The ROI Hospitals Can’t Afford to Ignore: Payment Modernization

Health care providers perform some of the most important and complex jobs in our society. But the systems that support them, particularly around payments, often lag behind.

PYMNTS Intelligence reports that 42% of suppliers still rely on paper checks – a method almost unknown in other industries or countries. It is not a reflection of healthcare priorities, but rather the weight of legacy infrastructure that makes change difficult.

The good news is that modernizing payments offers one of the clearest paths to relief. Manual payment systems introduce friction at every step. Errors appear during processing, reconciliations are delayed, records are lost, and risk increases. Modernizing these processes can generate savings and give hospitals the stability to focus resources where they matter most: patient care.

With “One Big Beautiful Bill” (OBBBA) Medicaid and Medicare Cuts As it looms, health systems can no longer afford to ignore the problem and lose the financial resilience that modernized payment infrastructure offers.

When decision makers look for savings, payments modernization offers the fastest return on investment compared to other operational changes. The benefits are tangible and immediate: faster cash flow, lower reconciliation costs, fewer disputes, and clearer reporting to understand financial needs in real time.

These rapid advances are critical for hospitals, but there’s another reason why modern payments are key to long-term resilience: patient loyalty. Patients often bear the brunt of outdated systems, facing delays and uncertainty that can push them to seek care elsewhere.

Patient pain points

I have recently experienced firsthand how damaging this friction can be.

After a doctor’s appointment, my billing address was captured incorrectly. A month passed, then two, with no word from the supplier. I had no idea what balance I had to pay, how much insurance had covered, or when I was expected to pay the rest.

For all I knew, the claim may not even have been processed yet. Then, out of the blue, a collection agency called me to let me know I had an unpaid bill. I spent hours on the phone trying to resolve the issue and protect my credit.

Stories like this are all too common, and as healthcare providers operate more like businesses that need to gain customers, an unhappy patient will result in lost revenue. According to an American Express survey, 24% of US healthcare consumers I would consider switching providers if they do not offer the consumer’s preferred payment method. This affects both the hospital’s bottom line and the continuity of patient care.

Modern payment systems replace confusion with clarity, allowing hospitals to turn a frequent source of friction into an opportunity to increase patient satisfaction.

Digital payment portals provide patients with real-time notifications as claims are processed. They can see what the insurance has covered and immediately know what they owe. Stored credentials and built-in “pay now” features make it easy to pay with a single click instead of waiting for paperwork.

When patients have access to clear documentation, cost estimates, and modern payment options, they feel more in control of their care. Meeting these expectations isn’t just about keeping up with consumer trends. It’s about providing secure and convenient solutions that build trust. Trust translates into loyalty and loyalty translates into income stability.

Inertia of inaction: the hidden cost of doing nothing

The transition to modern payment solutions often meets resistance. Healthcare leaders worry about fraud, compliance, costs, and disruptions—all legitimate concerns. However, this mindset creates an inertia that health systems can no longer afford if they want to protect their margins in the current climate.

I hear it all the time from executives: “Most of my concerns are making sure the hospital is running: there are enough nurses, the doctors are on time, we have enough syringes, all responsibilities are covered, etc. I’m evaluating hundreds of literal life-or-death priorities. Well, our payment technology may not be the best, but why fix it if it’s working well?”

The reality is that payments do not work well. They are being propped up with expensive solutions. Hospitals are forced to redouble manual processes, add staff and accept revenue leakage as a cost of doing business.

Manual systems create hidden costs in customer service, accounting, and finance. I’ve spoken to hospitals that employed 15 people in their call center just to follow up on overdue invoices. They had another 20 people in accounting to reconcile what was sent to collections and what was uncollectible. An entire team was dedicated to analyzing payment failures and manual interventions. And yet, a significant portion of the potential revenue was sold to collection agencies for pennies on the dollar.

With the right automation, none of that overhead would be necessary. Hospitals wouldn’t need entire departments chasing unpaid bills or fixing broken processes. Instead, those teams could be reassigned to higher-value work, such as patient technical support or proactive problem resolution to provide better care.

It’s a disaster, but it doesn’t have to be. The major players that have already adopted digital payments have shown what is possible. Those still hesitant just need to be strategic about how they approach modernization.

Simplified modernization

Mid-sized hospitals, in particular, often feel they lack the resources to update their payment system. They fear that the technology is too complex and disruptive for current operations. But with the right partner, implementation is much simpler than most leaders assume.

First of all, don’t get distracted by flashy demos and buzzwords, especially when it comes to AI. About 70% of vendors will talk about AI, another 25% know a little, and only about 5% have the genuine knowledge to implement it for the right reasons and use cases. Identifying a partner in that 5% is much more important than acting quickly with a supplier that cannot deliver on its promises.

Look for a technology partner with customized healthcare payment solutions who understands the nuances of your business and can guide the process from start to finish. The right partner brings domain-specific expertise, proven tools, and the security investments needed to protect patient data.

With APIs and endpoints already built to integrate with insurers, providers, and EHRs, implementation can be completed quickly and transparently. Health systems can complete integrations in weeks, or even days, not years.

That being said, don’t try to tackle everything at once. Start with your biggest problems and solve them with simple, proven processes. Quick wins build confidence and momentum, making it easier to spread modernization throughout the organization.

Worthwhile progress

Modern payments bring transparency, speed and security throughout the healthcare ecosystem. Providers get revenue faster, patients get clarity and control, and payers benefit from cleaner, more reliable data.

For health systems facing OBBBA-driven cuts, payment modernization is the most logical place to start building resilience. It’s a proven way to protect margins without sacrificing focus.

In 2025, there is no reason for healthcare payments to continue to be made through paper checks and manual processes. It’s time to overcome inertia and move forward.

Image: Warchi, Getty Images

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