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A Businessman’s Perspective on Healthcare Reform

If longtime Valley businessman Marvin Selter had his way, healthcare reform would follow “a legitimate, logical, workable simple plan” – that he is sure would keep a handle on spiraling costs, and fix much of today’s mess when it comes to reimbursements. It’s basically the same system his company used some 37 years ago. Selter, who started his career in medical management consulting, launched one of the first employee leasing companies in the region, National Staff Network, in 1972. The privately held company based in Sherman Oaks, which at its height had a payroll of more than 30,000 employees in 20 states, functioned as an outside human resources department of sorts. NSN was responsible for providing payroll services, government reporting, payroll taxes, all benefits from retirement plans to workers compensation, and even assumed complete legal liability in labor matters regarding employees. NSN also operated as a subsidiary insurance company, according to Selter. Healthcare providers billed NSN for health services rendered to its employees and NSN processed and paid the claims – all in house. Even back then, the company had computer programs in place to process healthcare claims with alert systems to root out fraud, and relied on an independent medical advisory panel as part of the arbitration process that took place when the validity of a claim was contested. In the 25 years that he ran the company before selling it to Goldman Sachs in 1997, Selter said they were able to establish a workable and sustainable system that both employees and providers could rely on. Their system of sending providers correspondence asking them to declare “under penalty of perjury” why a procedure was necessary, for example, was effective at dissuading fraudulent activity. “We were able to prove to providers that if they don’t play around they will be paid within 15 calendar days,” he said. That simple notion of having providers know what they can expect to be paid beforehand could go a long way today, when physicians are frequently reimbursed only a fraction of the cost of their services, especially by federal and state programs like Medical and Medicare, Selter said. Reinforcing confidence in the payment system, could also lure healthcare professionals back into the industry helping to address the pressing shortage of doctors and nurses, he added. Parting from his experience, Selter, a former chairman of the Valley Industry and Commerce Association, believes national healthcare reform should include a payment system where all costs are pre-published using the standard CPT codes (codes that describe medical examinations) and ICD9 diagnostic codes. In his ideal plan there would be no government-run “public option” where the government competes with private insurance companies. “That’s stupid,” he says adamantly. “That just sets another bureaucracy.” Instead, there would be another program similar to Medicare that would operate with government subsidies and cover all those who can’t afford insurance and don’t qualify for Medicare or Medicaid. “Everyone would be covered with the caveat that every single individual must have an annual physical covered by their insurance,” he said. “Preventive medicine is the key to reducing costs.” Although Selter says he doesn’t like anything that’s been kicked around in the form of healthcare reform proposals so far, his thoughts seem to resonate with the Baucus plan the Senate Finance Committee began considering last week. With a price tag of about $900 billion the Baucus plan, introduced by Finance Chairman Max Baucus, calls for payment system changes as well as requirements for all citizens and legal residents to buy insurance, and does not include the government run “public option”. Instead it calls for non profit cooperatives that would compete with private insurers in the non-group and small group insurance markets. Under this plan, beginning in 2013, all U.S. citizens would be required to obtain health coverage and insurance companies would not be able to exclude people from coverage based on pre-existing conditions. “We’ll have to wait and see what happens with these proposals,” said Selter. Staff Reporter Andrea Alegria can be reached at (818) 316-3123 or at aalegria@sfvbj.com .

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