Monthly Archives: August 2009

HOT SCOOP ON HEALTH INSURANCE

Below is an interview by Bill Moyers with Wendell Potter, who formerly
worked for CIGNA, the country’s fourth largest health insurance company.  This installment is very interesting.

Cullie

This is long, but you need to read it or watch the video, so that you can
understand why there is resistance to health care reform.

Date: August 11, 2009 4:01:48 AM EDT
Subject: Bill Moyers on PBS – Please Watch The Whole Issue

I’ve known for years that the Insurance Industry is absolutely unregulated
and there is no oversight. The Insurance Industry has structured it so.

I passed the California Insurance Agent License exam – [98%] top of
class!! I haven’t forgotten the lessons.

_http://www.pbs.org/moyers/journal/07312009/watch.html_
(http://www.pbs.org/moyers/journal/07312009/watch.html)

Website has video and transcript (pasted below).

(http://www.pbs.org/moyers/journal/index.html)

Wendell Potter was here a few weeks ago to tell an insider’s story of how
the health insurance industry “puts profits before patients.” Your response
bowled us over. One blogger at the widely read website Talking Points Memo
summed up what many had to say:

“I beg everyone who reads this and clicks onto the link to send it on to
everyone you know. Send it to your congressmen, your governors, your
legislatures, the White House. Get an email chain going–put the link up
on yard
signs or billboards. Put it on bumper stickers. Stencil it on tee-shirts or
tattoo it onto (sic) your forehead. Whatever it takes. This is a television
event too important to let die… Keep it going.”

Well, it’s alive and well, and thanks to this station, you’re about to see
it again. The message is even more timely. You heard Wendell Potter tell
us how the industry would try to shape the health care debate as it played
out in Washington over the summer. Sure enough, that’s exactly what has
happened. By pouring millions of dollars into lobbying — including
hiring more
than 350 former members of congress and government staffers and by
enriching incumbents with campaign contributions — the health care
industry is
winning again.

Here, a congressional subcommittee investigated the twisted tactics used
by health insurance companies to dump customers and stick them with their
bills. It’s a practice known as recission.

ROBIN BEATON: In May 2008, I went to a dermatologist for acne, pimples. A
word was written down on my chart, which was considered to mean
precancerous. In June 2008, I was diagnosed with invasive HER-2 genetic
breast cancer,
a very aggressive form of this cancer.

I needed a double mastectomy immediately. Blue Cross and Blue Shield
pre-certified me for my surgery and for a hospital stay. The Friday before I
was to have my double mastectomy, Blue Cross and Blue Shield called me by
telephone and told me that my chart was red flagged.

BILL MOYERS: Red flagged. The insurer used inadvertent omissions on her
original application — data that had nothing to do with her current
condition
— as an excuse to cancel her health policy. Without that insurance she
couldn’t have the cancer surgery that she needed.

ROBIN BEATON: I was frantic I did not know what to do. I didn’t know how
to pay for my surgery, the hospital wanted a $30,000 deposit. I was by
myself I didn’t have that kind of money.

BILL MOYERS: The committee found other insurers pulling the same tricks.
Over the past five years the companies — Assurant, Golden Rule and
WellPoint
— had cancelled 20 thousand individual policies. Michigan Congressman Bart
Stupak asked their executives if they would change their ways.

REP. BART STUPAK: Let me ask each of our CEOs this question, starting with
you Mr. Hamm, would you commit today that your company will never rescind
another policy unless there was intentional fraud– fraudulent
misrepresentation in the application?

DON HAMM: I would not commit to that.

REP. BART STUPAK: How about you Mr. Collins, would you commit to not to
rescind any policy unless there is an intentional fraudulent
misrepresentation?

RICHARD COLLINS: No, sir. We follow the state laws and regulations. And we
would not stipulate to that. That’s not consistent with each state’s laws.

REP. BART STUPAK: How about you, Mr. Sassi, would you commit that your
company will never rescind another policy unless there was an intentional
fraud, misrepresentation?

BRIAN A. SASSI: No, I can’t commit to that. The intentional standard is
not the law of the land in the majority of states.

BILL MOYERS: But business as usual comes as no surprise to Wendell Potter,
who knows all too wel l how they win and we lose.

SEN. JAY ROCKEFELLER: I’m pleased to welcome Mr. Wendell Potter to the
committee today. He is a former insurance executive who is going to tell us
about some of the tactics insurance companies use to keep insurance in the
dark. I have a special respect for him, simply because he’s doing something I
think very courageous and very brave.

WENDELL POTTER: Mr. Chairman, thank you for the opportunity to be here
this afternoon…

BILL MOYERS: Until last year, Wendell Potter was head of corporate
communications for CIGNA — the country’s fourth largest health
insurance company.

Altogether Potter spent nearly 2 decades playing for the side that has
opposed health care reform from the Clintons forward: he sat on policy
committees, crafted executive messages, cajoled the press and witnessed
firsthand
the promises made — and broken. Take the case of Nataline Sarkisyan:

HILDA SARKISYAN: The insurance company is denying our case. She needs a
liver transplant…

BILL MOYERS: At the end of 2007, Potter defended CIGNA when it refused to
pay for the 17-year-old’s transplant su rgery, claiming the procedure was
experimental. Protests at a regional headquarters created a public relations
nightmare.

CROWD: Health care for all! Health care for all!

BILL MOYERS: CIGNA reversed its decision, but by then, it was too late.
Nataline died just two hours after her surgery was approved. Early last year
Potter left CIGNA. This summer, before the Senate Commerce Committee, he
went public for the first time.

WENDELL POTTER: The industry and its backers are using fear tactics, as
they did in 1994, to tar a transparent and accountable, publicly accountable
health care option as, quote, “government-run health care.” What we have
today, Mr. Chairman, is Wall Street-run health care that has proven
itself an
untrustworthy partner to its customers, to the doctors and hospitals who
deliver care and to the state and federal governments that attempt to
regulate it.

BILL MOYERS: Wendell Potter joins us now. Welcome to the Journal.

WENDELL POTTER: Thank you very much for having me here.

BILL MOYERS: You worked for CIGNA 15 years and left last year.&nbs p;

WENDELL POTTER: I did.

BILL MOYERS: Were you pushed out?

WENDELL POTTER: I was not. I left– it was my decision to leave, and my
decision to leave when I did.

BILL MOYERS: Were you passed over for a promotion?

WENDELL POTTER: Absolutely not. No.

BILL MOYERS: Had you been well-paid and rewarded by the company?

WENDELL POTTER: Very well-paid. And I, over the years, had many job
opportunities, many bonuses, salary increases. So no, I was not. And in
fact,
there was no further place for me to go in the company. I was head of
corporate communications and that was the ultimate P.R. job.

BILL MOYERS: Did you like your boss and the people you work with?

WENDELL POTTER: I did, and still do. I still respect them.

BILL MOYERS: And they gave you a terrific party when you left?

WENDELL POTTER: They sure did, yeah.

BILL MOYERS: So then why are you speaking out now?

WENDELL POTTER: I didn’t intend to, until it became really clear to me
that the industry is resorting to the same tactics they’ve used over the
years, and particularly back in the early ’90s, when they were leading the
effort to kill the Clinton plan.

BILL MOYERS: But during this 15 years you were there, did you go to them
and say, “You know, I think we’re on the wrong side. I think we’re fighting
the wrong people here.”

WENDELL POTTER: You know, I didn’t, because for most of the time I was
there, I felt that what we were doing was the right thing. And that I was
playing on a team that was honorable. I just didn’t really get it all that
much
until toward the end of my tenure at CIGNA.

BILL MOYERS: What did you see?

WENDELL POTTER: Well, I was beginning to question what I was doing as the
industry shifted from selling primarily managed care plans, to what they
refer to as consumer-driven plans. And they’re really plans that have very
high deductibles, meaning that they’re shifting a lot of the cost off health
care from employers and insurers, insurance companies, to individuals. And
a lot of people can’t even afford to make their co-payments when they go
get care, as a result of this. But it really took a trip back home to
Tennessee for me to see exactly what is happening to so many Americans. I–

BILL MOYERS: When was this?

WENDELL POTTER: This was in July of 2007.

BILL MOYERS: You were still working for CIGNA?

WENDELL POTTER: I was. I went home, to visit relatives. And I picked up
the local newspaper and I saw that a health care expedition was being held a
few miles up the road, in Wise, Virginia. And I was intrigued.

BILL MOYERS: So you drove there?
WENDELL POTTER: I did. I borrowed my dad’s car and drove up 50 miles up
the road to Wise, Virginia. It was being held at a Wise County Fairground. I
took my camera. I took some pictures. It was a very cloudy, misty day, it
was raining that day, and I walked through the fairground gates. And I
didn’t know what to expect. I just assumed that it would be, you know,
like a
health– booths set up and people just getting their blood pressure checked
and things like that.

But what I saw were doctors who were set up to provide care in animal
stalls. Or they’d erected tents, to care for people. I mean, there was no
privacy. In some cases– and I’ve got some pictures of people being
treated on
gurneys, on rain-soaked pavement.

And I saw people lined up, standing in line or sitting in these long, long
lines, waiting to get care. People drove from South Carolina and Georgia
and Kentucky, Tennessee– all over the region, because they knew that this
was being done. A lot of them heard about it from word of mouth.

There could have been people and probably were people that I had grown up
with. They could have been people who grew up at the house down the road,
in the house down the road from me. And that made it real to me.

BILL MOYERS: What did you think?

WENDELL POTTER: It was absolutely stunning. It was like being hit by
lightning. It was almost– what country am I in? I just it just didn’t
seem to
be a possibility that I was in the United States. It was like a lightning
bolt had hit me.

BILL MOYERS: People are going to say, “How can Wendell Potter sit here and
say he was just finding out that there were a lot of Americans who didn’t
have adequate insurance and needed health care? He’d been in the industry
for over 15 years.”

WENDELL POTTER: And that was my problem. I had been in the industry and
I’d risen up in the ranks. And I had a great job. And I had a terrific
office
in a high-rise building in Philadelphia. I was insulated. I didn’t really
see what was going on. I saw the data. I knew that 47 million people were
uninsured, but I didn’t put faces with that number.

Just a few weeks later though, I was back in Philadelphia and I would
often fly on a corporate aircraft to go to meetings.

And I just thought that was a great way to travel. It is a great way to
travel. You’re sitting in a luxurious corporate jet, leather seats, very
spacious. And I was served my lunch by a flight attendant who brought my
lunch
on a gold-rimmed plate. And she handed me gold-plated silverware to eat it
with. And then I remembered the people that I had seen in Wise County.
Undoubtedly, they had no idea that this went on, at the corporate levels of
health insurance companies.

BILL MOYERS: But you had, all these years, seen premiums rising. People
purged from the rolls, people who couldn’t afford the health care that CIGNA
and other companies were offering. This is the first time you came face to
face with it?

WENDELL POTTER: Yeah, it was. You know, certainly, I knew people, and I
talked to people who were uninsured. But when you’re in the executive
offices, when you’re getting prepared for a call with an analyst, in the
financial
medium, what you think about are the numbers. You don’t think about
individual people. You think about the numbers, and whether or not you’re
going
to meet Wall Street’s expectations. That’s what you think about, at that
level. And it helps to think that way. That’s why you– that enables you to
stay there, if you don’t really think that you’re talking about and dealing
with real human beings.

BILL MOYERS: Did you go back to corporate headquarters and tell them what
you had seen?

WENDELL POTTER: I went back to corporate headquarters. I was trying to
process all this, and trying to figure out what I should do. I did tell many
of them about the experience I had and the trip. I showed them some pictures
I took while I was down there. But I didn’t know exactly what I should do.
You know, I had bills of my own. And it was hard to just figure out. How
do I step away from this? What do I do? And this was one of those things
that made me decide, “Okay, I can’t do this. I can’t keep– I can’t.” One of
the books I read as I was trying to make up my mind here was President
Kennedy’s “Profiles in Courage.” And in the forward, Robert Kennedy said
that
one of the president’s, one of his favorite quotes was a Dante quote that,
“The hottest places in hell are reserved for those who, in times of moral
crisis, maintain a neutrality.” And when I read that, I said, “Oh, jeez, I–
you know. I’m headed for that hottest place in hell, unless I say
something.”

BILL MOYERS: Your own resume says, and I’m quoting. “With the chief
medical officer and his staff, Potter developed rapid response mechanisms
for
handling media inquiries pertaining to complaints.” Direct quote. “This was
highly successful in keeping most such inquiries from becoming news stories,
at a time when managed care horror stories abounded.” I mean, you knew
there were horror stories out there.

WENDELL POTTER: I did. I did.

BILL MOYERS: You put these techniques to work, representing CIGNA doing
the Nataline Sarkisyan case, right?

WENDELL POTTER: That’s right.

BILL MOYERS: And that was a public relations nightmare, you called it.
Right?

WENDELL POTTER: It was. It was just the most difficult. We call them high
profile cases, when you have a case like that — a family or a patient goes
to the news media and complains about having some coverage denied that a
doctor had recommended. In this case, Nataline Sarkisyan’s doctors at UCLA
had recommended that she have a liver transplant. But when the coverage
request was reviewed at CIGNA, the decision was made to deny it.

It was around that time, also, that the family had gone to the media, had
sought out help from the California Nurses Association and some others to
really bring pressure to bear on CIGNA. And they were very successful in
getting a lot of media attention, and nothing like I had ever seen before.

PROTESTERS: Shame on CIGNA! Shame on CIGNA!

WENDELL POTTER: It got everyone’s attention. Everyone was focused on that
in the corporate offices.

BILL MOYERS: You were also involved in the campaign by the industry to
discredit Michael Moore and his film “Sicko” in 2007. In that film Moore
went
to several countries around the world, and reported that their health care
system was better than our health care system, in particular, Canada and
England. Take a look at this.

MICHAEL MOORE: I went across the city to a crowded hospital waiting room.
How long did you have to wait here to get help?

CANADIAN WOMAN #1: 20 minutes

CANADIAN WOMAN #2: 45 minutes

CANADIAN MAN #2: I got helped right away.

CANADIAN WOMAN #3: You can see how crowded this is. They really do an
amazing job.

MICHAEL MOORE: Did you have to get anyone’s permission to come to this
hospital?

CANADIAN MAN #2:: No.

CANADIAN MAN #3: No.

CANADIAN WOMAN #1: No.

CANADIAN WOMAN #3: We can go anywhere we want.

MICHAEL MOORE: You don’t have to get pre-approved?

CANADIAN WOMAN #3: No, no. You just–

MICHAEL MOORE: By your own insurance company?

CANADIAN WOMAN #3: Oh no, oh heavens no.

MICHAEL MOORE: Can you choose your own doctor?

CANADIAN WOMAN #3: Oh sure. Oh yes.

MICHAEL MOORE: What’s your deductible?

CANADIAN MAN #1: Nothing.

CANADIAN WOMAN #1: I don’t think we have any.

CANADIAN MAN #2:: I don’t know. I don’t think there’s any as far as I
know.

CANADIAN WOMAN #3: It’s really a fabulous system for making sure that the
least of us and the best of us are taken care of.

BRITISH WOMAN #1: Oh, really it’s not like that in the US? No. Not at all,
no.

MICHAEL MOORE: So what do you pay to stay here?

BRITISH WOMAN #1: No one pays. They’re asking, “How do people pay?” And I
said, well there isn’t, you don’t, you just leave.

BRITISH MAN #1: It’s just the insurance. There’s no bill at the end of it,
as it were.

MICHAEL MOORE: Even with insurance, there’s bound to be a bill somewhere.
So where’s the billing department?

BRITISH WOMAN #1: There isn’t really a billing department.

BRITISH WOMAN #2: There’s no such thing as a billing department.

MICHAEL MOORE: What did they charge you for that baby?

BRITISH WOMAN #3: Sorry?

MICHAEL MOORE: You’ve got to pay before you can get out of here, right?

BRITISH WOMAN #3: No.

BRITISH MAN #1: No, no, no. Everything’s on NHS.

BRITISH WOMAN #3: This is NHS.

BRITISH MAN #1: You know, it’s not America.

BILL MOYERS: So what did you think when you saw that film?

WENDELL POTTER: I thought that he hit the nail on the head with his movie.
But the industry, from the moment that the industry learned that Michael
Moore was taking on the health care industry, it was really concerned.

BILL MOYERS: What were they afraid of?

WENDELL POTTER: They were afraid that people would believe Michael Moore.

BILL MOYERS: We obtained a copy of the game plan that was adopted by the
industry’s trade association, AHIP. And it spells out the industry
strategies in gold letters. It says, “Highlight horror stories of
government-run
systems.” What was that about?

WENDELL POTTER: The industry has always tried to make Americans think that
government-run systems are the worst thing that could possibly happen to
them, that if you even consider that, you’re heading down on the slippery
slope towards socialism. So they have used scare tactics for years and years
and years, to keep that from happening. If there were a broader program
like our Medicare program, it could potentially reduce the profits of these
big companies. So that is their biggest concern.

BILL MOYERS: And there was a political strategy. “Position Sicko as a
threat to Democrats’ larger agenda.” What does that mean?

WENDELL POTTER: That means that part of the effort to discredit this film
was to use lobbyists and their own staff to g o onto Capitol Hill and say,
“Look, you don’t want to believe this movie. You don’t want to talk about
it. You don’t want to endorse it. And if you do, we can make things tough
for you.”

BILL MOYERS: How?

WENDELL POTTER: By running ads, commercials in your home district when
you’re running for reelection, not contributing to your campaigns again, or
contributing to your competitor.

BILL MOYERS: This is fascinating. You know, “Build awareness among
centrist Democratic policy organizations–”

WENDELL POTTER: Right.

BILL MOYERS: “–including the Democratic Leadership Council.”

WENDELL POTTER: Absolutely.

BILL MOYERS: Then it says, “Message to Democratic insiders. Embracing
Moore is one-way ticket back to minority party status.”

WENDELL POTTER: Yeah.

BILL MOYERS: Now, that’s exactly what they did, didn’t they? They–

WENDELL POTTER: Absolutely.

BILL MOYERS: –radicalized Moore, so that his message was discredited
because the messenger was seen to be radical.

WENDELL POTTER: Absolutely. In memos that would go back within the
industry– he was never, by the way, mentioned by name in any memos,
because we
didn’t want to inadvertently write something that would wind up in his
hands.
So the memos would usually– the subject line would be– the emails would
be, “Hollywood.” And as we would do the media training, we would always
have someone refer to him as Hollywood entertainer or Hollywood moviemaker
Michael Moore.

BILL MOYERS: Why?

WENDELL POTTER: Well, just to– Hollywood, I think people think that’s
entertainment, that’s movie-making. That’s not real documentary. They don’t
want you to think that it was a documentary that had some truth. They would
want you to see this as just some fantasy that a Hollywood filmmaker had
come up with. That’s part of the strategy.

BILL MOYERS: So you would actually hear politicians mouth the talking
points that had been circulated by the industry to discredit Michael Moore.

WENDELL POTTER: Absolutely.

BILL MOYERS: You’d hear ordinary people talking that. And politicians as
well, right?

WENDELL POTTER: Absolutely.

BILL MOYERS: So your plan worked.

WENDELL POTTER: It worked beautifully.

BILL MOYERS: The film was blunted, right?

WENDELL POTTER: The film was blunted. It–

BILL MOYERS: Was it true? Did you think it contained a great truth?

WENDELL POTTER: Absolutely did.

BILL MOYERS: What was it?

WENDELL POTTER: That we shouldn’t fear government involvement in our
health care system. That there is an appropriate role for government, and
it’s
been proven in the countries that were in that movie.

You know, we have more people who are uninsured in this country than the
entire population of Canada. And that if you include the people who are
underinsured, more people than in the United Kingdom. We have huge
numbers of
people who are also just a lay-off away from joining the ranks of the
uninsured, or being purged by their insurance company, and winding up there.

And another thing is that the advocates of reform or the opponents of
reform are those who are saying that we need to be careful about what we do
here, because we don’t want the government to take away your choice of a
health plan. It’s more likely that your employer and your insurer is
going to
switch you from a plan that you’re in now to one that you don’t want. You
might be in the plan you like now.

But chances are, pretty soon, you’re going to be enrolled in one of these
high deductible plans in which you’re going to find that much more of the
cost is being shifted to you than you ever imagined.

BILL MOYERS: I have a memo, from Frank Luntz. I have a memo written by
Frank Luntz. He’s the Republican strategist who we discovered, in the
spring,
has written the script for opponents of health care reform. “First,” he
says, “you have to pretend to support it. Then use phrases like, “government
takeover,” “delayed care is denied care,” “consequences of rationing,”
“bureaucrats, not doctors prescribing medicine.” That was a memo, by Frank
Luntz, to the opponents of health care reform in this debate. Now watch this
clip.

REP. JOHN BOEHNER: The forthcoming plan from Democratic leaders will make
health care more expensive, limit treatments, ration care, and put
bureaucrats in charge of medical decisions rather than patients and doctors.

SEN. MITCH MCCONNELL: Americans need to realize that when someone says
“government option,” what could really occur is a government takeover that
soon could lead to government bureaucrats denying and delaying care, and
telling Americans what kind of care they can have.

SEN. JON KYL: Washington run healthcare would diminish Americans’ access
to quality care, leading to denials, shortages and long delays for
treatment.

REP. JOE WILSON: How will a government run health plan not lead to the
same rationing of care that w e have seen in other countries?

REP. TOM PRICE: We don‘t want to put the government, we don’t want to
put bureaucrats between a doctor and a patient.

BILL MOYERS: Why do politicians puppet messages like that?

WENDELL POTTER: Well, they are ideologically aligned with the industry.
They want to believe that the free market system can and should work in this
country, like it does in other industries. So they don’t understand from an
insider’s perspective like I have, what that actually means, and the
consequences of that to Americans.

They parrot those comments, without really realizing what the real
situation is.

I was watching MSNBC one afternoon. And I saw Congressman Zach Wamp from
Tennessee. He’s just down the road from where I grew up, in Chattanooga. And
he was talking– he was asked a question about health care reform. I think
it was just a day or two after the president’s first– health care reform
summit. And he was one of the ones Republicans put on the tube.

And he was saying that, you know, the health care problem is not
necessarily as bad as we think. That of the uninsured people, half of
them are that
way because they want to “go naked.” < /span>

REP. ZACH WAMP: Half the people that are uninsured today choose to remain
uninsured. Half of them don’t have any choice but half of them choose to,
what’s called, go naked, and just take the risk of getting sick. They end up
in the emergency room costing you and me a whole lot more money.

WENDELL POTTER: He used the word naked. It’s an industry term for those
who, presumably, choose not to buy insurance, because they don’t want to.
They don’t want to pay the premiums. So he was saying that half… Well,
first
of all, it’s nothing like that. It was an absolutely ridiculous comment.
But it’s an example of a member of Congress buying what the insurance
industry is peddling.

BILL MOYERS: Back in 1993, the Republican propagandist, William Kristol,
urged his party to block any health care proposal, in order to prevent the
Democrats from being seen as the quote, “generous protector of the middle
class.” But today, you’ve got some Democrats who are going along with the
industry.

Max Baucus, the senator from Montana, for example, the most important
figure right now in this health care legislation that’s being written in the
Senate. He’s resisted including a public insurance option in the reform
bill,
right?

WENDELL POTTER: That’s right.

BILL MOYERS: Why is the industry so powerful on both sides of the aisle?

WENDELL POTTER: Well, money and relationships, ideology. The
relationships– an insurance company can hire and does hire many
different lobbying
firms. And they hire firms that are predominantly Republican and
predominantly
Democrat. And they do this because they know they need to reach influential
members of Congress like Max Baucus. So there are people who used to work
for Max Baucus who are in lobbying firms or on the staff of companies like
CIGNA or the association itself.

BILL MOYERS: Yeah, I just read the other day, in “The Washington Post,”
that Max Baucus’s staff met with a group of lobbyists. Two of them had been
Baucus’s former chiefs of staff.

WENDELL POTTER: Right.

BILL MOYERS: I mean, they left the government. They go to work for the
industry. Now they’re back with an insider status. They get an access,
right?

WENDELL POTTER: Oh, they do, they do. And these lobbyists’ ability to
raise money for these folks also is very important as well.

Lobbyists, many of the big lobbyists contributed a lot of money
themselves. One of the lobbyists for one of the big health insurance
company is
Heather Podesta, the Podesta Group, and she’s married to Tony Podesta,
who’s a
brother of John Podesta.

BILL MOYERS: Who used to be the White House chief of staff.

WENDELL POTTER: Right. Right. And they’re Democrats. And my executives
wanted to meet with — and when I say my, the people I used to work for–

BILL MOYERS: At CIGNA.

WENDELL POTTER: Yeah, wanted to meet with Hillary Clinton, when she was
still in the Senate and still a candidate for president. Well, that’s
hard to
do. That’s hard to pull off, but she did. That just shows you that you
can, through the relationships that are formed and that the insurance
industry
pays for, by hiring these lobbyists, you can your foot in the door. You can
get your messages across to these people, in ways that the average
American couldn’t possibly.

BILL MOYERS: So it’s money that can buy access to have their arguments
heard, right?

WENDELL POTTER: That’s right.

BILL MOYERS: When ordinary citizens cannot be heard.

WENDELL POTTER: Absolutely right. It’s the way the American system has
evolved, the political system. But it does offend me, that the vested
special
interests, who are so profitable and so powerful, are able to influence
public policy in the way that they have, and the way that they’ve done over
the years. And the insurance industry has been one of the most
successful, in
beating back any kinds of legislation that would hinder or affect the
profitability of the companies.

BILL MOYERS: Why is public insurance, a public option, so fiercely opposed
by the industry?

WENDELL POTTER: The industry doesn’t want to have any competitor. In fact,
over the course of the last few years, has been shrinking the number of
competitors through a lot of acquisitions and mergers. So first of all, they
don’t want any more competition period. They certainly don’t want it from a
government plan that might be operating more efficiently than they are,
that they operate. The Medicare program that we have here is a
government-run
program that has administrative expenses that are like three percent or
so.

BILL MOYERS: Compared to the industry’s–

WENDELL POTTER: They spend about 20 cents of every premium dollar on
overhead, which is administrative expense or profit. So they don’t want to
compete against a more efficient competitor.

BILL MOYERS: You told Congress that the industry has hijacked our health
care system and turned it into a giant ATM for Wall Street. You said, “I saw
how they confuse their customers and dump the sick, all so they can
satisfy their Wall Street investors.” How do they satisfy their Wall Street
investors?

WENDELL POTTER: Well, there’s a measure of profitability that investors
look to, and it’s called a medical loss ratio. And it’s unique to the health
insurance industry. And by medical loss ratio, I mean that it’s a measure
that tells investors or anyone else how much of a premium dollar is used by
the insurance company to actually pay medical claims. And that has been
shrinking, over the years, since the industry’s been dominated by, or become
dominated by for-profit insurance companies. Back in the early ’90s, or back
during the time that the Clinton plan was being debated, 95 cents out of
every dollar was sent, you know, on average was used by the insurance
companies to pay claims. Last year, it was down to just slightly above 80
percent.

So, investors want that to keep shrinking. And if they see that an
insurance company has not done what they think meets their expectations
with the
medical loss ratio, th ey’ll punish them. Investors will start leaving in
droves.

I’ve seen a company stock price fall 20 percent in a single day, when it
did not meet Wall Street’s expectations with this medical loss ratio.

BILL MOYERS: And they do what to make sure that they keep diminishing the
medical loss ratio?

WENDELL POTTER: Rescission is one thing. Denying claims is another. Being,
you know, really careful as they review claims, particularly for things
like liver transplants, to make sure, from their point of view, that it
really is medically necessary and not experimental. That’s one thing. And
that
was that issue in the Nataline Sarkisyan case.

But another way is to purge employer accounts, that– if a small business
has an employee, for example, who suddenly has have a lot of treatment, or
is in an accident. And medical bills are piling up, and this employee is
filing claims with the insurance company. That’ll be noticed by the
insurance
company.

And when that business is up for renewal, and it typically is up, once a
year, up for renewal, the underwriters will look at that. And they’ll say,
“We need to jack up the rates here, because the experience was,” when I say
experience, the claim experience, the number of claims filed was more than
we anticipated. So we need to jack up the price. Jack up the premiums.
Often they’ll do this, knowing that the employer will have no alternative
but
to leave. And that happens all the time.

BILL MOYERS: So, the more of my premium that goes to my health claims,
pays for my medical coverage, the less money the company makes.

WENDELL POTTER: That’s right. Exactly right.

BILL MOYERS: So they want to reverse that. They don’t want my premium to
go for my health care, right?

WENDELL POTTER: Exactly right. They–

BILL MOYERS: Where does it go?

WENDELL POTTER: Well, a big chunk of it goes into shareholders’ pockets.
It’s returned to them as part of the investment to them. It goes into the
exorbitant salaries that a lot of the executives make. It goes into paying
sales, marketing, and underwriting expenses. So a lot of it goes to pay those
kinds of administrative functions. Overhead.

BILL MOYERS: When a member of Congress asked the three executives who
appeared before the committee– if they wou ld end the practice of canceling
policies for sick enrollees, they refused. Why did they refuse?

WENDELL POTTER: Well, they were talking to Wall Street at that moment.
They were saying that because– I guess they might have to spend some
additional dollars to be more vigilant, to make sure that they were not
rescinding
a policy inappropriately. It makes no sense. The only reason they would
have said that is to cover themselves and to send a signal to Wall Street
that
you know, we’re going to continue business as usual here.

BILL MOYERS: You know, I’ve been around a long time. And I have to say, I
just don’t get this. I just don’t understand how the corporations can
oppose a plan that gives the unhealthy people a chance to be covered. And
they
don’t want to do it themselves.

WENDELL POTTER: Well, keep in mind, what they want to do is enhance their
profits. Enhance shareholder value. That’s number one. And the way that the
business that they’re in is health care, certainly. But their primary
motivation is to reward their shareholders.

Most of the shareholders are large, institutional investors and hedge
funds. Hedge fund managers are the ones who look at the stock and
investors for
large organizations. It’s not mom and pop investor.

BILL MOYERS: You w rote a column with the headline, “Obama’s false friends
of health reform.” You use as a prime example a man named Ron Williams,
who is at the top of the list of insurance executives in terms of their
compensation. We actually saw Ron Williams at President Obama’s Town Hall
meeting.

RON WILLIAMS: I would commend the president for the commitment he’s made
to really try to get and keep everyone covered. And I think as a health
insurance company we are committed to that.

BILL MOYERS: Who is Ron Williams, and why do you use him as the example of
what Wall Street expects and wants from the insurance companies?

WENDELL POTTER: He was recruited by Aetna from WellPoint. Aetna had gone
on a buying binge. There’s been an enormous amount of consolidation in the
health insurance industry over the last several years. Aetna bought a lot of
competitors.

It reached 21 million members. But what it realized and what investors
began to see is that a lot of the businesses that it had bought were not all
that profitable. So they were– Aetna was in a pickle. And they saw their
stock price starting to plummet. So they brought– among the things they did
was bring Ron Williams in. And Williams, among the first thing he did was
order a revamp of the IT system, so that–

BILL MOYERS: The information technology system–

WENDELL POTTER: Exactly, so that the company could determine more about
which accounts were not profitable or margining profitable. So with that new
system, he was able, and the other executives to identify the accounts that
they wanted to get rid of. And over the course of a very few years, they
shed 8 million members.

BILL MOYERS: 8 million policy holders?

WENDELL POTTER: 8 million people, men, women, and children, yes.

Some of them were shed by intention. Some, I’m sure, probably walked
because the– or left for whatever other reason, but they intentionally
had this
program to purge these accounts. Eight million fewer people were enrolled
in Aetna’s plans. Many of them undoubtedly joined the ranks of the
uninsured, because their employers had been purged.

BILL MOYERS: So what happened to Aetna’s stock?

WENDELL POTTER: Went up. And it has–

BILL MOYERS: And so did Ron’s–

WENDELL POTTER: And–

BILL MOYERS: –compensation, right?

WENDELL POTTER: Ron’s compensation and his stock on Wall Street. RON
WILLIAMS: And so I think in the context of thinking about a government plan,
what we say is, let’s identify the problem we’re trying to solve. Let’s work
collaboratively with physicians, hospitals, and other health care
professionals, and make certain that we solve the problem, as opposed to
introduce a
new competitor who has the rulemaking ability that government would have.

BILL MOYERS: You know, there’s an irony, because you hear the companies
and their trade groups talking about how we don’t want a public option that
would put a bureaucrat between a patient and his doctor. But you’ve just
described a situation in which a CEO is actually between a doctor and the
patient,

WENDELL POTTER: It’s true. And that same thing happened, in the Nataline
Sarkisyan case. You had a corporate bureaucrat making a decision on
coverage. So, they are trying to make you worry. And fear a government
bureaucrat
being between you and your doctor. What you have now is a corporate
bureaucrat between you and your doct or.

BILL MOYERS: Whose motive is profit. Understandably, naturally is profit.

WENDELL POTTER: Right.

BILL MOYERS: But companies, any company is in business to make a profit,
right?

WENDELL POTTER: Oh, absolutely.

BILL MOYERS: So how can you object? How can we object when an insurance
company wants to increase its profits? That’s a serious question. I mean, it
sounds like a set-up but it’s a serious question.

WENDELL POTTER: It’s a very serious question. And I think that people who
are strong advocates of our health care system remaining as it is, very
much a free market health care system, fail to realize that we’re really
talking about human beings here. And it doesn’t work as well as they
would like
it to. Yeah, there’s nothing wrong. And I’m a capitalist as well. I think
it’s a wonderful thing that companies can make a profit. But when you do it
in such a way that you are creating a situation in which these companies
are adding to the number of people who are uninsured and creating a problem
of the underinsured then that’s when we have a problem with it, or at least
I do.

BILL MOYERS: This is the key question for me. Can health reform that
includes a public plan actually rid our system of the financial incentive
on the
part of the insurance industry to provide less for more?

WENDELL POTTER: It will help. It would help. Would it rid it? No, I don’t
think it would, because of the for-profit structure that is now dominant in
this country. But the public plan would do a lot to keep them honest,
because it would have to offer a standard benefit plan. It would have to
operate more efficiently, as does the Medicare program. It would be
structured,
I’m certain on a level playing field, so that it wouldn’t be unfair
advantage to the private insurance companies. But because it could be
administered
more efficiently, then the private insurers, they would have to operate
more efficiently. And that 20 cents in that medical loss ratio we talked
about
earlier might get narrower. And they don’t want that.

BILL MOYERS: As this debate unfolds in the next month, into the fall, what
should we be watching for? Tell us as an insider what to look for that is
more than meets the eye?

WENDELL POTTER: When we see the actual legislation, when there’s something
before Congress, and it will happen, presumably, within the next few
weeks, you’ll start seeing a lot more criticism of it. And the special
interests
will be attacking this or that. The A MA will be upset about something.
The pharmaceutical industry will be upset about something. The insurance
industry will not like this or that. It’s, you know, a lot of money is
made in
this country off of sick people. And then you’ll start seeing a lot more of
the behind-the-scenes attacks on this legislation, in an attempt to kill
it. The status quo is what would work best for these industries.

BILL MOYERS: In other words, if the industry is able to kill reform, or
the Democrats and the Republicans can’t agree on a proposal, that’s what the
industry really wants.

WENDELL POTTER: Exactly. And it happened in ’93 and ’94. And just about
every time there has been significant legislation before Congress, the
industry has been able to kill it. Yeah, the status quo works for them. They
don’t like to have any regulation forced on them or laws forced on them. They
don’t want to have any competition from the federal government, or any
additional regulation from the federal government. They say they will
accept it.
But the behavior is that they will not– you know, they’ll not do anything
after say this plan fails. Say nothing happens. They’re saying now what
they did in ’93, ’94. “We think preexisting conditions is a bad thing,” for
example. Let’s watch and see if they really take the initiative to do
anything constructive. I bet you won’t see it. They didn’t then.

BILL MOYERS: Well, on the basis of the past performance, and on the basis
of your own experience in the industry, can we believe them when they say
they will do these things volu ntarily?

WENDELL POTTER: I don’t think you can. I think that they will implement
things that make them more efficient. And that enhance shareholder value.
And
if what they do contributes to that, maybe so. But now, they do say, they
are in favor of an individual mandate. They want us all to be insured.

BILL MOYERS: For the government to require every one of us to have some
policy.

WENDELL POTTER: Exactly. And that sounds great. It is an important thing
that everyone be enrolled in some kind of a benefit plan. They don’t want a
public plan. They want all the uninsured to have to be enrolled in a
private insurance plan. They want– they see those 50 million people as
potentially 50 million new customers. So they’re in favor of that. They
see this as
a way to essentially lock them into the system, and ensure their
profitability in the future. The strategy is as it was in 1993 and ’94, to
conduct
this charm offensive on the surface. But behind the scenes, to use front
groups and third-party advocates and ideological allies. And those on
Capitol
Hill who are aligned with them, philosophically, to do the dirty work. To
demean and scare people about a government-run plan, try to make people not
even remember that Medicare, their Medicare program, is a government-run plan
that has operated a lot more efficiently.

And also, the people who are enrolled in our Medicare plan like it better.
The satisfaction ratings are h igher in our Medicare program, a
government-run program, than in private insurance. But they don’t want
you to
remember that or to know that, and they want to scare you into thinking that
through the anecdotes they tell you, that any government-run system,
particularly those in Canada, and UK, and France that the people are very
unhappy.

And that these people will have to wait in long lines to get care, or wait
a long time to get care. I’d like to take them down to Wise County. I’d
like the president to come down to Wise County, and see some real lines of
Americans, standing in line to get their care.


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