The Ultimate Irony: Health Care Industry Adopts Big Tobacco's PR Tactics

At first look, one might not think that the health insurance industry has much in common with the tobacco industry. After all, one sells a product that kills people and the other sells a product nominally aimed at putting people back together. But when it comes to deceitful public relations techniques, the health insurance industry has been learning well from Big Tobacco, which employed a panoply of shady but highly successful public relations tactics to fend off changes to its business for generations.

One of the things I said in my testimony before the Senate Commerce Committee on June 24 is that the health insurance industry engages in duplicitous public relations campaigns to influence public opinion and the debate on health care reform. By that I mean there are campaigns they want you to you know about, and those they don't.

When you hear insurance company executives talk about how much they support health care reform and can be counted on by the President and Congress to be there for them, that's the campaign they want you to be aware of. I call it their PR charm offensive.

When you read or hear someone other than an insurance company executive -- including members of Congress -- trash some aspect of reform the industry doesn't like, such as the creation of a public health insurance option, there's a better-than-even chance that person is shilling for the industry. That's the PR campaign the industry doesn't want you to know about.

The public relations and lobbying firms that work for the industry plan and carry out those deception-based campaigns, and supply the shills with talking points. One of many tactics they use is to get people who are ideologically in sync with the industry's agenda to turn those talking points into letters to the editor.

An example of a letter that contained many of the industry's messages appeared in the June 27 edition of the New York Times.

The writer, Pete Petersen, identified as an employee benefits consultant for small employers, took issue with a June 20 Times editorial, which noted that, like Medicare, "a public (health insurance) plan would have lower administrative expenses than private plans."

Mr. Petersen claimed that the Medicare program is a poor example of an efficient government program, because it is administered by the private sector. While it is true that the government contracts with private companies to handle claims, the reason Medicare has such low administrative costs is because it does not have the unnecessary overhead expenses private insurers have, such as costs associated with sales, marketing and underwriting.

Mr. Peterson also wrote that Medicaid, Champus and state CHIPs "that are administered by federal, state and municipal authorities" average 26 percent in administrative costs. What he did not mention is that in many if not most cases, those authorities have turned those programs over to the insurance industry to run. Private insurers' involvement in those programs is much greater than in the Medicare program. That helps explain why they have higher administrative costs.

Mr. Peterson also claimed that, according to a 2006 PricewaterhouseCoopers study, "86 cents of every premium dollar goes directly toward paying for medical services." What he does not disclose is that America's Health Insurance Plans, the insurance industry's biggest trade and lobbying group, commissioned that study. A 2008 study by PricewaterhouseCoopers that was not paid for by the insurance industry tells a different and more revealing story. That study reveals that the percentage of premium dollars going to pay for medical care has fallen from more than 95 percent to slightly more than 80 percent since 1993.

For another great example of how the insurance industry uses its allies to flood newspapers with letters to the editor, read Trudy Lieberman's April blog post for Columbia Journalism Review. She discloses how an alert editorial page editor at the North Andover, Massachusetts Eagle-Tribune caught the industry red-handed.

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


Yes, thank you Mr. Potter for finally coming to your senses after 20 years in the business. May I ask -- what took so long? Also, where are your former coworkers? - Michael

The debate about referring to insurers as "insurance companies", or part of the "health care industry", can be solved by simply calling them "the Parasitic Insurance Protection Racket". [ This next part was sent, accidentally, as comment to the Bill Moyers story also about Wendell Potter. It belongs as comment here.] Saying that insurers use the same tactics as "tobacco" firms is a shade off-target. Top for-profit insurers ARE the cigarette industry in that they own billions of dollars of holdings in top cigarette manufacturers...and, for good measure, in manufacturers of tobacco pesticides. Google up "PNHP NEJM insurance tobacco" for info. This goes far to explain why such insurers use the cigarette makers' own deceptive name for themselves---"Tobacco Companies" if they just provide some traditionally-used natural plant product. Such insurers, and complicit chemical firms involved with the pesticides and chlorine contamination of typical cigarettes, and their allies in government and media, are understandably loath to call cigarette makers "the Pesticide-Contaminated, Chlorine-contaminated, Dioxin-delivering, Radiation-delivering Cigarette Industry". (Rads come from certain fertilizers.) To do so would be a long-overdue disaster for the insurers and the chemical and fertilizer cartels. If Wendell Potter touched on this scandalous angle, Big Insurance may well have already been packing its bags...making way for Single Payer.

A more significant question regarding the tactics of the health care industry, or the tactics of the tobacco industry, seems to do they get away with it? According to an Internet query I just performed, the FTC is still up and running. The first return on this query says "FTC: Working for U.S. consumer protection and a competitive marketplace." Entering their site, the banner touts: "FTC: Protecting Consumers". If we are going to continue to fund these various government agencies, when will we expect them to do their jobs? Continuing to add layer after layer of government intervention to cover for their previous mistakes is not going to give us any viable solutions. I'm almost sure there are respectable businessmen/women out there, if given the chance outside of a monopolistic environment, would be able to serve our economy in a more ethical manner. I'm not a believer of a lot of government intrusion, but history has taught us that greed has no conscience, and a small amount of guidance is unavoidable. Insurance companies may not be serving the needs of the population, but on the other hand, the government watchdogs have dropped the ball. Why not demand the FTC do their jobs, and give competition a chance--for once. I am not ready to throw in the towel yet, and am sorry to see so many people willing to concede yet another freedom to the U.S. Government.

Dear Mr. Potter: We are bombarded every day on TV with Republican talking heads, spouting about socialism and 'government take-over' of health care. We see carefully-crafted paid messages from our friends in the health insurance money machine, warning about impending doom for our country if that dangerous Socialist has his way with health. Most of this is paid for out of profits that insurance companies made from our outrageous payments for our health care. On the other side of the issue, we often see Democrats quoted on the news, talking about the mechanics of getting passage for a bill about which we know almost nothing. We know they've been wrangling over something, but what exactly, nobody tells. Yes, of course we hear about no denials for pre-existng conditions, affordability, and quite a lot of blather about costs and how to pay them. I think there should be some simple way to raise and sharpen problem awareness. To present some few bare facts about American health care, touted by many as the best in the world. Not just some emotional advert intoning "we really need health care, now!" Put the facts out for all to see, for example: 1. Health care expenditure, per capita in our country compared to some other developed nations, such as France, UK, Germany, Japan. 2. Approximate amount of that huge number that is burned up in administrative costs, compared, if possible to the countries enumeratred above. In our case, comparative percentages of Medicare vs. the profit-oriented insurers. 3. A ranking of life expectancy and infant mortality, in the same list of countries. ARE WE GETTING WHAT WE PAY FOR? Where, indeed, is the beef? Somebody, presumably one or more of our elected representatives, should be telling us what exactly it is they are trying to enact, even if it changes day to day. How about a running chronicle of amendments and deletions, including who was responsible? How about a clear statement from somebody about the Features, Advantages and Benefits of the proposed bill? We need a managed communication strategy to confront that Billion-dollar Megaphone being powered by the opponents of change. Whatever happens on the progressive side of the argument is disjointed and uncoordinated. This is a job that could be managed by a person like yourself, with extensive experience in managed communications. This is really urgent, and we run the very real risk of simply being out-shouted by the other side. CW+++