Out-of-pocket costs now represent 49.3% of the dollars sitting in large, slow-to-collect hospital balances, up from 37.5% just one year earlier, according to Patient Affordability as a Strategic Imperative: How 5 Leading Health Systems Are Responding to Rising Out-of-Pocket Costs, a report published by Cedar, a patient billing technology company, and The Health Management Academy (THMA). The shift occurred between Q1 2025 and Q1 2026. Out-of-pocket liability in those balances grew by $44 million, from $115 million to $159 million, while total billings in the same cohort grew by only $16 million.
The data come from Cedar’s own client health systems. Cedar’s technology platform is used by two of the five health systems profiled in the accompanying case-study report, conducted by THMA through CFO and revenue cycle interviews. The directional shift, however, is consistent with publicly available data on deductible and coinsurance trends. According to the KFF 2025 Employer Health Benefits Survey, cited in the report, deductibles have risen 43% over the past decade. A separate KFF analysis published in October 2025 found that 62% of insured adults report concern about affording care before their coverage takes effect.
The report attributes the billing shift specifically to the structure of high-deductible health plans (HDHPs) and rising coinsurance models. Patient liability scales with the size of the bill, and coverage protects least precisely where exposure is greatest. On small bills, the out-of-pocket share in Cedar’s data was essentially unchanged.
The divergence is concentrated in large balances, bills of roughly $200 or more. At that scale, a high deductible or coinsurance percentage places thousands of dollars of responsibility on a patient who has already paid premiums and met some portion of their cost-sharing obligations.
The population this describes is not the uninsured. The report identifies it as the underinsured: employees with employer-sponsored coverage whose incomes exceed traditional financial assistance thresholds but who cannot absorb what their plan requires them to pay.
Health systems, the THMA interviews found, have well-established pathways for uninsured patients and for insured patients who can pay, a structural gap the Commonwealth Fund documented this month in a separate survey finding that nearly one in three employer-insured workers cannot afford the care their plan nominally covers.
That gap has a direct connection to how employer plans are being designed. With health benefit costs projected to rise 8.2% per employee in 2027, the steepest increase since 2003, according to Mercer’s 2026 National Survey of Employer-Sponsored Health Plans, 59% of employers plan to make cost-cutting changes to their health plans, with higher deductibles and out-of-pocket maximums as the primary mechanism. Each of those decisions adds to the population Cedar’s billing data are now capturing in large, unresolved balances.
A $28 million patient cost shift on the same volume of care is not a function of more utilization. It is a function of where that cost lands after the insurer pays its share. When that landing point exceeds what an employee can pay, the balance ages, the collection cost rises, and the provider absorbs what remains.
A GoodRx survey published in September 2026 found that 56% of insured adults already feared they could not afford a serious illness or accident, with care avoidance concentrated in dental, vision, doctor visits, and prescriptions. Those are the categories most directly shaped by employer plan design.
The THMA case studies, drawn from five health systems of different structures, markets, and EHR platforms, converge on a consistent set of findings. The systems performing best on patient affordability shared three practices: upfront cost conversations before the point of service, presumptive charity screening to identify assistance-eligible patients earlier, and post-service outreach segmented by each patient’s ability and likelihood to pay rather than uniform collection attempts.
The challenge across all five systems was not a lack of technology. It was coordination - the difficulty of deploying the available tools across fragmented teams, reporting lines, and data flows at the pace the market is changing.
One academic health system identified self-pay patients eligible for ACA marketplace coverage and sponsored their premiums through a vendor partnership. It had projected 200 to 225 enrollments in its first year, enrolled approximately 350, and generated an estimated $10 million to $12 million in plan payments that would otherwise have remained self-pay balances.
The report’s central conclusion is that affordability strategy needs to be treated as an enterprise function, not a revenue cycle function. That represents a structural shift in how providers think about the patients showing up in their books. The plan design decisions that create those patients’ financial exposure originate with the same advisors reading these numbers.
