The healthcare payments system has reached a critical tipping point. With total U.S. healthcare spending reaching $5.3 trillion annually, and projected to increase by 6% each year¹, the scale and impact is massive. Patients are skipping necessary care due to the growing cost of healthcare, while providers are struggling with administrative burdens due to slow, paper-heavy collection processes. In addition, outdated systems are becoming prime targets for cybercriminals. Transforming healthcare payments infrastructure is essential for both improving revenue and mitigating systemic cyber risks.

In our Trends in Healthcare Payments Sixteenth Annual Report, we explore key developments shaping the U.S. healthcare industry in 2026 and how these trends are impacting providers, payers, and consumers. Highlights include:

1. AI is transforming manual processes in healthcare

    

   AI has become the most visible innovation in healthcare², with early wins in revenue cycle management, patient triage, prior authorization, and billing. The financial case is clear: $21 billion in savings potential with fully automated manual transactions.³ 65% of U.S. hospitals now use AI models⁴, and 34% of providers are already using AI for administrative support⁵. As processes scale across increasingly complex tasks, organizations can redirect staff and resources to valuable strategic initiatives.

2. Consumer expectations are resetting healthcare payments

   Patients expect the same fast and easy checkout experience in healthcare that they receive at a retailer, yet they are increasingly frustrated by the lack of it. 58% say they'd switch providers for a better payment experience, a 16% increase year over year⁶. While not every retail innovation translates seamlessly to medicine, the pressure to meet consumers where they are with innovations like digital wallets and automated payments has never been higher.

3. Rising patient balances challenge both sides of the transaction

   Healthcare affordability is increasingly a systemic concern for both patients and providers. The rising cost of medical bills is leading consumers to skip or postpone critical care: 55% of consumers reported receiving a medical bill for more than $400 in the last year⁷.  For providers, the fallout is just as severe: 63% cite large patient balances as a top challenge⁸, and 41% report rising bad debt from uncollected balances⁹. The financial strain on both sides of the transaction can be attributed to payment infrastructure that has not kept pace with clinical and consumer realities.

4. Legacy collection processes are slowing cash flow

   Despite the urgency of collecting payments from patients who owe more than ever, most providers still rely on the same slow, paper-heavy processes that have defined the industry for decades. 63% of providers primarily collect with manual, paper-based processes¹⁰, and 70% of providers take two or more statements to collect a patient balance in full¹¹.

5. Payments modernization is imperative for the healthcare industry as a whole

   Persistent administrative burden, fragmented systems and manual processes create cost, delay and error across healthcare payments. Recognition of the challenge and the desire to change is increasing as 44% of providers want to decrease administrative tasks and manual work for non-clinical staff¹². Cybersecurity raises these stakes even further. Legacy payment environments can expose an organization to ransomware, breaches and other threats. In fact, 84% of providers report cybersecurity is a priority at their organization and 42% are increasing cybersecurity and safety protocols to minimize risks for a data breach¹³.

The report draws on $656 billion in healthcare payments processed on the InstaMed Network from 2022 to 2025, combined with Qualtrics surveys capturing insights from providers, payers and consumers across the U.S. healthcare ecosystem.  

To dig deeper into these trends, read the full Trends in Healthcare Payments Sixteenth Annual Report here. Check out our solutions for healthcare payments here.