The Healthcare Finance Collapse is Imminent

This is the beginning of the end for health insurance, and how to replace it

Introduction

Normally, we talk about healthcare and health insurance here and today is no different. Today we discuss the coming collapse of the health insurance and health finance industry. We will discuss and document the rejection of the health insurance industry, what that means for patients still with the big carriers and for those who have left them.  

The Situation

 In 2026, two trends that have been building for decades are reaching critical mass. They are not unrelated - they are the same story seen from different angles. First, employer-sponsored health insurance is unraveling. According to the KFF 2025 Employer Health Benefits Survey, only 54% of small businesses with 10-49 workers offered health benefits in 2025, down from 78% in 1999. For firms with 10-199 workers, the rate dropped from 81% to 59% over the same period. The average family premium now costs employers $26,993 per year - a 26% increase in just five years. Cost increases are accelerating. Mercer's 2025 National Survey projects 9% increase in 2026 if employers take no action - the highest since 2010. The small group market is seeing a median 11% increase in premiums, with about 10% of insurers proposing 20% or higher increases.  Small businesses aren't dropping coverage out of malice - they're dropping it because the math doesn't work. A $27,000 annual premium for family coverage is the equivalent of buying a small car for every employee, every year. Enhanced ACA subsidies that helped 20 million Americans afford coverage were originally introduced in 2021 as temporary COVID relief. They were extended twice, but finally expired on January 1, 2026. For years, these subsidies effectively paid for much of patients' coverage - now they're paying the full cost themselves. The Urban Institute estimates 4.8 million people will drop coverage in 2026 because they can no longer afford to pay for their own care.  KFF projects the cost for subsidized enrollees will more than double.

Second, rural hospitals are dying. The Chartis Center for Rural Health reports that 46% of rural hospitals are operating at a negative margin.  432 rural hospitals are vulnerable to closure. 18 closed or converted in the last year alone. This is not a technology problem. It's not a policy problem. It's an economic collapse - the direct result of a system that was built on the assumption that insurance would always pay, that employers would always provide coverage.

The Logical Conclusion:

The employer-sponsored insurance model is dying. Small businesses can no longer afford $27,000 per employee. Rural hospitals can no longer survive on declining reimbursements. The ACA marketplace is imploding as subsidies expire and premiums more than double. These are not separate problems. They are the same problem - the healthcare financing system that the United States has relied on for decades is reaching the end of its lifespan.

Worse, as patients flee the collapsing system, the late adopters and those not paying attention will pay more and more since the risk is spread over an ever decreasing pool of those that still find insurance cheaper than acute care.  This will literally become a death spiral  

The healthcare finance system is collapsing because it was never sustainable. It was always about moving money, not delivering care. Every dollar that goes to insurance companies, PBMs, and hospital administrators is a dollar that doesn't go to doctors and patients. Small businesses are dropping coverage because $27,000 per employee per year is unsustainable - and they will keep dropping. Rural hospitals are closing because insurance reimbursements don't cover costs - and that will accelerate. The ACA marketplace is imploding because subsidies expired and premiums doubled. The solution isn't patching the old system with more technology, better AI, or better policy. The solution is removing the broken system entirely. 

The current system was built on assumptions that are no longer true: that employers would always pay, that insurance would always cover, that the middlemen would always make the math work. This isn't a glitch. It's not a temporary setback. It's the beginning of a collapse.

The Short Answer

The system is broken beyond repair.  Replace the entire broken mess by automating the only thing they do that is worth doing: paying for your healthcare.

The Slightly Longer Answer:

How do we automate the system?  It is actually amazingly simple

The Coverage Company Provides a Data Driven EMR

Electronic Medical Records Systems (EMRs) have gotten two things wrong.  You can’t document medical care with text or language, and you can’t support specialties.  It turns out the solution for both these problems is the same one.

Medical Care can’t be Documented with Text or Language

In the early 70s Judy Faulkner provided the forerunner of the Epic billing system.  It allows doctors to keep their handwritten notes, just typed instead of written and behind the glass of the monitor instead of in a file cabinet.  Those are the differences that Epic makes: typed and behind glass.  That is it.  If we document the encounter with data, that is, a nomenclature that is universal enough to document any situation, anywhere at any time then we gain several advantages.  

First, we can do searches.  By relating symptoms to lab results to observations to diagnoses to procedures to outcomes, we can do a search for anyone with a particular diagnosis, or a particular procedure or a set of symptoms.  There have been innumerable medical dramas about some doctor pulling his hair out over a correct diagnosis given a list of symptoms.  With a data-driven system  you pick out your list and get back a list of cases with positive outcomes that presented with those symptoms.  You can’t do that with language.

Second, you can do aggregations.  Let’s say that you have several patients that get diagnosed with aplastic anemia (thanks Robin Cook for the novel Fever) in a small geographic area.  Aggregation can show you these cases and even plot them on a map exposing illegal dumping of benzene into the water supply.

Medical Records Can’t be Built for Specialties

Here is the other structural problem that every other EMR vendor on the plant has gotten wrong.  There are 130+ specialties in medicine and every vendor write a separate application for each, or only covers one or maybe two.  That means thousands, or even tens of thousands of programmers and 130 different code bases to manage and maintain.  Each team does something slightly different and you can’t just switch between teams.

To the administrative trainwreck of 130+ applications that all do the same thing, add the training nightmare.  Epic and Cerner require about six weeks of training per module; a module is basically a specialty.  That means that nobody in the entire universe has a real handle on what these programs are actually doing overall.  The mind boggles at the inefficiency and sheer procedural and architectural blindness that led these huge organizations to these unsustainable positions.  After Oracle bought Cerner they decided to do a complete rewrite of the system with no architectural review, just 130+ text based abominations.  Consequently, they are showing signs of collapse themselves.    

The solution is to find or produce a universal nomenclature that is suitable to document all patient encounters and write your EMR on top of it.  This gives you a universal EMR, one application to rule them all.  This is what we at Sentia have done.  We use the NIH’s UMLS to document patient encounter with data, not text.  

Read about the entire plan here.

While these things are incredibly efficacious, that is only on the clinical side.

Integrating Coverage

With that data-driven EMR comes the ability to reach in, grab the data that is associated with procedures and pay for those procedures in real time.  That automation 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 for the patient and about a quarter for the hospital.

This system also eliminates Epic/Cerner AND BUCAH.

Sentia has this system in production, right now, today.

Delivery Methods for Automated Coverage

Gee, that’s great, but how do you tie the bell on that cat?

Sentia as the Coverage Provider

We at Sentia have the system we just described in production currently.  Our plans include actually being the company that provides half priced coverage.  We price the procedures, assemble them into policies and we pay practices and hospitals 150% of Medicare, and charge patients the actual cost of the risk, plus $10 per month as a data-management fee.  This supplants the big insurance companies with our low cost, automated coverage system.

Sentia as the Third-Party Administrator or Captive 

For those of you with employer provided health coverage, we will provide that as well.  Sentia can apply the same pricing and policies, but send a bill to your employer, broken down by practice and hospital at the end of the month in order that your employer can pay for your healthcare.  This replaces the current Third-Party Administrators (TPAs) and captives at a fraction of the cost, the same $10 per employee per month data management fee

Sentia as the Direct Universal Care (DUC) Facilitator

Sentia can partner with your hospital or hospital system, who can in turn partner with primary care practices to offer Direct Universal Care.  You pay your hospital directly for your care and Sentia just manages the data for our customary $10 per patient per month data management fee.  This is in lieu of a Direct Primary Care (DPC) plus catastrophic insurance policy offering.  Speaking of DPC, DUC is very similar, except that

1. We actually calculate the risk and only charge that to our clients as opposed to a DPC subscription fee that just guesstimates how much healthcare and of what type will be consumed.
2. We supply all the patient’s medical needs, not just primary care.

These three delivery methods guarantee the same choices that patients currently have for medical coverage and at a far reduced rate

These delivery methods cut costs at the hospital and practice level by encouraging frugal behaviors through take-it-or-leave-it payments of 150% of medicare, and by not having to deal with big insurance carriers and their layers of process around preauthorization, rounds of submission and denial, delayed payment and of course medical coding.  Read about other ways we streamline and automate the administration process here.  

Conclusions

With the data driven EMR we can completely fix healthcare finance.  We demonstrated a way to save the patient half, the hospital or practice an additional 25%, and the population of the US about 75% from the cost of healthcare.  We do this with streamlining, automation and really thinking about solving the general problem and not just the easiest way possible.

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. Yes, that is worth reading twice.

It also makes the 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.