Delivering Value Based Care, A How To

Deliver value for dollar and coordinated care in medicine and save half

Introduction

I’ve said for years that we just can’t have Value  Based Care (VBC).  Doctors, nurses, practices and hospitals all want to be paid for their work, and rightly so.  We at Sentia have adopted a new simplified explanation: integrate health coverage into the Electronic Medical Record (EMR) and pay for procedures documented in real time.  That made me think about what value based care really is. Let’s dig in.

What is Value Based Care (VBC)?

Centers For Medicaid and Medicare define VBC as

“...health care that is designed to focus on quality of care, provider performance and the patient experience. The “value” in value-based care refers to what an individual values most.

In value-based care, doctors and other health care providers work together to manage a person’s overall health, while considering an individual’s personal health goals. For example, doctors might coordinate an individual’s blood work so that they only need to go into the clinic once.” 

My assumption was that doctors were going to get paid for keeping patients healthy.  It seemed like If I were a doctor I would want to be paid for my work.  In reality, yes, the doctor is paid for providing the services they provide, but that isn’t antithetical to VBC.

Delivering VBC

It turns out that Our model easily delivers VBC.  What we are really talking about is coordination of care or receiving care as a whole person and delivering value for dollar.  

Automating Coverage

The legacy insurance companies pay for procedures performed.   They don’t care about bundling services or coordinating care. They get paid to finance risk.  That finance, coupled with everything they do costs you as the patient.  Consequently you only receive about half of your premiums back as benefits, but that isn’t the point.  The point is that the patient isn’t getting coordinated care, and they certainly aren’t receiving good value for their premium.

To solve this problem, Senita has designed, built and deployed a new breed of EMR that integrates health coverage with medical documentation, as stated above.  Let’s take a closer look at how this is different and why it is better.

Language for Medical Documentation

50 years ago almost all practices and hospitals used paper for medical documentation.  This is fine and it worked.  You visited the doctor’s and s/he literally wrote “Patient presents with…” and documented what you said, what s’he observed, what they thought the problem was and what s/he was going to do about it.

Enter Judy Faulkner.  Judy had a little programming experience when she was approached by a doc asking for help.  There is nothing more dangerous or expensive than a junior developer.  Judy listened to the doctor and built a system that did what the doctor wanted to have done.  The problem is that her new system was based on a 20 year old programming language then, and a 70 year old language now, and based on paper records.

That system is Epic. Epic still uses doctors writing typing notes and those notes aren’t related in any way to anything.  You can find the patient and go read the notes, but one would think in 2025 we could go type in a set of symptoms and get a list of historically associated diagnoses.  That isn’t the case because of this ancient, badly designed, ill thought out system that uses language.

The solution of course is data based documentation.  If we had a nomenclature that included everything that could be done to the human body, described every structure, that was hierarchical and easy to search, a patient encounter could be documented quickly and easily and that gives us the ability to do the searches mentioned.  For the first time we can associate symptoms to observations to lab results to diagnoses to treatments to outcomes.

But it gets better than that.  The database information we just described are called “discrete values” and put in a Relational Database Management System (RDBMS (Judy doesn't have one of these)) can be related in the way we described above.  We can also “relate” any other kind of information like people and policies and payments and because we got away from language and toward discrete values we can automate the entirety of the insurance industry.

Details of Automated Coverage

It really isn't all that complicated, but nobody has been able to do it because they have been hobbled by the language based, paper thinking.

Calculating Risk

Let’s take a little example.  Let’s say that the incidence of appendicitis is 228 per 100,000 in 2019.  If a hospital knows how many appendectomies they performed they can back into a population size.  We will just use the 100,000 for the purposes of illustration.  If an open appendectomy costs 10,000 (probably high, but for illustrative purposes) then we can make these statements: the number of procedures multiplied by the cost, divided among the population and divided by 12 gives us monthly risk per patient per month.

This is literally what insurance is, or should be.  We prefer to say coverage because this is all the patient will pay for with our system.

Reference Based Pricing

Reference Based Pricing (RPB) means that we take a reference, and base our pricing on it.  I know that is super confusing, but bear with me.  Most RBP plans use a percentage of Medicare.  WE probably don’t want to do that because medicare itself is so complicated with different pricing for locations and modifiers and on and on. That it will probably be more efficient to use something like the Medical Consumer Price Index.  That gives us an average price nationwide that seems easier and more fair.  That also means there is ONE price, and that is it.  There is no negotiation, take it or leave it.  That eliminates negotiation and insurance style monkey motion.  You see why we say coverage.  There is a bit of complexity that hasn’t been accounted for even in our example appendectomy.  An open appendectomy might only earn $5000 where a laparoscopic appendectomy might earn $15,000, for the example’s average of $10,000.  With our discrete value system,we account for that with modifiers/  If we see Laproscopic (modifier) then we know to use the higher value.  More on pricing later.

Pricing Plans

If we put all the covered procedures together, we call that a plan.  If we provide coverage to a patient, we call that a policy or an instantiation of a plan.  We haven’t actually priced any of the plans yet, utilization information is exceedingly difficult to get and the pricing to use as a reference is just as difficult.  We can get all this from the client hospital using our EMR.

Separating the Coverage Service from the Risk

In order for a user to have a log in to the new system, practitioner, patient, or whomever, is $10 per month.  This is a data management fee and this is how we earn our money.  The only other cost would be the actual cost of the risk.  We calculate that the coverage we offer will be less than half what the legacy insurance companies charge.  

Putting it all Together

We have this system designed and built.  We can talk about it all we like but a picture is worth a thousand words and a video is worth a thousand of those.  Here is a video of the fully functional EMR demonstrating the practitioner documenting the appendectomy procedure.  Notice the appendectomy is in green, with a dollar value payment associated with it.  As soon as s/he clicks save we can transfer payment.

There is a full demonstration of the EMR on our Substack site.

To keep things fair and not have a 20 year old paying the same as an 80 year old, wse break the population into ten year tranches, starting with 18-28.  

We don’t really care who pays the premium whether it is the patient, the employer or the government.  If we take government payment, we will not tolerate regulation.  We have seen what the government can (not) do in this industry and we won’t tolerate interference that will cause costs to rise and consequently people to die.  

Delivery Methods

There are three delivery methods:

Patient Financed

The patient pays for his or her own insurance.  The cost is the risk plus $10 for the management.  The risk can be itemized by procedure and published or emailed.

Employer Financed

The employer pays for the employee’s insurance.  The cost is the risk plus $10 for the management.  The risk can be itemized by procedure and published or emailed.

Captive/Self Funded

The employer can set up a captive insurance company to handle the transactions, or the employer can hire Sentia as a Third Party Administrator (TPA).  The cost is $10 per month per employee (PEPM) and the employer pays only the procedures performed at the Reference Based Price.

Direct Universal Care

The hospital provides the coverage.   The cost is the risk plus $10 for the management.  The risk can be itemized by procedure and published or emailed.  This also includes primary care that will generally be done at a practice with doctors who have admitting privileges at the hospital.

How is that Value Based Care

Since there is one low price and one system, care can be coordinated easily and efficiently.  With discrete values we can do searches for patients with combinations of conditions to catch disease early and either provide preventative care or modify behavior to correct the problem.  This is the very definition of VBC, providing value for the patient.

Caveats and Provisos

We don’t require hospitals to use our EMR, but it is highly recommended.  If a potential client has a $1,200,000,00  Epic installation (that’s BILLION with a “B”) they are probably, however wrong headed and erroneously, going to want to keep it.  We can build integrations into Epic/Oracle-Cerner/et al., to put their procedures into our system, but we will charge for that.  

The good news is that in the meantime, until we have 100% adoption, the hospital or practice can use our EMR with traditional insurance, they will just have to do the medical coding, verification, adjudication, pre-authorization, denials, delays, have insurance networks, rate negotiations, sales/brokers/agents, money for a third-party EMR, and pay for completely financing skyscrapers in every major city, hundreds of thousands of employees, all the monkey business legacy insurance charges for and forces them to do.

Additional Considerations

We alluded to behavior modification to combat avoidable chronic disease.  Our solution is to prescribe education to the patient.  When they read it, they get a 1-2% discount on their health coverage.  When they follow it and get better lab results they get a large 15% discount.  The lack of discount is also cumulative.  That means that the patient that has worse lab results through their own inaction, their own behavior, of course, will effectively have a 15% rise in costs year over year.  Eventually they will have to go back to the legacy insurance companies that can't manage things like this, as the economics force them to go elsewhere for insurance..  That will shift the burden of bad behavior to the patients behaving badly.

Conclusions

We have shown a comprehensive, viable plan to move toward value based care.  This plan cuts more than half from the cost of health coverage and eliminates the big payers and the legacy EMR vendors in one fell swoop.

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 direct payments to doctors and practices.  

Here are promised points detailing the costs incurred by the legacy insurance companies that you pay currently, 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.  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 the 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.