Saving Healthcare: Cutting Hospital Costs

Eliminating “workflow” thinking, automating work distribution and cost accounting along with the entire health insurance process

Introduction

Normally we discuss healthcare and healthcare finance and today is no different.   Today we will discuss one of the four planks of Sentia’s plan to completely rethink healthcare finance: hospital spending.

The Situation

Large hospitals, and particularly hospital systems, have leverage on the big payers in that they have large patient populations and can dictate price and policy for reimbursement.

Since smaller hospitals and practices don’t have this population and thus the power to dictate terms, they have to be content with what they are offered.  That means that the small, rural hospitals are quite literally paying for the profits at the big hospitals and hospital systems.

This means that everyone who ever gets healthcare in the US is paying for the big hospitals and hospital systems waste, graft and profit.

The Logical Conclusion

With rampant cost inflation, the entire system will collapse under its own onerous, costly financial weight. Smaller rural and independent hospitals and practices will be less and less profitable until the only options available are shut down or sell out to the big systems.  This will either leave huge swaths of rural america without care at all or with care that is eyewateringly expensive from the big wasteful systems.

The Short Answer

We, Sentia, streamline and automate the rural/small independent hospital by:

• Providing a data driven EMR.
• Integrating the coverage into the EMR.
• Paying for covered procedures as they are documented.
• Paying a reference-based price, we suggest 150% of Medicare, but ONE price.
• Separating the cost of the coverage service from the cost of the risk.
• Charging $10/month for the service, plus the true cost of the risk.
• Providing an ERP style Hospital/Practice Management system to run the enterprise efficiently
• Providing a queueing system that eliminates linear, ‘workflow’ thinking

Let’s take an in depth look at these below.

The Slightly Longer Answer

Data Driven EMR

Language is not adequate to document patient care.

• Language is imprecise
• You can’t relate symptoms to diagnoses or outcomes
• Language leads to ‘code sets’ in an attempt to codify things that can’t be described
• Nobody reads your notes

Move to a discrete value based documentation system. Discrete values are the ones that you can pick out of a drop down list box. They are generally kept in a Relational Database Management System (RDBMS) for easy, fast search and retrieval. This will allow us to relate (that’s the relational part) complaints to symptoms to observations to lab results to diagnoses to treatments to outcomes. That simply can’t be done with language or any of the current batch of EMR systems.

Further, Our universal nomenclature supports all specialties in one seamless platform, eliminating the need for 130+ fragmented, siloed solutions needing integration.

Integrating Coverage into the EMR

Since Sentia wrote and provides the data driven EMR, we can house the patient’s policy and show you right in the Patient Encounter screen what is covered, what is not, and for how much. Without the need for a third party insurance company we eliminate sales/brokers/agents. skyscrapers in every major city and their associated costs. 

Pay for Covered Procedures as they are Documented

That means that we can detect and pay for procedures performed in real time, automating the entire health insurance industry, verification, adjudication, pre-authorization, denials, delays and eliminating their associated costs. The NIH documents that AI-driven automation in claims processing can reduce operational expenses by up to 35%.  This is not AI, but rather real, deterministic automation and eliminates claims altogether.  If automating claims saves 35%, imagine what eliminating all claims will save.

Pay a Reference-Based Price

Reference based pricing means that we pick a reference, like the medical consumer price index or Medicare, and adjust it as a percentage to fit our needs.  We think that 150% of medicare would be enough to cover costs and provide adequate profit for everyone.  We offer the same price to everyone obviating the need for  insurance networks and  rate negotiations and eliminate their associated costs.  Reference-based pricing has proven to cut spending by 17-21%.

Separate the Cost of the Coverage Service from the Risk.        

You’ll notice that we say coverage, to differentiate ourselves from legacy insurance. What we mean by separating the risk from the coverage service is this: we calculate the cost of the risk per procedure per month and show you that calculation.  We add up the risk for all the various covered procedures and show you exactly how we arrive at the dollar values.  The cost of the service is a flat $10/month to house and maintain your data.  That means we replace your old, legacy insurance company and everything that they make you and your doctor do with a $10 per month subscription fee.  

ERP Style Hospital and Practice Management System

An ERP system basically tracks everything. The thing we are after is to produce a Profit and Loss statement for individual employees, patients, procedures, rooms, capital equipment, consumables, or anything else we can think of.  This is all one report, just swapping out the data source in the background, so it is easy to produce with the data-driven EMR.  This makes cash leaks and inefficiencies easy to identify and eliminate.

Queueing System

Most hospitals have a rigid “workflow” that assigns one nurse to four rooms and one nutritionist to a floor, and several techs to a wing, et cetera.  Most new EMR systems are rejected because they don’t support this kind of linear, workflow thinking.  The thought is that the patient will get to know and trust their staff.  The reality is that patients don’t and in many cases can’t care about staff or even doctors.  Further this linear, “workflow” thinking leads to staff idle and gossiping or “charting” while there are patients in the waiting room and on gurneys lining halls, waiting for a room or bed.  A better use of resources is to assign tasks and human resources to queues. The oldest or most urgent task goes to the top of the queue to be assigned to the staff member idle the longest.  No more will there be a lot of gossip and “charting.”  There will be real work, done in a timely manner and nobody has to “just know” what the most urgent task is, it is assigned specifically.

This also allows real, evidence based, efficacy reports.  The administration can point to tasks accomplished and their complexity as real, concrete indicators of productivity.

Conclusions

Cutting hospital and practice costs are one of the four planks of Sentia’s plan to save healthcare.  We have shown a way to reduce costs, increase productivity, report on waste and inefficiency and assign work in a rational, well thought out manner instead of one nurse for four rooms.

To accomplish that, we showed how to automate and streamline the health insurance process and allow rural hospitals and practices to offer their own direct pay coverage.  That means that the rural hospital will partner with primary and ambulatory care facilities to offer Direct Universal Care (DUC) and offer anything the patient needs while circumventing the big payers altogether.  This eliminates medical coding, verification, adjudication, pre-authorization, denials, delays, insurance networks, rate negotiations, sales/brokers/agents, money for a third-party EMR, skyscrapers in every major city, 400,000 insurance company employees, all the monkey business and reduces cost by about half for the patient and about a quarter for the hospital. 

It also eliminates Epic/Cerner AND BUCAH.

With enough time and adoption, self insured patients will begin to flock to the rural hospitals and practices, just minutes away,  on price alone.  Self insured companies will begin to strike deals for group policies based on cost savings alone. Eventually the big hospital systems will begin to feel the pinch of lost revenue and either adopt our system, be put out of business or be acquired by Sentia and run in a more efficacious, efficient manner.  

We have shown a way to control hospital costs in a way that has not been done in this industry, but with technology that is used in almost all others.

While this only shows the practice or hospital where the money goes, and it is up to them to fix the problem, we here at Sentia will be looking at these financials and ‘helping’ to report them to the government and public in the case of publicly traded and not-for-profit systems.  These two categories include the vast majority of hospitals and are where the vast majority of the waste is.

We have built a comprehensive health information system to keep the patient healthy and on the right track with the ability to incentivize healthy living. This system includes the automation of the health insurance industry completely.  We have designed and are currently building the ERP style PM system.  Implementing this system should be fairly simple and will completely revolutionize the way healthcare is paid for, saving countless lives. We have shown a way to use this system to make the best healthcare system in the world also the most efficacious and the most affordable.

If you liked what you read contact us here, on our site, SentiaHealth.com, our parent company SentiaSystems.com, or send us an email to info@sentiasystems.com or info@sentiahealth.com