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

Healthcare providers do some of the most important and complex work in our society. But the systems that support them, particularly around payments, often lag behind.

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

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

With Medicaid and Medicare cuts from the “One Big Beautiful Bill” (OBBBA) looming, health systems can no longer afford to ignore the issue – and miss out on the financial resilience that modernized payments infrastructure offers. 

When decision makers look for savings, payment modernization offers the fastest ROI 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 quick gains are critical for hospitals, but there’s another reason modern payments are key for 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 Patients often bear the brunt of outdated systems, facing delays and uncertainty that can push them to seek care elsewhere.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’ve recently experienced firsthand just 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 provider. I had no idea what balance was due, how much insurance had covered or when I was expected to pay the remainder. 

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

Stories like this are far too common, and as healthcare providers operate more like businesses that need to win customers, a dissatisfied patient will lead to lost revenue. According to a survey from American Express, 24% of U.S. healthcare consumers would consider switching providers if they don’t offer the consumer’s preferred payment method. This impacts both the hospital’s bottom line and the patient’s continuity of care.

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

Digital payment portals give patients real-time notifications as claims are processed. They can see what insurance has covered and know immediately what they owe. Stored credentials and seamless “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, convenient solutions that build trust. Trust translates into loyalty, and loyalty translates into revenue stability. 

Inaction inertia: The hidden cost of doing nothing

Making the transition to modern payment solutions is often met with resistance. Healthcare leaders worry about fraud, compliance, cost and disruption – all legitimate concerns. However, this mindset creates 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 functioning — there are enough nurses, the doctors show up on time, we have ample syringes, the liabilities are all covered, and so on. I’m triaging hundreds of literal life-or-death priorities. Ok, our payment technology may not be the best, but why fix it if it’s working fine?”

The reality is that payments aren’t working fine. They’re being propped up with expensive workarounds. Hospitals are forced to double down on manual processes, add staff and accept revenue leakage as the cost of doing business.

Manual systems create hidden costs across customer service, accounting and finance. I’ve spoken with hospitals that employed 15 people in their call center just to follow up on overdue bills. They had another 20 people in accounting to reconcile what was sent to collections and what was uncollectable. A full team was dedicated to analyzing payment failures and manual interventions. And still, a significant portion of potential revenue was being sold to collections 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 patching broken processes. Instead, those teams could be redeployed to higher-value work — like white glove patient support or proactive issue resolution to deliver better care. 

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

Modernization made simple

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

First, don’t get distracted by flashy demos and buzzwords, especially when it comes to AI. Roughly 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 far more important than moving fast with a vendor who can’t deliver on promises.

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

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

With that said, don’t try to tackle everything at once. Begin with your biggest pain points and solve them with simple, proven processes. Quick wins build confidence and momentum, making it easier to expand modernization across the organization.

Progress that pays off

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

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

In 2025, there’s no reason healthcare payments should still run on paper checks and manual processes. It’s time to push past inertia and move forward.

Picture: Warchi, Getty Images

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