What’s the Difference Between “Payer” and “Payor” in Healthcare?
Highlights:
- Payer is the standardly used term and dominates usage across both media and search engines
- Payor, while technically correct, is used less commonly and is often seen in more formal contexts
In the healthcare industry, terms like payer and payor are both used to describe entities responsible for financing or reimbursing the cost of health services. These can include insurance companies, government programs (such as Medicare and Medicaid), or even employers offering health plans. But is there a difference between payer and payor?
An agent noun in Latin form from the word “pay,” payor began appearing in text in the early 1800s and skyrocketed in the 1990s before seeing a sharp downturn shortly after. Generally seen as the more formal term, payor is often preferred for use within legal documentation. Examples of this can be seen with organizations such as PayrHealth and the American Arbitration Association, which only use payor within healthcare contexts as opposed to the -er spelling.
Payer has a much longer and more robust history, having first been used in the late 14th century. The term originally referred to a person who paid wages and then later became used in regard to taxes. Stemming from the Old French term “paiere,” the term also has roots in the Germanic origins of the English language, using the “-er” suffix, which is typically applied to someone performing an action, such as a driver or dancer. The term is the more widely accepted spelling and can be seen in academic settings and across industries.
The first use of payer within a health insurance context is difficult to pinpoint exactly, but the term started to gain prominence within healthcare in the mid-to-late 20th century, particularly with the growth of managed care and the introduction of health maintenance organizations (HMOs). As the healthcare industry started to adopt more complex financial and administrative systems for managing care and insurance payments, the term eventually became a standard. Today, the same trend continues as the health insurance sector leans heavily toward using payer to describe relationships between insurance providers and patients or healthcare providers.
When comparing the two terms for both search interest and media coverage, payer leads by a large margin and has shown large upticks within both areas. The search interest spike in 2009 likely coincides with the bubbling conversations around the Affordable Care Act (ACA), which was signed into law in 2010. Also known as Obamacare, the ACA faced some conflict, including the Tea Party protests, relevant to payers who were preparing to navigate new payment structures and a substantially expanded insurance population. 2017 saw a similar surge in search interest when there was significant activity surrounding efforts to repeal and replace the ACA.
Payer’s performance in media has been increasing at a quicker rate over the past few years, with a considerable peak in October 2023. The term had 66% more coverage that month than its next-best performing month, likely a result of various end-of-year activities across the industry, including the Centers for Medicare & Medicaid Services’ (CMS) issue of a final rule centered around timeliness in reporting, penalties, and compliance monitoring for payers. This was also the month that Governor Gavin Newsom signed SB 770, which was seen as a step toward a single-payer system that would cover all Californians.
Similar to media outlets and search inquiries, databases such as PubMed and Google Scholar signal a preference for payer among researchers and academic scholars, as shown by the contents of their journal articles and research reports. For instance, a search within these databases reveals that payer appears an average of 48 times more frequently than payor across articles. Additionally, when analyzing the articles published by the Journal of the American Medical Association (JAMA), a site-specific advanced Google search of the journal surfaces 5,437 results for payer but only 233 results for the -or spelling, a nearly 96% decrease.
Another popular alternative in the healthcare industry is “health plan.” When comparing Google search trends and media, this term proves to be the sector’s preference among the general public, but not among journalists. This is an indication of the preference industry-specific journalists have for using more specialized terminology that is not as commonly used among consumer audiences. Payer’s lead in the media is also unsurprising considering those reporting on insurance topics outside of healthcare also use the term. Although all three terms see similar trendline activity, for both search interest and media coverage, payor still comes in last place, signaling its lack of mainstream recognition.
The preference for payer over payor might come down to simplicity and standardization, along with influence from the introduction of major policy frameworks like the Affordable Care Act. Across hundreds of years, healthcare terminology has become increasingly complex, and the trend toward using payer more frequently in official healthcare documents, online search queries, and publications likely reflects a desire to reduce confusion and create consistent language across the industry.
Due to the industry’s more established usage of payer, it’s often the safer bet for most healthcare communications. For organizations looking to create consistency and clarity in messaging, particularly in patient- or provider-facing materials, payer is the term to go with.
