Doctors may avoid discussing costs because they do not want a medical visit to feel transactional. They treat the patient and leave the billing conversation for later. The intention may be kind, but the result can be frustrating: patients receive bills they were not prepared for, and practices are left trying to collect payments after the visit.
Clear communication before treatment can help patients understand their expected costs and available payment options. It can also help practices reduce confusion and make payment easier.
Why Don't Patients Pay Their Medical Bills?
A 2024 analysis by Kodiak Solutions, covering more than 1,850 hospitals and 250,000 physicians, reported that the average patient collection rate fell from 54.8% in 2021 to 47.8% in 2022 and 2023. Researchers also identified a clear tipping point: patients tend to pay bills of $500 or less.
The analysis also reported lower collection rates for larger patient balances. In 2023 alone, bad debt write-offs reached 1.54% of total claim charges over $17.4 billion with self-pay patients carrying the largest share.
A bill can raise questions that patients did not have during the appointment: What does insurance cover? Why do I owe this amount? Could the cost have been explained earlier? When patients do not understand a bill or cannot afford to pay it in full, they may delay dealing with it. Clear explanations and realistic payment options can make the next step easier.
Why Doctors Should Discuss Patient Costs Before Treatment
The patient feels blindsided weeks later, with no context and no one to ask. The physician isn't present when the bill arrives, so they never witness the reaction directly. What they see instead is a canceled follow-up, a patient who doesn't return, or an unfavorable review. The moment that caused it goes unseen. It's the same blind spot that keeps healthcare payments trailing retail payments by years, even as every other part of the patient experience has caught up.
The AMA's own Code of Medical Ethics suggests that physicians should be candid about financial matters and specifically calls for notifying patients in advance about payment policies, before a balance ever becomes delinquent. Waiting until after treatment to have the conversation isn't a neutral choice. It's the one the profession's own ethical standards advise against.
What Do Unpaid Patient Balances Cost a Practice?
The leading reason a patient changes practices is because they owe money. That single fact reframes the entire problem. It´s the unpaid balance at stake, the patient relationship itself, and everything that relationship would have generated over time.
Referrals matter more than most billing conversations account for. Every patient relationship carries value well beyond a single balance. Over 60% of patients say they choose a provider based on referrals from family and friends.
Lose the patient over an unresolved bill, and the downstream cost compounds quietly, in referrals that never happen and a relationship that never gets the chance to continue.
Why Patients Can’t Pay Medical Bills in Full
The worry shows up in the numbers. About six in ten adults (62%) say they worry about affording health care costs, according to KFF’s 2026 polling. In KFF’s 2022 Health Care Debt Survey, about half of U.S. adults said they couldn’t cover an unexpected $500 medical bill out of pocket, and 41% already carried debt from medical or dental bills.
When a bill isn´t explained, it usually goes unopened. And a patient who can’t pay in full and has no way to split it has nothing to do but wait. So, the first job for a practice is a realistic payment option: a plan, a text link, a way to split the balance.
Make Payment Easier Without Relying on the Portal Alone
Patient portals promise a lot: instant access to test results, secure messaging, appointment scheduling, and a direct line to medical records. They’re also where most practices send patients to pay.
Adoption tells a different story. National survey data published in Health Affairs found that 63% of insured adults who’d had a health care visit in the past year hadn’t logged into a portal during that time. For a practice that collects payments through the portal, that’s a majority of patients with no way to pay.
Rather than assuming patients will find a payment option themselves, practices can explain how to pay during the visit and repeat the information in appointment reminders or follow-up messages. Where appropriate and secure, messages can direct patients to a clear payment page. Give patients enough context to recognise that the message is legitimate.
Why Financial Transparency Matters in Patient Billing
We understand why clear communication is essential when collecting patient payments. However, another aspect that patients now are very cautious is nowadays trends. Patients are more aware of scams, identity theft, and unexpected medical bills than ever. When a billing message arrives without enough context, patients may question whether it is legitimate. This can reduce trust, delay payment, and even affect whether they return to the practice.
Following Ethical Collection Practices
But, how to avoid confusion? According to the latest version of the AMA’s Code of Medical Ethics, physicians should follow these points:
Clearly inform patients in advance about payment and collection policies, including payment due dates, potential interest or finance charges, and when unpaid accounts may be sent to collections.
Be aware of any accounts before they are referred to collections.
Use discretion and compassion when dealing with financially vulnerable patients, considering hardship before applying late fees or referring accounts to collections.
Ensure that fees are reasonable and appropriate for the services provided.
A clear collection of policy that follow these principles helps practices remain ethical, patient-centered, and financially stable.
How Upfront Cost Estimates Improve Patient Payments
According to a 2026 survey of U.S. health providers by PayZen and HFMA, 92% now either encourage prepayment, require it, or collect a payment method on file during the estimate process. Up from 81% the year before. The industry is moving toward transparency because the alternative keeps failing. In this case, Dr. ClearCare shows the patient their expected balance before the visit and explains to them an easy way to pay it.
An estimate is most useful when it is easy to understand. Explain the expected patient responsibility, what the estimate includes, and why the patient may owe that amount. Avoid relying on unexplained billing codes or payer terms. Because estimates can change, make clear that the amount is an estimate rather than a guarantee.
Timing and convenience matter, too. Sharing an estimate before treatment gives patients time to ask questions and consider their options. Offering suitable ways to pay, such as in person, online, by text link, or through an agreed payment plan, can reduce friction.
What Better Payment Communication Can Look Like: Case Study
Consider a patient who leaves an appointment with an unexpected $400 balance. If the patient does not return, the practice may lose both the unpaid balance and potential future revenue. The following is an illustrative example, not a prediction of what every practice will lose:
Unpaid balance: $400
Future visits lost: 4 per year × $120 in revenue per visit × 3 years = $1,440
Illustrative value of one referral: $1,440
Total: $3,280
This example assumes the patient would otherwise have returned for the stated number of visits and made a referral of the stated value. Actual outcomes will vary, and the referral value should be explained or removed if it cannot be supported.
One multi-location mental health practice started giving patients their balance before treatment. Between April and July, its monthly patient payments grew 779%, from $14,481 to $127,296, after Myriad added upfront cost estimates, card-on-file requirements, and clearer check-in messaging. It started from a deep hole: insurance was paying 14 times what patients were, and only 10 to 20% of patients paid their copay before treatment, detailed in Myriad's full case study. Annualized, that’s more than $1.3 million a year the practice had earned and wasn’t collecting. Most practices running a similar gap see gains in the thousands to tens of thousands of dollars a month.
What’s your insurance-to-patient payment ratio? Divide your monthly insurance payments by your patient payments. The industry range is 1.5 to 3x, depending on payer mix and specialty. Above that, you’re in the same gap.
How to Protect the Patient Payment Experience
Transparency fixes what a surprise bill breaks. A surprise bill costs more than the balance. Patients leave, cancel future visits, and tell others. Show them what they owe, why, and how to pay before they walk out, and they engage instead of avoiding the bill.
Dr. ClearCare brings that transparency into the payment process. It helps practices communicate expected patient responsibility upfront and provide convenient ways for patients to pay. So, instead of waiting for an unpaid balance to become a collection problem, your practice addresses financial responsibility earlier and keeps the patient's experience clear and positive.
In sum, better communication can protect both sides of the relationship: the patient from unexpected financial surprises and the practice from avoidable revenue loss.
Want to learn how Dr. ClearCare can support patient payment transparency? Contact the Myriad Systems team to learn more.
