Over the past decade, the US healthcare landscape has witnessed the emergence of alternative payment models designed to realign incentives, improve patient access, and stabilize practice finances. Chief among these innovative models are concierge medicine, Direct Primary Care (DPC), and the pay-first approach.
Although each model operates differently, they share a common goal: reducing administrative burden, enhancing patient engagement, and ensuring predictable revenue streams. Understanding their nuances, benefits, and implementation challenges can help practices decide which path best fits their mission and patient population.
Concierge Medicine, sometimes called “boutique” or “retainer” medicine, typically involves patients paying an annual fee, often several thousand dollars, in exchange for enhanced access to their physician. This can include same-day or next-day appointments, longer visit times, 24/7 phone or text access, and comprehensive annual physicals. For physicians, the concierge model offers a reliable source of revenue detached from traditional insurance reimbursement.
This steady income can reduce reliance on high patient volumes, allowing doctors to maintain smaller patient panels and dedicate more time to individualized care. Patients, in turn, enjoy a white-glove experience: fewer waits, more personal attention, and simplified navigation of preventive care.
Despite its advantages, concierge medicine remains accessible primarily to higher-income patients who can afford the retainer fee. Practices evaluating this model must consider patient demographics and local competition. Physicians must be transparent about which services the retainer covers and which remain subject to traditional insurance billing.
Clear contract terms help prevent confusion when patients seek specialists or hospital care outside the concierge arrangement. Additionally, regulatory and legal frameworks governing retainer practices vary by state, so clinics should seek guidance to ensure compliance with fee-splitting and insurance regulations.
Direct Primary Care (DPC) represents a middle ground between concierge medicine and traditional fee-for-service. In DPC, patients pay a flat monthly or annual subscription—typically ranging from $50 to $100 per person—that covers an agreed-upon suite of primary care services. These may include preventive exams, chronic disease management, basic labs, and unlimited office visits. By removing insurance billing for primary care services, DPC practices eliminate much of the administrative overhead associated with coding, claims submission, and payer denials. The model enables physicians to focus on delivering comprehensive care, often with same-day appointments and enhanced access through telehealth or direct messaging.
Unlike concierge medicine, Direct Primary Care is designed to be affordable for a broader patient base, including those with high-deductible insurance plans or no coverage at all. Patients appreciate the predictability of subscription fees, which can replace unpredictable copays and coinsurance charges. For physicians, DPC creates predictable revenue streams while maintaining the flexibility to bill insurance for services outside the primary care scope, such as specialist referrals, imaging, or hospitalizations. Practices considering DPC should carefully size their patient panels to balance access with financial sustainability, as too many subscribers can strain provider capacity and erode the very benefits that make the model attractive.
The Pay-First Model addresses financial sustainability through a different mechanism: point-of-service collections. At its core, pay-first asks patients to pay their copays, deductibles, or estimated out-of-pocket responsibility when they check in, or even in advance via secure online portals. After insurance adjudication, any remaining balance is automatically charged to a credit card on file. By collecting anticipated patient dues upfront, practices can drastically reduce accounts receivable and bad debt write-offs. Staff spend less time on billing follow up and more on patient engagement, while revenue cycles accelerate and cash flow becomes more predictable.
From the patient perspective, pay-first delivers transparency and convenience. When patients understand their financial responsibility before the visit, surprise bills become a thing of the past. Many practices augment this clarity with automated estimates generated from integrated eligibility and benefits platforms, which check coverage in real time. To succeed with pay-first, practices must communicate clearly across multiple channels—phone, text, email, and web—and offer flexible payment options, including online portals, health savings account payments, or payment plans. Training staff to navigate conversations about costs empathetically is crucial to maintaining trust and minimizing friction.
Although these models each offer compelling advantages, practices must carefully align choice of model with their patient population, specialty, and operational capacity. Smaller primary care clinics in underserved areas may find DPC especially well-suited to populations with high-deductible insurance, as the predictable subscription fee encourages regular preventive visits. Specialty practices with stable, affluent patient bases might lean toward concierge medicine, offering a differentiated, service-rich experience. Multi-specialty groups or larger health systems can pilot pay-first for routine outpatient visits, leveraging their administrative infrastructure and digital engagement tools to reduce billing complexity and improve patient satisfaction.
Regardless of model, technology plays a pivotal role in ensuring success. Practices should invest in integrated EHR platforms that streamline scheduling, billing, and documentation for virtual and in-person visits alike. Automated patient portals and mobile apps facilitate pre-visit questionnaires, consent forms, and payment processing. Telehealth capabilities extend reach beyond the conference room, offering virtual check ins and chronic disease monitoring that complement subscription- or retainer-based care. Data analytics tools can track key performance indicators such as patient acquisition costs, no-show rates, revenue per visit, and patient satisfaction, which enables continuous optimization.
Looking ahead, the adoption of concierge medicine, Direct Primary Care, and pay-first models reflects a broader shift toward value-based, patient-centric care. These approaches challenge the status quo of volume-driven reimbursements, incentivizing proactive, relationship-driven engagement over transactional encounters. As policymakers and payers increasingly recognize the importance of preventive care and population health, hybrid models may emerge, blending subscription fees with performance-based incentives for quality metrics. Practices that remain agile, invest in digital infrastructure, and prioritize transparent communication will be best positioned to thrive in this evolving landscape.
Ultimately, the future of U.S. healthcare depends on aligning financial incentives with patient outcomes and experience. Emerging payment models, whether through concierge retainers, DPC subscriptions, or pay-first collections, offer practical pathways to reduce administrative overhead, improve access, and build sustainable practices. By thoughtfully selecting and tailoring these models to fit their unique context, healthcare providers can create resilient, patient-focused practices that stand the test of time.
By Matthew Bernier, product management director and VP of PayerSync, Rectangle Health.
Healthcare providers are at a defining point, grappling with financial strain, often stemming from outdated and inefficient revenue cycle management (RCM) strategies.
These strategies, often riddled with manual inefficiencies and slow to adapt, are no longer sufficient to navigate the relentless tide of evolving payer regulations, skyrocketing denial rates, and the growing financial burden on patients.
RCM is widely recognized as an essential framework supporting the financial health and operational effectiveness of medical practices. Despite significant advancements in healthcare technology, many reimbursement processes remain outdated, cumbersome, and fragmented. This escalating pressure isn’t just a minor inconvenience; it’s actively eroding reimbursements, stifling cash flow, and ultimately compromising a provider’s ability to deliver essential patient care.
New research from American Express and PYMNTS revealed that 67% of healthcare payer executives reported that their firms’ reliance on manual payment systems is hampering their operational efficiency. Additionally, nearly 74% said that these outdated systems are increasing their exposure to regulatory fines and compliance penalties. Healthcare providers are already feeling the sting, meaning streamlining these processes is vital for redirecting valuable resources toward patient care and clinical services.
The Pitfalls of Outdated Reimbursement Methods
Many inefficiencies originate from continued reliance on traditional payment systems, notably paper checks and standard ACH transfers. While foundational in their own right, these payment methods were not designed to accommodate healthcare’s specialized requirements, such as the secure, compliant transmission of detailed patient remittance information. Providers frequently find themselves manually reconciling Explanation of Payments (EOPs) with deposits, a process prone to delays, errors, and unnecessary complexity.
Although ACH transfers represent a digital improvement over paper checks, standard ACH formats typically cannot include the comprehensive remittance details essential for precise and timely payment reconciliation. Additionally, financial institutions lack the infrastructure and incentives to manage HIPAA-sensitive information securely, adding administrative burdens and complexity for healthcare organizations.
Mounting Financial Pressures on Providers
The financial impact on providers due to outdated reimbursement methods is evident. According to a 2024 survey by Experian Health, 73% of healthcare administrators reported an increase in claim denials, rising from 42% just two years prior.
Several factors contribute to this decline:
Increased claim denials: Providers are seeing higher initial claim denial rates, especially from commercial health plans and Medicare Advantage plans.
Higher patient financial responsibility: The rise in high-deductible health plans and cost-sharing arrangements has placed more financial burden on patients, complicating the collection process.
Bad debt write-offs: Insured patients are increasingly accounting for significant amounts of bad debt, creating additional financial strain on healthcare providers.
Ongoing healthcare staffing shortages only amplify these challenges. Healthcare leaders report severe impacts from staff shortages, with 81% citing delays in care, longer wait times, and reduced access to essential services as significant issues. Providers, already stretched thin, are forced to divert limited resources to manage overdue payments, exacerbating administrative strain and creating uncertainty around cash flows and financial projections.
The Power of Next Generation Payment Rails
Addressing the persistent challenges of healthcare payments, next-generation digital payment rails offer providers a transformative path forward. Unlike standard ACH transfers, these advanced digital rails embed detailed remittance data directly within transactions, providing immediate, automated reconciliation. This integration reduces the time providers spend matching payments to claims, dramatically decreasing accounts receivable (A/R) days.
Providers already leveraging these innovative payment rails have experienced reimbursement processing times shrink from weeks to days. These streamlined systems automatically post reimbursements directly into practice management systems (PMSs) or electronic medical records (EMRs), eliminating manual data entry and reducing costly errors.
Next generation payment solutions meet patients’ evolving expectations. Modern online digital payment portals provide patients with transparent billing, cost estimates, flexible payment options, and insurance information. This is particularly important as nearly seven in 10 Gen Z patients report having payment issues with their latest healthcare service, highlighting a strong preference for convenient, contactless, and online payment methods. For providers, these solutions streamline billing through stored patient payment methods, deliver instant notifications, and offer consistent reporting across all payers, significantly enhancing financial visibility and control.
Digital Reimbursement: Accelerating Cash Flow and Accuracy
To overcome revenue cycle challenges effectively, providers should embrace automation and digitization within their reimbursement workflows. Modern, healthcare-specific digital reimbursement solutions securely integrate detailed, HIPAA-compliant patient data directly into financial transactions. This integration reduces manual reconciliation, enhancing accuracy and accelerating the reimbursement cycle.
Digitally automated reimbursement solutions consolidate various payment forms into a unified system, offering providers real-time transaction visibility and simplified reconciliation. By automating routine administrative tasks, healthcare staff can dedicate more time to high-value activities focused on patient care and practice growth, resulting in improved patient experiences and outcomes.
Additionally, automated reimbursement solutions provide immediate insights into payment statuses, equipping providers with accurate revenue forecasting, efficient budgeting, and proactive financial management.
The Path to Financial Strength
As reimbursement complexity grows, adopting automated and digitally integrated payment systems designed explicitly for healthcare becomes essential. Providers who modernize their reimbursement processes today will position themselves to handle industry challenges more effectively, securing their financial health, enhancing operational efficiency, and ensuring superior patient care for years to come.
By Joe McMurray, senior vice president of patient experience, Zotec Partners.
A July 2022 report confirmed what most providers have seen coming during this time of rampant inflation: Unexpected healthcare costs can be crippling for the majority of Americans. Many factors have influenced this fact, including rising high-deductible plans, ongoing pandemic stress, and the general truth that patients are often sick, scared, or confused — or a mix of all three. This strain poses many challenges for healthcare providers and their revenue cycle teams, highlighting the importance of patient-centric financial experiences.
Calculating cost estimates on unexpected medical encounters is a very challenging process, and if done so inaccurately, it can push patients to switch medical providers. According to PYMNTS, 46% of unwell patients have canceled an appointment because of high cost estimates, and two-fifths of patients who received inaccurate cost estimates spent more on healthcare than they could afford. Healthcare providers and organizations have seen drastic reductions in payment as a result.
Understanding Why Patients Don’t Pay
According to research by Debt.com, 45% of Americans have outstanding medical debt. Some reasons why patients can’t pay their debts includes financial hardship (which can be from job loss), murky healthcare billing systems, unexpected billings (especially during the holidays), and ambiguities with insurance. Inflation isn’t helping the situation, with almost 60% of people forgoing healthcare due to higher living expenses across the board.
Unpaid medical bills and their resulting medical debt are typically the outcomes of a combination of factors. First and foremost are unexpected healthcare costs, which is precisely what it sounds like: unplanned and unbudgeted medical expenses. The continued hike in high deductible plans and increased out-of-pocket expenses has also hit healthcare consumers’ wallets.
Additionally, uncertainty around billing is an issue for patients who need clarification on their responsibilities, billing due dates, or even which providers they saw during their encounters. Finally, technology can be a barrier to patient payments. When patients can’t access, understand, or act quickly on their bills, they are less likely to make a payment or pay in full.
Improving the Financial Experience for Patients
Health systems and clinicians shape patient care experiences, which can unfortunately lead to medical debt and devastating consequences in certain circumstances. So, what can healthcare providers do to alleviate these financial pressures for patients and set them up for success beyond diagnosis and treatment?
The first and most obvious response is to get the bill covered by the carrier prior to sending it to the patient. With advanced technology partners, this is a goal that should and can be explored. However, if there is still a patient portion, the following four steps will enhance the experience for all:
• Patient Education and Awareness
Healthcare organizations can help individuals make educated decisions about how to plan and pay for their care. Enhancing medical billing transparency means ensuring patients are aware of out-of-pocket expenses, including cost-of-care discussions in provider-patient interactions.
With the federal No Surprises Act in effect, patients now have increased transparency into what scheduled medical encounters cost. However, these estimates can only be accurate if no unplanned medical care or treatment is needed during service. By communicating up front with patients about additional costs, they will be more empowered when making healthcare decisions.
Once a patient receives a bill, it should be accurate, easy to understand, and convenient for them to take action.
• Payment Choices and Flexibility
Healthcare organizations can help patients with medical expenses by expanding, simplifying, and innovating payment options and plans. Offering more ways to pay based on patients’ preferences is essential, as is giving patients more time and flexibility. No two patients are alike, and based on their propensity to pay, providers can offer patients customized communications that offer payments through paper, phone, text, email, or portal access.
Offering payment plans is a proven way to increase collection rates. Patients who are offered additional time, even if it’s just a few weeks more, are more likely to make payments or pay their bills in full, reducing likelihood of medical debt. By adding a few more weeks to the billing cycle, providers can offer patients a more dignified and effective way to pay for services at a time most suitable for their financial situations.
• Compassionate Care Continuum
Healthcare expenses are a source of anxiety for many patients. Intimidating collection steps won’t do them any good, but a more compassionate billing approach could help increase patient payments.
Team members should utilize compassionate language as they guide patients through their journeys. When patients are confused, they should be met with a responsive contact center that leads with empathy and understanding. After all, calm patients feel more confident in their billing and are increasingly more vested in paying for the services rendered.
• Simple and Streamlined Technology
Providers should implement portals that make it easy for patients to pay bills, schedule appointments, review payment plans, and share feedback. Empowering patients with a self-service option enables greater transparency and customized experiences — all leading to higher payment capture.
By developing an extensive and dynamic patient journey by persona, organizations can customize communications by patient demographics and propensity-to-pay. This allows them to use the most innovative, intelligent means to request and receive payment. If providers don’t have a portal that meets these criteria, there are technology-enabled revenue cycle services partners that can further enhance the patient experience.
No two patients have the same pain points when it comes to medical expenses. And considering the economic landscape evolves daily, healthcare needs to be ready to adjust accordingly. Providers need to find flexible and intuitive ways to connect with patients and offer a variety of payment options to engage compassionately throughout the entire healthcare journey.
By Ryan Mooney, general manager, Source Division, HealthEdge.
In our healthcare ecosystem, waste, fraud and abuse run rampant: in 2020 alone, healthcare spending in the U.S. exceeded $4 trillion, and estimates suggest about a quarter of that was attributed to waste. What this tells us is that an increased focus on payment integrity – and in particular, fixing its traditionally disparate practices – has the potential to greatly benefit payers, providers, and ultimately members.
At its core, payment integrity is the process by which stakeholders ensure healthcare claims are paid properly, both pre- and post-pay. It encompasses determining the correct party, membership eligibility, contractual adherence, and fraud, waste and abuse detection and prevention. In recent years, as healthcare spending continues to skyrocket, payment integrity has received more attention – and investment – than ever. And yet, it leaves much to be desired.
The Current State of Payment Integrity
A comprehensive payment integrity strategy is key to lowering costs and achieving higher quality of care for members, but the systems in place are far from perfect. With over 24 years working in payment integrity, throughout this experience I’ve found it nearly impossible not to run into issues within the system. As it stands, many parties focus on enriching the contingency model versus solving the problem. Structurally, the contingency model is flawed: when the vendor gets paid according to the quantity of errors they find, the core problem will continue, as these parties are incentivized to identify what is incorrect rather than why.
Our 2021 Voice of the Market survey of over 200 health insurance executives found that payment accuracy would help reduce administrative costs at their organization, directly impacting savings that can be reallocated for other business priorities such as considering partnerships, acquisitions, or investing in a new geography or line of business. This represents a substantial shift from the past, demonstrating how stakeholders today want to take advantage of all available resources to expand in the current landscape.
By Alison Arthur, product and content marketing manager, Alacriti.
The financial well-being of healthcare organizations depends on steady, predictable revenue from their patients. However, healthcare payments are often impacted by a number of financial factors including insurance, co-payments, deductibles, and co-insurance.
Research from TransUnion shows that patients are becoming increasingly responsible for out-of-pocket healthcare expenditures. This means that the possibility of missed bill payments can increase as well. Healthcare providers know that sending unpaid bills to collections can be a significant expense and even lead to costly write-offs that negatively impact the bottom line.
How can healthcare organizations increase the likelihood of collecting patient payments on-time and in-full? Digital bill presentment and electronic payment technology can be a chief facilitator of timely bill payments. Here are some dos and don’ts for healthcare organizations to consider when adopting an electronic bill presentment and payment (EBPP) solution.
Do allow patients to personalize their digital bill payments experience.
Consumers are growing more accustomed to electronic payments in all aspects of their lives. However, many healthcare providers still aren’t equipped to accept online payments from their patients. This continued reliance on in-person payments, agent-assisted transactions, and mailed payments can put a strain on internal resources that costs both time and money. In addition, there are security and compliance implications when employees handle sensitive payment information directly from patients.
EBPP technology can provide patients 24/7 accessibility to their accounts, meaning that patient payments no longer need to be processed exclusively during office hours. These payments can be made using a variety of digital channels that are aligned with patients’ preferences including mobile devices, text messages, and intelligent personal assistants like Amazon Alexa and Google Assistant.
The healthcare payments market is growing rapidly and is estimated to reach $5 trillion by 2022 as a total of both payer and consumer payments. The fastest growing portion of the market is payments from consumers for healthcare services and health plan premiums as a result of shifting payment responsibility and changes because of health reform.
However, the healthcare industry is struggling to address the new role of consumers in the payments process with more than 30 percent of healthcare dollars considered to be wasted because of inefficient, disjointed payment processing and costs associated with paper-based billing and administrative processes. These costs are expected to continue to increase unless the healthcare industry recognizes and addresses the critical role of consumer choice and the impact of the digital economy on payment options.
These latest trends and best practices presented in InstaMed’s Trends in Healthcare Payments Annual Report 2014 outline a critical need for healthcare industry professionals to focus on consumer preferences and their emerging role in the payments process. Healthcare providers and payers who offer consumers preferred payment methods, including card payments and online payments, reduce confusion and ultimately increase collections. Additionally, new electronic payment channels, such as mobile payments and Apple Pay, will further accommodate consumers’ expectations for simple billing and convenient ways to pay. A focus on streamlining the consumer payment experience will improve collection rates, increase consumer satisfaction, and enhance profitability and cash flow.
The following infographic illustrates the top trends, industry challenges and best practices to enable healthcare organizations to adapt to the future of healthcare payments. For more information, download the full report: www.instamed.com/trends.
The financial well-being of healthcare organizations depends on steady, predictable revenue from their patients. However, healthcare payments are often impacted by a number of financial factors including insurance, co-payments, deductibles, and co-insurance.
The healthcare payments market is growing rapidly and is estimated to reach $5 trillion by 2022 as a total of both payer and consumer payments. The fastest growing portion of the market is payments from consumers for healthcare services and health plan premiums as a result of shifting payment responsibility and changes because of health reform.