Behind the Health Insurance Industry Spin

Several dozen health insurance executives sat in a room in 2007 waiting for a phone call. When the phone rang, the news wasn't good. A man attending the Cannes Film Festival for the premiere of Sicko reported that the audience gave standing ovation to filmmaker Michael Moore. The executives knew the thing they feared the most—comprehensive legislation that sought to drastically reform how health insurance works in America—could surface, and soon. So the executives decided to launch a public relations campaign under a cover group called Health Care America designed to discredit the film and influence on the rumored upcoming health care legislation. Now, after the Affordable Care Act has passed, some members of Congress are threatening to repeal the legislation, states are challenging it in court, and public opinion on the legislation is divided. Their strategy worked.

This artificial opposition to the health care reform bill, manufactured in large part by insurance companies and other opponents to the bill, has been recounted in Wendell Potter's recent book, Deadly Spin:  An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans. The book attempts to document the health care reform fight from inside the insurance industry. Potter writes about how the industry's public relations machine was used in the debate over health care reform.

Potter begins by painstakingly chronicling the history of health care in America, from the first government provided health care given to sailors in 1798 to Roosevelt's Social Security Act in 1935. Roosevelt was unsuccessful in his attempt to include health care in the bill because of political opposition. More recently, former President Bill Clinton led an ultimately unsuccessful push in the 1990s to implement spending and health insurance premium caps.

Heath care reform didn't seriously enter public debate again until Obama came to office under the election platform of a public option. Obama compromised on the public option to get the bill passed—and not a moment too soon. Potter writes that medical debt was the reason for 62 percent of personal bankruptcy filings in 2007 and the lack of medical coverage will cause bankruptcy for 45,000 people in 2010.

But while other historians will document the political realities of reform in the years to come, Potter writes from his perspective as the former head of corporate communications at CIGNA, one of the top insurance companies that dominate the market, where he'd been since 1993.

Potter presents a harsh review of the insurance industry during the debate over health care reform. He finally decided to leave CIGNA in May 2008 after the death of Nataline Sarkisyan, a 17-year-old who was denied a liver transplant by his company. Potter writes, “It became clearer to me than ever that I was part of an industry that would do whatever it took to perpetuate its extraordinary profitable existence.”

But though Sarkisyan's death was shocking, no lawsuit could be filed against CIGNA because of the Employee Retirement Income Security Act (ERISA) of 1974, which governs the health insurance policies of 130 million Americans, and supersedes any state laws on suing insurers. Even if a lawsuit had been possible, federal courts can only award monetary damages—not force insurance companies to reverse their decisions—and the kicker is that if the victim is dead, his or her surviving relatives cannot collect any money.

It was Potter's job to field the questions of financial reporters over why stock was down when CIGNA renewed its commitment to paying for care and led the crisis management team when bad press got out. In a recent interview with Campus Progress, Potter says no financial reporter ever probed into the real reason stock prices were going down:  CIGNA was actually paying for care. When they didn't pay for care, profits went up and so did the stock.

“I would tell reporters that the company missed expectations because of high utilization of medical services or unexpected change in the way people were getting,” Potter says, using technical jargon to beat around the bush to financial reporters who's interests were their Wall Street Journal readers:  Readers that were most likely to already have health insurance be invested in keeping stock prices up. When asked for specific numbers, Potter recalls, “Sometimes I would say that I’d look into it and get back to them. But the reporter would be on deadline and not press me on it.”

Potter says he blames the decline of the resources in mainstream newspapers has left niche publications to cover issues of health care. Such niche publications cater to audiences who are typically not invested in the health care of the middle and lower classes. Until the added coverage by major news outlets during the health care debate such as The Washington Post and NPR, there wasn’t much in the way of specialized coverage for the masses.

“We need to be mindful of what has happened in our history; it clearly has repeated itself with social security, Medicare, or any effort to improve our society,” Potter says. He writes in the book on Obama's naïveté going into March 2010 when he met with the heads of insurance companies and spoke about the health care bill and the challenges that lie ahead as the GOP gains control of the House, “They will try to weaken [the health care reform bill] to go back to the status quo so they can continue to reward shareholders. Obama knows that. He knew it going in. They have millions of dollars to influence public policy and that was why he worked with the pharmaceutical companies so they wouldn’t throw nuclear bombs at the bill.”

But the biggest flaw Potter finds in Obama's strategy is that he thought he could trust the talking heads the insurance companies sent to the White House. “He thought he could work with them in good faith. They wanted someone to go there that appeared to be reasonable; his job was to be persuasive, so you had a very sophisticated messenger from the messenger, and eventually the public option was dropped,” Potter says.

Potter also says that the health insurance industry wants the bill to stand as it is, even though some incoming Republicans used the overthrow of the health care bill as an election platform. “The big special interests have the real influence and if this law were dismounted we’d have an awful mess. The industry works in a 'free market' and has created a mess in which 51 million Americans don’t have insurance and that would get far worse. They need new premiums and if they don't have it, it would collapse,” Potter says.

In the book, Potter explains that the insurance industry lives off new premiums from healthy young people. In short, those 26 and under who will be able to go under their parents plans again is a boon to health insurance companies, even if it serves as a greater social safety net for young people.

The book criticizes the insurance industry and exposes all those details that the news doesn’t expose, yet Potter says he hasn't gotten any threats or negative comments from the insurance industry; instead they are ignoring his book and his appearances.

But he has heard from a few of his old co-workers at CIGNA, “They've been quiet and they’ve been supportive, but they have to keep their jobs and feed their families like everyone else. But they know I’m telling the truth.”

Nataline Sarkisyan was one of those that Potter, in his old life, attempted to spin away. “I realized that with both political leaders and the media buying the industry line, ordinary Americans had little chance of understanding what was happening. Health care reform was about to be eviscerated, again. I couldn’t sit back and watch this happen,” he writes. 

Lisa Gillespie is a former staff writer for Campus Progress as well as the Managing Editor & New Media Director at Street Sense. She graduated from the University of North Carolina–Asheville.

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