Health Savings Accounts are not the Answer

Sorry Donnie, you are barking up the wrong tree

Introduction

Normally we discuss healthcare and health insurance in this space and today is no different.  Today we are going to discuss President Trump’s plan to ‘just give it to the people.’  In this article we will discuss the why and the how of this proposal and why it is not even moving the needle on making access to healthcare easier and more affordable.

Trump’s “Great Healthcare Plan” Proposal

Basically the entire plan is to pay the money directly to consumers; take the money and “buy your own healthcare."  There is some other verbiage about prescription drug pricing, but any analysis will show that drugs are only about 10% of the problem.  The mechanism for this disbursal of funds is into a health savings account (HSA).  

The Situation

Healthcare Finance

Health care is too expensive for the average US citizen.  The median amount in an emergency fund in the US is around $1000.00.  If Americans could save for a medical emergency, they would.  This is why we have insurance in the first place.  People in general can’t and never have been able to pay for healthcare.  That is why we need insurance to spread the risk.  And that is all well and fine except that now health insurance swallows about half your premium dollar and only returns the other half as benefits.  If patients could finance their own healthcare without help, they would.  They can’t.

Consumers Want to be Left Alone

The same way that nobody enjoys going to the doctor, nobody wants to shop for health insurance.  Thinking that giving people money to “spend on healthcare” is naive at best and criminally wrong at worst.  Nobody wants to be forced to compare prices and doctors.

Patients Don’t Want to Shop

Part of being left alone is not being forced to shop for your own healthcare.  If medicine is a commodity and it is, it has to be, then why shop at all?  The fit of the doctor to the patient is going to be far more important than price.  Consequently, if a patient is going to shop, it is for a suitable doctor not a price.

Adding HSAs will not Encourage Shopping

If patients don’t want to shop, they certainly aren’t going to shop MORE just because they have money to spend directly.  Having more money encourages us to shop less.

Government Never Reduced the Price of Anything

Throwing money around, creating inflation in every facet of the economy, and quite literally paying the big insurers has zero chance of reducing costs or even working as well as the ACA.

Transparency is a Moot Point

There is much talk of transparency in healthcare and has been for years.  However, given that patients want to be left alone and that patients don't want to shop for healthcare, transparency is largely useless, outside of the monthly premium amount.

The Logical Conclusion

Most people get their health insurance at a job.  The HSA is only going to help them with deductibles and then it is going straight into the coffers of the big insurance companies.  Remember that until deductibles are met, you get zero benefit from health insurance. People without health insurance will be able to afford primary care, but it isn't that expensive to begin with and they aren’t covered for a more major event, like a major surgery.  The money will then end up going to the big insurers.  This same problem applies to people who purchase their insurance independently: Big deductibles, money goes to insurers.

The “Great Healthcare Plan” is just another way to funnel tax dollars to big insurers.

The Solution

The Short Answer

Do nothing. The world will be a better place if we don’t give tax dollars directly to consumers in the form of HSAs, that will end up in the hands of big insurers in any case.

The Slightly Longer Answer  

Blow it all up and start over.  Allow me to explain.  Sentia has automated everything that isn’t “provide your care.” We, as a new breed of insurance company, offer the insurance service for a flat rate $10 per month.  The risk is a separate thing and kept in different accounts to pay for the healthcare of the population.  

How do we do this?  We provide a data driven EMR to hospitals and practices, with integrated coverage.  We pay a reference based price, we suggest 150% of medicare, but we pay one price to everyone.  We separate the cost of the service from the cost of the risk.  We charge $10/month for the service.  You, the patient, already pay for the risk.

That 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, hundreds of thousands of employees, all the monkey business and reduces cost by about half. 

It also eliminates Epic/Cerner AND The big insurers.   

We put health insurance companies, with their silly manual processes and requiring work of external entities, out of business, and we are going to show you how, right here and right now.  First, you don't want greedy, profit-above-everything business people, bankers, in charge of your healthcare.  The Commonwealth Fund identified several problems in their paper “U.S. Health Care from a Global Perspective, 2022: Accelerating Spending, Worsening Outcomes” That basically boiled down to two problems:

• Health insurance is too expensive
• Patient education is largely ignored

When we address these two problems, along with streamlining and automating the process, we fix the US healthcare system.

The Concept

Health insurance companies have two inputs: a patient and a procedure, and one output: a check to the practice for the procedure performed.  That is it.  If we automate the process between the input and the output, then we have eliminated everything the insurance company does.  The only other thing we will address is the way to educate and incentivize the patient on how to live a healthy lifestyle.  That would result in fewer claims, causing reduced rates for everyone.

The Execution

We at Sentia have designed and developed a solution that completely automates health insurance.  We provide the Electronic Medical Records (EMR) system to the practice, and when they document a patient encounter, we pull out the procedures performed and pay for them in real time.  There are no networks, no adjudication, no denials, no medical coding, no big buildings, no people and most importantly, little to no cost once the system is built.  For this service we charge $10 per month plus the actual cost of the risk.  According to iii.org, your health insurance company only returns 53% of your premiums as benefits.  We can return the 47% they waste to the patient, in lieu of the previously stated $10 per month, plus the actual cost of the risk.  That 47% does not include all the things that practices and hospitals have to do to actually coerce the payers to, well, pay. There are other efficiencies we will explain, and a way to manage chronic, behavior-based disease.

Patient Education

Also remember that treatment for chronic, behavior based disease consumes 84%, or $3.7 trillion, of the $4.9 trillion spent on healthcare in 2024 in the US.  The average of avoidable deaths per 100,000 in OECD countries is 225.  In the US it is 335, or about 1/3 higher.  If we could bring the US average down to the OECD average, we would save about $1.34 trillion.  

That is a further reduction in costs of about a quarter.  

How do we do this?  We offer financial incentives for people who live a healthier lifestyle as measured by our built-in health and wellness system.  This system takes into account measurements taken at the primary care physician’s practice, like height, weight and  blood pressure, plus things screened for in blood work.  Additionally, there is a mental health screening right in the wellness package.  This system looks at all these factors and then prescribes patient education based on the results. At Sentia, this is part of the system. We can tell when the patient opened the patient education and how long they spent reading it, and offer a small discount for simply doing so.  A larger, double digit, discount is offered for following the education, as evidenced by better results in the patient’s health assessment.

The Finances

Let’s look at big round numbers.  Let’s say we can save the patient about half on their health insurance up front.  Let’s say that we save the people of the US another 25% by being educated about healthy living and getting to the average OECD deaths per 100,000.  We know that eliminating medical coding, providing a free EMR to the practice and putting compliance and efficacy reporting into that system will save each and every practitioner an additional $77,000 per year that they currently spend.  That, however, is only about 2% of the total, so we’ll just give that to the doctors as either a raise or hire more doctors and decrease the workload, while we still have some doctors left.  If we total all that up, we see about 75% in savings.  That means that we would have not only the best healthcare on the planet but also the cheapest.

Conclusion

We have shown a way to revolutionize the way medical records are thought of, executed, used and searched.  This eliminates Epic, all the legacy EMR vendors and makes research a simple pick and click operation, saving millions of lives.

We have shown a way to integrate health coverage into the EMR.  The practice or hospital gets paid as the practitioner documents patient care.  That 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, hundreds of thousands of employees, all the insurance monkey business and reduces cost by about half. 

It also eliminates Epic/Cerner AND the legacy insurers.

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, eliminating more than half the costs by Sentia as the coverage company, employer based captive or TPA or by direct payments to doctors and practices.

Here are additional points detailing the costs incurred by the legacy insurance companies that you pay currently, in addition to wasting about half your premium, according to Grand View Research and current as of 2023 and that Sentia would eliminate completely:

Medical Records:

• The average practitioner spends $35,925 annually on electronic medical records
• The average patient spends $106 annually on electronic medical records
• The average patient encounter or visit cost for electronic medical records alone is $32

Medical Coding:

• The average practitioner spends $20,286 annually on medical coding
• The average patient spends $60 annually on medical coding
• The average patient encounter or visit cost for medical coding alone is $18

Compliance and Efficacy Reporting:

• The average practitioner spends $17,165 annually on compliance and efficacy reporting
• The average patient spends $51 annually on compliance and efficacy reporting
• The average patient encounter or visit cost for compliance and efficacy reporting alone is $15

Totals:

• The average practitioner spends $73,376 annually on completely avoidable costs
• The average patient spends $217 annually on completely avoidable costs
• The average patient encounter or visit cost for completely avoidable costs alone is $66

Yes, you read that correctly: $66 per visit. That is probably more than the practice makes on the average encounter.  There must be a better way. There is a better way and Sentia has it.

Remember also that these costs are over and above the 50%+ your insurance company wastes or shoves into their pockets.

We have designed and are building an ERP style practice/hospital management system that will pinpoint and eliminate cash leaks and inefficiencies in enterprise medical facilities. Implementing this system should be fairly simple and will completely revolutionize the way healthcare is delivered and 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.