Big Insurance, Big Tobacco and You

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The health care consulting firm the Lewin Group says that 114 million people may lose their employer-sponsored health insurance if Congress includes a "public option" in its health reform plan. Several Republican Congress members recently cited the figure in opposing a public health insurance option.

It's an alarming statistic, but it's not true.

The figure was based on assumptions the Lewin Group made about how many businesses would switch their employees to a public plan. The Congressional Budget Office (CBO) came to a very different conclusion, saying that under the proposed law, about "20 million fewer people would be uninsured nationwide compared with projections under current law," and that "in the aggregate, the number of people obtaining coverage through an employer would change very little." The Lewin Group assumed all employers in the country would switch to a public plan, while the CBO assumed only smaller employers would be able to make the switch. It's a vast difference, but the bill leaves the number entirely open, which permits the wild variations in estimates.

The Lewin Group's extreme estimate is suspect not just because it based it on an outside assumption, but because the Washington Post recently revealed that the Lewin Group, which is often referred to by those opposing health care reform as a "non-partisan" and "independent" research firm, is really a wholly-owned subsidiary of UnitedHealth Group, one of the largest private insurers in the country. UnitedHealth owns the Lewin Group under its subsidiary Ingenix, which was sued by the state of New York in 2008 for wide-scale fraud. Ingenix created and disseminated a skewed database of physician reimbursement rates, which was subsequently used by insurers all over the country, resulting in huge number of citizens being bilked. Here's how the scam worked: In a typical insurance scenario, an "out-of-network" doctor might charge $200 for an office visit but is told that the going rate is $77. The insurer then usually pays just 80% of that figure, leaving the patient to pay the $138 difference. The lawsuit against Ingenix was based on how that "$77 rate" got set in the first place. The number was derived from a database of claims data that was created and maintained by Ingenix, and that Ingenix sold to other insurers around the country. The New York Attorney General described the arrangement as "an industry-wide scheme perpetrated by some of the nation’s largest health insurance companies to defraud consumers." UnitedHealth ultimately settled the suit for $350 million and agreed to shut down Ingenix's medical billing information service, which was the focus of the probe.

As the Center for Media and Democracy's Wendell Potter, former public relations executive for Cigna and Humana, has written, the insurance industry is taking these and other flim-flams straight from the tobacco industry's playbook.

Big Tobacco: A great teacher

Big Tobacco's finely-tuned PR techniques were highly effective at stalling regulation. Cigarettes were conclusively linked to certain deadly diseases in the mid-1950s, but the government didn't require health warnings on cigarettes until fully a decade later, in 1965. In 1993, the U.S. Environmental Protection Agency classified secondhand smoke as a "Group A known human carcinogen," the same classification the agency gives asbestos, radon and vinyl chloride. Despite this, laws protecting workers from on-the-job exposure to secondhand smoke have been passed only recently, and when they do pass, they are local or state laws -- not federal. Even the new FDA tobacco law took decades to come about, even though the Surgeon General officially declared cigarettes harmful back in 1964. It is also clear that the new law was crafted to disproportionately benefit Philip Morris, the company that drove the law's creation and passage after a ten year-long, secret internal "Regulatory Strategy Project."

Not only is the tobacco industry a pioneer in manipulating public opinion and perception, it doesn't hesitate to stoop low to achieve its goals. An examination of tobacco industry tactics can help show what the health insurance industry might do next to scuttle reform of the U.S. health care system. The TobaccoWiki article about tobacco industry PR tactics describes time-tested corporate PR strategies, like commissioning favorable research, reframing the debate onto more advantageous terms, fostering public confusion, changing the focus of the issue, broadening the issue, staging fake "grassroots" uprisings, generating controversy where there really is none, manipulating the media and legislators, undermining science, creating phony economic statistics, inducing fear among the public and harassing and intimidating opponents, to name a few.

How low can corporate lobbying go? Some examples...

The depths to which desperate industries stoop to manipulate the public are best illustrated by tobacco industry documents. In the words of Philip Morris, one method is to "create a bigger monster."

In the early 1990's, this industry was fighting a "monster" of its own: smoking bans. The industry needed to create bigger monsters, to take people's minds off their desire to have clean indoor air. A 1993 Tobacco Institute (TI) memo outlines strategies the tobacco industry could use to fight smoking bans.

To prevent the public from becoming sympathetic towards restaurant workers who fell ill from breathing secondhand smoke on their jobs, authors Joanna Hamilton and Peter G. Sparber of the TI lobbying firm Sparber & Associates, recommended promoting the idea that restaurant workers -- particularly immigrant workers from South America -- were spreaders, rather than victims, of disease:

Since restaurant workers are largely incapable of speaking out for themselves, we believe the only way that the "restaurant workers as victims of [the environmental tobacco smoke]" issue can grow is if the anti-smokers can generate sympathy for them ... The best way of countering the [anti-tobacco advocates], is to encourage third parties to increase public awareness of the public health threat posed by restaurant workers. It may be hard to generate public concern over restaurant worker exposure to ETS, when the public is more concerned about contracting rare, Central American strains of tuberculosis from restaurant workers.

Another strategy they recommended was to portray smoking bans as an attack on low-income workers and small businesses, now a common theme for industries threatened with regulation:

IV. Portray restaurant smoking bans as hitting the "little guy" by focusing the issue on down-scale restaurants. COMMENT: Banning smoking to protect public health is a less attractive issue when it becomes a case of upper middle class political activists telling blue-collar workers whether they can smoke a cigarette with their beer and hamburger platter.

The TI's plan constantly reinforces the need to deploy these tactics using third parties, like state and national restaurant associations, to help cloak the tobacco industry's involvement. A 1993 Philip Morris planning document found in the files of Ted Lattanzio, Director of Philip Morris Worldwide Regulatory Affairs, describes a novel strategy to deal with public's awareness that children are disproportionately affected by secondhand smoke:

Shift the debate on ETS [environmental tobacco smoke] and children to: Are our schools and day care centers making children sick? ... Feed available information to National School Board Association in D.C. Feed information to Oprah, et. al. Get sick children on the shows. Research newspaper clippings of parents who keep children at home because of school environment -- pass those on. Why? Shift the debate.

Philip Morris actually produced an estimated budget for the proposed program to blame schools and day cares for making children sick: $100,000.

Fabricating buzz phrases

Another technique pioneered by the tobacco industry is the creation of alternative language and phraseology for use in discussing the issue. A 1993 presentation prepared by the advertising agency Young and Rubicam (Y&R) for Philip Morris suggests terminology to use in public discussions about secondhand smoke, to help take the focus off the health issue and "help forestall further smoking bans and restrictions in public/work places." The paper suggests using terms like "indirect smoke" and "incidental smoke" instead of secondhand smoke. To describe public health advocates, Y&R suggested introducing new terms like "HVE's - Highly vocal extremists," and "ASA's - Anti-smoking Alarmists." They suggest referring to smoking bans as "exclusionary remedies," and "reactionary" and "knee-jerk legislation." They also suggest terms like "On-site absentees" for people who come to work, but who must go outside the building to smoke, or "Corporate MIA's," for people who are "missing in action" while they go outside to smoke. They suggest referring to EPA science as "scare du jour," "selective analysis," and "alarmist science."

The tobacco industry did in fact adopt such phrases in their advertising.

Now, it's Big Health Insurance's turn

With its back to the wall, the health insurance industry is following Big Tobacco's playbook: skewing public perception, stirring up fear, and manipulating policy makers. It is recruiting "independent" and "credible" third parties like the Lewin Group to crank out favorable studies, reports and statistics, and publicize their results. It is determining which buzzwords scare people the most (like "socialism") and incorporating them into arguments that emanate from talk show hosts and other opinion leaders. It is using the code-phrase "personal responsibility," which is often industry-speak for shifting greater costs, or other burdens, onto consumers. Republicans' use of terms like "rationing" and "government-controlled health care" is designed to instill fear and distract from the fact that, as Wendell Potter told Bill Moyers, Americans are already suffering from Wall Street-controlled health care, where insurance bureaucracies stand between individuals and their doctors, and, in some cases, ration health care by denying life-saving procedures.

Big Insurance has adopted Philip Morris' "Echo Chamber" lobbying technique in which lobbying firms assure politicians hear pro-industry arguments coming at them from every quarter of their districts. In the insurance debate, though, corporate efforts to manufacture "grassroots opposition" to reform has reached a shrill new low, as we discover that professional lobby groups like FreedomWorks and Americans for Prosperity are behind the coordinating the unruly, threatening mob scenes now occurring at Democratic town-hall meetings, to scare representatives out of voting for a public option.

A group with the vague name "League of American Voters" is paying to run a TV ad campaign that features a credible figure -- a doctor in a white coat -- and photos of bleak, empty hospital beds and seniors posing with bottles of medicine. The doctor warns of dire dangers if health care reform is enacted, like rationing of care and long delays in getting cancer treatment. It turns out that the League of American Voters is housed at the very same Washington, D.C. address as a slew of other pro-business, conservative supposed "grassroots" citizen groups that lobby for business interests, like Americans for Tax Reform, the American Family Business Institute, and the Property Rights Alliance.

The health insurance industry has indeed taken Big Tobacco's playbook and is expanding on it. If all goes according to Big Insurance's plans, people will be misled and frightened enough to doom themselves to a watered-down, cobbled-together "solution" to the health care crisis that will have little or no effect on corporate profits. The upside is that we can learn from past lessons and from dealing with the tobacco industry. We now know far more about corporate propaganda and lobbying campaigns that we used to. By this time, legislators, journalists and citizens should be able to see through the insurance industry's manipulative lobbying techniques and misleading claims and call them out for the self-serving propaganda that they are.