitals receive the full amount of the patient loan upfront. The lender keeps all patient accounts no matter their status. This frees up capital that hospitals can use for more strategic initiatives.

Hospitals that push back on the idea of using a non-recourse lender usually do so because they think the fees are too high. However, they may want to think again. The return on investment should be the top consideration. Bad-debt agency fees, contingent liability management, a complex reconciliation process, and time spent on managing returned patient accounts all have an associated cost.

Patient Satisfaction

Another important consideration when choosing a third-party lending partner to better manage your hospital debt is patient satisfaction. The lender you choose needs to act as an extension of your hospital and understand that each patient interaction is a reflection of your brand.

Even a single negative encounter with a hospital debt collector can reflect poorly on your patient satisfaction scores. According to one survey, 93% of healthcare consumers said a poor financial experience could discourage them from returning to a provider. Furthermore, 90% of the same healthcare consumers said a positive patient financial experience is the “deciding factor” for returning to a provider for future care.[6]

Proven Success

iVitaFi is an ideal choice for improving hospital bill collection practices and minimizing hospital debt. Our program provides patients with affordable payment options like no-interest, no-fee credit lines. Since we are a non-recourse lender, hospitals receive full payment upfront, without having to wait months or years to collect only a small portion of the original amount.

With iVitaFi, hospitals receive the full amount owed—up to 5 times their average collection rate—with no further cost to collect.

Overall, what is most important to us is that your patients are treated like you want them to be treated. But you don’t have to take our word for it, you can check out the reviews for yourself.

Our team is proud that our borrowers consistently rate us 4.98 on a scale of 5.0 for being “likely to recommend to a friend or family member.” They have identified program features like “no interest,” “fast approval,” “easy to afford,” and “automatic payments” among some of their favorites.

In fact, many borrowers return to us multiple times to draw on their healthcare line of credit for subsequent healthcare episodes. The revolving nature of our line of credit encourages patient loyalty, patient recommendations to friends and family, and your hospital’s brand reputation.

The Journey Forward

Each year, billions in patient responsibility go uncollected. On the road to post-pandemic financial recovery, hospitals simply cannot afford subpar patient bill collection practices. Partnering with iVitaFi can help hospitals collect these patient payments, faster, easier, and in full. And resultantly, your patients will be better able to afford the care they need when they need it, helping them stay on the path to improved physical and financial well-being.

Contact us to learn more about hospital bill collection practices, and find a solution that works best for you and your patients.


[1] “Report on the Economic Well-Being of U.S. Households in 2018 – May 2019,” Federal Reserve, May 23, 2019 (

[2] “Americans’ Challenges with Health Care Costs,” KFF, December 14, 2021 (

[3] “Americans’ Challenges with Health Care Costs,” KFF, December 14, 2021 (

[4] iVitaFi Data Study findings

[5] “Market Research on Patient Collections Strategies: 2020 and Beyond,” by Eliciting Insights, sponsored by iVitaFI, September 2020

[6] “90% of Patients Say Loyalty Relies on Patient Financial Experience,” Patient Engagement HIT, December 7, 2021 (