Don’t Play the Big Payers Game

Claims begin the games.  Don’t participate.

Introduction

Normally we talk about healthcare and health insurance in this space and today is no different.  First we are going to define the problem, and then we will outline a way for you or your medical practitioners to stop playing the big insurance game of denials, delays, preauthorization, copays, coinsurance and deductibles.  We will discuss how to eliminate all the things they force you and your practitioner to do along with the associated expenses.

The Situation

Insurance had been around for hundreds of years, since the 16th century in its current form and for over a thousand years in one form or another.  There has been little change in all that time, with the exception of the spreadsheet moving behind the screen of the monitor.  

 Here are a few things your insurance company does to keep you from using your insurance:

1. Prior Authorization (Pre-Cert)

1. Require approval before procedures, imaging, medications
2. Creates gatekeeping bottleneck
3. • Delays/denies care

2.  High Deductible Health Plans (HDHP)

1. Shift costs to patients with $1,500-$10k+ deductibles
2. Fear of bills makes people avoid care

3. Narrow Networks

1. • Exclude specialists/hospitals
2. • Force to use cheaper in-network providers

4.  Prior Authorization Denials

1. • Deny 15-30% of requests (industry average)
2. • Appeal process is burdensome
3. • Force patients to give up

5. Step Therapy

1. Require trying cheaper drugs first
2. Insurance won't cover brand until generics fail

6. Usual & Customary (UCR) Limits

1. Pay only "customary" rates
2. Balance bill patient for difference

7. Pre-existing Condition Exclusions (now limited by law)
8. Lifetime/Annual Maximums

1. Cap total benefits
2. Stop paying after hitting limit

9.  Co-pays & Co-insurance

1. Ongoing cost-sharing
2. 20-40% patient responsibility

10. Delayed Payments

1. 60-90 days to pay providers
2. Creates cash flow issues for practices

We all know what the problems are however, every author in the land is writing about what the problems are.  What is the eventual outcome?

The Logical Conclusion

Something has to give.  With the Medical industry consuming 17-18% of the Gross Domestic Product in 2024 and a 30% average rate hike in 2025, the entire complex system is set to collapse.  First, people without employer sponsored health insurance will just opt out of the system.  The second consequence is that employers will start either not offering health insurance or requiring employees to contribute more and more until they opt out as well.  At this point, the big insurance companies and the large hospital systems they support at 400-700% of Medicare will start to go bankrupt and shut down as fewer and fewer participants struggle to finance the healthcare of a not-decreasing population.  This will trigger a US and therefore global recession/depression and cost millions of lives.  

The Short Answer

There are two ways this plays out:

1. Let Them Collapse

Getting rid of the big insurers and the big hospital systems they support at the expense of everyone else and costing millions of short term lives is not a bad trade to get rid of these murdering, thieving entities.  In the long run as the system recovers from the collapse, the  prices will stabilize at a far lower rate and the fatcat bizdiots will starve.

The problem is that two things are infinite: human stupidity and greed.  It will take about ten years for the system to recover and be at a break even point for all those lives lost due to lack of healthcare when collectively we forget what happened and the cycle starts over.

We see this economic cycle everywhere.  There are five minutes of prosperity followed by a year or two of hype about some nonexistent product, like mortgage derivatives, or the dotcom bubble or big data, or yes, AI and then the walls come crumbling down. Then for the rest of the decade we worry and struggle and yes, die to feed the fat cat bizdiots.  Another decade passes and we do the same dance all over again.

2. A Better Mousetrap

Someone comes along and invents a way to completely automate the health insurance industry and cut out the costs incurred by the stupid, fat cat bizdiots.  Costs that come from 11-figure (yes tens of billions, $54 billion in 2025) profits, and big buildings in every major city in the US and 400,000 employees and associated infrastructure.

The Slightly Longer Answer

Let’s explore the better mousetrap scenario.  Sentia has designed and built a four-part solution to this problem.

Data Driven Electronic Medical Record

The first of its kind, Sentia has produced a fully data-driven Electronic Medical Record (EMR) that does not require practitioners to type their notes.  The EMR is based on the Unified Medical Language System (UMLS) a kind of one-stop shop for all medical nomenclature.  This includes the SNOMED_CT, the Systematic Nomenclature of Medical Terms and Clinical Terms, the VSAC, the Value Set Authority Center and RxNorm, the national drug database.  The SNOMED is adequate to document any patient encounter with over 400,000 concepts.  The RxNorm needs no explanation and the VSAC is a way to translate down to current ICD/CPT/Epic/Cerner and other proprietary, partial “code sets”

Sentia has imported these UMLS raw, flat files into a real database with indexes and made it queryable, and gives us the ability to document any care with this nomenclature, meaning data, instead of handwritten or hand typed notes.  We will discuss the benefits of this later.  For now this obviates the need for a third part EMR.  Epic now has installations that cost upwards of a billion dollars.  That doesn't include the yearly maintenance agreement that is traditionally about 20% of the purchase price.

Integrated Coverage

Since we have the Data Drive EMR, we don’t need medical coding to turn notes into data.  In fact, as the insurance company, Sentia can and will pull procedures performed out of the EMR and pay for them in real time at 150% of medicare.  No denials, delays, preauthorization, networks or any of the other ten things above that the big payers use to limit access to care.  That cuts about half from the cost of healthcare of the patient.  

Integrated Health and Wellness

As a health Risk Assessment, or physical is administered the system has the capability to analyze lab results and clinical measurements and prescribe patient education based on those results.  Having the knowledge is not the trick.  The goal is to change behavior.  In an effort to incentivize behavior change Sentia can offer a 15% discount on health coverage.  When the patient education is internalized and translated in the healthier behaviors, the lab results and clinical measurements will improve.  At that point  the discount will kick in for demonstrate behavior change.  

Avoidable, behavior based, chronic disease accounts for almost 90% of medical spending in the US.  The average mortality due to avoidable, behavior based, chronic disease is 335 per 100,000 in the US.  The OECD average is 226, about ⅓ lower.  When the coverage incentives do their magic, what means cutting almost 30% out of the $5 trillion plus bill for chronic disease care or $1.5 trillion.

Practice and Hospital Management

Large hospitals just don’t care what costs are.  They can always negotiate a new rate with the big payers because they have control of a large swath of a large patient population.  It is not unusual for a big hospital to command 400-600% (or more) of Medicare reimbursement rates.  They don’t realize that the big insurers must pass that cost on to the patient.  

Small, independent hospitals struggle to get 125% of Medicare and sometimes fail.  This causes them to struggle to even be a viable economic entity.  Not-for-profit still has to make payroll so that isn’t an argument either.  This means that quite literally the small hospital is subsidizing the large hospital systems.

The answer is to implement a low cost, enterprise Resource Planning (ERP) style Practice/Hospital Management System (PHM).  this system tracks all economic activity in the hospital via a barcode system, right down to the single band-aid or acetaminophen.  That allows the administration to run a profit and loss statement on any employee, procedure, room, piece of equipment, consumable, wing or department or any combination of those things, in order to eliminate cash leaks.  Never again will we wait until the end of the month to see if we have any money left over.

Part and parcel of the PHM is a work queueing system.  Instead of assigning four nurses to 16 rooms and watching half of them stand around while the others can’t keep up with demand, we implement a kind of assembly line where the oldest/most urgent tasks are assigned to the longest idle worker.  We find that 15 rooms can easily be handled by four nurses, increasing capacity and decreasing costs. This PHM will save the hospital a quarter if no other system is implemented and make many of the rural and small hospitals viable for the first time in a decade or more.

Deployment Options

Sentia as the Coverage Company

Sentia can be the coverage carrier.  We don’t call ourselves payers or insurance. The patient signs up with us and pays us for the actual risk incurred plus a $10/month data management fee.  We do everything the old, legacy payers do that matters, that is, pay for your care, and nothing else.  That nothing else is where the 50% comes in.  our insurance company only returns about 50% of your premiums as benefits.  

Sentia as the Captive/TPA

Sentia can be the Third Party Administrator (TPA) or Captive coverage carrier, allowing employers to offer their employees a low cost, high quality, customizable for the individual coverage plan.  The fully self-insured company pays us the $10 data management fee and then receives an itemized bill for each practice or hospital their employee went to for medical care.  

Sentia as the Direct Universal Care Facilitator

Sentia can allow your hospital to offer their own coverage.  YOU pay the hospital the same subscription fee, $10 plus the actual cost of the risk monthly, and you go to either their facility or a partner practice for all your medical care.  Again this should be about half what traditional insurance charges.  For procedures not offered, or injury sustained outside the home geographic region, they (and we, the employer and Sentia) will pay the cash price.

Conclusions

Together, the four systems detailed above will cut over 75% of the cost from healthcare.  Half comes from integrating and automating coverage.  25% comes from automating and incentivizing healthy living.  

I'm sure the astute noticed that we left 25% on the table.  That quarter simply makes small hospitals viable.  Once they are stable and the population finds out that having coverage at a smaller hospital is half the cost, the large systems will be forced to lower their prices or go out of business.  Further, as the Sentia systems gain acceptance, we will put the big insurance companies out of business along with Epic, Cerner, Athena and all the other vendors with several  million  to billion dollar installations

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.

It also makes your facility leaner faster, more efficient and more profitable.

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.

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.