The Health Care Industry vs. Health Reform

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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I hope that this whistleblower recognizes that ERISA is a factor in the current success of insurance companys' thefts of legitimate benefits from legitimate claims by legitimate policyholders. People whose benefits are denied no longer have recourse to punitive damages or bad faith IF they get their policies through the workplace. They can ask for a hearing, but the result if successful will be the same or a very little more than the amount they were orginally entitled to. If people must hire a lawyer, the chance is that a settlement will be negotiated, and the lawyer will take a substantial part of the fraction of the claim that will finally be granted.

The feds have stripped away the power of the states to regulate and ride herd on insurance companies and have turned the job of keeping them honest over to NOBODY. Unless one can afford to pay for one's own that case, the state agencies still have some jurisdiction. And....I can't stress this too the days of bad faith judgments, insurance companies could be severely punished for cheating policy holders. They were often made to pay a percentage of their profits to the victims. Now, there is no incentive for them to pay claims....whatever they can get away with cheating is theirs to keep.

If people purchase their policies outside the workplace, the state insurance commissions still have regulatory and punative powers to keep the insurance companies honest (or, at least try to). Both Democrats and Republicans are responsible for misusing ERISA (which, afterall was supposedly designed to protect the pensions of workers) to use it instead to create a situations in which insurance companies have nothing to lose by withholding benefits. Again, our government, bought and paid for by big business, has turned over the keys to our wellbeing to the foxes in our henhouses.

Thank you

Thank you Wendell for standing up. I've been preaching single-payer system on my blog for quite some time. I'd race you for first place in line to sign up.

My wife contracted ARDS (acute respiratory distress syndrome) following an "inadvertent cut" during routine surgery. Within 48 hours her lungs and kidneys stopped funcitoning and she was found lifeless in her hospital bed. The lack of oxygen caused an anoxic brain injury, but we were never told by hospital staff or attending doctors that had happened.

Months of trying to find out why she was having debilitating migraines, problems thinking, memory problems and vision problems were fruitless until an opthalmalogist said she had 20/20 vision. Her question to him, "Then why can't I see?" He ordered an MRI that revealed the brain injury.

A few more months of visiting a whole new team of specialists ensued that resulted in a recommendation that she be admitted to a neuro-medical facility.

The insurance company refused to first. Brain injury is best treated within the first few crucial hours following the event. My wife was admitted for treatment 15 months after her event. And only then after her nation-wide corporation threatened to change insurance companies.

Again, thank you.

Cigna Sarbanes-Oxley Violation

Wendell, How far will your convictions to stay out of Dante's inferno carry you?

Cigna goes into great detail in its SEC filings about its Patients Bill of Rights and its elaborate member complaint policy promising that its members will Be Heard, promising access to quality care from Cigna providers. Well, from my personal experience, Cigna doesn't have any method for handling complaints, and this is a violation of Sarbanes-Oxley subject to millions of dollars in damages if prosecuted.

The many Cigna providers I saw when I became sick in my late 40s did nothing more than refer me from one test and specialist to the next. Providers dismissed all positive test results and each assumed the other specialist was in charge of my care. My primary care doctor delegated my care to the specialists which is against Cigna rules unless Cigna expressly gives written permission.

When I complained to Cigna in writing, my complaint was returned to me months later with a form letter attached. When I repeatedly complained over the phone, I was told by member services supervisors that Cigna's computer system doesn't have any lines to enter member complaints and there is no where to forward complaints. Not one of the many member service reps I spoke with had ever heard of the Patient Bill of Rights.

As a result of not being diagnosed nor treated, I lost my job and all my savings. Using the mountain of positive test results amassed from all my doctor visits, I applied for and was awarded Social Security disability insurance. I have been disabled for five years now with severe osteoarthritis and degenerative disc disease caused by an undiagnosed, untreated systemic bacterial infection that could have been treated with long-term antibiotic therapy--penicillin.

I finally qualify for Medicare coverage in August 2009. I hope I can find somewhere to live after my home is foreclosed upon.

Why don't you talk about this aspect of Cigna shenanigans and the influence medical insurers have on how doctors behave toward their patients? How many doctors do you think fail to see illness because their bonus from insurers depends upon the number of "healthy" patients they have?

I was a former investigative reporter, took notes after each dealing with Cigna, and saved every scrap of paper related to Cigna and my medical care. Unfortunately, attorneys have the same scrupples as medical insurers. I can't find one to represent me now that I've lost everything, including my health -- all while I was insured with Cigna.

You and I both know this was just another dishonest Cigna marketing ploy. But when Cigna documented the ploy in SEC filings, it broke the law, and no one cares. Do you?

I'm willing to go public with all details of my health, names, times, dates... I've nothing left to lose.

Health care from a nurses perspective


You have got to be kidding! You actually believe that physicians are paid a bonus by the insurance company? In reality, they repeatedly spend hours of their time, without a mechanism to charge for this time, trying to get the insurance companies to pay for what their patients truly need, whether it be a non-formulary drugs that seems to work better for a patient, because of his individual needs, some "equipment" that the patient needs, such as an insulin pump, or for a test that is needed to make a diagnosis...but that the insurance company is refusing to pay for!

In addition, the physician's office has to spend time submitting their claim for the patient's bill, often multiple times, to these same companies... in hopes of receiving a fraction of their charge for seeing the patient in their office. These are the same physicians who give of their time in free or reduced fee clinics for the uninsured, and when there is a true need, the specialists see many of these patients in their offices, free of charge.

I am sorry that you had such a negative experience, but from my perspective as a nurse, while it may be easy to blame the physicians, you are blaming the only people who could even potentially help you, while failing to see that they too are vicitims of the insurance company abuses!!

The problem is that in order to even make a living, your primary care physician is having to see so many patients that he or she cannot even begin to worry about the details of tests ordered by specialists, when he may not even be aware of what these test results are! ANY patient must be an advocate for himself! If you were aware of some "positive test results" as you mentioned, why on earth were you not asking the specialist who ordered the test what should be done with the results, or asking your primary care physician to call the specialist he sent you to for follow up on any tests, and possible treatment options?

I must tell you that I often see patients who do not want to go in to see their doctor to discuss any possible treatment options... because they do not want to pay their $15 co-pay!! Health care abuse works both ways!! All of our society needs to be grateful to have access to well trained physicians, who are capable and willing to help! That is what will change if we have "socialized medicine." In that scenario, you would never have been able to see specialists in the first place (most will be eliminated over time) and you would just have to live with the problems you have as best as you could. Perhaps if you have enough money you might still be able to access some well trained specialists in another country... but I'm not sure where that would be.

Instead of railing against the actual health care providers (physicians, who do not make any exhorbatant income for the number of hours they put in) ... I suggest that we need to be grateful that we have access to these well trained professionals... and to instead complain loudly about the HUGE profits made by the drug companies, the insurance companies, and also the many companies that provide all types of health care services to the public, from physical therapy services to durable medical equipment. Also, NONE of these companies should be allowed to call any advertising or lobbying costs and expenses, an "expense" for tax deduction purposes!!

To me, we as a nation are in grave danger of "throwing the baby out with the bath water!" The well trained health care providers that we have access to need to be both appreciated and to be fairly compensated for their time and the expenses involved in running their practices, which are mainly due to government and insurance regulations.

When we speak of health care as a right... we are most un-informed. Health care in no more a "right" than is food, a home, or clothes! Nurses, physicians and other heath care providers have a genuine desire to help people, but they invest a great deal of money in obtaining their education, and many years of their time in training. In order to keep a "supply" of these trained professionals, they must be fairly compensated... or the supply will being to "dry up," as it already has in many medical specialties.

We as a nation have an obligation to provide "public health" only as a means to control illnesses, such as tuberculosis, from spreading to all the population... and that care does not have to be provided by a nurse or a physician! In fact, to me, this is what the current House plan looks like it is modeling, with many data collectors being trained, and the designing of redundant information systems (as Nabi from Canada spoke of in this blog on 7/07.) What a waste of our health care dollars this would be!!!

Pat P. MSN, RN

Thank you, Anna

To complain about a provider charging too much is to be naive about the entire broken system of health care in this country. Thank you for providing much-needed insight about how the insurance companies, drug companies, medical equipment companies, etc, etc, take up valuable time and re$ource$ in our health care delivery system, all of which is paid for by those who are fortunate to have insurance.

Health care reform is long overdue and the scare tactics that are being employed are just that - scare tactics. They are not based in reality.

You're Entitled To Your Opinion

Pat, We all view life based upon our individual experiences. You are obviously looking at things from the perspective of someone in the health care field who, I'm guessing, wasn't made chronically ill and disabled because the doctors you paid in full -- not only with insurance but also with your retirement savings -- couldn't decide who was responsible for diagnosing and treating the patient. Sometimes it's a bit harsh to judge someone before looking into their situation more. If you are interested, I have a blog that chronicles my many visits with doctors ( If you read my story beginning with #1 on, you'll see that I was very vocal about my dismay at positive test results being ignored and that I spent considerable time, money and effort to be my own educated advocate to no avail -- it only pissed off the doctors more. I agree wholeheartedly that doctors should be paid for helping people heal. But all I got was tests whose results I used to get my disability--my illness was that obvious. After not being able to work for five years, I ran out of money, so their actions caused me to lose my job, my health and all my savings and assets. My grievance is not mutually exclusive. I think doctors are unconsciously acting this way based upon how they are treated by the insurance companies, but this is misdirected anger. Why take out their frustrations on the patient, particularly one who was paying higher rates in cash at the time of service. No paperwork to file here. I paid because I wanted to get well and get back to work. Sometimes, it's not the patient's fault. Read my story and perhaps you'll gain some insight on a different perspective. As a patient, I ran into a lot of angry nurses, because I agree nurses are overworked, under appreciated and should be paid more, too. The medical mistakes that I endured are unfathomable.

Help us help you fight the good fight...


After so many years as an insider, your courage to speak out about the abuses of the U.S. health insurance industry is refreshing and admirable.

There are many pigs feeding at the trough of the U.S. healthcare dollar (to use Uwe Reinhardt's apt metaphor), but the health insurance industry is one of the biggest, baddest, and most slippery.

Please continue to use your considerable PR expertise and experience, and knowledge of the industry, to help us ordinary citizens counter the massive propoganda and lobbying campaign now being waged to counter meaningful reform of U.S. healthcare. Just preaching to the choir is not going to get anything done. We may be oupspent and outmanned, but this is STILL a democracy, isn't it?

More Thinkers Needed

Since when is expanding, rethinking, or innovating "a thing" a crime? I applaud Mr. Potter for making the move he did. I have, what I believe to be, excellent medical coverage - ironically through CIGNA. But that doesn't mean I don't think it could be better. Much better. Don't you think it's the job of good government, big or small, to at least investigate to needs of those who do not have medical care? Imagine if we only "covered" part of country with defense? "Sorry Florida, or Alaksa, or Texas it's just too complicated to provide your part of the country with military defense. Too expensive. Covering you would make government too big. Give it too much power."

Too big for what? Too complicated for who? Our priorities are jacked up. Take for instance the recent government bailout of GM. Do you think if a company like GM could have off-loaded health care costs they would have needed a bailout? Apply this to any company and the benefits from a Wall Street perspective would out weigh the costs.

Go Wendell Go!!!!

The desperate need for Disability Insurance Reform (Erisa)

Mr. Potter,
Please do not ignore the desperate need for disability insurance (erisa) reform in healthcare discussions. This would be like continuing to allow the most ill amoung us to be slaughtered by the insurance industry. The average american is not aware that they are purchasing a faulty product when they buy disabilty insurance or they don't even own it (only 40% of the workforce has disability insurance). With illness/injury being the #1 cause of foreclosure prior to the recent mortgage crisis, everyone needs disability coverage they can count on. The media has done an attrocious job of covering the facts on this subject. I know we are talking really big bucks for the industry. In 2006 alone, Unem alone denied 250,000 disability claims. Industry whistleblowers state insurers cutoff for claim approval is no more that 60%, regardless of the validity of the claim.
I put myself through college, was a competitive athlete, and had a very successful corporate carreer for over a decade before becoming ill. I recieved short term disability through my employer and then was promptly denied ltd by Cigna. I was also denied ssd. It took 3 years for both my ssd trial and the trial with Cigna. During that time I tried repeatedly to do different types of work but my uncontrolled symptoms would stop me in my tracks. I depleted my 401K and savings and had less than $100 in my bank account by my court dates. I won both but my court costs were devastating. Then a few years later, Cigna denied me again. The average american does not understand that legal fees for the insurer are negligible - about 20k or so. (compare that to paying benefits for the claimant until retirement age). But to the sick person who probably has to hire an attorney on contingency, the stakes are much higher - my fees each time have been around 80K. I won the second time around and once again the judge ruled that Cigna pay interest and reasonable attorney fees. "Reasonable" is only reasonable to the insurer. And dont forget that after you win, the insurer will make you sign a non disclosure statement so no one hears about this crime.
Then there are IRS problems. When folks are forced to live off their 401K there are heavy fines. When you get your lump sum payment you are now in alternative minimum tax. In 03 it meant I was taxed on the 80K of attorney fees that were an important part of my monthly benefit. Also, when one becomes ill, often the most reasonable option is self employment because you can set your own hours - of course this is the type of business that most often gets audited. I know first hand that auditors can be tyrant, They can demand whatever they want, even if they know it wont hold up in court. (who can afford to go?)
Note that the sick person has stumbled into two areas now where if you go to court and win, you still have to fork out legal fees.
So, I had to go to court with the IRS, for an issue I was told by more than one accountant that it never should have gone to court. I won, but it cost me 40K in legal fees. I never would have been there if I hadnt become ill.
Bringing my legal fees alone to $200,000 for being ill. And I'm not done with the IRS. They say I owe 70K, if you knew the circumstances, you would be outraged. I will probalby loose my home now,despite getting the lump sum owed to me by Cigna. Obama has said that they were going to be more flexible with offer and compromises when dealing with folks that may lose their homes due to health issues. That is not what I and my accountants/attorneys are seeing.
Bottom line: the legal process is financially devastating for the disabled once the insurance company has denied them. The industry is unregulated in this area and there are no consumer protection laws.
Then the IRS gives the knock out punch if the insurers hasnt done the disabled in.
All of this is unneccessary. For example, there are simple tests that could utilized to prove the degree of disability - thereby protecting both the ill and the employer/insurer from fraud. But with most of America not concerned about this area since most can't concieve of becoming disabled, the voice of the seriously ill will not be heard. And America will continue to either be vulnerable, or just have their pockets picked.
Please contact me regarding the important story I have to share. I feel like I am a war victim. The only positive thing that can come from me going through this is to help prevent it from happening to others.

Comment on Mr. Potter's blog

Mr. Potter,

I applaud your decision to leave the health insurance industry and speak out on our failed health care enterprise. I too am an insider having worked for 25 years as a senior manager and consultant for a variety of regional and national health plans, Blue Cross companies and others. I came to the conclusion 10 or 12 years ago that a single payer, government solution was the only one that can work in health care. I won't belabor why I support this approach, but I would like to suggest respectfully to you that your focus on health insurers misses a big part of the reason that our current system won't work, namely, a fractured and unregulated delivery system.

While it is true that for-profit health insurers (though I would argue non-profits aren't much better) are a big part of the problem in health care, providers are the other, and arguably bigger part of the problem. After all, even if administrative costs in health insurance are 20 percent, we still spend the other 80 on providers. And they are just as protective of the status quo, despite their protests to the contrary.

I'm sure you are familiar with John Wennberg's work at Dartmouth and that of others who have written about the variation in costs throughout the country. Reforming the payer community would certainly go a long way toward solving some of our problems, but the provider world must be reformed as well.

It is because of this twin dilemma that I support national health care--there is no way to rationalize the entire enterprise without changing the fundamentals of both payers and providers. I would be interested in your thoughts on providers and other issues. I have written a 5,000 word essay on this issue that I would share with you if you are interested. I would value your comments and thoughts.

Please accept my genuine support for your courage to speak out.

Steve Williams