The Health Care Industry vs. Health Reform

Wendell PotterI'm the former insurance industry insider now speaking out about how big for-profit insurers have hijacked our health care system and turned it into a giant ATM for Wall Street investors, and how the industry is using its massive wealth and influence to determine what is (and is not) included in the health care reform legislation members of Congress are now writing.

Although by most measures I had a great career in the insurance industry (four years at Humana and nearly 15 at CIGNA), in recent years I had grown increasingly uncomfortable serving as one of the industry's top PR executives. In addition to my responsibilities at CIGNA, which included serving as the company's chief spokesman to the media on all corporate and financial matters, I also served on a lot of trade association committees and industry-financed coalitions, many of which were essentially front groups for insurers. So I was in a unique position to see not only how Wall Street analysts and investors influence decisions insurance company executives make but also how the industry has carried out behind-the-scenes PR and lobbying campaigns to kill or weaken any health care reform efforts that threatened insurers' profitability.

I also have seen how the industry's practices -- especially those of the for-profit insurers that are under constant pressure from Wall Street to meet their profit expectations -- have contributed to the tragedy of nearly 50 million people being uninsured as well as to the growing number of Americans who, because insurers now require them to pay thousands of dollars out of their own pockets before their coverage kicks in -- are underinsured. An estimated 25 million of us now fall into that category.

What I saw happening over the past few years was a steady movement away from the concept of insurance and toward "individual responsibility," a term used a lot by insurers and their ideological allies. This is playing out as a continuous shifting of the financial burden of health care costs away from insurers and employers and onto the backs of individuals. As a result, more and more sick people are not going to the doctor or picking up their prescriptions because of costs. If they are unfortunate enough to become seriously ill or injured, many people enrolled in these plans find themselves on the hook for such high medical bills that they are losing their homes to foreclosure or being forced into bankruptcy.

As an industry spokesman, I was expected to put a positive spin on this trend that the industry created and euphemistically refers to as "consumerism" and to promote so-called "consumer-driven" health plans. I ultimately reached the point of feeling like a huckster.

I thought I could live with being a well-paid huckster and hang in there a few more years until I could retire. I probably would have if I hadn't made a completely spur-of-the-moment decision a couple of years ago that changed the direction of my life. While visiting my folks in northeast Tennessee where I grew up, I read in the local paper about a health "expedition" being held that weekend a few miles up U.S. 23 in Wise, Va. Doctors, nurses and other medical professionals were volunteering their time to provide free medical care to people who lived in the area. What intrigued me most was that Remote Area Medical, a non-profit group whose original mission was to provide free care to people in remote villages in South America, was organizing the expedition. I decided to check it out.

That 50-mile stretch of U.S. 23, which twists through the mountains where thousands of men have made their living working in the coalmines, turned out to be my "road to Damascus."

Nothing could have prepared me for what I saw when I reached the Wise County Fairgrounds, where the expedition was being held. Hundreds of people had camped out all night in the parking lot to be assured of seeing a doctor or dentist when the gates opened. By the time I got there, long lines of people stretched from every animal stall and tent where the volunteers were treating patients.

That scene was so visually and emotionally stunning it was all I could do to hold back tears. How could it be that citizens of the richest nation in the world were being treated this way?

A couple of weeks later I was boarding a corporate jet to fly from Philadelphia to a meeting in Connecticut. When the flight attendant served my lunch on gold-rimmed china and gave me a gold-plated knife and fork to eat it with, I realized for the first time that someone's insurance premiums were paying for me to travel in such luxury. I also realized that one of the reasons those people in Wise County had to wait in long lines to be treated in animal stalls was because our Wall Street-driven health care system has created one of the most inequitable health care systems on the planet.

Although I quit my job last year, I did not make a final decision to speak out as a former insider until recently when it became clear to me that the insurance industry and its allies (often including drug and medical device makers, business groups and even the American Medical Association) were succeeding in shaping the current debate on health care reform. While the thought of speaking out had crossed my mind during the months leading up to the day I gave notice, I initially decided instead to hang out my shingle as a consultant to small businesses and nonprofit organizations.

I decided to take the shingle down, though, at least for a while, when I heard members of Congress reciting talking points like the ones I used to write to scare people away from real reform. I'll have more to say about that over the coming weeks and months, but, for now, remember this: whenever you hear a politician or pundit use the term "government-run health care" and warn that the creation of a public health insurance option that would compete with private insurers (or heaven forbid, a single-payer system like the one Canada has) will "lead us down the path to socialism," know that the original source of the sound bite most likely was some flack like I used to be.

Bottom line: I ultimately decided the stakes are too high for me to just sit on the sidelines and let the special interests win again. So I have joined forces with thousands of other Americans who are trying to persuade our lawmakers to listen to us for a change, not just to the insurance and drug company executives who are spending millions to shape reform to benefit them and the Wall Street hedge fund managers they are beholden to.

Take it from me, a former insider, who knows what really motivates those folks. You need to know where the hard-earned money you pay in health insurance premiums -- if you lucky enough to have coverage at all -- really goes.

I decided to speak out knowing that some people will not like what I have to say and will do all they can to discredit me. In anticipation of that, here are some facts:

  • I am not doing this because my former employer was pushing me out the door or because I had become a disgruntled employee. I had not been passed over for a promotion or anything like that. As I noted earlier, I had a financially rewarding career in the industry, and I'm very grateful for that. I had numerous promotions, raises, bonuses, stock options and stock grants over the years. When I left my last job, I was as close on the corporate ladder to the CEO as any PR person has ever climbed at the company. I reported to the general counsel, the company's top lawyer, whose boss is the chairman and CEO, a man I like and worked closely with over many years.
  • The decision to leave was entirely my own, and I left on good terms with everybody at the company. In fact, I agreed to postpone my last day at work by more than two months at the company's request. My coworkers gave me a terrific going-away party, and I received dozens of kind notes from people all across the country including friends at other companies and at America's Health Insurance Plans, the industry trade association.

I still consider all of them my friends. In fact, the thing I have missed most since I left is working as part of a team, even though I eventually came to the conclusion that I was playing for the wrong side. Being a consultant has its advantages, but I have missed the camaraderie. After a few months, I thought that maybe I should consider working for another company again. At one point, a former boss told me that another insurer had posted a PR job and encouraged me to contact a former CIGNA executive who worked there about it. Against my better judgment, I did, but I immediately decided not to pursue it. The last thing I wanted to do was to go from one big insurer to another one. What the hell was I thinking?

I'm writing this because, knowing how things work, I'm fully expecting insurers' PR firms to quietly feed friends of the industry (which include a roster of editorial writers and pundits, lawmakers and many others who fall under the broad category of "third-party advocates,") with anything they can think of to discredit me and what I say. This will go on behind the scenes because the insurers will want to preserve the image they are working so hard to cultivate -- as a group of kind and caring folks who think only of you and your health and are working hard as real partners to Congress and the White House to find "a uniquely American solution" to what ails our system.

I expect this because I have worked closely with the industry's PR firms over many years whenever the insurers were being threatened with bad publicity, litigation or legislation that might hinder profits.

One of the reasons I chose to become affiliated with the Center for Media and Democracy is because of the important work the organization does to expose often devious, dishonest and unethical PR practices that further the self interests of big corporations and special interest groups at the expense of the American people and the democratic principles this country was founded on.

After a long career in PR, I am looking forward to providing an insider's perspective as a senior fellow at CMD, and I am very grateful for the opportunity to speak out for the rights and dignity of ordinary people. The people of Wise County and every county deserve much better than to be left behind to suffer or die ahead of their time due to Wall Street's efforts to keep our government from ensuring that all Americans have real access to first-class health care.

Wendell Potter is the Senior Fellow on Health Care for the Center for Media and Democracy in Madison, Wisconsin.


Elle, you say government can't do anything right, but I bet you support all its wars and interventionist foreign policy, don't you? I'm just guessing here, but I'm betting you as a military wife "support the troops" right down the line, including everything the Pentagon asks for and more. If government is so universally corrupt and incompetent, why would you support our military interventions and our bloated defense budget? You can't have it both ways.

So you are ok with the services, but you don't want to pay? Do you think Wall Street has our best interests in mind where it comes to health care? I don't. This is a fundamental part of living in a society. You pay for fire departments even if you don't use them. Millions of people pay for schools, even when they don't have children... because it makes for a better society. It seems to me that the conservatives in this country are so paranoid that a penny of their taxes are going to go for something they don't benefit from. It is the same greed that got us into the current economic crisis. My wife has an inoperable brain tumor. I'm scared to death of losing my job because of the economy. Put yourself, for once, in someone else's shoes. Ever heard of the term "pre-existing condition"? It is the first thought in an insurance company's list of ways to deny coverage. How fair is that???

Dear Wendel Potter, I am a 55 year old Vietnam Era Veteran, who is permanently and totally disabled, but I currently have VA insurance for myself and Medical Mutual Insurance of Ohio for my wife and I. We are both disabled at 55 and 50 yrs. I am worried that whenever Big Brother and Government steps into a free enterprised, they overstaff it with ignoramuses, who don't know a fig about health care, are more concerned about their next break from the break they call work, and over inflate our health care costs. I do not want my health care managed by an HMO, PPO or Big Brother, so they can limit my health care, exclude new experimental drugsmedical treatments and procedures to make us well, and deny old people health care as we are too old to be of any good use to the society as a whole, so kill us off now as they can't afford us. Now I have lived in Odessa, Ukraine, with my Russian wife of six years and I know first hand how this socialized medicine works. The doctors are not paid a living wage, which causes them to prioritize who gets health care on the basis of gifts, bribes or whatever you want to call it. Then you also need to give to the doctors a bottle of vodka or box of candy to pass out to their friends and family for such a privilege. You don't need a prescription to buy a drug, except narcotics, and can go to any drug store without such and pay $.50 to $2.00 for your favorite drug of choice. The recent economic downturn has increased these costs in the last two years, since I was there. When you have a small medical problem, this system is satisfactory, but you have to wait all day in the hallway for the doctor to get to you, or pay a doctor to come to your house, yes they still do house calls. However, if you have a heart attack, you will have a major health care & financial problem, as they have you by the shorts. None of your medical insurance works as they will not give to you a bill for a bribe, which means your 80/20 insurance card will not work in a socialist, low paid, medical plan. Because of my beautiful daughter-in-law opera singer, I got to see the chief cardiologist of the President of Ukraine in Kiev, they said I should go to the US and have this done, bypass, angioplasty and stents or pay them $25,000 to $50,000 to do such there. They were trained in the US. Normal meds cost $2 a bottle, but heart meds cost so much, my wife had to borrow $500 for one month of foreign made meds like Plavix from Franceyour . So I came home, saw the VA and had my heart cath, angiography, angioplasty and stent done in Ohio. Now I see this big problem about the proposed health reform. I can see the Canadians coming to the US to avoid rationing of health care for 2 to 3 years and do not like this prospect. I do not like the idea of the government forcing me to pay for five jokers who have never worked a day in their lives and decreasing my access to advanced medical treatment and drugs to pay for them, when I have to pay $150 a month for such and will have to pay much more than I can afford, since I am $20,000 below the poverty level for 2 people as a disabled veteran without a military pension as of yet. If any of my fellow medically insured change their plans from civilian to government covered plans, my Medical Mutual of Ohio will not be able to compete and throw me and all the others like me, who have earned their retirement benefits and full medical coverage into the new socialized medical plan. This threatens my health coverage, health, marriage, than and life as I am 55 years old. What young looking wife, wants a sick old man for a husband? Care takers of the family suffer from serious depression and that causes divorce. So now my question is, what do I do? Pray to God the health reform fails? Go back to Ukraine, or emigrate to another non-socialist country? The 10th Amendment stops the US Government from claiming rights that are not specifically enumerated in the US Constitution, and such legal rights belong to the Sovereign States and Individuals. The Government will have denied my God-given right to contract with those medical insurance co and doctors, that I need to become healthy and remain so. Somehow, I am sure that all this control of our doctors and medical systems, will profit some fatcat bankster or politician down the line. What is your take on all this? I too feel sorry for the hillbillies of the Appalachians, for I am one of them, and do not wish to join the lines of people to sick to get such coverage. Then I see that those who are already disabled, will be forced to pay a fortune for such care or be penalized for not having done so, in order to spread the costs, and I already go to the food pantry 4 times a month. Where is the line for the medical pantry? I have no huge financial largesse to afford more taxes or costs by gold digging politicians or banksters. I am not the only one. Three times, I have almost been killed by the pill pushing VA, who now gives me 22 types of pills a month at an additional $176/mo. Tell me they care about me. Hog slop. The one thing I did like about the medical system of former Russian controlled Ukraine was that they used alternative, integrative, and complementary health care by incorporating the Eastern medical philosophies of acupuncture, herbs, and less potent pills, thereby allowing your body to heal itself, rather than poisoning you with counter-acting side effects, making your whole body a toxic waste. My only hope is that Jesus will come soon and give to me and my wife a new, immortal and incorruptible body, because my faith in any health care system has failed due to greedy, ignorant, politicians, and the pharmaceutical companies. If you have the time, please comment. Yours, David Harvey

As the spouse of a Viet Nam (yes he was there, not just an era) veteran, I can tell you that you are eligible for complete health care if it's service related. Even if you are disabled and it is NOT service related you can contact the VA hospital and most things ARE covered even if you are NOT RETIRED military! I am shocked that you have not been given this information. My son was in for 10 years, disabled and they pay all his meds. FTR, they go so far as to even cut your toenails if needed. I am proud of my family's service and grateful for the health care we get. Neither my husband nor I are eligible for Medicare yet but I can tell you that the American military health care system is a good one and they DO negotiate with drug companies on price to enable vets to get their medicines either free or a $3 co-pay at any local pharmacy for generics. The government Medicare system has been barred from negotiating prescription drug prices, a real waste of health dollars. I advise you to get on the Internet and go visit the VA website or go to your nearest base pharmacy with your prescriptions. IF you are a military retiree you are eligible to get a 90 day supply of your prescriptions for $0. BTW, for anyone that doesn't know, military retirees health care (referred to as Tricare) DOES come from Humana health care. If you don't get the answers that you want there are always people you can talk to, yep, real human beings that do care. My husband was not an officer or a "higher-up" when he retired, but a real person checks on him every couple of months to make sure his congestive heart failure is under control. We have several either retired vets or military disabled in my family, all, including spouses, treated with fairness and respect. I hope that America will adopt a version of the military health care system that covers everybody. I was a claims analyst for RE Harrington (a 3rd part claims processor) 20+ years ago and was so disgusted by the corruption, paying claims for the VP's new step-daughter's cosmetic surgery while ordering me to deny a claim for a child that required maxilofacial surgery for birth defects, necessary for him to eat and breathe like a normal human being. I did complain way back then and nobody listened or seemed to care. One of their favorite ploys was to keep claims from being paid as long as possible. Why? Interest paid on the funds in their bank was far more than a few customer service reps paycheck:( Glad Mr. Potter got thru to some people, it was long overdue. America is far from perfect and we do need a comprehensive health care system for everyone. If all the waste and corruption was cut, we could probably pay for it with just those savings. Contact your congresscritters and tell them to "move their butts" NOW!! Mr. Harvey or anyone else that needs military retiree info, go to You can also write to Military Health System Skyline 5, Suite 810, 5111 Leesburg Pike Falls Church, VA 22041-3206

The title of Mr. Potter's piece does him no service: "The Health Care Industry vs. Health Reform." It's not a dichotomous choice. As a former employee of United Health Group, as well as Kaiser Permanente, I know the flaws in the system, as well as how for-profit insurance schemes are susceptible to abuse. However, absent from his post is any idea of how he would reform the current system. Should we merely transpose a Medicare-like system onto 300 million Americans? Does anyone know how Medicare "balances" its fiscal obligations? By reducing payments to physicians and hospitals. Succinctly stated, we have a cost problem based on over-utilization because the nexus between the consumer and the payment entity has been broken, which means I can obtain $275 worth of medical services from a visit to a specialist for about $50. I could try, but I doubt an attorney or CPA would give me the same deal, so why should we expect that from our health insurance system? Moreover, we don't have insurance for oil changes or tune-ups for our cars, so why do we have it for routine medical visits? How did this Faustian bargain begin? It goes back to WWII when employers were circumscribed by wage restrictions, so they began providing health insurance to their employees. The rest is a muddled and admittedly imperfect system. It does need to be reformed, and although the profit incentive must be controlled with oversight, if you excise that entirely, you'll merely have a Medicare-like system that strives on mediocrity. I know, because I live it on a daily basis and it simply doesn't work.

Another 'Anonymous' expert, I see, though this one took some more time to push some insurance industry talking points as well as attack Mr. Potter. Let's take this as an opportunity to go through some of them, a 'vaccination' against insurance-monger spin, if you will. :^) "absent from his post is any idea of how he would reform the current system." - this could simply be a lack of understanding; this article is about how the Health Care Industry has put itself in the way of Health Reform and why it has been profitable to do so. Perhaps this writer is unaware that this is PR Watch, a watchdog group that points out false statements and spin, not a health care reform advocacy group. If the writer or anyone else would like to hear Potter's solutions, you can see him discuss this in more depth on his recent "Democracy Now!" interview. "Does anyone know how Medicare "balances" its fiscal obligations? By reducing payments to physicians and hospitals." - Again, possibly just ignorance on the writer's part. First, let's establish a reasonable context: Medicare has been one of the most functional and efficient programs in the history of the US government. It has been so successful at handling its finances and taking care of its beneficiaries that it has been a cash cow for hundreds of other federal programs that have been dipping into its funds for decades. Having a central, consistent, single payer of benefits has meant enormous savings on the hundreds of billions of dollars of overhead costs that multiple insurance companies now incur and have burdened our healthcare system with, according to GAO findings. Medicare also has consistently higher approval ratings by doctors and other professionals than any private insurance company. One small part of Medicare's success is the use of negotiated rates, a tactic used far more often by HMOs usual suspects like Kaiser Permanente. In fact, because groups like Kaiser negotiate individually instead of setting a consistent rate for all, insurance companies push the larger burden of costs onto smaller businesses and individuals who do not have the leverage to negotiate more advantageous contracts. The statements that follow are similarly remarkably ignorant or radically disengenous; of course CPAs and lawyers give discounted services under negotiated contracts. Perhaps the writer has never owned a new car, but my last one came with a year of insurance for oil changes and tune-ups. Much like the attempted accusation, the writer makes allusions to 'knowing the flaws' in the current system, but doesn't say what they are. The writer says "the profit incentive" can be controlled by oversight, but gives no indication why this would suddenly start working after several decades or why the insurance industry wouldn't fight this just as viciously. As someone who is supposedly an expert, why not add something useful into the discussion, rather than just attacking a known and recognized expert?

Wendell has written some truth and that is great. Nothing pleases the Lord more than a sinner who has repented and works to change. The information from Wendell ( Healthcare Greed) is not a revelation; we knew this already. Christians will continue to take care of the sick and poor because it is our mission. We will do the work we are commanded to do, regardless of the world. Many non-Christian people carry the load as well and deserve recognition.. It's not the money; "The love of money is the root of all evil." Way to go Wendell Potter !

Until Potter gives back all the money he made from the "big for-profit insurers [that] have hijacked our health care system," I don't trust him one iota. This is always the scheme with the neo-Bourgeoisie: Build up huge wealth with deceit and greed. Then, once they've gotten theirs, they kick down the ladder and demand "reform" that, conveniently, destroys others but leaves them unscathed. I see Potter in my mind's eye sitting cozily in his Aspen lodge sipping wine, admiring the vistas and berating the "masses" as hicks and hillbillies, all the while rolling his blood-stained fingers over his ill-gotten booty. He's got his money. Now he lusts power and a personal legacy. One wonders what became of the more noble co-workers Potter shoved aside as he clawed his way to the top. I note that this site proclaims to "remove personal attacks." This seems ironic, as Mr. Potter cites only his "personal" story as proof of the validity of his ideas. This site's tactic demands pro-propaganda conformity masquerading behind the facade of "free-speech."

Mr. Potter has a right to a change of heart and to live his life the way he sees fit. You say: "...they kick down the ladder and demand "reform" that, conveniently, destroys others but leaves them unscathed..." Just what "others" do you think that he is destroying? Your post is very odd, but your bitterness and rage are evident. It sounds like you yourself are clawing your way up the corporate ladder at an insurance company, perhaps denying claims and purging policyholders, and you worry that your own ambitions might fall victim to reform. That's the conclusion I drew from your vituperation..

Orwell's Avenger - Ii realize that this reply is pretty late relative to your comment and the article but I must comment. I have to wonder what makes a person think the way you do? There are millions of people who keep quiet about things they know are terribly wrong because of their paycheck and benefits. If your salary depends on you closing your eyes to certain things then it's very human to do that - we are after all, defective human creatures. So Mr. Potter had his eyes opened to the point that he could not look away anymore - and you condemn him for this and attack him for this. Again, your anger at him seems misplaced. What would you have done in his situation? We all like to think that we would always to the right thing in all circumstances - I am grateful that he came forward and wish that many more had followed his lead - it would have made for an easier time reforming healthcare and we would not have had to pacify the insurance companies and their congressional mouthpieces of opposition. Bless you Mr. Potter, bless all the sick and suffering here in the good old USA, and may people like you OA have a change of heart, without having to learn the hard way with an illness for which the insurance giants toss you out. Peace.