The Consumer of Healthcare 2025: The Evolving Relationship Between Medical Practices and Insurance Companies, and the Role of AI Today
in 0by
99

The Consumer of Healthcare 2025: The Evolving Relationship Between Medical Practices and Insurance Companies, and the Role of AI Today

By Noel J. Guillama-Alvarez
LinkedIn Profile

Recently, one of my favorite industry sources, which focuses on the business practices of medicine, conducted a survey of their physician subscribers. As you can imagine, while the results weren’t surprising to me, they are still quite staggering. The summary of the survey in one sentence: “The relationship between medical practices and the insurance companies they work with is one of the most fraught in the entirety of the healthcare industry.”

Survey Details: The respondents were diverse, with 30% in primary care or family practice, 14% in internal medicine, 11% pediatricians, and 32% marking “other.” 95% were solo practitioners or independent group practices, with over 70% having fewer than 5 physicians, and most practices employed between 2-10 support staff. The overall Payor Score was a mere 2.3 out of 5 stars.

Top reported challenges in dealing with payors:

  1. System incompatibility: Their systems don’t interact well with ours, leading to office staff having to correct claims, resulting in delayed payments.
  2. Reimbursement issues: “Reimbursement stinks. I quit!!!”
  3. Outsourced staff: Insurance company representatives, often located overseas, are unfamiliar with the issues and reluctant to refer concerns to experts.
  4. Neglect of small practices: “My small practice is ignored. They won’t negotiate fees. For over 15 years, there’s been no fee increase, only a steady decline.”
  5. Prior authorizations: Time-consuming processes for what should be simple approvals.
  6. Lack of urgency: Insurers show little motivation to provide basic services.

The Role of AI: In addition to these concerns, we’ve seen growing reports about the role of Artificial Intelligence (AI) in insurance decisions. For instance, a lawsuit was filed against UnitedHealth Group alleging that its AI system was denying necessary rehabilitation care for elderly Medicare Advantage patients. The AI system reportedly overrode doctors’ recommendations, resulting in shortened or denied rehabilitation stays, despite evidence suggesting the AI’s assessments were inaccurate. While UnitedHealth denies these allegations, claiming AI is only used as a guide, the lawsuit argues that the AI’s high error rate and the low appeal rates reflect a profit-driven agenda.

This issue extends beyond physicians to hospitals. A Newsweek article (November 2024) discussed the increase in insurance denials and raised questions about whether AI is a factor. According to the article, hospitals have seen an uptick in denials starting around 2020, with one lawsuit against Cigna in July 2023 alleging the company rejected over 300,000 claims in two months, spending only 1.2 seconds on each.

Hospitals, with their resources, experience, and capital, are likely developing their own AI systems to fight back against what they see as escalating denial practices by insurers. It’s becoming clear that we are in the early stages of an AI “arms race” between payors, hospitals, and the small providers who are often at the disadvantage.

What are physicians doing about AI denials? Physicians are increasingly using AI tools to challenge insurance denials. As The New York Times noted, “In constant battles with insurers, doctors reach for a cudgel: AI.” Physicians are turning to chatbots that synthesize research and make their case. A report by ComputerWorld further explained how doctors are leveraging AI to combat patient care authorization issues. Data shows that many clinicians rarely appeal denials more than once, and a recent survey from the American Medical Association revealed that 93% of physicians report care delays or disruptions due to prior authorizations.

What can patients do? Recently, I came across a company offering to help patients appeal their claim denials using AI. For around $50 per attempt, the patient answers several questions, and the service helps present their case to the insurance company. But I question how effective this approach can be without a comprehensive, longitudinal view of the patient’s health data. While it might help in presenting the case, we believe a better approach exists.

We strongly believe that patients must have access to and control over their own healthcare data. Despite government mandates on interoperability (the ability to transfer medical records between providers), this system has not been working well for most patients. To resolve this, patients need full access to their health data, which can then be reviewed using AI to offer suggestions for improving health or for discussions with their providers.

With a complete, longitudinal view of their records, patients could use AI to appeal issues directly with insurance companies. After 30 years in the industry, I can confidently say that the most formidable challenge to the system is an informed and engaged consumer. AI has the power to empower patients in ways no other technology has before.

About HealthScoreAI™

Healthcare is at a tipping point, and HealthScoreAI is positioning to revolutionize the industry by giving consumers control over their health data and unlocking its immense value. U.S. healthcare annual spending has exceeded $5 trillion with little improvement in outcomes. Despite advances, technology has failed to reduce costs or improve care. Meanwhile, 3,000 exabytes of consumer health data remain trapped in fragmented USA systems, leaving consumers and doctors without a complete picture of care.

HealthScoreAI seeks to provide a unique solution, acting as a data surrogate for consumers and offering an unbiased holistic view of their health. By monetizing de-identified data, HealthScoreAI seeks to share revenue with consumers, potentially creating a new $100 billion market opportunity. With near-universal EHR adoption in the USA, and advances in technology, now is the perfect time to capitalize on the data available, practical use of AI and the empowering of consumers, in particular the 13,000 tech savvy baby boomers turning 65 every single day and entering the Medicare system for the first time.  Our team, with deep healthcare and tech expertise, holds U.S. patents and a proven track record of scaling companies and leading them to IPO.

Noel J. Guillama-Alvarez

nguillama@mypwer.com

+1-561-904-9477, Ext 355