Commentary & Opinion

Political Chaos, Scandal Overshadowing National Health Insurance Issues

Veteran health-care CEO proposes an aggressive seven-step cure

TAMPA, Fla. – As politicians in D.C. are regrettably distracted from the spiraling direction of national health care legislation, one industry expert is weighing in on the lesser known issues plaguing the system.

After spending nearly three decades in the health insurance and tax industries, Steve Doletzky sees the need for a major shake-up of the nation’s health care landscape that could easily be funded with minor tax law changes effecting tax welfare.

“For nearly my entire career, the industry has failed so many. It’s failed the sickest among us, insurers and the tax-paying public,” said Doletzky, founder of Unified Partners and former partner of John Hewitt CEO of Liberty Tax Service. “Price fixing, the medical establishment and our tax welfare system are at the very crux of a solution to this entire fiasco of this mess we call our health care system.”

Doletzky strongly believes the solution to the national health care system can be attained by addressing to two main causes, price fixing and tax fraud.

Lack of Transparency

“Price fixing and a lack of transparency in pricing through participating provider organizations (PPO) networks do, in effect, permit the medical establishment to operate on a purely monopolistic basis because all competitive forces have been eliminated. This has ultimately led to the creation of the most unaffordable healthcare system in the world,” said Doletzky. “The culprit of this massive degree of price inflation is not insurers, small independent medical service providers or insurance agents, but rather the medical industrial complex spearheaded by the American Medical Association.”

Doletzky’s stance on the issue points to actions by the AMA, the medical education system, privately owned mega-hospital conglomerates and major pharmaceutical companies, as a driving force in high medical and insurance costs. According to Doletzky, these entities have diligently worked to assume control and the monopolization of their respective markets, through the use of lobbying efforts and the creation of PPOs.

According to Doletzky, PPO arrangements do not treat insurers equally, either. Certain insurers are often given advantages over other insurers in medical care pricing, making it difficult for smaller insurers to compete successfully in their market. Namely, Blue Cross Blue Shield, which controls nearly 85 percent of the market share, receives rates typically 30 percent lower than other competing insurance companies.

The mega-hospital conglomerates dictate the terms of PPO agreements. Lack of price transparency and the ability to analyze the same makes it nearly impossible for newly formed health insurance carriers to compete. The public though, rarely gets a glimpse into these arrangements as insurers are, as part of their agreement with the PPO network, generally prohibited from disclosing their arrangements.

Stick to the Code

PPO rates are controlled directly through current procedural terminology codes (CPT). In short, every medical treatment is assigned a code and a corresponding reimbursement rate, which the insurance company pays each time one of their insureds receives services. With these rates primarily controlled directly by mega-hospital conglomerates, they are often subject to manipulation.

“Often times these large hospitals will approach insurance companies and impose a raise in prices across every CPT code. The insurance company is then faced with passing on the cost to their policy holders, risking significant loss in business,” said Doletzky. “As part of the negotiation process, hospitals will usually agree to only raise rates on certain CPT codes.”

Certain CPT code costs are selectively regulated by PPOs to make medical procedures performed by ‘hospitalists’ more affordable compared to those performed by resident doctors. This allows major-hospital conglomerates to decrease overhead costs and aggressively compete with independent physicians.

“With many new doctors graduating with massive debt and unable to go into private practice, major-hospital conglomerates have discovered a more cost-effective way of treating their patients by creating a new position for these new graduates called a hospitalist,” said Doletzky. “The salaried position on average pays $200,000 per year, well below the salary of a typical physician. This allows large hospitals to employ less resident physicians, reduce overhead like salaries and medical malpractice premiums and squeeze out smaller competition.”

While the cost of procedures performed by hospitalists is significantly less, health care consumers increasingly find themselves compelled to seek treatment from either a hospitalist or a physician assistant.

“In seeing a hospitalist, patients are even subjected to new charges they didn’t expect. One of the most onerous charges they face when seeing a hospitalist is that of a facility fee. This fee has traditionally been charged whenever one visits a hospital emergency room. Now, whenever one receives treatment from a hospitalist, even if the office of the hospitalist is not located on the hospital campus, one is often billed a facility fee for use of a hospital facility. The facility fee charges I’ve encountered typically range from $500 to $750,” said Doletzky.

This mandate is crushing small business and only causes ridiculously designed “compliant” plans

“As planned by the medical industrial complex, this lack of transparency has lead the public to believe that the insurers, which are charging higher and higher premiums, whilst simultaneously seeming to pay less and less for their non-catastrophic needs, are to blame,” said Doletzky.

“Unless there is a medical care pricing system implemented, which is consistent, orderly, and based upon the free market enterprise system principles of competition, the system will continue to deteriorate,” said Doletzky. “A single payer system will simply not work in the U.S. because it relies solely on monopolies and does not address the deep hole of losses insurance carriers have gotten into.”

Seven-Step Plan

The solution? Doletzky proposes a minor tweak to the U.S. tax system and directly addressing the issues plaguing the health care system. Doletzky’s plan encompasses seven key steps:

Eliminating the Earned Income Tax Credit for all small business owners
EITC helps millions and is a vital part of helping people fight their way out of poverty. That needs to stay in place, however, the fraud on schedule C filers needs to be eliminated. Every year hundreds of thousands of fraudulent “small business” returns are filed in order to “create” the income needed to qualify for EITC. Each year this means millions of dollars are distributed to fraudulent filers all across the country. We need to redirect the money saved to get us over the pre-existing bump insurance carriers have dealt with and then we will be on our way to solid providers in every state.

All Americans should be allowed a one-time preexisting condition enrollment in their lifetime
If they fail to pay they would be removed. Taking steps to deal with a long waiting period for all coverages to be allowed, at minimum a year, would stop the practice of jump on jump off coverage.

Retaining Medical Debt
Medical debt, like education debt, should never be allowed to be removed from one’s personal record, even after a bankruptcy filing. Those who fail to maintain coverage or allow a coverage to lapse should still be responsible for these debts.

Remove the employer mandate
This mandate is crushing small business and only causes ridiculously designed “compliant” plans where the coverage is next to useless and only results in pushing the employee to enroll direct with the Affordable Care Act.

Institute transparency in pricing for all health insurance pricing
The closed bid process does not serve anyone other than organizations like Blue Cross Blue Shield and the medical establishment. Allow free competition to exist and demand price transparency. Implement a medical care pricing system, which is consistent, orderly, and based upon the free market enterprise system principles of competition.

Expand education opportunities for medical schools to meet the demand
Academia is expanding in nearly every other field when a demand presents itself. No longer allow the AMA to manipulate medical schools to ensure that the number of doctor trainees continues to be limited. Short supply and high demand ensure that higher medical charges can be imposed. Of the number of accepted medical school applicants, the fields of entry too, are limited. In other words, a doctor trainee cannot simply decide they want to enter a particular field and pursue it.

Allow Collective Bargaining
Some years ago, the medical industrial complex lobbied for laws to be passed, which now prohibit doctors, dentists, and other medical service providers from participating in any sort of collective bargaining arrangement. Indeed, they are prohibited from even discussing their fees with one another for fear they will have their license revoked. This is not the American way and must end, as well.

“Once enacted, it will allow for the sick among us to have coverage. It will allow the insurance industry that has served this country well to deal with the risk and the backlog of uninsured needing care. It will provide funding from the government to address this vital need instead of being sent to fraudulent filers and those preparing their tax returns,” said Doletzky. “It will allow doctors and hospitals to get back to caring for patients and provide them with the earnings they deserve. It will open the doors for more intelligent, hard-working Americans to get an education and be a part of this solution moving forward.”

“The math works, the solution is before us. Keeping what does work inside the Affordable Care Act and implementing these steps along with better plan design and choice is the only thing that has any chance of solving this huge challenge for our people and our economy. Do not throw the baby out with the bath water,” said Doletzky.