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THE MAN WHO WASN’T THERE: Meet Wendell Potter, Healthcare Executive Turned Whistleblower

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http://farm8.staticflickr.com/7170/6464636673_4a24aa6d61_s.jpgBY JONATHAN VALANIA This is the first installment of a massive, 30,000 word, three-part Q&A with Philadelphian Wendell Potter*, former mild-mannered Cigna health insurance executive turned whistle-blowing superman standing up for truth, justice and the American way. You may have seen Mr. Potter testifying before Congress or talking about the ills of the health insurance industrial complex on CNN or MSNBC or PBS, or in the pages of The New York Times, Wall Street Journal or Time magazine, to name but a few. Last year he published Deadly Spin, an authoritative takedown of a sick and dangerous healthcare system and the incredibly powerful and phenomenally profitable industry that games it for billions; the dark arts of modern corporate P.R.; and an impassioned call for substantive reform, basic mercy and common decency.  In this first installment we discuss the crisis of conscience that turned him from loyal, not to mention highly paid, company man to crusading reformer and all-around thorn in the industry’s side. Having long thought he was on the side of the angels he increasingly came to realize that he was in fact playing for the other team, that the point of for-profit healthcare insurance is not paying for customers’ medical costs but avoiding doing so whenever possible. That for-profit health insurance corporations have a legal obligation to prioritize enhancing shareholder value over saving the lives of its customers. That he had blood on his hands. That he was an apologist for a system that denies medical care to more than 50 million Americans, and as a result more than 48,000 people die prematurely every year. Potter was tasked with writing an official-sounding report that minimized the problem and shifted all the blame on the uninsured. He helped craft reform-killing talking points for the healthcare lobby’s Congressional stooges to repeat into the cameras of Fox News and CNN. He was part of the effort to smear Michael Moore and discredit Sicko, his 2007 critique of the iniquities of the healthcare industrial complex, even though deep down he knew Moore was dead-on. The final straw was having to serve as company spokesperson through the resulting media firestorm when Cigna denied 17-year-old Nataline Sarkisyan a liver transplant and she died less than a week later.

*In the interest of full disclosure, let the record show that Wendell Potter does not smoke nor does he wear a noir-ish fedora, we just thought this Cohen brother movie poster was cool artwork to go with this interview. He actually looks like this…

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[Photo by ROBIN ODLAND]

PHAWKER: You start off your book Deadly Spin with this very dramatic statistic: About 45,000 people will die in America every year because they have no health insurance. Can you explain that?

WENDELL POTTER: That’s based on a study conducted by researchers here at the time at Harvard, Dr. David Himmelstein and Dr. Steffie Woolhandler. It was a very scientific based study to determine mortality rates, why people die. I think, probably, it’s understated. The reason for that is because uninsured people don’t have access to care in the proper setting and often at the right time. They suffer as a consequence. People forgo routine care and wait until it’s often too late to save their lives. Consequently, a lot of Americans are dying prematurely. The reason I say the number is understated is because I think there are a lot of Americans dying because they are underinsured. They have insurance but they have no idea it’s inadequate until it’s too late. They realize they can’t afford to make co-payments or they have such limited benefits they can’t get what they really need. There’s no other country in the developed world that even has to have a study to determine that. We’re unique in that regard, that just doesn’t happen in any other developed country in the world.

PHAWKER: Why is that?

WENDELL POTTER: Because the other countries have at some point in their history addressed healthcare issues and developed the healthcare system with some central government role that has been significant in shaping the healthcare system. We never did that. We allowed so called market forces to shape what we call a system here. I have a doctor friend who says we shouldn’t even call it a healthcare system, he refers to what we have here as a sickness industry. The reason he says that is a lot of money can be made off of treating people once they get sick if they have insurance or the means to pay for it. We’ve really let for-profit corporations shape our so called system to the point that they make a lot of money once we get sick, again if we’re insured and have the means to pay for it. Insurance companies make a lot of money insuring the healthiest and trying to avoid the sickest. Most people don’t really think about that, that our system here is set up to be at a disadvantage to people who really need insurance. It’s because the free market system just simply doesn’t work as people think it probably should in healthcare. I think the majority of Americans think that the free market mechanism will make for the best healthcare system, but they don’t really stop to think exactly how it doesn’t work in healthcare and how it works to the disadvantage of consumers or patrons, whatever you want to call people.

PHAWKER: You mentioned all these other industrialized Western countries, Canada, etc., the defenders of the for-profit healthcare like to paint them as http://farm8.staticflickr.com/7147/6464338099_91ae600cd0.jpgbeing these grossly inefficient socialist hells where people get terrible medical care and have to wait in line six months to get treated for a heart attack. Can you speak to that at all?

WENDELL POTTER: Yeah, and the insurance companies are behind that, they want us to believe that. And then most of us will not take the time to determine the truth. They say that kind of thing knowing that a lot of people will believe it, believe it for a variety of reasons. One, the insurance companies themselves are not the messengers, they create the messages, they create that misinformation and get others to misinform people about it. They’re very skillful in doing that. Americans, they know too, are likely to believe if it’s not invented here it’s not good enough, “how could anyone have a system better than ours?” So we’ve got this American exceptionalism or whatever you call it here. People believe it as a matter of national pride. Plus, Americans don’t travel as much as many people in other countries travel. In other words, not enough of us travel to really see that other systems really do work better than ours does. So we’re very susceptible to that misinformation to start with. It’s purposeful because the insurance companies make a lot of money off the current system, they don’t want it to change to be more like another country’s healthcare system because it would either put them out of business or make them less profitable.

PHAWKER: Just to be clear, speaking as a former healthcare insurance executive, you are saying Canadian system and healthcare systems in most of Western European countries are superior to the United States?

WENDELL POTTER: In many ways, it absolutely is. No system is perfect. There is no system that isn’t struggling with cost, with aging populations, and that will always be. As a society we’re getting older, not just our society but almost every society in the west. The cost of treating people is always going to be going up, probably. So we’re always going to have those problems, but those other countries have been able to address those concerns in more effective ways. We have in this country the most expensive healthcare system in the world. But we’re also one of the most inefficient. One of the most inequitable. We spend so much more on administrative functions, much more than any other country in the world and it’s because of the way it’s set up. One of the reasons why we spend almost 17 percent of our gross domestic product on healthcare is not because we’re getting all that great care, it’s because a big chunk of that goes to administrative functions that do not make us feel better or keep us well.

PHAWKER: How did that happen?

WENDELL POTTER: Because of the way we let our system evolve. We have a lot of middle men in our system, if you will. Insurance companies being the most visibly prominent. We have the opposite of a single payer system, we have a multi-payer system. We have multiple insurance companies that compete for business. But each one of these health insurance companies has its own set of rules, and its own way of doing things. They negotiate separate contracts with doctors and hospitals. Every healthcare provider, every doctor, every physician, organization or practice, every hospital in this country has to deal with multiple insurance companies, unless they refuse to take insurance. They have to have a different system with dealing with each one of them. They have to hire a significant staff just to deal with it. That’s not the case in other countries, we’ve created this layer of bureaucracy that doesn’t exist anywhere else. The way it’s set up, it makes it necessary for both the healthcare providers and the insurers to set up a massive administrative bureaucracy to deal with all these different systems. We also have these organizations called PBMs, pharmacy benefit management companies, another middle man that makes a lot of money and provides some function, but it’s largely administrative. So we just have a lot of companies that make a lot of money and a number of individuals that make an enormous amount of money off of the way things are because of the high overhead. We just allow this to happen here.

PHAWKER: If elections were publicly financed in this company, would it end the healthcare cartels’ choke hold on policy in this country?

http://farm8.staticflickr.com/7029/6464344085_8a7cdbe2e3_o.jpgWENDELL POTTER: Yes, and you hit on something that’s really a problem. Public financing of campaigns would go a long way toward removing the influence of special interests from our government. People are under the illusion that we’re in control of our government, or even that our elected officials call the shots in Washington or the state capitals. They don’t. The agenda is set and determined by the special interests. They have that much power to influence elections and influence what politicians do once they’re in office. Until we address that, we will continue to have a healthcare system that is dysfunctional as ours.

EDITOR’S NOTE: Edward Hanway (pictured, left) retired in 2009 with a $111 million golden parachute.

PHAWKER: How long has it been like this? For all of the 20th Century or just after WWII?

WENDELL POTTER: I think it got worse after WWII. The origins of our current healthcare system date back to the late 20s early 30s, when health insurance kind of developed as a concept in this country. It was really hospital insurance that developed first. The original health insurance companies were nonprofit. They were mostly statewide in their coverage, not national, and called Blue Cross plans.

PHAWKER: When did health insurance become a for-profit enterprise?

WENDELL POTTER: When the large life insurance companies in this country started to notice there’s some money to be made in health insurance, and they realized they could make some money by cherry picking the healthiest, by selling insurance only to people who were healthy. They could do that by offering policies with lower premiums to people that were younger and healthier. They refused to sell coverage to people who were older and sicker. That began to skew the whole system. That’s continued to be the case and even more so now than it was initially, but that’s how these insurance companies make money. They try to cherry pick as much as they can to avoid paying for care and they make tons and tons of money.

PHAWKER: In the book you point out the United States ranks 47th in life expectancy at birth, right behind Bosnia, and 54th in fairness, behind Bangladesh. Can you explain those rankings?

WENDELL POTTER: For life expectancy we’re ranked lower than almost any developed country, we’re way down there in the rankings below some of what we would consider Third World countries. It’s because we don’t focus on keeping people healthy. Again, this goes back to us having a sickness industry. We don’t have a national structure that promotes wellness and that incentivizes healthcare providers to keep us healthy in the first place. So we don’t have this in place like other countries do, that’s one reason why life expectancy and infant mortality rates are much worse here than they are in any other developed country.

PHAWKER: These other countries, do they incentivize wellness?

WENDELL POTTER: They absolutely do. In the UK for example, each person is assigned to or has a general practitioner that looks after their well being and the incentive is on keeping folks healthy. There is a mechanism better than ours to compensate positions for keeping people well. In this country another reason for that is most insurance companies and even the medicare program pays for services rendered. That means that doctors and hospitals will want to do more services, perform more tests, do more things, because that increases their compensation. The way we compensate doesn’t create much of an incentive to keep us well. Plus the insurance companies don’t have much incentive to focus on wellness either. We have an employer based system of healthcare coverage in this country, and Americans change jobs on average right now every 4.4 years. That means you will probably change your insurance carrier that often as well, if not even more often. So insurance companies know that, they won’t make a significant investment in keeping you healthy because most likely in four years you won’t even be on their rolls anyway. We rank even lower than Bangladesh in fairness because we have a very inequitable system, and that’s very important, too. It’s one of the most inequitable systems in the world.

PHAWKER: What do you mean by inequitable?

WENDELL POTTER: It means that countries that rank higher than we do, any given citizen of those countries has more equal access to care regardless of http://farm8.staticflickr.com/7006/6464344213_8a0485f25a_m.jpghow poor or wealthy they are. In this country, we have more stratification, the wealthier you are the more likely you are that you will have access or will be able to plea for care. If you are insured you have access to care that people who are uninsured don’t have. We 50 million people who are uninsured and another 30 million who are underinsured. That’s one in every three Americans who don’t have as good access to care as people who are fully insured, and that’s why it’s an inequitable system. Most every other system in every other developed country there is no significant chunk of people who are uninsured. Because of them, all the citizens of these countries have access to care.

PHAWKER: Have we dropped in the rankings over the years? Were we ever at the top of some of these categories?

WENDELL POTTER: We’re losing ground. The Commonwealth Found just a few weeks ago, they do an annual survey of how we rank against other countries and we’re falling behind. We’re falling further behind because of this profit motive we have here that works against us improving access to care and quality of care.

PHAWKER: “The health insurance industry is dominated by a cartel of large for-profit corporations. By necessity and by law, the top priority of the officers of these companies is to ‘enhance shareholder value.’ Explain that to people who might not understand how corporations work and how companies operate and prioritize their obligations to customers and shareholders.

WENDELL POTTER: In the for-profit world, if you are a publicly traded company, you have a legal obligation to think first of your shareholders. That’s just the way it’s structured in this country. By law that’s the way it is. (There has recently been this development in some states that companies can become a ‘beneficial corporation,’ where it is recognized you have a focus on more socially responsible activities, it’s not a single focus on profit, but no insurance company that I’m aware of has applied for that kind of a legal structure.) So it’s just a legal requirement that you have to keep your shareholders’ interest first in mind. If you don’t do that you’re liable, you set yourself up to be sued by your shareholders for being negligent and not looking after their interest. You know that is always a reality, that you can be sued by your shareholders. As a result of that, and the way that works in the insurance industry is you will do whatever it takes to make sure your shareholders are happy and that you’re looking after their interests first. They have to meet those shareholders’ expectations, and in this country it’s expected that for-profit companies will announce earnings results every three months. Every quarter you have accounting to your shareholders how you’ve done over the previous three months with their money. If they don’t like what you’ve done, if they think your performance hasn’t been what they expected they’ll sell their shares. Selling their shares in mass will drive the stock price down and the company is worth less. So you don’t want that to happen. So there’s a constant awareness among the executives of any corporation that you need to keep those shareholders in mind. Otherwise, if they’re not happy your stock price will suffer and if you’re an executive and you get stock options, that means your net worth will go down if you have a lot of stock in the company and you’re not likely going to get rewarded in terms of a raise or a bonus. So it’s all about satisfying your investors. That’s job number one.

http://farm8.staticflickr.com/7169/6464344259_b22ee64809_m.jpgPHAWKER: Isn’t that flat out immoral. These companies are paid by their customers to assume the financial responsibility for the health and well being and prolonged existence of said customers – but that’s not their top priority.

WENDELL POTTER: You’re right. And I’ve come to believe that that is immoral, that is not a moral way to run a healthcare system, it is not. The things these companies have to do to make that money are to a disadvantage of a growing number of people. I spent 10 years handling financial reports for Cigna, I know what this is like. I worked very closely with the CEO and the Chief Financial Officer and the investor relations people on the financial reports and the pressure is intense, it’s unrelenting. That is why they have to focus on making sure they avoid insuring people who actually need it. That’s why this cherry picking persists. It’s why they will avoid paying for care even of the people who have insurance if they can get away with it.

PHAWKER: But come 2014 when Obamacare kicks in, that will no longer be the case, it will be illegal to turn people down for pre-existing conditions, right?

WENDELL POTTER: Exactly. They don’t like that, the insurance companies will be doing anything they can between now and 2014 to try and change the law to their benefit. But you’re right. And that’s why it’s important in my view to keep going forward with this law, it will make some of the most egregious practices in the industry illegal. That will undoubtably compress their profit margins and they don’t want that, and the shareholders don’t want that. So they are working much behind the scenes, but they’re working to try to influence the elections next year, which they will and they’re trying to influence the way the regulations have to be written as a consequence of Obamacare. As we speak, they are working in Washington and in the state capitals to try to make sure that the law, if it goes forward, is implemented in ways that favor them. And they’re very very influential, they’re very very influential.

PHAWKER: In the book you write, “It was not until later in my career that I became aware of the lengths to which insurance company executives will go to meet Wall Street’s expectations. The further up the corporate ladder I climbed, the more I saw and the more disillusioned I became with my job, my profession, and my industry.”

WENDELL POTTER: I think most of us who have jobs and work for big corporations, if you’re not working with the CEO and those who report to him, you often don’t have a very clear understanding of how exactly your company makes money. You got your job to do, and I was doing my job, I felt that I was doing my job well and I took some pride in that. I would be rewarded if my boss thought I was doing a good job, I’d get a raise or I’d get a promotion. So that’s what typically happens I think in almost any kind of a job, you want to do your job well because you want to get rewarded. You want to keep getting those financial rewards and the recognition of the bonuses and the promotions. You’re also sheltered from a lot of the things that really go on at the upper levels of the company, and I certainly was. I was a firm believer for a long time, I guess I was a believer in ideology to a certain extent, I felt that the free market should work in healthcare just like it works in every other sector of the economy. I think most people do. Why not? But unless you see how it works up close you don’t really understand why it doesn’t work.

PHAWKER: The free market will spur innovation which would spur better healthcare, better treatment, better coverage, etc. But it doesn’t necessarily play that way…

WENDELL POTTER: No, it doesn’t in healthcare. That’s the theory, the free market will always lead to some improvement or enhancement but it does not in http://farm8.staticflickr.com/7035/6464344329_b07b82d063_m.jpghealthcare. It works, in many cases, in the opposite way. It rewards inefficiency in this country, the proliferation of things that are done that do not improve the quality of care, but that enable some individuals to make a lot of money. It just doesn’t work. That goes back to the ideology, I wouldn’t say I was an ideologue, but at least I was buying into that. I also felt that, I guess it was something I told myself, ‘I am doing my job,’ I was doing my part in helping some people to get the care that they need. I don’t begrudge, I don’t say everybody who has insurance is disadvantaged, insurance companies do pay a lot of claims, it does work a lot of the time. But I’ve began to see how it does not work for growing numbers, and how that is going to be more and more of a problem and how more and more are joining the ranks of people for whom the insurance system doesn’t work anymore.

PHAWKER: Can I ask what your political affiliation was then or is now?

WENDELL POTTER: I’ve been all over the place, I grew up in a Republican family, I grew up in a Republican part of the country. I’m from Eastern Tennessee which is historically one of the most Republican parts of the country. Everybody I know and that I’m related to is a Republican. I don’t think I even knew a Democrat growing up, there was that much of a Republican culture. And it was a culture, you were born into being a Republican just as I was born into being a Baptist.

PHAWKER: It’s a very poor part of the country and yet the Republican party makes no bones about it that they’re the party of the rich. I’m curious how they’re always able to convince people to vote against their own best interest.

WENDELL POTTER: They’re very skillful about that. And part of it is, in sections of the country like that it’s cultural, you are a Republican and you’re suspicious of anyone who’s not like you. But it goes back, frankly, to the Civil War. There were a lot of people who, in my family and much of that part of the country, did not have slaves, they were Lincoln Republicans. So it goes back to that time. As it changed, they are also very social conservative folks. The corporations understand that, they know how to create wedges, how to exploit that. And they’ve exploited that. They’re extremely skillful at getting people to vote against their own self interest. It’s very hard also to persuade someone who’s grown up as a Republican to switch sides, we’re not necessarily independent thinkers many of us, we believe what we think you’re supposed to believe. So I grew up in that environment, when I was in college I began to become more of an independent political thinker, I began to question a lot of what I had been told was the way to be and think when I was growing up. I went to work, actually, after I had left my job as a journalist, to work for a Democrat who was running for governor of Tennessee. But I voted for George Bush when he ran for president in 2000 because I was buying into his…

PHAWKER: Compassionate conservatism?

WENDELL POTTER: Compassionate conservatism, absolutely. I’m still very much a believer in managed care and the idea that my company and companies like mine could do a better job than the government. Now I do not consider myself a Democrat or Republican, a conservative or a liberal, I just don’t want to label myself. I just don’t want to do that, to me it’s not the right thing to do. I heard someone at a conference this past weekend who said that ideology is a false faith and I tend to agree with that. People who adhere to certain ideologies are so susceptible to being manipulated and I just don’t want to label myself.

PHAWKER: Fair enough. Let’s talk about when you started to have a change of heart about all of this. Not that long ago, it was after 2000. What was the first a-ha moment?

http://farm8.staticflickr.com/7153/6464344377_efb458d6e1_m.jpgWENDELL POTTER: It began when insurance companies started shifting from the managed care model, which I thought was a solid model, to what they referred to as consumer driven care, which is just a euphemistic expression for shifting people into plans with high deductibles, or in other words, shifting the cost of care from us to them. The term that was very popular at the beginning of that movement was ‘skin in the game,’ as in ‘Americans need to have more skin in the game, they need to have more of an awareness of how much healthcare costs.’ If they did, if they had to pay more for it, they would become better consumers of healthcare. That implies we’re consumers of healthcare. You are not a consumer of healthcare if you have cancer or had a heart attack, you are a patient and you’re not likely to go out and shop for care when you have a critical need for it. I was beginning to see the fallacy in my view of that business model.

PHAWKER: When did that shift happen?

WENDELL POTTER: It was happening toward the end of the 90s but it didn’t really catch on in a significant way until the middle of the last decade, but it’s growing very rapidly. More and more employers are shifting their workers into these high deductible plans. That points to another failing in an employer-based system. Most employers want to stay in the game of offering benefits, but they’re being priced out of it and the only way they can stay in it is to shift more and more of the cost onto their employees. It’s a cost shift that is not sustainable. That’s one of the reasons I decided to leave. I could see that this was a way for insurance companies and employers to make money, to continue the profits they’ve been making. It’s very profitable for insurance companies because you’re able to unload the risk by doing this. The peer-reviewed Journal of Health Affairs in September had an article, a research project about incomes in this country. Income gains for the last decade have been completely wiped out because increases in healthcare costs. Completely wiped out. We’re losing ground. The medium household income in this country is less now than it was in 1999 when you adjust for inflation, and a big part of that is because money that would have gone to raises has been going to pay for healthcare. So we’ve been losing ground and as we’ve been losing ground the insurance companies have been getting wealthier. I began to see all this, I was doing my own research. It was one of the things that was part of my job, I had to stay informed of all the trends in healthcare, I was in charge of a daily news summary we put together for all of the company’s executives. So I was as knowledgeable I guess on the healthcare system as anybody because of my constant reading and doing research. I realized I was no longer believing my own PR, I was seeing the evidence that the insurances were not a part of the solution as I was trying to make people believe, but they were actually contributing to the problems and were absolutely the main reason why a growing number of us don’t have coverage.

PHAWKER: How does this evolve? Around what time are we talking here that you were coming to these realizations?

WENDELL POTTER: I guess it was really 2007. It was significant because I was actually doing better in the company, I had been made head of corporate communications, I was reporting to the general council, I had the top PR job in the company, I was made a member of the Public Policy Council – that was important because it was a small group of executives led by the CEO. What we were doing was developing the company’s positions on healthcare reform. This was the year before the 2008 elections, the campaigns for president were already obviously under way, we were paying close attention to what the candidates from both parties were saying about healthcare reform, I was being tasked with developing a position paper on what the company’s points of view were on various healthcare issues, and one of the things I was asked to write was a white paper on the uninsured. The expectation was that what I would write would lead people to believe that the problem with the uninsured is not quite as significant a problem as the Democratic candidates would lead us to believe, that the majority of Americans have insurance and they’re happy with their insurance so let’s not screw things up for those who have it. I was trying to, in a certain way, make people think that those who were uninsured were that way by choice, that they were shirking their responsibility.
PHAWKER: They wanted you to whip up this official-sounding report that make it look like the uninsured problem wasn’t as big of a problem as it really was, there were a lot of people who were happy to be uninsured.

WENDELL POTTER: That’s exactly right, that’s how it was being shaped. It became increasingly clear to me that they weren’t interested in an objective piece of analysis, they wanted a piece of persuasion. I was just not liking that, I didn’t think it was appropriate. I was having the beginning of a crisis of conscience. I became increasingly aware of what I was doing was the opposite of what I had been trying to do as a journalist at the beginning of my career. I was spinning the truth. It wasn’t that data that was wrong, but it was the selective disclosure, the picking of certain things to create a picture that wasn’t necessarily a complete picture. It dawned on me that ‘Geez, this is pretty much what I do these days.’ I just was not happy with myself. I was literally having a hard time looking at myself in the mirror sometimes. I would look in the mirror and sometimes, honest to God, and ask ‘who are you and how in the world did this http://farm8.staticflickr.com/7141/6464485245_114222f7ca_m.jpghappen to you? How did you get here?’ I loved being a journalist and I loved the mission of journalism, but I was being paid for handsomely for what I was doing. But even though I was growing increasingly unhappy with what I was doing and not at all proud of what I was doing, there were times where I thought, ‘Well I can just keep doing this, I can see retirement out there, I’m moving in that direction so maybe I can just hang in here and ride it out.’ But then I went back home to visit my parents in Tennessee in July of 2007 while I was in the midst of writing this paper. I picked up my hometown’s newspaper and read about this healthcare expedition that was being held across the state line in Southwest Virginia. There were two big stories on the front page, one was about the expedition and the other was about the fact that John Edwards had been there the day before, he had made a campaign stop there.

PHAWKER: Just to explain what a healthcare expedition is, this is where doctors and nurses volunteer to come to these very poor sections of the country where people have little or no access to medical attention and set up a two day temporary clinic, and there’s thousands that come out for these thing.

WENDELL POTTER: The story said this was the eighth time this was being held. It’s always a three day weekend in July, Friday through Sunday. I went there out of curiosity and I was just stunned. This organization was started by a guy who started flying doctors from the US to third world countries and word started getting around, he was being invited by people in the US to bring these expeditions to their counties. I couldn’t believe it when I got there because people were lined up by the hundreds.

PHAWKER: You actually went out to see it firsthand?

WENDELL POTTER: I did. I borrowed dad’s car and drove up there the next morning, I got up early and it was about 50 miles from where I grew up, I didn’t realize it was about that far, I might not have gone if I had known but I just kept going. I finally got to the Wise County fairgrounds and it was just unbelievable. I saw people of all ages, although they weren’t really senior citizens, those senior citizens have coverage from Medicare, it’s mostly working adults who were there and in fact most of them had jobs I found out later, they just didn’t have any insurance and didn’t have enough money to be able to pay for care out of their own pockets and so they had to wait until this event came around once a year to get care. They drove from hundreds of miles away to get there and they were spending the night in their cars and their trucks. I had no idea this was going on. It struck me to the point where I teared up.

PHAWKER: And this happened in the middle of you crafting this paper that was trying to whitewash this issue?

WENDELL POTTER: Right. And it was almost as if I was supposed to be there to see this. I will never ever forget the moment I walked through the fairground gates it was almost like things started swirling around me. There was so much activity and just the awareness of all these people who were lined up and it was clear that those lines led to barns and animal stalls. It just felt like an electrical shock or something, I have never before and haven’t since experienced something quite like it. It was a sudden realization of what was going on.

http://farm8.staticflickr.com/7012/6464584667_ee2db108a2.jpgPHAWKER: Like Paul on the road to Damascus?

WENDELL POTTER: Absolutely that. That road I took to get there was my road to Damascus, it was my epiphany, and it truly was in many ways kind of a spiritual journey. I don’t think I would have had that reaction, I don’t think I would have even gone there if it weren’t for the way I was brought up. I’m a compassionate person, my parents are, and I was raised in a church setting. I knew the road to Damascus story, I knew that what was happening to me was more than just a coincidence. I knew at that moment sooner or later I was going to have to do something else. What I was doing for a living was not right, I was part of the problem myself, I was in my own way perpetuating a system that was making it necessary for people to resort to getting care that way, people I could have grown up with.

PHAWKER: They were getting medical care in animal stalls and barns?

WENDELL POTTER: Absolutely, it’s a county fairground where the livestock go. They judge livestock there. The animal stalls, other volunteers had come and cleaned out the animal stalls, sanitized them best they could, they were clean settings but at other times this is where animals were being kept. They strung up sheets to serve as curtains to provide privacy to people being examined. It was beyond anything I ever thought I’d see in this country. It was like a M.A.S.H. unit because they also had to set up tents because of the size of the crowd, there weren’t enough barns and animal stalls to take care of everyone so they had tents as well. You could just walk around and see people being cared for in many different ways, there was just no privacy. I was just stunned. I’ll never ever forget it, it was truly a life changing moment.

PHAWKER: How old were you at the time?

WENDELL POTTER: I had just turned 56, I’m 60 now.

PHAWKER: So you were 10 years off from retirement age.

WENDELL POTTER: I was, yeah I was. But I could see it. It was not impossible to see it. I thought, well that’s a long way but I can probably just hang in there. Have a good retirement and you know.

PHAWKER: If you worked until 65, surely there were advantages to you sticking it out as a company man.

WENDELL POTTER: I had a pension, I was vested, the longer I stayed the more would be in my pension fund, I had a 401K that I was contributing to and the company matched. I guess I would have continued to get bonuses and stock options as I had in years past. So I was building up what I thought would be retirement, how could I walk away from that? 56? It’s not so easy to walk away from that kind of a job and demand one somewhere else. What made it necessary for me to quit, and I think I wrote about this in the book, a couple of weeks after I got back to work I had to fly to Connecticut on the company plane and I was just paying attention to things more than I had before. I was flying on a plane that cost about $5,000 an hour to operate. I was being served lunch on gold rim china by a flight attendant who worked for the company. Even though I’d been on the company plane many times before, I just never paid much attention to it, but I was seeing things through different eyes this time: How unbelievable this is. No wonder those people have to stand in line to get healthcare in animal stalls because of what I’m doing this very minute with my CEO in the plane there. When you’re at that level you can go through your day to day without realizing the consequences of what you’re doing. I had to go out of my way to go see that, I was drawn to that. I wouldn’t have necessarily known about that if I hadn’t gone to Tennessee and read about it and then driven up there. I lived on the Main Line and in my daily existence I didn’t really know people who were uninsured. I probably did but it just wasn’t anything I thought about. I didn’t see them by the hundreds and thousands like I did that day in Wise County. At the end of the year, December, I served as spokesman for the company when Cigna denied coverage for a transplant for a 17 year old girl in Los Angeles.

PHAWKER: What was her condition again?

WENDELL POTTER: She had leukemia. She had it first when she was 14, she was in many remissions and it came back when she was 16, treatments were just not working, she had to have a bone marrow transplant which weakened her liver and her doctor said she’d have to have a liver transplant.

PHAWKER: Which would cost how much?

WENDELL POTTER: About $200,000 – $250,000 plus aftercare which would be a lot more and an ongoing expense.

PHAWKER: As you write in your book, the cost of the transplant was roughly the same amount Cigna spent for travel, catering and hotel rooms for its annual Investor’s Day meeting in New York City.

WENDELL POTTER: Correct.

PHAWKER: Where does this fit in the timeline after the…

WENDELL POTTER: The healthcare expedition. Remote Area Medical was the organization that puts them on, by the way. That was in July and it was http://farm8.staticflickr.com/7165/6464543453_8027f9a6d3_m.jpgDecember when the Nataline Sarkisyan case developed. I first heard about it when I was back in Tennessee again visiting relatives and I got a call from my secretary about the first reporter who called about it. I didn’t really think a lot of it, I thought it was an odd call, the reporter had misunderstood or had at least been led to believe that Cigna had denied coverage because Cigna had learned that the family owned a second home somewhere and were denying coverage for the transplant because the family could afford to pay for another home. It didn’t make any sense, and it did turn out that was erroneous information, that was true the reason Cigna had denied coverage. The reason Cigna denied coverage was because a medical director for Cigna in Pittsburgh had reviewed the request from Nataline’s doctors at UCLA and in his opinion, he didn’t think it would be an appropriate procedure so he refused to pay for it.

PHAWKER: What do you mean appropriate, the transplant wouldn’t work?

WENDELL POTTER: Yes.

PHAWKER: Just explain what the medical director does, he is a doctor and he has the kind of expertise that he can make these decisions from Pittsburgh?

WENDELL POTTER: Yes, in fact he was a medical director in Cigna’s transplant unit, so what he dealt with were requests for coverage for transplants of various kinds. The company does cover a lot of transplants, this one he felt was, in his view, not appropriate and did not meet the medical necessity guidelines. Her doctors said they felt that the transplant would be effective, it would give her I think a 65% chance of living five years. The medical director in Pittsburgh for Cigna said he didn’t think so, he didn’t think the medical literature supported that. Of course, he never examined her and never saw her in person, he was relying on the information faxed to him or sent to him electronically.

PHAWKER: So she’s denied care and the family had managed to get a lot of media attention for their daughter’s plight?

WENDELL POTTER: Yeah, the family was very resourceful. It’s an Armenian family, there’s a very close knit Armenian community in Los Angeles I learned, a fairly large community, they rallied behind the family, they were very well connected. They helped the family find an attorney, actually Mark Geragos who was an attorney at one point for Michael Jackson.

PHAWKER: He knows how to work the media.

WENDELL POTTER: He does, absolutely. They also got connected with the California Nurses Association, they’re very politically active and media savvy. They had a relative who worked for a TV station, I think. With all that, they were able to get a lot of attention in the Los Angeles media. That’s where all the calls were coming from initially. Stories started appearing and it quickly became a national story. CNN started covering it, NBC started covering it, then it became an international story. My phone was just ringing off the hook. I came back up here and it was just snowballing, there was so much at stake for the company from a PR perspective, we certainly needed to make sure that the CEO was aware of what was going on. We had a meeting early in the day on December 20th, and later that day the Sarkisyan family had planned to have a protest in front of Cigna’s regional offices in Glendale, California. CNN was planning to be there, all the local media, and that’s what happened. It was being televised live and I let my CEO and my boss know about it and very quickly, within an hour or so, the decision was made that we needed to make this go away. The company had decided to go ahead and cover the transplant.

http://farm8.staticflickr.com/7020/6464543327_a47dcf2201_m.jpgPHAWKER: I was going say, surely the cost of the transplant would be worth the…

WENDELL POTTER: Oh yeah, the company realized the potential reputational damage of the company could far exceed the cost of the transplant. We had to spin it in a way that limited legal exposure and try to make sure the employer involved in this was not at risk. So it was tricky, I was involved in crafting the media statement.

PHAWKER: At risk of what, if the procedure went wrong or from negative media fallout?

WENDELL POTTER: Both, we knew that Mark Geragos was a resourceful attorney and knew the chances could be great that litigation could be brought against the company either way. So we wanted to make sure we had a legal strategy, a PR strategy, and they were working very close together, I was wanting to make sure whatever we said in the media wasn’t an admission that we had screwed up in the first place. Essentially what we wound up saying was that we agreed to pay for it out of the goodness of our hearts, we don’t think we made a mistake in the first place but because of the specifics of the case we would go ahead and cover it and that Cigna would pay for it rather than having the employer pay for it. I thought, well that’s the right thing to do. Everybody was hoping that would make the story diminish and the transplant would happen and hopefully she would come through OK. The problem was, of course, that it was coming days after her doctors requested it.

PHAWKER: How many days?

WENDELL POTTER: About a week I guess. During that time, her other organs began to shut down, her health was deteriorating. I was watching TV while all this was going on, in real time, CNN was covering it live, I had a TV in my office and I was watching it unfold. By this time, I knew that Cigna was going to pay for it but the family didn’t know yet, we were trying to figure out how to get the word to the family in an appropriate way. I told everybody you’re not going to find them at home because they’re on their way to Cigna’s headquarters so I called someone in Glendale to make sure there was someone there to get the word to the family. I was watching on TV as someone whispered in Mrs. Sarkisyan’s ear something that made her happy and I knew she had finally gotten word.

PHAWKER: You literally saw this happening on television in real time?

WENDELL POTTER: Yeah, they whispered in her ear something to the effect of “Cigna will pay for it,” and she was just overjoyed. She began hugging her husband and saying, “Cigna will pay for it!” I’ve forgotten the exact words, but it was just unbelievable to see this all played out right on TV, and of course the family was just thrilled that Nataline was going to get the transplant. But, I learned about a year later that Mr. Sarkisyan had already learned from the doctor that she had just gotten too sick. They couldn’t even go forth with the transplant. Mrs. Sarkisyan hadn’t been told that yet so she was still so hopeful that the transplant would save her daughter’s life. But just within hours after that celebration, Nataline died. Just incredible.

END OF PART I

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Nataline Sarkisyan’s tombstone

***

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[Photo by ROBIN ODLAND]

PART II

http://farm8.staticflickr.com/7170/6464636673_4a24aa6d61_s.jpgBY JONATHAN VALANIA This is the second installment of a massive, 30,000 word, three-part Q&A with Philadelphian Wendell Potter*, former mild-mannered Cigna health insurance executive turned whistle-blowing superman standing up for truth, justice and the American way. (You can read Part I HERE.) You may have seen Mr. Potter testifying before Congress or talking about the ills of the health insurance industrial complex on CNN or MSNBC or PBS, or in the pages of The New York Times, Wall Street Journal or Time magazine, to name but a few. Last year he published Deadly Spin, an authoritative takedown of a sick and dangerous healthcare system and the incredibly powerful and phenomenally profitable industry that games it for billions. He debunks the dark arts of modern corporate P.R. that uses subterfuge, misdirection and good old fashioned distortion of the truth to manipulate public opinion and absolve its paymasters of all culpability for the dirty deeds that make those obscene profits possible. In the end, Deadly Spin is an impassioned call for substantive reform, basic mercy and common decency.

In the first installment we discussed the crisis of conscience that turned him from loyal, not to mention highly paid, company man to crusading reformer, watchdog and all-around thorn in the industry’s side. Having long thought he was on the side of the angels he increasingly came to realize that he was in fact playing for the other team, that the point of for-profit healthcare insurance is not paying for customers’ medical costs but avoiding doing so whenever possible. That for-profit health insurance corporations have a legal obligation to prioritize the http://farm8.staticflickr.com/7170/6509803525_54ddf8be7a_m.jpgenhancement of shareholder value over saving the lives of its customers. That he had blood on his hands. That he was an apologist for a system that denies medical care to more than 50 million Americans, and as a result more than 48,000 people die prematurely every year. Potter was tasked with writing an official-sounding report that minimized the problem and shifted all the blame on the uninsured. He helped craft reform-killing talking points for the healthcare lobby’s Congressional stooges to repeat into the cameras of Fox News and CNN. He was part of the effort to smear Michael Moore and discredit Sicko, his 2007 critique of the iniquities of the healthcare industrial complex, even though deep down he knew Moore was dead-on. The final straw was having to serve as company spokesperson through the resulting media firestorm when Cigna denied 17-year-old Nataline Sarkisyan a liver transplant and she died less than a week later. It is the campaign against Michael Moore and Sicko that we focus on in this installment. It begins with a cabal of health insurance operatives hiring a mole to sneak into the premier of Sicko at Cannes and take notes so that neutralizing talking points can be crafted. These talking points — which mostly rely on the usual lizard brain illuminators, namely fear (“Universal coverage is creeping Socialism!”) and loathing (“Taxpayers will have to pay out of pocket for illegal immigrants to get Cadillac health care!”) — are then passed along to various industry-owned Congressmen who dutifully parrot them in the echo chamber of 24-7 cable news and talk radio. It ends with Wendell Potter apologizing to Michael Moore live on national television.

PHAWKER: Just to pick up where we left off. Cigna refuses to pay for Nataline Sakisyan’s liver transplant, then after her parents stage a series of protests that get lots of media coverage, Cigna decides to go ahead and pay for the procedure but by then it’s too late and she dies. You point out in the book that the cost of Nataline’s liver transplant would have been about the equivalent of the catering and hospitality budget of an investor’s meeting?

WENDELL POTTER: It was about the equivalent of the budget for the half day in its entirety at the hotel in New York where it was held. That included the rooms of the Cigna people who were staying at the hotel, the rent of the facilities and the catering, and audio/visual support. So it was about $250,000 or so. The cost of the transplant would have been about that. Of course, the after-care expenses would have been beyond that.

PHAWKER: So you guys decide to go ahead and green-light the transplant but it’s too late and she passes away. What’s the reaction to that around Cigna HQ?

http://farm8.staticflickr.com/7003/6464543285_f8da8e7f3b_m.jpgWENDELL POTTER: I guess I’ll just start with myself. I was personally devastated because I just really thought that she was well enough to live long enough to get the transplant. I hadn’t realized she’d gotten that sick that fast. My small staff was really very devastated as well. It was hard to determine how the rest of headquarters felt. We got really busy, or at least I did, writing a public condolence to the family. I think it shifted very quickly to, “Well, what are we going to do next and how are we going to defend ourselves from an inevitable lawsuit?” It was very quickly that the attention turned to the company’s legal defense and setting up what was referred to as the “lead team” at Cigna. The lead team involved a few people led by someone who reported to the general counsel, I was a part of it, members of Cigna Healthcare including the chief medical officer and the head of Cigna Healthcare were part of the lead team. It was just a team of people that met by phone or in person if everyone was together, on a very regular basis, at least daily and initially twice a day to determine what was happening in terms of news coverage – I was responsible for monitoring that and making sure the executives have all the news coverage. So it was very quickly a change in focus now that Nataline was dead, that meant that the PR nightmare was not over by any means for the company, it was really in a way just beginning, we were probably going to be having to sustain that for quite some time, or at least endure it.

PHAWKER: How did that play out? You resigned how long after this?

WENDELL POTTER: I resigned in May. This happened in December, it was December the 20th, 2007, when Nataline died and I left in May of 2008. Actually turned in my notice in January, but my boss persuaded me to stay for a while longer and so I agreed to do that and stayed until May.

PHAWKER: So you were kind of out of the afterword to that story.

WENDELL POTTER: Not really, to an extent I was and I wasn’t. It began to diminish while I was still there. The media moved on to other things before too long, I was very much involved in damage control, working with a PR firm to try to place sympathetic articles about Cigna in various media. So I was part of the effort to try to shift the public opinion to be more favorable towards Cigna.

PHAWKER: Sympathetic stories about Cigna regarding this incident or just in general?

WENDELL POTTER: Sympathetic stories regarding this incident.

PHAWKER: What was the sympathetic side of Cigna’s story?

WENDELL POTTER: I guess you’d say the story line was Cigna was doing what it had an obligation to do, that it was obligated to try to make sure the http://farm8.staticflickr.com/7012/6509605337_8c155b2e6f_m.jpgemployer’s money was spent prudently, and it was part of the company’s responsibility to review these requests for expensive procedures and make a judgement call as to whether or not they should go forward. I guess you’d say the rough rest of it was to try and explain to people that Nataline might not have gotten that transplant as she did in a public program, if she’d been living in Canada or the UK, we made that point. We made the point that financial resources are not infinite, they’re limited. So we tried to at least persuade the business community that we had done the right thing. That’s why it was important to get an op-ed place in the Wall Street Journal, to try to reassure business customers and prospective customers that we thought we’d handled the case appropriately.

PHAWKER: Did you write the op-ed?

WENDELL POTTER: I did not, the author was a guy named Scott Gottlieb. And I’m sure the PR firm assisted in writing.

PHAWKER: So taking off your Cigna employee hat and putting on your human being hat, is there a justifiable side to Cigna’s story in this saga?

WENDELL POTTER: You know, I do agree that resources are not infinite, there are limits on what you can do, but my biggest concern here is I would not want to know that if my daughter were in that situation that a medical director at a for-profit health insurance company would be calling the shots and making the final decision as to whether or not she would get the coverage she needed to pay for it. That medical director who made that decision was just as much of a corporate as I was, I’m sure he got stock options and stock grants and bonuses based on his performance just like I was. I know how it works inside a corporation like that, and that’s where I think the problem lies. It’s our for-profit structure of health insurance and so much of our healthcare system is for-profit. I would much rather have had someone who was either working for a non-profit health plan make that decision, or preferably in a single payer system, where there would be some remove from the profit motive, it’s the profit motive I think, well I know that I have the biggest problem with.

PHAWKER: Let’s walk through you checking out of the business. You were thinking about this for a while, you saw firsthand the annual healthcare expedition in the rural South that draws thousands of the working poor who are uninsured, then your riding on the corporate jet with the CEO and eating off of fine china which costs the equivalent of the combined annual premiums of five Cigna customers for every hour of operation, and then Nataline Sarkysan death is the proverbial nail in the coffin. You decide that you were going to give notice and the reaction to that is? Did you explain to them why you were leaving?

WENDELL POTTER: Not fully, I just explained to them that I was just burned out. I didn’t want to keep doing what I was doing. I had a good long run at the company, I was grateful for the chance to have a paycheck for 15 years and the things I had when I was there, and I just didn’t want to do that anymore. I didn’t have it in me to do this anymore. I was no more specific than that really. I didn’t have a plan, I just wanted to leave.

PHAWKER: So you told them you would stay on until May?

WENDELL POTTER: Yeah, my boss had asked me to stay on until the company announced Cigna quarter earnings, which I was responsible for doing, and to be there to help handle the annual meeting. Those were two of my main responsibilities as head of financial communications. I agreed to do it, like I said I didn’t have anything else lined up, I just didn’t want stay there for a long period of time but I was willing to stay on at my boss’s request for a while longer. I was sorting things through in my head, I didn’t know what I wanted to do, I really didn’t. I was very relieved when I walked out the door May the 2nd and http://farm8.staticflickr.com/7002/6509636855_88d4a45c7a_m.jpgdidn’t have to do that anymore. I think my boss had detected that I wasn’t a happy camper in the months preceding that. She said at one point, “Wendell, you don’t seem to be engaged.” I knew if she was picking up on that then it was very evident that I wasn’t very happy to be there. So she wasn’t shocked, but some were very surprised, they didn’t have a succession plan in place so one of the reasons she asked me to stay on was until they could figure out how they would divide my responsibilities.

PHAWKER: And the third quarter was very healthy and profitable for Cigna?

WENDELL POTTER: Yeah, quite healthy, quite profitable. This was in the book but I can’t remember now what the results were but the company was profitable and I think the company was happy and I walk out the door and that was it.

PHAWKER: How many shareholders would show up at these meetings?

WENDELL POTTER: Oh, very few. It’s surprising, it varies from company to company but Cigna has never had a large turnout at these shareholder meetings. One thing to keep in mind is that the shares of these companies are largely owned by institutional investors, not individuals. There are some individuals who own stock and who do show up, but the best majority of the shares are owned by large institutional investors. They’ll often send a representative to the annual meeting but usually not because they keep up with the company on a regular basis, they have access to CEO and the CFO almost any time they want it, so it’s not very well attended and they’re usually very brief – that’s the goal. The company always strives to make sure they can get through the annual meeting very very quickly, in fact if the meeting lasts 15 minutes or longer it’s a marathon meeting.

PHAWKER: And people are flying in from all over for this? Is it in New York or Philadelphia?

WENDELL POTTER: Philadelphia. Philadelphia or in the suburbs, for a while we were having it in Bryn Mawr, and towards the end of my time there they started having it at the Art Museum.

PHAWKER: It costs a quarter million dollars for a 15 minute meeting?

WENDELL POTTER: This is a different meeting, the annual meeting is separate from the investor meeting. The investor meeting I was talking about is for a much different prize, largely for the Wall Street analysts who cover the company, and some of the institutional investors and representatives here and there. It’s called an investor’s meeting, but it’s really a meeting for analysts. Financial analysts are extraordinarily powerful and influential. The reports they write are very much heeded by investors. If they like you they write positive things about you and that’s a good thing for you, but if they don’t and they downgrade your shares, then you’re likely to get a hit in the stock market.

PHAWKER: Speak to that. What do you make of the integrity of that whole process? Are they truly independent or are people persuading them and buying them fancy meals, etc?

WENDELL POTTER: There are enough laws in place and regulations in place, they’re pretty careful, they don’t seem to be in the pocket of any given companies. Shareholders would be upset if they came to find out an analyst was really in the pocket of a particular company. That said, they have very easy access to top executives. It’s always important to try to influence them, to persuade them to think positive in positive terms about the company and the company’s future. So it’s somewhat of a game, an ongoing game of trying to go beyond just what the numbers in the quarterly earnings report shows and to drill down deeper to the company’s strategy for the future. So it’s an exceedingly important audience and there are very well heeled individuals who do this who work for big companies that are on Wall Street we all know about – CitiGroup, Goldman Sachs, you name it – they all are assigned to cover certain industries.

PHAWKER: Let’s talk about modern PR techniques and how they were employed in the anti-Sicko campaign. Good PR is invisible so most people probably think you just issue press releases, but there is a lot more to it. You are manipulating public opinion and if you are doing it right nobody ever suspects they are being manipulated. It’s called framing. You want to frame the story in the most sympathetic terms to the people you work for. Can you talk about that?

WENDELL POTTER: One of my biggest responsibilities was to develop good relationships with key reporters at the Wall Street Journal, New York Times, mainstream media, when appropriate with the broadcast media and usually at the national level but sometimes at the state and local levels, too, and to work with the trade associations for the insurance agency, because we often did not want to get involved in handling questions about public policy itself, we wanted to have the trade association do that. Much of what we do is to try to manipulate public opinion but do it in a way that’s completely undetected by the public. That’s one of the reasons why these trade associations are important. That’s one layer. If you don’t even want your trade association to be actively involved or vocal on some issue, you funnel – I say launder – your money through the trade association. Your trade association in turn will hire a PR firm, often to set up http://farm8.staticflickr.com/7164/6509552547_596f3a13bd.jpga front group that is reporting to the trade organization, but in reality it’s nothing more than a shell operation run out of a big PR firm.

PHAWKER: Astro-turf they call it. Was that the term you guys were using in-house?

WENDELL POTTER: Well, we didn’t use it so much, we didn’t use the term “front group” either, we just called them a coalition.

PHAWKER: What was the name of the trade group again?

WENDELL POTTER: The trade group is America’s Health Insurance Plans, that’s the big trade group for all health insurance companies. America’s Health Insurance Plans, or AHIP for short. AHIP is extraordinarily influential in Washington, pays its president very very well. She’s one of the best lobbyists in Washington, she’s extremely well known in the media.

PHAWKER: What was her name again?

WENDELL POTTER: Karen Ignagni.

PHAWKER: Where did she come over from before that? Wasn’t she on the other side?

WENDELL POTTER: She was, she was with the AFL-CIO, she was in union in the labor unions.

PHAWKER: How much do you think she’s paid?

WENDELL POTTER: Last I looked over $2 million.

PHAWKER: A year?

WENDELL POTTER: Yeah. She’s very highly compensated. And I think she deserves it because she’s extraordinarily effective, she’s probably the best face for the insurance industry we’ve probably got. At least someone who understands politics and is not only very articulate and looks good on TV and sounds pretty impressive on TV, but she also knows Washington extraordinarily well, she knows Capitol Hill, she knows the White House, regardless of the administration she’s very well connected. There are times when even AHIP doesn’t want to have its fingerprints on something so it will funnel money into, like I said, PR firms or at times into other entities like the U.S. Chamber of Commerce or the National Federation Of Independent Business and many times to be so far removed that you want to have your allies who are not perceived to be close to the insurance industry to do your bidding for you, to deliver your talking points. It’s done a lot.

PHAWKER: Can you give me an example of a talking point that is so radioactive that you want to have seven degrees of separation?

WENDELL POTTER: Death panels, for example.

PHAWKER: Did you guys coin that term?

WENDELL POTTER: That was after I left, I’m not sure exactly, the first time I saw anyone use it was Sarah Palin. I’m not sure whether it came from the insurance – I don’t think she coined it, I’m sure it was something that was given to her, it was just an irresistible soundbite.

PHAWKER: Frank Luntz? He’s the wizard. Have you had any direct involvement with him?

WENDELL POTTER: No, at the time I was there he didn’t work directly for Cigna, nor do I recall his being hired to work for the industry. We had other message people and pollsters that we worked with on a regular basis. He was someone, I’m sure that during the trade association would call if necessary but he was not publicly associated.

PHAWKER: Now what Luntz does, is he technically a pollster or a message guy or both?

WENDELL POTTER: It’s messaging and research. The industry has a polling firm on retainer for a long time, a Republican pollster but it’s not Luntz. The industry has hired the same pollster for years, he was John McCain’s pollster when he ran for president last time. He is an expert in messaging, and I mention him in the book — guerilla messaging is what he calls it. You do your research, you test phrases, you test public opinions and see what they are thinking about issues that’s important to your industry. Then you craft messages and then you use focus groups to make sure that you have effective messaging and the right words.

One of my roles was financial communication so it was my responsibility to explain to financial reporters whether the company met Wall St. expectations and if not, why not. So I had to know how the company makes money, how the company operates, how the industry operates, I had to have a pretty deep knowledge of the company and the industry to be able do that. And again, that was another reason why having good relationships with reporters was so key, I spent a lot of time developing good relationships in particular with the Dow Jones reporter, the Reuters reporter, the Bloomberg reporter, the Wall Street Journal reporter because they write for a university which is extraordinarily important for the company, far more important than the media.

http://farm8.staticflickr.com/7149/6509677901_57c8a445ab.jpgPHAWKER: How did you foster good relationships with these reporters? Take them out to dinner?

WENDELL POTTER: Take them to lunch, take them out to dinner, I’d go to New York a lot and have coffee or lunch with them, take their call immediately when they call me with questions and try to get back to them with a reasonable answer within reasonable time.

PHAWKER: Give them something exclusive every now and then?

WENDELL POTTER: Every now and then yes, absolutely. It’s a dance, you want to make sure that – I wanted to make sure they perceived me as someone who was cooperative, knowledgeable, who would do them a favor every now and then if they were working on a story and were looking to get some information about even a competitor. Sometimes they would call and ask questions. You try to be cooperative, and of course while you are doing that you’re trying to shape the story. You’re trying to make sure that if you want your company to be a part of the story that it’s as positive as possible. So it’s really important to develop these relationships with big reporters like that.

PHAWKER: By and large did you feel you were successful in doing just that?

WENDELL POTTER: Absolutely. You don’t stay in that job for as long as I did unless you’ve got a pretty good track record and have good relationships and delivering. I actually liked that part, I liked working with reporters because I had been a reporter myself. That was one thing that helped make me successful is that I was good at their jobs and I just like reporters. I came to not like what I was having to say, and that’s when I ultimately decided I couldn’t in good conscience keep doing what I was doing, it became more and more difficult to be a spokesman for the company and to maintain those kinds of relationships.

PHAWKER: Let’s go back to the anti-Sicko campaign. Let’s start at the beginning. When did you guys first get an inkling that Michael Moore working on this movie and something had to be done?

WENDELL POTTER: It was years before the movie came out, I think I mention in the book that it was two or three years before the movie’s premiere that he mentioned in some interview that his next movie was going to be on healthcare. Every sector of the healthcare industry trembled. Pharmaceutical companies were certainly convinced that they would be the target of the movie. Insurers were worried that they would be, but Moore was playing it very closely to this during the whole time he was doing his filming. There wasn’t really much information about it at all.

PHAWKER: Corporate America quakes in its boots at the thought of Michael Moore doing a documentary about the health care system?

WENDELL POTTER: Absolutely. You have to consider the timing of it. The premiere was expected in 2007 and this was just as the presidential campaigns were under way, there was a lot of discussion about healthcare reform and the fear was that this movie could be so successful that it could persuade more people to vote for Democrats, to vote for candidates who would be more favorably inclined to really do significant reform. We were very concerned that it might serve as a kind of tipping point, and our pollsters were already telling us for that the first time since they’d been doing polling in the industry that the majority of Americans were saying it was necessary now for the federal government to have a greater role in our healthcare system than ever before. That concerned everybody in the industry because the last thing you want is to have more government regulation, more government oversight. Certainly there was a fear that more and more politicians would be emboldened to support a single payer system which would be really good to the demise of the health insurance industry as we know it. So that was the ultimate fear. We had our PR firms looking at this constantly and keeping us abreast of any interviews, any articles that appeared about Michael Moore over the course of two years or three years, when even the littlest thing came out we analyzed it, we wanted to see if we could read a something into these reports about the direction of his movie. Again, he played very closely to the point that when it was to appear at the Cannes Film Festival, we didn’t know whether the insurance industry was going to be a target or not. So we sent a young staff member to France to go to the first screening of the movie at the Cannes Film Festival.

PHAWKER: And the report came back that…?

WENDELL POTTER: The report came back that our worst nightmares were true, that the focus of the industry was largely health insurance companies, not http://farm8.staticflickr.com/7161/6509694413_aaeaef7cd3.jpgso much the problems of the uninsured, but the problems that people who had insurance were having with their insurance companies to get the coverage they need, not unlike the Nataline Sarkisyan family. This guy who went to the south of France, went to the Cannes Film Festival called us after the screening and we had a conference call with us and explained what was in the movie and which companies were mentioned, what the focus of the movie was, so we knew we had our work cut out for us. We knew we had to do all we could to discredit Michael Moore.

PHAWKER: Was Cigna named?

WENDELL POTTER: Oh yeah. Early on in the film and more than once. At least two people who were in the movie who had Cigna insurance and for one reason or another were denied coverage for something doctors had recommended. But the spy in France didn’t give us a lot of details, he gave us kind of an overview, he told us almost all the big companies were mentioned, but I needed to know more specifically how Cigna was mentioned. When the movie was to be screened for the first time in the U.S., it was in Sacramento, so I flew from here to Sacramento, got a ticket to the movie screening from a lobbyist in Sacramento and did the same thing as this guy did in France. I went to the back of the theater and took notes.

PHAWKER: Were you wearing a Groucho Marx mustache?

WENDELL POTTER: I wasn’t very recognizable back then, I don’t think Michael Moore would have known me.

PHAWKER: Was Michael Moore there?

WENDELL POTTER: He was there.

PHAWKER: Why was it in Sacramento, why was that the first screening in the U.S.?

WENDELL POTTER: The movie was highly supported by the California Nurses Association, they were very big proponents of the film and the single payer system.

PHAWKER: California Nurses Association, why would they be advocating single payer? What’s in it for them? Just the humaneness?

WENDELL POTTER: It was largely that. Nurses are at the front line of giving care, even more so than doctors. They see day in and day out how insurance companies have really come into control of the healthcare system and the often deathly consequences that has on the patients, not being able to get the care they need and always being very intrusive and second guessing and interfering with care. So they’ve been a leader nationally to try to move towards a single payer system. They’re also much more politically active than a lot of nurse’s organizations. It’s not part of a national organization.

PHAWKER: So getting back to the caper, you slip into the movie and you’re taking notes?

WENDELL POTTER: I was in the very back row way up in back in the dark with my notepad and taking notes I could barely read when I got back to the room. But yeah, I was making as many notes as I could specifically about how Cigna was portrayed.

PHAWKER: Did this cause some soul searching yourself or was it strictly you were there to do a job?

WENDELL POTTER: I began to do some soul searching. This was the month before I went to the remote medical expedition and I was not looking forward to trashing Michael Moore when I saw the movie, I knew that the stories were very possibly legitimate because I had seen examples of stories like that over the course of time so I knew he was characterizing the system very accurately. I also had been studying other healthcare systems and I thought he had done a very good job of characterizing those systems. So I thought it was a well done movie. I also thought that because it was Michael Moore he would be fairly easy to demonize and that we would probably be very successful in getting people to turn against him and decide his movie wasn’t worth seeing, and that was what we set out to do.

PHAWKER: Let’s talk about how you did that a little more specifically.

WENDELL POTTER: We worked with AHIP, they were kind of coordinating the effort for all the insurance companies. They hired a PR firm, APCO Worldwide, which set up a front group that was funded by both insurers and the drug companies, Healthcare America and that was the entity that was sending out press releases, sending statements to Capitol Hill, disseminating talking points to members of Congress they felt could be relied upon to trash the movie, and they had lobbyists that would go on the Hill and essentially intimidate Democrats in particular by saying, “Look you don’t want to say anything positive about this movie, the implications being if you do, you won’t get any money from the industry and very possibly you would see that the money go towards an opponent of yours or an opponent might materialize.” So that’s how they operate, through intimidation but also working with their reliable and friendly members of Congress, to equip them with talking points and to work with the media. The PR firm has very good connections with the media.

http://farm8.staticflickr.com/7165/6509714121_ba963ba8de.jpgPHAWKER: I remember all the ginned up controversy surrounding Fahrenheit 9/11 and how loudly opponents of the movie were shouting it down before it even opened. I remember how they framed the movie as ludicrous, divorced from reality and possibly unpatriotic etc etc, and five years later the perspective of that movie became the conventional wisdom in this country, it was what The Great Middle thought about all that.

WENDELL POTTER: I think the anti-Sicko campaign really picked up from where the campaign against Fahrenheit 9/11. Michael Moore was already someone that had been demonized by the right and a lot of politicians, so that work had already begun. Now the message was, “Well, here’s his latest attempt to undermine this country and this guy is not someone who shares our values.” So we build on that. It wasn’t a hard sell, there were a lot of members of Congress who were quite willing to be the industry’s shills.

PHAWKER: So it’s safe to say that the louder they denounce your documentary, the closer you are to the truth.

WENDELL POTTER: Absolutely. The industry knew it had to do this very carefully, it didn’t want to draw so much attention to the movie that people would want to see it out of curiosity. There’s a risk there, it’s kind of a surgical PR campaign if you will. The target was Capitol Hill.

PHAWKER: Why was that? Because you didn’t want anybody in Congress persuaded by this film?

WENDELL POTTER: Absolutely, you wanted your allies were equipped with talking points, to make sure they didn’t even think about saying anything positive about the movie, that was the first objective. Then to those who might be marginal, say blue dog Democrats, you want to make sure that they too were not likely to not say anything positive and to try to get people to say ‘This guy’s off base, what he’s proposing is socialism, socialized medicine and we don’t want that in this country.’ That’s what you wanted to do. I guess the biggest threat was in Washington, we didn’t want this threat to affect thinking on Capitol Hill, as lawmakers were moving towards a real debate on healthcare reform. There wasn’t a visible public campaign that the public saw. There were some letters to the editor, there were some op-eds that were placed, but it was not a very visible campaign. Part of what you want to do is to influence the influencers, as PR people do because you can’t really do it very effectively with the modest budget that we had and influence everybody. So you wanted to try to get thought leaders to say things bad about it or to question it.

PHAWKER: This reminds me of the spoken word album Ronald Reagan made in the 60s warning that Medicare was socialized medicine that was then passed around for people to play in their living rooms, to have coffee clatches and listen to it and discuss. We’ve come a long way since then.

WENDELL POTTER: We have and we haven’t. The same techniques are used, the technology is different, but some of the tactics are very similar.

PHAWKER: In the main, the industry perception is that the Democrats are sympathetic to healthcare reform and the GOP is not?

WENDELL POTTER: Yeah, if you’re an insurance guy you can rely on almost every Republican to side with you. They’ve invested heavily into Republican campaigns over the years, they’ve also contributed to a lot of Democrats because they know they have to. If you’ve got Congress controlled by Democrats you’ve got to get to the right people. That’s why Max Baucus had received at that time the most campaign contribution of any member of Congress from http://farm8.staticflickr.com/7152/6509552715_1ac52fddbe_m.jpghealthcare.

PHAWKER: Well he was the head of the Finance Committee.

WENDELL POTTER: He was heading the Finance Committee which is the most important committee in Congress. House committees were important but his committee was the most important committee.

PHAWKER: It just blows my mind, it’s just a hair away from outright bribery.

WENDELL POTTER: Oh, absolutely, it’s just legalized bribery.

PHAWKER: Or extortion really, you’re threatening them.

WENDELL POTTER: And that’s why things will never change in this country until the public comes to understand exactly what’s going on. It’s extortion, it’s bribery, it’s intimidation, because of the enormous power and influence Congress members have. That’s why we’re in gridlock on Capitol Hill right now, it’s why it’s so partisan and nothing gets done, and it will always be that way.

PHAWKER: I can’t even buy into the Democratic-Republican divide anymore, I know there is a hair’s difference between them but to me they’re both bought and sold by corporate America.

WENDELL POTTER: You’re right. And the thing is I’m sure that there are members of Congress in both parties that go there with some purity and expectations that they can make a difference. But the public is under the misimpression that Washington is controlled by political parties, that the president has a significant power – he has significant power but special interests run that town and to a large extent the members of Congress are just puppets, and to a large extent the president is too. I see this every day, as I’m monitoring the implementation of health care reform, how influential the special interests are in directing largely how the regulations are written and how far they can go. But you’re right, a young progressive Democrat might be elected but will pretty soon come to understand this is the way this town works. Lobbyists are so influential that if you’re newly elected that means possibly your seat is vulnerable the next time you’re up for re-election. You’re likely to be willing to accept campaign contributions because it costs so much to win.

PHAWKER: As soon as they get elected they have to start collecting campaign money, it’s a very short cycle, two years for representatives and six years for senators.

WENDELL POTTER: You have to have campaign cash, these people come with checkbooks open and you know too that if you don’t please them that they’re going to take their money elsewhere. They learn pretty quickly how things are done.

PHAWKER: Presumably this has been the case for quite some time, if not from the beginning in some form or another, do you agree with that? Or have things accelerated in the course of your career?

WENDELL POTTER: We’re back to the Gilded Age again, we’re back to the point where corporations have incredible power, that’s a lot different. I’ve seen a shift in who runs the healthcare system, we were talking about Ronald Reagan, the AMA was behind that and they were behind all the efforts in the early years to block healthcare reform but they’ve been outgunned. The most influential lobbyists are the healthcare, health insurance lobbyists, the pharmaceutical lobbyists, hospitals.

PHAWKER: Getting back to Sicko, how does this play out? Was it a successful campaign? Were you happy with how things played out for you guys?

http://farm8.staticflickr.com/7011/6509774629_ce240c922c_m.jpgWENDELL POTTER: We were happy because we monitored the box office numbers every week, we got a report every week on how the movie was doing and we could obviously see, as any movie does, it begins to trail off through time. We saw its influence was waning.

PHAWKER: Although you have to be concerned this day and age, the DVD, the after theater viewing is actually far more significant.

WENDELL POTTER: As far as we could tell there was not an organized effort to get the DVD into more homes, it was not nearly what it could have been. So the influence of the movie began to wane very quickly. It was talked about for a while, pretty soon it wasn’t in the movies and it was a while before the DVD came out. When it did there was a little bit of a blip of interest in it but it never really came back as a big threat.

PHAWKER: Who are these congressmen that can be relied on the stand up for the healthcare industry and badmouth any talk of reform?

WENDELL POTTER: The entire Republican party. Everybody who’s got an “R.” John Boehner, he’s certainly been in bed with the industry for a long time. Zach Wamp was. Marsha Blackburn, a congresswoman from middle-West Tennessee has long been a staunch ally and regular water carrier for the industry.

PHAWKER: Arlen Specter?

WENDELL POTTER: Arlen Specter was a pretty reliable ally of the industry but he had an independent streak, he wasn’t always. Now he played a very key role towards the end of the healthcare reform in siding with the insurers as did Joe Lieberman. If it weren’t for Lieberman we would have probably had a public option.

PHAWKER: Nice.

WENDELL POTTER: Thank Joe for that. Singlehandedly.

PHAWKER: Really?

WENDELL POTTER: The industry knew that he was a go-to guy in Connecticut. A lot of insurance companies were based there, Cigna has a large operation and now its headquarters is there. They knew Joe was someone they could get to and they got to him.

PHAWKER: Getting back you Sicko, in the end you wind up apologizing to Michael Moore on national television.

WENDELL POTTER: I met Michael Moore. I actually went to the second screening of the movie in Michigan. I flew there because I had seen the movie in http://farm8.staticflickr.com/7011/6509824979_65dc611dda.jpgSacramento, I was curious to see if it might change anything, if it might be the editing, I just wanted to see it again to make sure my head was right. So I flew to Detroit, rented a car and drove to Bel-Air, actually met him there and had my picture taken with him. He didn’t know who I was, I didn’t tell him who I was, but I still had that picture.

PHAWKER: This was when Alex was with you?

WENDELL POTTER: Yes.

PHAWKER: Alex is your son, who is a contributor to Phawker. He’s a fan of Michael Moore, obviously it’s a thrill to get to meet him. Now this is a movie about reform and the need for change, and Alex’s father’s job is to maintain the status quo. How do you square that circle?

WENDELL POTTER: I know I was telling Alex at that time that I was not happy, that I was going to have to be a part of the effort to discredit the movie. It was this time in particular that I was beginning to really question why in the hell I was still doing what I was doing. That was, I think, when my crisis of conscience really began.

PHAWKER: Moving forward, you’ve resigned from Cigna and you’ve published Deadly Spin, and you and Michael Moore are on Countdown With Keith Olberman…?

WENDELL POTTER: It was one of the most memorable things I’ve ever done. I was in a studio here in Philadelphia and he was in New York so I was not in the same room with him, but we just had a personal conversation almost oblivious to the fact that we were on TV.It was almost like I was talking to someone on the phone. I just almost forgot the camera was on and it was on national TV. Olbermann surprisingly said very little, he sat back and let the conversation go. It lasted far longer than the producers had told us to expect it to. So we just had a conversation, I apologized for the role I played in discrediting the movie, he was talking about how he appreciated what I had done in confirming a lot of what he suspected, no one had ever confirmed it before. It was an amazing time.

END PART II

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L-R: Alex Potter, Michael Moore, Wendell Potter

***

http://farm8.staticflickr.com/7144/6550890551_e4999430ab_b.jpg
[Image via The Coen Bros.]

PART III

http://farm8.staticflickr.com/7170/6464636673_4a24aa6d61_s.jpgBY JONATHAN VALANIA This is the third and final installment of a massive, 30,000 word, three-part Q&A with Philadelphian Wendell Potter*, former mild-mannered Cigna health insurance executive turned whistle-blowing superman standing up for truth, justice and the American way. (You can read Part I HERE and Part II HERE) You may have seen Mr. Potter testifying before Congress or talking about the ills of the health insurance industrial complex on CNN or MSNBC or PBS, or in the pages of The New York Times, Wall Street Journal or Time magazine, to name but a few. Last year he published Deadly Spin, an authoritative takedown of a sick and dangerous healthcare system and the incredibly powerful and phenomenally profitable industry that games it for billions. He debunks the dark arts of modern corporate P.R. that uses subterfuge, misdirection and good old fashioned distortion of the truth to manipulate public opinion and absolve its paymasters of all culpability for the dirty deeds that make those obscene profits possible. In the end, Deadly Spin is an impassioned call for substantive reform, basic mercy and common decency.

In the first installment we discussed the crisis of conscience that turned him from loyal, not to mention highly paid, company man to crusading reformer, watchdog and all-around thorn in the industry’s side. Having long thought he was on the side of the angels he increasingly came to realize that he was in fact playing for the other team, that the point of for-profit healthcare insurance is not paying for customers’ medical costs but avoiding doing so whenever possible. That for-profit health insurance corporations have a legal obligation to prioritize the enhancement of shareholder value over saving the lives of its customers. That he had blood on his hands. That he was an apologist for a system that denies medical care to more than 50 million Americans, and as a result more than 48,000 people die prematurely every year.

Potter was tasked with writing an official-sounding report that minimized the problem and shifted all the blame on the uninsured. He helped craft reform-http://farm8.staticflickr.com/7002/6464324853_87fdb1da74_m.jpgkilling talking points for the healthcare lobby’s Congressional stooges to repeat into the cameras of Fox News and CNN. He was part of the effort to smear Michael Moore and discredit Sicko, his 2007 critique of the iniquities of the healthcare industrial complex, even though deep down he knew Moore was dead-on. The final straw was having to serve as company spokesperson through the resulting media firestorm when Cigna denied 17-year-old Nataline Sarkisyan a liver transplant and she died less than a week later.

In the second installment we discussed the smear campaign against Michael Moore and Sicko. It begins with a cabal of health insurance operatives hiring a mole to sneak into the premier of Sicko at Cannes and take notes so that neutralizing talking points can be crafted. These talking points — which mostly rely on the usual lizard brain illuminators, namely fear (”Universal coverage is creeping Socialism!”) and loathing (”Taxpayers will have to pay out of pocket for illegal immigrants to get Cadillac health care!”) — are then passed along to various industry-owned Congressmen who dutifully parrot them in the echo chamber of 24-7 cable news and talk radio. It ends with Wendell Potter apologizing to Michael Moore live on national television.

In the final installment, we discuss how and why Obama’s effort to reform health care largely failed, who killed the public option and what was their motive, why moving forward with Obamacare is absolutely essential to substantive reform in the future. But the bottom line is that nothing will change until elections are publicly-financed and politicians are no longer beholden to powerful, deep-pocketed corporate interests for campaign cash. Money is the root of all that is evil, and wrong and dysfunctional in Washington, DC.

PHAWKER: When was your last day at Cigna?

WENDELL POTTER: May the 2nd, 2008.

PHAWKER: When did you go from guy who just went away quietly to guy who testifies before Congress about the ways the health insurance industrial complex games the system and torpedoes reform at every turn?

WENDELL POTTER: It was almost a year later, actually March of 2009. I think the date was March the 5th, the very day the president had his healthcare summit at the White House. It was kind of the kickoff of the healthcare reform debate at Washington. The president invited representatives of a lot of different organizations, insurers from pharmaceutical companies, hospitals, doctor groups, some consumer groups, employer groups and labor unions, a gathering of all the constituency groups that are important or would be involved in reform, with the hope of trying to get everyone on the same page working towards meaningful reform and to try to get it off on a positive start.

PHAWKER: Do you think most of those people showed up in good faith planning to cooperate and make reform happen? Or was it window dressing?

http://farm8.staticflickr.com/7016/6555249177_6d3883b678_m.jpgWENDELL POTTER: It was window dressing. What happens when you are setting out to reform any sector of the economy, in particular the healthcare system, there will be winners and losers, and everyone wants to make sure their interests are protected, that no one gets a haircut, that no one loses. So they all go in and say they support the president in favor of reform, but the reality was and is that they support reform as long as their interests are protected. As long as reform doesn’t have any adverse effect on them, their pockets or their incomes.

PHAWKER: You retired but had no plans to advocate reform or be an industry critic. In fact you were a little concerned that if you did speak up there would be blowback or recrimination, correct?

WENDELL POTTER: I felt it wouldn’t be in my best interest to be visible and vocal, so I thought if I ever did do anything it would be behind the scenes. It didn’t occur to me at that time that I would have the nerve to be anywhere near as public as I decided to be.

PHAWKER: What was the fallout you were afraid of?

WENDELL POTTER: I was afraid I could get sued if I wasn’t careful about what I said and how I said it. I’ve been very careful, I’ve worked with the legal and public affairs division of the company, I worked with lawyers all the time. My boss was general council. Of course I also was part of the effort to discredit Michael Moore, so I know what the industry does to try and discredit their enemies or critics, and they have a lot of money.

PHAWKER: Deep pockets, right?

WENDELL POTTER: Very deep pockets. When I decided to do this I took this all into consideration and I went back and forth a lot before I decided to finally do this. Many times I thought, ‘Are you crazy? Do you know what you’re getting yourself into?’ But eventually I got pissed off to the point I said, ‘I can’t not do this, I have to take a stand. I’ve got to do something.’

PHAWKER: So, March 5th, 2009, you were watching television…

WENDELL POTTER: And flipping through the channels I landed on this interview with this Congressmen I had met, I didn’t know him well but I had met http://farm8.staticflickr.com/7152/6555249035_7e1ed1956f_m.jpghim.

PHAWKER: What was his name again?

WENDELL POTTER: Zack Wamp. Very odd last name. Republican from Chattanooga. I went back later to make sure I heard what I thought I heard, but he was essentially calling Obama all but a Marxist and a socialist, and was very dismissive in particular to people who were uninsured. That’s what got me so mad.

PHAWKER: Didn’t he bring up the illegal immigrants and the money will go to pay for them?

WENDELL POTTER: It was clear that his comments to me were xenophobic in trying to make people believe that –

PHAWKER: Quasi-racist, really.

WENDELL POTTER: It was a racist comment. I just got really upset about it. I started making some phone calls.

PHAWKER: Zach Wamp, R-Tennessee, represents the next Congressional district over from where you grew up. You know the people whom he represents, you know how they live.

WENDELL POTTER: I know the section of the state, yes.

PHAWKER: There are probably a lot of working poor, people that would have to rely on free clinics to get medical care.

WENDELL POTTER: His Congressional district that borders the one where I grew up and includes some of the poorest counties in the country. I’ve been to every county in Tennessee, I know that state very well and I knew his district and I knew there were a lot of people in his district that were uninsured and were that way not by choice but because they couldn’t afford it and needed it but couldn’t get it, people that would have been helped by the kind of reform he fought against.

PHAWKER: So, you started making some calls to journalists you worked with when you were at Cigna, who connected you to some academics who connected you to some advocacy groups who eventually referred you to some Congressional aides to Senator Rockefeller, who chairs the Senate Commerce Committee, which was holding hearings on the health insurance industry, that could use a guy like you.

http://farm8.staticflickr.com/7159/6555249415_1984c1221c_m.jpgWENDELL POTTER: I was invited to meet with people who were on the committee’s investigative staff who did a lot of the leg work before the hearings. I agreed to do it and they grilled me for two solid hours. It was very interesting, very memorable, very scary because they were clearly trying to determine if I was legitimate, if I knew what I was talking about.

PHAWKER: And that you weren’t just a crank or a mole?

WENDELL POTTER: All that, they wanted to make sure I was not a mole and that I didn’t have an ax to grind, I wasn’t doing this because of a grudge with the company. After two hours they were satisfied that I was not a mole and that I didn’t have an axe to grind with Cigna. I even made the point of stating that during when I did testify to the senator that what I was talking about was not specific to Cigna, and I always do that, the practices I talk about are prevalent throughout the industry, just about every company engages in them because they have to. It’s developed as a standard operating procedure throughout the industry.

PHAWKER: You were called to testify before a hearing on what?

WENDELL POTTER: It was a hearing on healthcare information and how the healthcare reform law should be structured to make sure consumers get the information they need so they can make informed decisions, but also into the practices of the insurance industry and because of the broadness of that I told the industry about how much investors influence the ‘medical loss ratio,’ something that most members of Congress never heard about. Medical loss ratio is an indication first of all that insurers consider it a loss when they pay a claim and whenever they spend money on anything pertaining to medical care or claims, it’s a loss hence the name medical loss ratio. The ratio is how much money they spend on care compared to how much they take in in revenues from their policy holders. Investors are constantly pressuring for-profit companies to spend less and less of revenues on patient care because the less they spend on patient care, the more there is available to reward shareholders.

PHAWKER: How do you do that? You raise the bar on what you are willing to pay for, your guidelines become more rigorous?

WENDELL POTTER: The guidelines become more rigorous as to who you will insure in the first place, there’s a greater incentive to cherry pick the http://farm8.staticflickr.com/7001/6555248895_be1e188b6c_m.jpghealthiest and exclude people who really need insurance, they have long engaged in a practice of refusing to sell coverage to people with pre-existing conditions, but also they do it by refusing to provide coverage for needed care.

PHAWKER: Policy holders who are sick and their doctors say they need this or that procedure or treatment.

WENDELL POTTER: And the insurance company will overrule that.

PHAWKER: Just to clarify how the insurance industry works, you guys are taking premiums from customers, it’s a huge pile of money and you’re taking that money and investing that elsewhere. In what?

WENDELL POTTER: They have a lot of pretty broad investment portfolio. It can be investments in index funds and other stocks, but also in real estate. These companies often have large real estate holdings. In fact, Cigna owned hotel properties and a lot of different kinds of real estate properties. So they have a broad investment portfolio, it’s diversified. Not just stocks and bonds, but in real property and things of that nature as well. Whenever they announce earnings, they segregate out how much money they earn from investments. When you pay premiums, you’re money is invested and they of course have to have a certain amount of money available to pay claims but a lot of the income is from investments.

PHAWKER: On average a person pays about $5,000 a year in premiums?

WENDELL POTTER: It depends on how much coverage you’re buying. The average for a family of four is about $15,000. Most families pay that but don’t realize they’re paying it because most of use get coverage through employers, so it’s subsidized. In other words, the employer pays a substantial portion, usually significantly more than half. So we workers assume that we’re getting, that it’s the employers money. It’s our money, but we’re not getting it in the form of compensation. It comes in the form of a benefit like that. For an individual now, it’s less that half of that – five to six thousand dollars a year. But if you have a family and have to have coverage for the whole family, the minimum cost now is $15,000.

PHAWKER: So in order for Cigna to make money, they have to pay out less over your lifetime than you pay into the fund?

http://farm8.staticflickr.com/7031/6555302943_fa40e1079d_m.jpgWENDELL POTTER: All of the insurance companies have many underwriters on staff who do nothing more than estimate how much each person or a group of people will cost the company based on what underwriters come up with, they are able to price their premiums at a certain level to exceed what they pay out in medical claims. If the underwriters are good, they are always able to price their products at a certain percentage above inflated medical costs.

PHAWKER: So you testify, what exactly were you telling them that day?

WENDELL POTTER: I was telling them that for 20 years I saw how insurance companies confuse their customers and make it difficult for customers to understand and get the information they really need. I went on to explain some of the practices the companies engage in to make sure they meet shareholders’ expectations. I said they do what they do to meet Wall Street’s relentless profit expectations.

PHAWKER: What are some of the things they do? Where’s the absence of transparency in all this?

WENDELL POTTER: They often will purge their small business accounts when an employee’s dependent gets sick because that means the company will have to pay more claims than they anticipated and when the premium comes up for renewal, the company will jack the rates up so high the employer has no choice but to cancel coverage for everybody.

PHAWKER: And find coverage elsewhere?

WENDELL POTTER: If you can, because once you’re priced out of the market you have to disclose to your next prospective insurer that you have this employee that’s gotten sick. You have to provide a lot of information to your prospective insurance company, whether you’re an individual or a small group.

PHAWKER: Doesn’t this happen all the time though, isn’t somebody going to get sick in every company at some point?

WENDELL POTTER: Exactly, that’s why we have fewer and fewer small businesses able to offer coverage, they’ve been priced out of the market. Several http://farm8.staticflickr.com/7026/6555303145_9f591739c4_m.jpgyears ago it wasn’t so bad, but but now far fewer than half of small businesses are able to offer coverage.

PHAWKER: This ratio you’re talking about, where they’re just demanding you pay out less so the profit margin is wider.

WENDELL POTTER: They’re quite willing to get rid of small businesses if they aren’t profitable and the company term for this is ‘purging,’ they use this internally not externally but I disclosed that in my testimony, that this is a common practice called purging. Another, which some members of Congress had heard about a few weeks before I testified, is called ‘policy rescission,’ that happens when someone who has bought a policy on their own through the individual market, usually because they don’t get it through an employer, and if the policy holder gets sick and that raises your claims, the insurance company will go back and take a close look at your application for coverage to see if they might find a reason to cancel your policy, which they usually do. They do that routinely.

PHAWKER: There’s a guy in Sicko whose job was to do just that.

WENDELL POTTER: The LA Times did a an investigation and found out some companies paid employees a bonus for finding policies they could rescind. They call it rescission or rescinding coverage which is essentially canceling someone’s policy often in the midst of treatment for cancer. There was one woman who testified she got a notice the day before she was scheduled to have a mastectomy because she had failed to disclose she had been treated recently for acne. These are examples of the lengths these companies will go to to avoid paying claims.

PHAWKER: Does this not result in lawsuits?

WENDELL POTTER: No, most people can’t afford to. And even if they do, the way the laws are written, policy holders have very little ability to sue insurance companies and employers for denying coverage.

PHAWKER: Let’s talk about the infamous ‘individual mandate,’ which requires that everyone purchases health insurance. Everyone. That was the industry’s idea.

http://farm8.staticflickr.com/7002/6555303063_4068a6249d_m.jpgWENDELL POTTER: As the healthcare reform legislation was working it’s way through Congress, the healthcare lobbyists were very insistent that the reform legislation had to have an individual mandate in it, a requirement that we all had to buy coverage or they would do all they could to derail the reform as they had in the past.

PHAWKER: Why were they so adamant about that?

WENDELL POTTER: It would favor them because not only would we be required to buy coverage but if I’m for example someone who has low income and can’t afford the costs, the government will subsidize the cost. They’ll be getting revenue from two sources, individuals who pay from their own pockets, but a lot of people can’t afford it so the government subsidizes it and the money goes straight to the insurance companies. So they get an entire new revenue stream they hadn’t had before. And since everybody will be required to buy coverage, no one company theoretically will be disadvantaged. No company will get more sick people than any other company, but there will be some risk adjustment in the way this all takes shape so companies are protected from adverse selection, from getting more sick people than their competitors. So they’ll get a lot of money.

PHAWKER: It’s corporate welfare.

WENDELL POTTER: It gives them what I call a new lease on life because they know their current business models aren’t sustainable in the long haul and we’re seeing the evidence of that with growing numbers of Americans without insurance, it’s not because they don’t want coverage but they’ve been priced out of the market or haven’t been able to buy at all because of the practices of the industry.

PHAWKER: When you say not sustainable — sustainable for them or the public?

WENDELL POTTER: Both. it’s not sustainable for them as health policy, but it’s not sustainable for them from a business standpoint because in this country we’ve got a mature market for health insurance – it’s not growing. What is growing is the number of people who cannot afford coverage. What the companies do is steal market share from each other, it’s not an expanding market so they way they grow is to buy each other through mergers and acquisitions or to take market shares from each other.

The other reason why it’s not sustainable, the current business model is based on what they refer to as consumer-driven care, a euphemism for high http://farm8.staticflickr.com/7149/6555302889_9291acc3bf_m.jpgdeductible healthcare policies in which they’re able to shift more of the cost of care from them to us. But there’ s a limit to the point where that doesn’t work. People will eventually get to the point of saying it doesn’t make sense to pay good money for a high deductible plan because I’ll pay so much out of pocket that they’ll become under-insured the minute they buy these high deductible plans. They’re forced to pay so much out of their own pockets that in many cases people are forgoing care. You have to spend in many cases thousands from your own pocket before your insurance company will give you a dime to cover your own care.

PHAWKER: If the individual mandate provision was inserted into the healthcare reform at the insistence of the health insurers, why are the Republicans, who clearly have the industry’s back, fighting the individual mandate so aggressively, using it as a cudgel to try to kill Obamacare, with Republican-run states suing the federal government in the courts.

WENDELL POTTER: It’s because of politics and ideology. They see this as a winning issue for them and it’s to their advantage to try to turn against this reform for the purpose of getting their allies or colleagues re-elected. It’s ideology. They’re saying it’s an infringement upon freedom and the free market, but it’s really a political strategy to win control of Congress and the White House. So they grandstand against the individual mandate but it’s not genuine. In my view, it’s disingenuous because they get a lot of money from insurance companies, the companies spend a lot of money on elections and lobbying efforts to influence how policy should take shape in Capitol Hill. These Republicans must realize, I think many of them do, that the insurance industry really needs this individual mandate. It’s disingenuous and the real motivation is not really to kill Obamacare, not to repeal it or have it declared unconstitutional despite what you might hear, it’s to get more Republicans elected.

PHAWKER: By saying look, this is socialism, it’s the government telling you what to do.

WENDELL POTTER: And the insurance industry is willing to go along with that because they know if Republicans control the Senate and the White House, they would be able to strip out consumer protections in the law, but they would be able to preserve that individual mandate.

PHAWKER: Let’s drill down on Obamacare – what are the consumer protections that are in there now?

http://farm8.staticflickr.com/7168/6555302817_bac81e6206_m.jpgWENDELL POTTER: Most importantly it prohibits them from refusing to sell coverage to us, it makes them at least offer us coverage. If we’re going to have a requirement that everyone has to buy coverage, the insurance industry can no longer use pre-existing conditions to refuse selling us coverage. That will be a thing of the past. It requires them to spend at least 80% in what we pay in premiums on medical care and they cannot go below that as many of them had been doing. It requires them to allow parents to keep adult children on their policies until age 26 if their children haven’t been able to get policies from their employers. It also makes it illegal for them to cancel policies when you get sick, unless you’ve committed fraud and lied on your application. If you’ve lied on your application, they can cancel your coverage, but they can’t do it just because the want to. And for senior citizens it closes a large gaps in Medicare coverage for medications that’s called a ‘donut hole.’ Plus Medicare will start paying for preventive care like screenings. So it is benefiting a lot of people already.

PHAWKER: Why aren’t the supporters of Obamacare explaining this to the people?

WENDELL POTTER: When people are told the benefits they say they like that and are for that, but they’ve been subjected to a relentless opposition to Obamacare and believe the whole act is bad, made to think the individual mandate is not in their best interest. They think wrongly that most of us who have insurance already will be affected. It will not affect most people except those who don’t want coverage. It’s been vilified by the opponents of the president and they have been successful in turning people away from reform. My belief is that it’s been so successful that we’ve forgotten why we need reform in the first place.

PHAWKER: You were saying half of all small business owners cannot provide health insurance for their employees anymore – when did it get to that percentage?

WENDELL POTTER: Even in the early- to mid-90s well over 60% were able to offer coverage but it’s been decreasing ever since. These days most of the smallest businesses can’t offer insurance.

PHAWKER: That’s one of the main Republican talking points: Obamacare will hurt small business owners.

WENDELL POTTER: What they don’t realize is the law doesn’t apply to small businesses that employ fewer than 50 people, which is the majority of small http://farm8.staticflickr.com/7003/6555303215_2fe13a7d64_m.jpgbusinesses. It’s a small percentage of small businesses that will be affected by this but we’ve been led to believe that this is something that will be onerous to all business owners but it’s not. It’s only a small number of small businesses that don’t offer coverage now will be required to. It also supplies a subsidy to small businesses if they want to provide coverage, so it will actually be a benefit to small businesses and help them offer coverage when they haven’t been able to in the past.

PHAWKER: Explain the public option and why the industry was so vehemently opposed to it and succeeded in killing it.

WENDELL POTTER: The public option as originally envisioned would’ve been a government insurance plan and would have been operated just like a private insurance. It would have had to abide by the same rules as the private plans. It would be a plan that would operate on a nonprofit basis and consequently more than likely offer the same benefits as a private insurance plan but possibly and probably at a less expensive premium because it’s a nonprofit. It would have been another choice, it would not have replaced private insurance, it would have been a public option. We would have the option of buying health insurance from the government or a private insurance company.

PHAWKER: You would pay the government premiums.

WENDELL POTTER: Exactly the way you would pay a private insurance company.

PHAWKER: But if people couldn’t afford private insurance, how would they afford public insurance?

WENDELL POTTER: If you wanted coverage from the government but couldn’t afford premiums you would’ve gotten a subsidy to pay for your premiums.

PHAWKER: Why were private insurers so vehemently opposed to it?

WENDELL POTTER: They didn’t want another competitor and realized the government operates more efficiently than they can. They operate on a nonprofit basis and are able to have a much lower overhead cost than private companies. They don’t have to pay CEOs a hundred million dollars a year, they don’t need to reward shareholders every three months. They operate much more efficiently. Private insurers knew that and knew it would take business from them and they didn’t want that.

PHAWKER: Wasn’t the public option for people who couldn’t afford private insurance?

WENDELL POTTER: As initially proposed, it would have been for anyone. If you had coverage available from your workplace, you wouldn’t have been able to apply for the public plan. Most get coverage from employers so it would have been a small percentage of people that qualified for the public option.

PHAWKER: I distinctly remember candidate Obama was talking about a public option, but I don’t recall President Obama ever saying much about it.

http://farm8.staticflickr.com/7025/6555302779_d79435b2c7_m.jpgWENDELL POTTER: It became clear to me that the insurance industry was getting to him and those around him to embrace the individual mandate. When he was running for president he said he was opposed to it but the industry changed his mind. They sent people to the White House to do that and they were very successful. They did the same thing on Capitol Hill to members of Congress. The bill that that ultimately was passed, contained something that the president said when he was running that he did not support, the individual mandate, and it did not contain the public option which he had supported. It was becoming clear over the course of 2009 that he was backing away from the public option. He said that while the public option was important and would help keep insurance companies honest, it’s not the only way we can go about doing this. He was essentially back-pedaling. When he said that it was clear to me that he was throwing the public option overboard.

PHAWKER: That was the beginning of my great disillusionment. It was a litmus test for how corrupt the system has become — with the White House and control of both houses of Congress he couldn’t do any of the things he said he would do on the campaign trail — the things that made people vote for him.

WENDELL POTTER: It really is the system. I honestly think the president really believed it when he was campaigning and thought he had a chance to pull this off. The system wasn’t going to let that happen and it is the system that we have allowed to develop that controls Washington. No one person will ever be able to do things in a different way.

PHAWKER: He seemed to start running for reelection immediately after inauguration when he should have said ‘I’m happy to be a one-termer but I’m going to go balls to the wall and get this done because this is what the American want.’ Do you think that would have been suicidal?

WENDELL POTTER: I think it would have been and here’s why, yes he’s got the bully pulpit but he doesn’t have millions of dollars to devote to PR and http://farm8.staticflickr.com/7029/6555366357_566f3d20aa_m.jpgadvertising constantly, one of the reasons why we’ve seen erosion in the support for healthcare reform because even though he and Democrats can talk about benefits, they really can’t overcome all the opposition coming from millions of dollars spent on PR and advertising efforts to discredit the reform.

PHAWKER: I find this hard to believe, we’re talking about the federal government. They spend almost four trillion dollars a year and the public is wildly misinformed about healthcare reform because they can’t match a few million dollars worth of negative ad buys? There’s no money budgeted for this?

WENDELL POTTER: There is not, I’ve been to the White House and know there is no adequate amount of money to explain the Affordable Care Act. There just is not.

PHAWKER: Why isn’t he pushing for a change in Congress that would allocate some funds?

WENDELL POTTER: He got what he could get. Congress put this together. There’s a website but in terms of having money to hire big PR firms and advertising companies to compete, they don’t have close to the amount of money that opponents have.

Also consider that people would be skeptical if it was coming from the White House in the first place or the administration. There are a lot of constraints, a lot of credibility issues, but the other thing is to get the kind of change we really need, you have to change the system. He could go in there and go balls to the wall, I don’t care if I’m a one-term president or not, this will be a meaningful reform. A lot of people were saying why didn’t we go with single-payer or something bold that would put these companies out of business, which a lot of people support? It’s because the insurance industry has the money to devote to PR and advertising campaigns, corporate allies that have and will join them in an effort, and in fact the administration was already threatened by the pharmaceutical companies who said if you don’t play with us and give us what we want, we will bring in the heavy artillery, we will make sure nothing passes, the insurers will do the same thing, hospitals will do the same thing, they’re so influential and that’s why it’s hard to get anything done. We’ve been at this 100 years and haven’t because of the incredible power that special interests have. When you’re trying to influence or change something you’re affecting someone’s profits and income, these people have powerful trade associations and allies and millions of dollars to make sure it doesn’t happen.

PHAWKER: They have the money but we have the numbers, though.

http://farm8.staticflickr.com/7011/6555366293_4a7523b0e9_m.jpgWENDELL POTTER: That’s why I’m optimistic. That’s why I wrote Deadly Spin, to make sure people know their enemy and how they’ve been able to [kill reform] time and time again. Understand your enemy and play by their rules, you don’t need the money they’ve got but you need a strategy and what I have observed is that advocates for reform don’t have a clue about strategy. They don’t have coherent political and communications strategies. It’s not that the tools of PR are evil, they’ve just been used so successfully by people without our best interest at heart. You also need to have some kind of structure that is effective at pushing real change. We don’t have, as consumers, anything quite like America’s Health Insurance Plans, the big trade association for insurers, we don’t have anything like the Pharmaceutical Research and Manufacturers of America, which is able to amass a lot of resources and demand discipline and a cohesive strategy. Consumers are all over the map and have competing interests, it’s hard to bring them together with one way of doing it and that’s where things fall apart, because we have dissension within the ranks.

PHAWKER: If we had gone to a single payer system, do you think there would be degradation in innovation and the quality of care, would it be like the post office?

WENDELL POTTER: No, because you can look at all of the other developed countries of the world and see they’ve achieved universal coverage and can guarantee citizens of those countries has access to decent care and it is not lower quality care, the outcomes of success are often far superior to ours. No, there doesn’t have to be degradation of loss in technology, they can continue to do that. Single payer is not dead, it just won’t pass at the federal level in the near or distant future. It can start at the state level like it did in Canada. It started in Saskatchewan, one of the smaller provinces. One of our smaller states, Vermont, this year passed a bill to move towards single payer. It could happen. If Vermont does it, other states will notice that and if it can show that it can guarantee access while controlling costs, you’ll start seeing other states follow Vermont’s lead. That’s how we’ll get to the system we need, not out of Washington because of the way the system is structured.

PHAWKER: Why is Romneycare so hated by the right?

WENDELL POTTER: It wasn’t hated by the right until it became possible to use it as a tool against Obama. Romney doesn’t want to acknowledge that Romneycare was the model for the federal law that’s passed. It’s been able to get them very much closer to universal coverage but they did it trying to keep private health insurers in place with an individual mandate as the federal law has with new regulations as the federal law has and it was something that Governor Romney oversaw and worked very closely to get passed. They just don’t like it because they call it Obamacare. It’s all political and contrived to try and win an election, they could care less as to whether it might work or not.

PHAWKER: Why the long gap between Obamacare being signed into law and when it actually kicks in? is it really necessary for a 2 ½ years waiting period?

WENDELL POTTER: The long phase-in was in deference to the insurance industry largely because they were able to persuade the administration and http://farm8.staticflickr.com/7152/6509552715_1ac52fddbe_m.jpgCongress that it would take a long time for us to change, to abide by all these new regulations and get everything in place to be able to do what you say we’ve got to do, we need that kind of lead time. They were able to persuade them to do that.

PHAWKER: You don’t think it was really necessary, just time to dismantle reform before it kicks in?

WENDELL POTTER: Absolutely. Some of it is legitimate, these are huge companies that have to put this in place so it is complex, but I don’t think it was necessary to wait quite that long. They could have done it easily a year earlier or a more than that but clearly one reason for dragging it out is it gives special interests more time to weaken it or derail it and that’s exactly what we’re seeing behind closed doors now out of public view, even though the law has passed and as big as the legislation was, the way it’s implemented is what’s important. After the law is passed then people will then begin writing regulations to implement it and they are just as susceptible to lobbying as Congress is.

PHAWKER: In the main you are for Obamacare, it’s progress?

WENDELL POTTER: I said at the time that it was important for Congress to enact what was before them considering the political dynamics. I said it’s more important to pass it than to kill the bill. It took us 100 years to get to that point and it was unlikely that Congress would get anything better, it falls short in many ways and it’s far too friendly to insurers and special interests. But if it’s implemented as intended, it will bring coverage to 30 million people without coverage right now and those subsidies can be viewed in a positive way, enabling them to get coverage and ending some of the most egregious practices of the insurance industry and make them behave differently. It was not possible to get rid of the insurance industry, we might wish it so but it’s not the real world. We live in a political world and most people don’t understand that. They have a low opinion of Congress and often for very good reason because of the way it’s influenced and held captive by special interests, but we’ve allowed it to happen.

PHAWKER: How do you change that when the people responsible for changing the way elections are financed are on the take?

http://farm8.staticflickr.com/7147/6555436599_91a8ef4130_m.jpgWENDELL POTTER: People are beginning to wake up to the reality of what’s going on and paying more attention. That’s what Occupy Wall Street is really all about, protesting the influence they have on our lives and government as rightly they should. That can be the beginning of a broader movement than it currently is to the point where it can be a growing awareness of how dysfunctional our government is and how captive it is by Wall Street and special interests. Until that gets more traction, and I think it will, it can reach that tipping point if more people understand what is really going on. There is more of us than them, as you noted earlier. Occupy may be the beginning of it.

PHAWKER: Linguistically, we need something sexier than ‘campaign finance reform,’ people’s eyes glaze over the minute you talk about this, they don’t realize how crucial it is, how it’s the key to everything. We need a Frank Luntz on the left.

WENDELL POTTER: We do and there isn’t that. Part of it is no one has figured out how to hire a Frank Luntz on the side of the angels. Linguistics and language are extraordinarily important, I wrote about that in my book, language is how these special interests achieve their goals. They’re masters of manipulating public opinion to achieve their policy goals.

PHAWKER: Where do we go from here?

WENDELL POTTER: Where I go from here is to continue building awareness of what’s going on to do exactly what we’re talking about, help a movement gain traction, enlighten people about just why Congress really is dysfunctional, why things can’t happen there, and why we need to take our government back from Wall Street and corporate interests.

http://farm8.staticflickr.com/7030/6508906837_977d5f4cce_b.jpg

[Photos by ROBIN ODLAND]

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15 Responses to “THE MAN WHO WASN’T THERE: Meet Wendell Potter, Healthcare Executive Turned Whistleblower”

  1. Lily Baber Coyle Says:

    Nice work, Jon. I am on the edge of my seat… Currently trying to score a new health plan for my “healthy” family of four, and I am so stymied, frustrated, and infuriated by the reality of our system. Have to turn down what my employer is offering, because it comes out to be 25% of my income, with a high deductible and no dental. But supposedly, the HSA will make me a “better consumer.” Maybe so, if I had a dime leftover to deposit into that account. I’m buying the cheapest plan I can find on the open market and hoping for the best. If catastrophe strikes our family, we may have to rally our loved ones to assist us. But if I take the coverage offered through my employer, we WILL have to rally our loved ones to assist us, every week, to buy groceries. The best care I ever had was when I was on active duty in the Navy. Isn’t it ironic that our military represents the perfect model of socialism? Health care, housing, food, fuel, clothing, alcohol, cigarettes–all of those prices are controlled. An active duty military ID is your free pass out of the free market system. Looking forward to the next installment of this piece.

    [Thanks, Lil. The military is socialism with guns. Not sure why that is so hard to understand for the folks in outer GlennBeckistan. Good night and good luck. — The Ed.]

  2. Deedub Says:

    What the hell are we supposed to do with this information? Huh? We all know what goes on, but we don’t have the evidence to force a change in these practices through current channels. The government is the point of balance to regulate and make it as fair as possible and the tug of war for attention continues. It appears that life and death are ongoing struggles to bring to light what is right and good. Only everyone thinks that they are right and those with money can pay for more things to show that they have it right.

  3. angie Says:

    And they say that the drugs cartel are those ones that come from Mexico and Colombia? that it’s only the illegal one. The big fish, the real one is the legal one they have at home.

  4. Lorraine Says:

    After seeing Michael Moore’s documentaries and reading about U.S. health care, I just cry with joy that I do not live in south of the Canadian border! I am horrified daily hearing accounts in my country of our government ‘shaving’ away our health provisions and that any grandchildren I might have will never have the quality of medical access that my generation has today. I can only hope that this type of exposure to the current government in office will help as our Tommy Douglas did for our country. Who will be the United States ‘Tommy Douglas’ and who has the guts?

  5. Meg McLeod Says:

    As a person who is in a constant battle with the insurance companies, I am so glad to see this man open his heart. He has shown you can change and he is doing so much good by telling the world what is going on. I have health issues, this opened my eyes to the flawed healthcare system of America. When you are on the other end of the line hearing for the thousandth time that your medication will not be covered it makes you loose faith in people and in this country that our own government would let this happen to us. It isn’t about handouts, it is about logic and kindness… Keep people from getting sick in the first place, if they do get ill keep them as healthy as possible…

  6. Dustin Says:

    What we do with it is get business out of government. Then we can begin to effectively create policy. You also need to take up leadership yourself and get your friends/family involved. Nobody accomplishes anything great by themselves.

  7. Susan Says:

    Not to put the kibosh on kindness but we also need to think about what’s right for America. Bring in universal health care and we take this heavy burden off businesses and individuals. It would boost the economy by putting tons of money back into consumers pockets, (for me alone, at one time I was paying $1500 a month for a simple HMO, way before Obama was president). It gives more money to the folks doing the hiring. Why should they be forced to provide anyone’s care? We as consumers pay $1500 for the cost of their employee health care every time we buy just one new car. Outrageous. You can be sure that cost is put back into every product you purchase. With the current system we are paying everyone and getting less and less in return. In Japan a CT cost $17, they go to the doctor 5 times more than the average American and live longer and stronger lives, go figure. Facts don’t lie. America needs to move forward and provide everyone the same care at the same price. We need to stop tossing 50,000 sick Americans to the curb each and every year to die. No more 1% gets the best and we get the rest.

  8. Leblanc Says:

    Wow! But as Deedub notes, what do we do with this info?

    Yep we know this system is crooked and it is stacked against us and POTUS and friends have helped a little but in essence have kept the same foxes in charge of the chicken house. A single payer insurance modeled on the military and government employee plans, with the mandatory buy-in rule (unless you want to buy your own) or free for low income folks, AND every hospital and every MD, DDM, etc. HAVE to accept the insurance. This is sharing in a human right.

    The problem: folks who have even a little bit don’t care! We all sob and cry when we hear about people dying just minutes after being “approved” for paid care, but beyond that, most of us, just shrug and say, “Glad it isn’t me!” Until of course when it does happen to us.

  9. Janet Warren Says:

    How do we stop this. It is called the public option. I would rather pay some slightly over paid government employees to do the work these insurance companies do than let these insurance companies continue to kill innocent people so they can have larger bonuses and bigger beach homes. One man stood up. What is wrong with the rest of us? How long will we listen to the Republican lie that the government can’t handle insurance? It takes really scary scam artists like these to run health care? When we get the money out of politics we can run our government without this kind of corruption buying off our leaders and actually killing us. You don’t have to wonder how they have enough money to buy our members of congress. We give it to them. :(

  10. Joanna Economakos Says:

    In 1976 my pediatrician doubled the cost for a doctor appt. in his office. He was a man who spoke the truth. I asked him why because I told him I can no longer afford you and there is nothing I can do about it. He said with a wistful look ” it is my insurance Co.” His patients were some of the healthiest children in the world, then.
    My children are now 56, 54, and 43; we live in the Newport Beach area of California. Both sons are without jobs and my daughter (the youngest) has M.S. and if it wasn’t for the Kaiser HMO I doubt if she would have any insurance.
    My husband worked in the early days of Data Processing and was employed by big insurance companies. He said they get huge tax breaks by the government. Those were the days of redlining, etc.
    Al Capone was taken to jail for income tax evasion…maybe that is what we should do at present to these crooks of the sickness industry.

  11. Dave Says:

    I’m so pleased that I grew up in England and now live in Canada,where nobody is left out and the phrase “pre-existing condition” is non-existant….

    It isn’t “free”, we all pay through our taxes,and its good to know that we will always be looked after,that we never have to worry about medical bills…

  12. MCT Says:

    (Sorry for this third post, it’s the final revision, please just remove the prior two postings)

    The American people, at least the great majority who constitute the middle class, are no longer perceived as the wholesome backbone of America; the middle class is now perceived simply as prey; the domestic source of revenue for corporations to exploit with impunity. In the past, Americans have relied on the institution of Congress as a social backstop to protect the interests of the people from organized exploitation. But now, that institution has failed miserably as a protector of the public. This failure is further exacerbated by the practice of allowing private money to finance Congressional candidates who in turn pass favorable legislation for these private contributors, corporations. This practice effectively allows corporations to dictate public policy in their favor with the blessing of a turncoat Congress. Private, corporate money now dictates the law of the land in the US and those new laws limit legal liability and monetary compensation exposure of those companies whose practices damage us individually or collectively. The US legal system now favors corporate interests over public interest at every turn, the proof is in the fine print of every contract of every transaction entered by the middle class.
    Corporations have only one goal, only one legal mandate and that is to maximize the wealth of its owners, the shareholders. There are no legally required moral or ethical restrictions or caveats on business practices, no rigidly-enforced legal requirements regarding corporate social or environmental responsibility. Congress has effectively removed all obstacles regarding corporate social or environmental accountability so that tobacco industry corporations can sell as many cigarettes as possible without having to account for the social costs of the use of that product, and the alcohol industry can sell as much alcohol as possible without any legal, moral or ethical consideration whatsoever of those enormous social costs. The oil industry pumps and transports as much oil as possible without any substantial environmental responsibility for when their negligence causes something to go wrong. The insurance industry sells as many insurance policies as possible while having in place secret internal practices of avoiding payment of legitimate claims whenever possible. Corporations seem to operate in a vacuum without any of the social, environmental, ethical or moral considerations that would naturally be expected of individuals; corporations are allowed to exploit wherever possible and do whatever is necessary to make profits in order to assure the wealth of the shareholders. In fact, the lack of social or environmental accountability assures an uninterrupted source of revenue for other industries like the healthcare/insurance industry who profit when long-term tobacco and alcohol use begin to take a toll on the health of those consumers. The people of this country are simply prey for perpetuating an uninterrupted and unrestricted cycle of corporate greed. And with the help of Congress, the floodgates have been opened; corporate exploitation has been legalized and unleashed on the American people, on the middle class. Large corporations pollute our oceans and ground water with impunity, they have jeopardized our entire economic/financial system without even a hint of accountability or remorse, they refuse to pay insurance claims as a matter of standard practice, the credit card industry writes off bad debt losses on their tax forms on a dollar for dollar basis yet turns around and sells the full value of the bad debt to third party collection agencies who legally pursue the debtors in court for judgments for the full amount of the debt that has already been written off, car dealers can repossess vehicles and resell them for well below book value and then sue the defaulting purchaser for the full amount of the loan.
    We, the people, are prey.
    Congress has allowed all of this, Congress has sold the middle class out entirely. So now we are basically powerless, being shoved and pulled at the whim of whatever corporate policy we happen to be exposed to.

  13. David Lange Says:

    We can do a lot. The first step is to share this article on your social media page. I did so before reading it, but I already knew a lot about what the “Sickness” Industry was up to.

    Secondly you can call all of your elected officials to see what their opinions are and make sure you ask them how much money they have received from the Sickness Lobby, in support of their campaign funding.

    Baby steps people, baby steps – your life, or the life of someone you love may depend on it.

  14. LBoyce Says:

    The American people, at least the great majority who constitute the middle class, are no longer perceived as the wholesome backbone of America; the middle class is now perceived simply as prey; the domestic source of revenue for corporations to exploit with impunity. In the past, Americans have relied on the institution of Congress as a social backstop to protect the interests of the people from organized exploitation. But now, that institution has failed miserably as a protector of the public. This failure is further exacerbated by the practice of allowing private money to finance Congressional candidates who in turn pass favorable legislation for these private contributors, corporations. This practice effectively allows corporations to dictate public policy in their favor with the blessing of a turncoat Congress. Private, corporate money now dictates the law of the land in the US and those new laws limit legal liability and monetary compensation exposure of those companies whose practices damage us individually or collectively. The US legal system now favors corporate interests over public interest at every turn, the proof is in the fine print of every contract of every transaction entered by the middle class.
    Corporations have only one goal, only one legal mandate and that is to maximize the wealth of its owners, the shareholders. There are no legally required moral or ethical restrictions or caveats on business practices, no rigidly-enforced legal requirements regarding corporate social or environmental responsibility. Congress has effectively removed all obstacles regarding corporate social or environmental accountability so that tobacco industry corporations can sell as many cigarettes as possible without having to account for the social costs of the use of that product, and the alcohol industry can sell as much alcohol as possible without any legal, moral or ethical consideration whatsoever of those enormous social costs. The oil industry pumps and transports as much oil as possible without any substantial environmental responsibility for when their negligence causes something to go wrong. The insurance industry sells as many insurance policies as possible while having in place secret internal practices of avoiding payment of legitimate claims whenever possible. Corporations seem to operate in a vacuum without any of the social, environmental, ethical or moral considerations that would naturally be expected of individuals; corporations are allowed to exploit wherever possible and do whatever is necessary to make profits in order to assure the wealth of the shareholders. In fact, the lack of social or environmental accountability assures an uninterrupted source of revenue for other industries like the healthcare/insurance industry who profit when long-term tobacco and alcohol use begin to take a toll on the health of those consumers. The people of this country are simply prey for perpetuating an uninterrupted and unrestricted cycle of corporate greed. And with the help of Congress, the floodgates have been opened; corporate exploitation has been legalized and unleashed on the American people, on the middle class. Large corporations pollute our oceans and ground water with impunity, they have jeopardized our entire economic/financial system without even a hint of accountability or remorse, they refuse to pay insurance claims as a matter of standard practice, the credit card industry writes off bad debt losses on their tax forms on a dollar for dollar basis yet turns around and sells the full value of the bad debt to third party collection agencies who legally pursue the debtors in court for judgments for the full amount of the debt that has already been written off, car dealers can repossess vehicles and resell them for well below book value and then sue the defaulting purchaser for the full amount of the loan.
    We, the people, are prey.
    Congress has allowed all of this, Congress has sold the middle class out entirely. So now we are basically powerless, being shoved and pulled at the whim of whatever corporate policy we happen to be exposed to. AND WE ARE TO BLAME FOR VOTING THEM IN AND GIVING THEM THE POWER. MAYBE WE NEED TO VOTE FOR ANOTHER PARTY INSTEAD OF REPUBLICAN OR DEMOCRAT!

  15. Ralph Says:

    Wow! MCT summed it up PERFECTLY! It was as though he read my mind. The only thing he ( or she) didn’t mention was all of the corporate mergers that started in the 1980’s and have resulted in almost no consumer choice on the retail level. ( Walmart, Federated Dept Stores, etc…) Sadly, our country has become similar to what the Soviets experienced ( GUM Dept Store) ( Walmart). Lousy service, cheap and shoddy imported goods because they have KILLED our domestice manufacturing.

    I’m glad I’m not any younger, because I see no way out!

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