In recent years, hospital systems and academic medical centers across the U.S. have increasingly moved toward cashless or near-cashless acceptance models, particularly in relation to patient receivables. This change arises from a combination of enhanced efficiencies, patient behavior and evolving technology — though not without controversy or concern.
Historically, hospitals have accepted a variety of payment methods, including cash, checks and cards. Today, major healthcare institutions are rapidly transitioning away from cash payments for patient balances in favor of electronic transactions through online portals, mobile apps, automated phone systems and QR codes. In addition, going cashless can help improve operations and mitigate risk in areas where healthcare has been vulnerable.
Drivers Behind the Shift
1. Cost and Efficiency
Handling physical cash can add to security concerns and reconciliation processes, as well as armored transport and labor costs. For hospitals, especially large health systems that process millions of dollars in physical cash, the operational burdens can be significant. Cashless systems reduce processing costs and are easier to audit, track and integrate with electronic health records (EHR) and financial platforms.
2. Digital Movement and Patient Behavior
The Covid-19 pandemic accelerated the movement toward consumer adoption of digital payments. Many patients now prefer to receive bills and make payments online or through mobile devices. This preference aligns with broader shifts in consumer finance, where mobile wallets and tap-to-pay payments are becoming standard.
3. Revenue Cycle Optimization
Cashless systems allow hospitals to automate certain areas of their revenue cycle, from pre-service payment estimates to post-visit collections. This can help increase collection rates and shorten the revenue cycle timeline, which has become increasingly important as hospitals manage tighter margins and declining reimbursements.
4. Fraud Reduction and Compliance
Cashless transactions can be more secure and compliant with healthcare regulations. They can also reduce the risk of theft, misappropriation of funds and reporting errors.
Implications and Impact
Despite the efficiencies, the move to cashless payments has raised concerns about access and equity. Critics argue that moving to cashless systems may marginalize patients who are underbanked, a total of roughly 5.9 million households according to 2024 FDIC[1]. These patients often include lower-income households, immigrants and older adults.
In response, some institutions have adopted a hybrid model, or “cash-lite.” These may include designating select locations to accommodate cash payments, accepting cash at kiosks on main campuses, offering prepaid debit cards for patient refunds and/or balances, or partnering with financial counseling services to assist with payment options.
Additionally, older adults may not be as comfortable interacting online or using technology such as tap to pay. According to AARP[2], “Only two-thirds of those 50-plus express comfort with their digital skills, and comfort diminishes with age.”
To help ease the way, some hospitals are investing in patient education and support services to build confidence in using digital tools and training staff to assist older patients with digital payments.[3]
Lastly, hospitals that receive federal funding or operate as a nonprofit may face legal scrutiny or public pressure to maintain some level of accessibility for all payment methods, including cash.
The Roadmap
With U.S. health systems continuing to advance digitally, the shift to cashless payments is set to grow. Hospitals and academic medical centers may also work to strike a balance between modernizing revenue collection for future financial sustainability while also striving to keep healthcare accessible and equitable for all patients, regardless of how they pay.
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Source
[2] 2024 Tech Trends and Adults 50+
[3] Older adults and technology: Creating an age-inclusive, digital-first patient intake strategy
