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  Date / Time: 8/31/2009 4:50 AM UTC

  Last Temptation
  

  The former mouthpiece for insurance giant Cigna divulges his role in misleading the public, the emotional day that led to his whistle-blowing, and what should really scare you.

  In June 2007, Wendell Potter was head of corporate communications at Cigna, one of the largest health insurance companies in America, when he attended the U.S. premiere of Michael Moore’s Sicko. Potter was part of the team charged with discrediting Moore’s film, which advance word said was highly critical of the health insurance industry. Potter “sat quietly in the back and took notes,” but soon realized he had a problem. “When I saw the movie, I’ll be honest: I thought it was a real good documentary. I knew from my own studies of other healthcare systems that it was an accurate portrayal of those systems and how they are able to provide universal coverage.” Yet he was being paid by Cigna to tell people the opposite, that the film was full of lies.

  Just a few weeks later, Potter, who is from Tennessee, read in a local paper about a free healthcare expedition being held in Wise County, Virginia. He decided to check it out. Walking through the fairground gates, Potter saw hundreds of people waiting in the rain while physicians attended to patients in animal stalls or on gurneys lying on the rain-soaked pavement. Tents had been pitched across the fairground lawns, creating a scene “like something that could’ve been happening on a battlefield or in a war-torn country.” Tears mixed with the rain to cloud Potter’s vision. “What I thought was: ‘Is this the United States?’ It was so remote from my reality. It just seemed impossible.”
  
  In months and years prior, Potter had grown increasingly skeptical about his job as chief spokesman for Cigna. Though he insists he never intentionally lied to a reporter, he began to spout what he thought were either misleading or less than honest statements. Moreover, his job required him to hype new programs he felt were not in the best interest of patients or the U.S. healthcare system—particularly when it came to high-deductible, or “consumer driven” plans. He came to feel he was on the wrong side of the healthcare debate and would catch himself gazing into a mirror, wondering, “Who is this? How did this happen to me?” After Sicko and Wise County, he resigned.

  Since then, Potter has become an outspoken advocate for healthcare reform. Why reform? Because of statistics like these: The U.S. healthcare system is the most expensive in the world, with each person spending more than twice as much on care than people in other industrialized nations. Yet our system ranks 29th in infant mortality, 28th in healthy life expectancy, and 37th overall. In June, Potter testified before the Senate on the devastating effects that Wall Street has on our healthcare system. The overwhelming demand to satisfy investors, Potter told the committee, is what causes insurance companies to “confuse their customers and dump the sick.”

  With twenty years of industry experience—he was head of corporate communications with Humana before moving on to Cigna—Potter is an important voice in the healthcare debate. As a former insider, he is uniquely positioned to reveal the industry’s secrets, like its obsession with the medical-loss ratio—the difference between what health insurance companies pay out in claims and what it has left over—which, Potter says, causes otherwise good people in the industry to allow patients to die in order to increase profits. Yet in another sense, Potter is not so unique. We’ve seen them before, former insiders who reap huge financial benefits from an industry or system only to publicly denigrate it years later. If things were so bad, we’re left wondering, why didn’t Potter say something earlier? I recently spoke with Potter by phone.

  —Jake Whitney for Guernica

  Guernica: During your time in the industry, you created health insurance front groups to mislead the public. Can you give me an example of one of these front groups?

  Wendell Potter: When the Clinton plan collapsed [in 1994], there was an effort to pass legislation that would give enrollees in managed care more protections. The industry saw this as anti-managed care legislation, so they established a group called the Health Benefits Coalition. The Health Benefits Coalition, with the funding it got from the insurance industry, killed off the effort to get a Patient’s Bill of Rights passed. A more recent example of a front group I was involved with was trying to blunt the effect of [Michael Moore’s documentary] Sicko. Through a PR firm, the industry created a front group to disseminate misleading information about the healthcare systems featured in Sicko—particularly in Canada, the U.K., and France. This front group was set up specifically to try to counter [Moore’s positive depiction of them].

  Guernica: What were your duties with these front groups?

  Wendell Potter: To help form messaging and develop strategy with public relations firms. PR firms help create the front groups and serve as the back offices to get the work done. The insurance industry contributes advice and counsel and feedback, but the real work gets done by the PR firms that the insurance industry hires.

  Guernica: Was it difficult for you to discredit a movie you felt was accurate?

  Wendell Potter: It was very difficult. I was beginning to hate my job. I’d look in the mirror and say, “Who is this? How did this happen to you?” But I had a job to do and was being paid quite a bit, so I soldiered on. I wouldn’t have stayed as long as I did if I didn’t believe that the company I worked for was honest and trying to meet the needs of people. I believed I was making some kind of positive contribution. As I was climbing up the corporate ladder, I got to understand more about how the companies make money and how they are so beholden to Wall Street—both investors and Wall Street analysts—and the things that they do to meet Wall Street’s expectations.

  Guernica: You worked in the industry for twenty years. It doesn’t seem like it should have taken so long.

  Wendell Potter: You don’t really focus on it or understand the significance of it. I’ll admit I knew that Wall Street looked at the medical-loss ratio. I knew it was an important measure. I didn’t know until, frankly, very recently how important it was. As recently as fifteen years ago, the medical-loss ratio in this country was 95 percent. Since then, there’s been great industry consolidation to the point that now there are seven companies that dominate. They’re all for-profit. During the time that this consolidation, this shift to for-profit occurred, the medical-loss ratio has continued to drop. Now it’s around 80 percent. That means twenty cents of every dollar goes to something other than paying medical claims. Just fifteen years ago, ninety-five cents of every dollar went to paying medical claims. This trend is due to pressure from Wall Street. If a company misses Wall Street’s expectations—if the medical-loss ratio starts to inch up—the company will suffer. I’ve seen companies lose 20 percent of their stock value in one day by disappointing Wall Street with their medical-loss ratio.

  Our current reality is far scarier than the fear-mongering. What people have now is a corporate bureaucrat who stands between a person and his or her doctor.

  Guernica: So are you saying our healthcare system would be better off if medical insurance companies weren’t publicly traded?

  Wendell Potter: We would not have the same problems. Just look at what’s happened since 1993, the beginning of the conversion to for-profit status. The two biggest companies now are Wellpoint and United. In 1993, they were very small. They’ve grown to their size and influence through very aggressive acquisition strategies. In Wellpoint’s case, they bought up many non-profit Blue Cross and Blue Shield plans around the country, which have since converted to for-profit status. United has had a similar strategy. Aetna and Cigna are third and fourth in size, and they, too, have grown largely by acquisition. The fixation that Wall Street has with the medical-loss ratio has created huge problems because investors look at that measure even more than they look at earnings-per-share, which is the primary measure that investors look at in most industries.

  Guernica: Shifting to President Obama’s plan: critics often say that Obama’s healthcare plan would be detrimental to care because it would take decisions away from doctors and patients and put them in the hands of a government bureaucrat. Is this a legitimate concern?

  Wendell Potter: No. But it is one of those talking points the industry repeats every time we have a debate about reform. They said it in 1993. They say it whenever the industry is under threat of increased government involvement. What I’m telling people is that our current reality is far scarier than the fear-mongering. What people have now is a corporate bureaucrat who stands between a person and his or her doctor. That’s much scarier than the specter of more government. In any event, there is nothing in any healthcare plan that is being proposed that would put a government bureaucrat between a person and his or her doctor.

  Guernica: Why is a corporate bureaucrat scarier?

  Wendell Potter: Because every person who works for a for-profit company knows that the company has to meet Wall Street’s expectations. Every manager of the company has to pull his or her weight to make sure he and his team are doing all that they can to help the company meet that objective. That includes medical directors. Same with the nurses. They know what the company has to do to meet Wall Street’s expectations and to stay in the good graces of investors.

  Guernica: So in other words, corporate bureaucrats have a profit incentive to deny care to people who are enrolled in their plans.

  Wendell Potter: Absolutely. It doesn’t have to be stated directly to them that you will be paid a particular bonus if you deny X number of claims; it’s known, and it’s part of the culture.

  Guernica: You said you’re familiar with the healthcare systems featured in Sicko and believe them to be superior to the U.S. system.

  Wendell Potter: They’re better in many regards. No system is perfect. Every system has flaws and challenges.

  Guernica: What about the long wait times we’re warned about, and that government-run healthcare would be one step on the path to socialism? Is there any legitimacy to these claims?

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