Healthcare Providers’ Real Competition Isn’t the Health System Down the Street—It’s Groceries

Healthcare providers used to compete with the hospital across town. Today, they’re competing with groceries. With rent. With childcare. And in this zero-sum game, everyone loses.
Since 2010, U.S. household income has risen by about 22%. But essentials have climbed much faster: food up 30%, childcare about 65%, housing nearly 50%. Health insurance deductible spending? Up a staggering 230% over the past two decades. Families may earn a bit more, but every necessity takes a bigger bite out of the monthly budget. And we know healthcare rarely comes first.
For providers, the patient relationship is more financial than ever. Most have responded with billing improvements: redesigned statements, text reminders, and online portals. But these fixes don't matter when patients must choose between treatment and putting food on the table. Instead of chasing patients for money they don’t have, providers should be navigating them to resources they don’t know exist.
Patient liability is shifting (again)
Healthcare’s affordability crisis isn’t new to leaders in the space. In fact, healthcare costs were declared a national emergency as far back as 1971 by President Nixon. At the time, healthcare spending was just over 7% of the U.S. gross domestic product. Today, it's over 17% — more than double.
What's different now is where the crisis lands. Over the last 15 years, patients have absorbed more and more of the burden. In 2006, just 4% of covered workers were enrolled in high-deductible health plans (HDHPs). Today, it’s more than half. We've gone from predictable $20 copays to unpredictable $8,000 deductibles. Affordability has gone from being a bug in the healthcare system to one of its defining features.
And it's only getting worse. Across Cedar's clients, over 35% of collectible dollars come from patients without insurance,1 up 8% year-over-year.2 Layer in 10 million projected coverage losses under the One Big Beautiful Bill, plus the potential doubling of marketplace premiums due to expiring subsidies, and providers could face a complete reshuffling of their payer mix.
But the traditional way of thinking about it (commercial, government, self-pay) no longer tells providers what they need to know about a patient's ability to pay.
Insured doesn’t mean covered
Historically, self-pay patients posed the greatest financial risk to providers’ balance sheets. But with the explosive growth of HDHPs and the rising cost of living, a new class of underinsured patients is having an equally outsized impact on organizations’ bottom lines.
Many of these individuals are classified as ALICE — Asset Limited, Income Constrained, Employed. ALICE households earn above the Federal Poverty Level but still struggle to make ends meet. And they’re not an exception: ALICE represents one in three U.S. households and has grown twice as fast as all others since 2010.
While they often can cover essential expenses like housing, food, and childcare, a single high-cost medical bill can push them into financial distress. They earn too much to qualify for federal aid but lack the discretionary income to absorb unexpected costs.
Effectively, these underinsured ALICE patients are “self-pay in disguise.” When they show up in the Emergency Department, provider systems classify them as “commercially insured” and “employed,” assuming high collectibility — but from an affordability standpoint, they have the same capacity to pay a $5,000 hospital bill as an uninsured patient.
The reality is that this population has very unique needs, and "commercial" is no longer a reliable indicator of universally good insurance. The center of gravity has shifted, and our classification systems haven't caught up.
Rethinking the traditional payer mix
The consequences of this misclassification show up in how providers communicate with patients. If ALICE patients are so different from traditional commercially insured patients, why do they get the same one-size-fits-all billing communication?
Providers need more detailed segmentation to understand and meet the needs of their individual patients. At Cedar, we group patients by bill size and days in the billing process, breaking them into four quadrants:
Low bill, fastest to collect
Low bill, longer to collect
High bill, faster to collect
High bill, longest to collect
Applied to a Cedar health system client,3 only a little more than a quarter of patient dollars fall into the “easy and fast” category — digitally engaged patients with good insurance and manageable bills. These are your $20 copays, patients who pay online within 30 days.
That means three in four patients need specialized collection strategies:
14% are small bills but long to collect, often digitally disengaged or ALICE patients, juggling multiple priorities. They need micro-payment plans and gentle, persistent outreach.

23% are large bills, moderate collection time, likely traditional HDHP patients. They need easy access to HSA/FSA funds and coverage verification.

34% are large bills, longest to collect, typically self-pay and health-crisis patients, or those stuck in denial loops. They need Medicaid enrollment and charity care navigation, third-party financing, and pharmacy copay assistance.
And the opportunity is massive: $123 billion sits idle in HSA accounts, 97% of eligible patients aren’t using $5 billion in medication assistance, and 17% of eligible adults churn out of Medicaid due to procedural reasons and administrative barriers.
The programs and funding exist to help. Patients just don't know how to access them, and a one-size-fits-all approach will never bridge that divide.
From transaction to navigation
We need a paradigm shift—away from systems built for the past, which treated all patient financial needs the same, toward systems that start with affordability.
For decades, patient billing was transactional: send a statement, wait for payment, follow up if overdue. This approach assumes patients can and will pay, treating every obligation the same. But when an ALICE patient is staring down a $10,000 hospital bill, a simpler statement or faster checkout isn't just irrelevant. It’s absurd.
Or put more bluntly: providers have gotten really good at asking patients to pay bills they can’t afford. The next step is navigating them to resources that are scattered across systems, disconnected from the patient experience, and nowhere to be found in EHR patient portals.
Think about GPS. In the past, everyone had the same map, and wrong turns meant getting stuck. Today, GPS is personalized: it reroutes, anticipates obstacles, and nudges you on when to leave. Billing should work the same way.
That's why we recently launched Cedar Cover: it acts as a financial GPS for healthcare affordability. Cedar Cover presents personalized pathways directly in the billing experience, matching patients’ financial situations with resources they may qualify for. We anticipate challenges, suggest alternate routes, and guide patients to care they can realistically manage.
By intelligently connecting patients to the right solutions at the right moment — whether that's Medicaid enrollment and renewal, medication assistance programs, or denials resolution workflows — Cedar Cover is the digital safety net that catches patients who would otherwise be written off. Leading healthcare organizations like Novant Health, Baystate Health, ApolloMD, and The Iowa Clinic are already using Cedar Cover to transform how they approach patient affordability, and the impact is real.
Just ask Katie, a Novant Health patient who was overwhelmed with the cost of her breast cancer treatment. Through Cedar Cover, she was connected to medication assistance programs she wouldn't have otherwise known existed. And she's not alone: so far, grants awarded to eligible patients have averaged more than $12,000 per approved application.4 Watch Katie share her story in her own words.
Stories like Katie's remind us what's at stake. Patients are already weighing affordability at every turn, deciding whether they can access care, skip a dose, or delay treatment. The question for providers: what if affordability were the starting point for every patient interaction, not something to react to after the bill is sent? With Cedar Cover, it now can be.
References
Cedar. (2025, February). Average patient responsibility without insurance coverage as a percentage of total patient responsibility in H1 2024 across a sampling of Cedar health system clients.

Cedar. (2025, February). Growth in average patient responsibility without insurance coverage as a percentage of total patient responsibility, H1 2023 vs H1 2024, across a sampling of Cedar health system clients.

Cedar. (2025, October). Patient accounts receivable segmentation analysis at a large health system client.

Cedar. (2025). Based on January to July 2025 medication assistance results for one Cedar health system client. Performance not guaranteed.