Out-of-Pocket Costs Now Make Up Nearly Half of Large Hospital Balances, New Cedar and Health Management Academy Report Finds

Original data show patients' share of large, slow-to-resolve balances rose from 37.5% to 49.3% in one year; case studies of five health systems show how they are responding

NEW YORK and ARLINGTON, Va., Oct. 26, 2026 /PRNewswire/ -- Patients are paying a growing share of their largest medical bills, even when they have insurance, according to Patient Affordability as a Strategic Imperative: How 5 Leading Health Systems Are Responding to Rising Out-of-Pocket Costs, a report published today by Cedar and The Health Management Academy (THMA). The research, conducted by THMA, includes an analysis of Cedar's aggregated billing data. It found that out-of-pocket costs made up 49.3% of the dollars in large, slow-to-resolve balances at health systems in the first quarter of 2026, up from 37.5% in the first quarter of 2025.

Over that year, total billings in those balances grew by $16 million, from $307 million to $323 million. The out-of-pocket portion grew by $44 million, from $115 million to $159 million, meaning about $28 million shifted from insurers to patients. On smaller bills, under roughly $200, the out-of-pocket share was essentially unchanged. The report attributes the shift to the growth of high-deductible plans and coinsurance, where what a patient owes rises with the size of the bill.

The report describes a growing underinsured population: insured patients whose incomes exceed traditional financial assistance thresholds but who cannot absorb thousands of dollars in healthcare costs. According to KFF, deductibles have risen 43% over the past decade, and 62% of insured adults worry about affording care before their coverage takes effect.

"This research underscores a critical issue for health system leaders: patients are bearing an increasing share of their healthcare costs. Underinsured individuals are particularly vulnerable to financial hardship, which our current infrastructure is not built to absorb," said Coltin Ball, Associate Director at THMA and lead researcher on the report.

THMA researchers paired the data with case studies of five health systems that differ in size, market, payer mix and electronic health record (EHR) platform, based on interviews with chief financial officers, revenue cycle leaders and operational staff. Two of the five systems use Cedar's platform.

Key findings include:

• Health systems are least prepared to support underinsured patients. Systems have established pathways for uninsured and very-low-income patients, and for insured patients who can pay. Patients with coverage who still cannot afford what they owe fall between them. In response, systems are reconsidering charity care thresholds, payment-plan length, discounts and presumptive assistance criteria.
• The biggest gap is coordination, not technology. The tools to help patients largely exist. The harder problem is coordinating them across teams, technology and reporting lines as quickly as the market is changing.
• Options matched to each patient produced the clearest results. The strongest outcomes came from coverage support, financial assistance and payment plans built around each patient's situation. One academic health system that helped self-pay patients enroll in marketplace coverage expected 200 to 225 enrollments in its first year and enrolled about 350.
• Leaders want to measure access, not only revenue. CFOs across the systems agreed that success should be defined by whether patients can access care and manage what they owe, alongside financial results, so that gains in one area don't shift burdens to another.

"This is the moment patients are least equipped to handle, and it's exactly where most billing systems still fail them. Cedar exists to close that gap. We built our platform to meet patients where they are, with coverage screening, tailored financial assistance and payment options built around how real people actually pay, not how insurance claims settle," said Florian Otto, CEO and co-founder of Cedar. "The Health Management Academy's research confirms what we see in our own billing data, that when systems put the right options in front of patients, people use them. The next step is reaching patients with those options earlier, before a bill ever arrives, so a growing balance never becomes a reason someone delays care."

Key questions the report answers

How much of their largest hospital bills are patients paying? In Cedar's billing data, analyzed for the report, out-of-pocket costs made up 49.3% of the dollars in large, slow-to-resolve balances at health systems in the first quarter of 2026, up from 37.5% a year earlier.

Who are the underinsured? Insured patients whose incomes exceed traditional financial assistance thresholds but who cannot absorb thousands of dollars in healthcare costs.

What are health systems doing about it? The systems studied are moving support earlier in the patient's financial journey, through self-service estimates, presumptive charity screening and earlier payment-plan enrollment, and are widening options for patients with remaining balances, including tailored payment plans and financing.

The full report, including five case studies, a framework of four dimensions that shape each system's approach (market environment, digital infrastructure, systemness and financial standing) and questions leaders can use to assess their own strategy, is available here: Patient Affordability as a Strategic Imperative: How 5 Leading Health Systems Are Responding to Rising Out-of-Pocket Costs.

About Cedar

Patients are healthcare's fastest-growing payer class, but most billing infrastructure was built to collect from insurers, not individuals. Cedar closes that gap. Powered by more than 1.5 billion patient interactions, Cedar's AI-driven technology meets patients where they are, across billing, payments, and financial assistance, with outreach and payment options built around how people pay today. Cedar has processed over $13.6 billion in payments and supported more than 63 million patients nationwide. Health systems collect more, at lower cost, from a payor class legacy systems were never built for. To learn more, visit www.cedar.com.

About The Health Management Academy
Since 1998, The Health Management Academy has cultivated the premier community of influential changemakers in healthcare. Our members are aligned around a common goal of improving health for all, and a core belief that partnership will accelerate progress. Our member community includes Leading Health Systems – the approximately 150 innovative integrated delivery systems with over $2B in total operating revenue – and innovative Industry Partners that are working alongside health systems to drive health forward. We power our members by building our community and fostering connections through executive peer learning. We support professional growth through talent and development. We accelerate understanding by delivering timely and actionable data and insights on key challenges. And we catalyze transformation.

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SOURCE Cedar