Mar 18, 2022 | Blogs

A Better Approach to Hospital Bill Collections

Even before the pandemic, patients were struggling to pay their medical bills.[1] While the uninsured struggle most, 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 challenging than ever.

The problem, however, goes even beyond collecting patient payments. 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]

When patients don’t receive the care they need when they need it, or they’re noncompliant with their medication, their conditions can worsen. This, in turn, drives up hospitalizations and trips to the emergency department. It 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 collections, 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 inhouse 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

You may also want to consider a non-recourse lender. What’s the difference between recourse and non-recourse? 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 up front. 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 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 on your brand. Even a single negative encounter 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 and 90% said a positive patient financial experience is the “deciding factor” for returning to a provider for future care.[6]

Proven Success

iVitaFi is a perfect choice for hospitals looking to improve bill collections. 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 up front, without having to wait months or years to collection only a small portion of original amount.

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

At iVitaFi, we treat your patients like you would want them to be treated. 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 goes uncollected. On the road to post-pandemic financial recovery, hospitals simply cannot afford subpar patient payment collections. Partnering with iVitaFi can help hospitals collect more patient payments, faster, easier, and in full. And patients are better able to afford the care they need when they need it, helping them stay on the path to physical and financial well-being.

[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 (