by Bill Moyers
It was, Bill. Certainly I knew people and talked to people who were uninsured. But when you’re in the executive offices, when you’re getting prepared for a call with a financial analyst, going over the numbers—you don’t think about individual people. You think about the numbers, and whether or not you’re going to meet Wall Street’s expectations. That’s what you think about at corporate headquarters. And it helps to think that way, it helps you do your job, if you don’t really think about real human beings.
Did you go back to corporate headquarters and tell them what you had seen?
I went back to corporate headquarters. I was trying to process what I had seen, trying to figure out what I should do. I did tell many of them about the experience in Virginia. I showed them some pictures I took while I was down there. But I didn’t know exactly what I should do. You know, I had bills of my own. How do I step away from this? What do I do?
One day I was reading President Kennedy’s book Profiles in Courage. In the foreword, his brother Robert Kennedy said that one of the president’s favorite quotes was from Dante: “The hottest places in Hell are reserved for those who, in a time of great moral crisis, maintain their neutrality.” And when I read that, I said, “Oh, jeez, I’m headed for that hottest place in Hell, unless I say something.”
I’m looking at your résumé, describing what you did at CIGNA. It says: “With the chief medical officer and his staff, Potter developed rapid response mechanisms for handling media inquiries pertaining to complaints.” It goes on, “This was highly successful in keeping most of such inquiries from becoming news stories, at a time when managed care horror stories abounded.” You knew there were horror stories out there.
I did. I did.
You put these techniques to work representing CIGNA during the Nataline Sarkisyan case, right?
That’s right.
And that was a public relations nightmare, you called it.
It was. It was the most difficult of the high-profile cases. A family or a patient goes to the news media and complains about having some coverage denied that a doctor had recommended. In this case, Nataline Sarkisyan’s doctors at UCLA had recommended that she have a liver transplant. But when the coverage request was reviewed at CIGNA, the decision was made to deny it. The family had sought some help from the California Nurses Association and was very successful in getting media attention like nothing I had ever seen before. Protestors gathered outside the office there shouting, “Shame on CIGNA! Shame on CIGNA!” I’ll tell you, that got our attention in the corporate offices.
You were also involved in the campaign by the industry to discredit Michael Moore and his film Sicko in 2007. Moore went to several countries around the world and reported that their health care systems were better than our health care system, in particular, Canada and England. What did you think when you saw that film?
I thought he hit the nail on the head with his movie. But from the moment that the industry learned that Michael Moore was taking on the subject, people inside our industry were really concerned.
What were they afraid of?
They were afraid that people would believe Michael Moore.
We obtained a copy of the game plan that was adopted by the industry’s trade association, AHIP [America’s Health Insurance Plans]. And it spells out the industry strategies in gold letters. Part of that strategy, according to this document, was: “Highlight horror stories of government-run systems.” What was that about?
The industry has always tried to make Americans think that government-run systems are the worst thing that could possibly happen to them, that you’re heading down the slippery slope toward socialism just to think about them. So they have used scare tactics for years and years and years to keep that from happening. Their biggest concern was that a broader program of coverage like our Medicare program could potentially reduce profits.
The industry document also advises: “Position Sicko as a threat to Democrats’ larger agenda.” What does that mean?
That means that part of the effort to discredit this film was to use lobbyists and their own staff to go onto Capitol Hill and say to members of Congress: “Look, you don’t want to believe this movie, you don’t want to talk about it, you don’t want to endorse it. And if you do any of these things, we can make it tough for you.”
How?
By running ads against you in your home district when you’re up for reelection, by refusing to ever again contribute to your campaigns and giving the money instead to your competitor.
And here it reads: “Build awareness among centrist Democratic policy organizations, including the Democratic Leadership Council.”
Absolutely.
The Democratic Leadership Council is the front group for the corporate wing of the Democratic Party. Now, the industry document also says, “Message to Democratic insiders. Embracing Moore is a one-way ticket back to minority party status.”
Yes.
They radicalized Moore, in an effort to discredit his message.
Absolutely. By the way, when we did media training for our people, we would always have Moore referred to as “the Hollywood entertainer” or “Hollywood moviemaker Michael Moore.”
Why?
People think of Hollywood as entertainment—you know, that’s moviemaking, not real documentary. They didn’t want you to think that it was a documentary with some truth in it. They would want you to see this as just some fantasy that a Hollywood filmmaker had come up with. That was part of the strategy.
And you would actually hear politicians mouth the talking points that had been circulated by the industry to discredit Michael Moore. And you would hear ordinary people repeating those lines?
Absolutely.
Your plan worked.
It worked beautifully.
The impact of the film was blunted?
The film was blunted.
Did you think the film contained a great truth?
Absolutely.
What was it?
That we shouldn’t fear government involvement in our health care system. That there is an appropriate role for government, and it’s been proven in the countries that were in that movie. You know, Bill, we have more people who are uninsured in this country than the entire population of Canada. We have huge numbers of people who are also just a layoff away from joining the ranks of the uninsured, or being purged by their insurance company, and winding up there. And another thing is that the opponents of reform are those who are saying that we need to be careful about what we do here, because we don’t want the government to take away your choice of a health plan. It’s more likely that your employer and your insurer are going to switch you from a plan you’re in now to one that you don’t want. You might be in the plan you like now. But chances are, pretty soon, you’re going to be enrolled in one of these high-deductible plans in which you’re going to find that much more of the cost is being shifted to you than you ever imagined.
Here’s a memo from the Republican strategist Frank Luntz. He’s the fellow who wrote the script for opponents of health care reform. “First,” he says, “ you have to pretend to support it. Then use phrases like ‘government takeover,’ ‘delayed care is denied care,’ ‘the consequences of rationing,’ ‘bureaucrats, not doctors, prescribing medicine.’” Those are among the talking points in a memo from Frank Luntz for the opponents of health care reform in this debate, including the politicians puppeting messages from the industry.
Yes, they are ideologically aligned with the industry. They want to believe that the free market system can and should work in this country, like it does in other industries. But I don’t think they understand what that actually means, and the consequences to Americans. So they parrot those comments without realizing what the real situation is.
I was watching MSNBC one afternoon. And I saw Congressman Zach Wamp from Tennessee. He’s from just down the road from where I grew up, in Chattanooga. And he was asked a question about health care reform. It was just
a day or two after the president’s first health care reform summit, and he was one of the Republicans being interviewed. He was actually saying that the health care problem is not as bad as we think—that half of the uninsured are that way because they want to go naked.
He used the word naked. That’s an industry term for those who presumably choose not to buy insurance because they don’t want to pay the premiums. It was an absolutely ridiculous comment. And it’s a specific example of a member of Congress buying what the insurance industry is peddling.
Why is the industry so powerful on both sides of the aisle?
Money and relationships, plus ideology. The industry can hire and does hire many different lobbying firms. They hire firms that are predominantly Republican or predominantly Democrat, and maybe both, because they need to reach influential members of Congress like Max Baucus. There are people who used to work for Max Baucus who are in lobbying firms or on the staff of companies like CIGNA or the industry association itself.
The Washington Post recently reported that when Max Baucus’ staff met with a group of lobbyists, two of them had once served as his chief of staff.
That’s the way it works.
They leave the government. They go to work for the industry. Now they come back with insider status.
Oh, they do, they do. And these lobbyists’ ability to raise money for these politicians is very important as well. Many of the big lobbyists contributed a lot of money themselves. One of the lobbyists for one of the big health insurance companies is Heather Podesta, of the Podesta Group. She’s married to Tony Podesta, the brother of John Podesta, who was Clinton’s White House chief of staff—Democrats. That’s how Washington works. Hiring the right lobbyists gets your foot in the door, and you get your message across in ways average Americans can’t.
You’ve seen it become harder and harder for ordinary citizens to be heard, right?
Absolutely. It’s the way the American system has evolved, the political system. And it offends me that the special interests, who are so profitable and so powerful, are able to influence public policy in the way that they have. The insurance industry has been one of the most successful in beating back any legislation that would hinder or affect the profitability of the companies.
Why is public insurance, the public option, so fiercely opposed by the industry?
The industry doesn’t want to have any competitor. In fact, over the course of the last few years, the industry has been shrinking the number of competitors through acquisitions and mergers. It’s as simple as that. They don’t want any more competition, period. And they certainly don’t want it from a government plan that might be operating more efficiently than they are. Our Medicare program, as you know, is a government-run program that has administrative expenses that are like 3 percent or so compared to the industry. The insurance companies spend about 20 cents of every premium dollar on overhead—administrative expense or profit.
You told Congress the industry has hijacked our health care system and turned it into a giant ATM for Wall Street. You said, “I saw how they confuse their customers and dump the sick, all so they can satisfy their Wall Street investors.” Talk about how they satisfy their Wall Street investors.
There’s a measure of profitability that investors look to, and it’s called a medical loss ratio. It’s unique to the health insurance industry. By medical loss ratio, I mean how much of a premium dollar is used by the insurance company to actually pay medical claims. And that has been shrinking over the years as the industry has become more and more dominated by for-profit insurance companies. Back in the early ’90s when the Clinton health plan was being debated, 95 cents out of every dollar, on average, was used by the insurance companies to pay claims. Last year, it was down to just slightly above 80 percent.
Of course investors want that to keep shrinking. If they see that a company has not done what they think meets their expectations with the medical loss ratio, they’ll punish that company. Investors will start leaving in droves. I’ve seen a company’s stock price fall 20 percent in a single day when it did not meet Wall Street’s expectations with this medical loss ratio. Say a company’s medical loss ratio was 77.9 percent in one quarter, and the next quarter it was 78.2 percent. That seems like a small movement. But investors will think that’s ridiculous, horrible—
That they’re spending more money for medical claims and less money on profits.
Exactly. In their eyes this company has not done a good job of managing medical expenses. It has not denied enough claims. It has not kicked enough people off the rolls. And that’s what happens, Bill. It’s what these companies do to make sure that they satisfy Wall Street’s expectations with the medical loss ratio.
And what do they do to keep diminishing the medical loss ratio?
Rescission is one thing, denying claims is another. They also purge employer accounts. Say a small business has an employee who suddenly has to have a lot of treatment or is in an accident. Medical bills pile up. When that business’s coverage is up for renewal—and it typically is up for renewal once a year—the underwriters will jack up the rates, jack up the premiums, knowing the employer will have no alternative but to leave. And that happens all the time. Dumping employer groups from the rolls. Because the more of the premiums that go to pay my health claims, my medical coverage, the less money the company makes.
And the more profit those companies make by not paying claims—
A big chunk of it goes into shareholders’ pockets. The return on their investment. It goes into the exorbitant salaries that a lot of the executives make. It goes into sales, marketing, and underwriting expenses. All these administrative functions. Overhead.
At a recent hearing on Capitol Hill three insurance executives were asked if they would end the practice of rescission—canceling policies for sick enrollees. They refused. Why did they refuse?
Well, they knew Wall Street was listening. They were signaling Wall Street that we’re going to continue business as usual.
You know, I’ve been around a long time. And I have to say that I just don’t get this. I just don’t understand how the corporations can oppose a plan that gives unhealthy people a chance to be covered. Especially since they don’t want to cover those people themselves.
But the simple fact is they are out to enhance their profits. Enhance shareholder value. That’s number one. They may be in the health care business, but it is a business—and their primary motivation is to reward their shareholders. And keep in mind that most of the shareholders are large, institutional investors and hedge funds. We’re not talking about mom-and-pop investors.
You wrote a column with the headline “Obama’s False Friends of Health Reform.” And you use as a prime example a man named Ron Williams, who is at the top of the list of insurance executives in terms of compensation. Who is Ron Williams, and why do you invoke him as the example of what Wall Street expects and wants from the insurance companies?
Williams was recruited by Aetna from WellPoint. Aetna had gone on a buying binge. I said earlier there’s been an enormous amount of consolidation in the health insurance industry over the last several years. Aetna bought a lot of competitors and reached 21 million members. But investors began to see that a lot of the businesses that it had bought were not all that profitable. So Aetna was in a pickle. Their stock price started to drop. And they brought in Ron Williams, and one of the first things he did was a revamp of the IT system—
The information technology system.
Exactly, so that the company could better determine which accounts were not profitable or only marginally profitable. With that new system they were able to identify the accounts that they wanted to get rid of. Over the course of a very few years, they shed eight million members. Many of them no doubt wound up in the ranks of the uninsured.
And what happened to Aetna’s stock?
It went up. And so did Ron Williams’s compensation.
What an irony. We hear the companie
s and their trade groups talking about how we don’t want a public option that would put a bureaucrat between a patient and his doctor. But you’ve just described a situation in which a CEO actually comes between a doctor and the patient.
It’s true. That same thing happened in the Nataline Sarkisyan case. Corporate bureaucrats made the decision. They came between the patient and the doctor.
Any company is in business to make a profit, right? Can we object when an insurance company wants to increase its profits?
It’s a very serious question. I just think the people who believe our health care system should operate according to the free market fail to realize that we’re really talking about human beings here. And it just doesn’t work as well as they would like it to for a lot of human beings. I’m a capitalist, Bill. I think it’s wonderful that companies can earn a profit. But when you do it in such a way that you are adding to the number of people who are uninsured and can’t get health care, then we have to change it.
Do you believe that health reform that includes a public plan can actually rid our system of the financial incentive on the part of the insurance industry to provide less for more?
It would help. Would it rid it? No, I don’t think it would, because the for-profit structure dominates in America. But the public plan would do a lot to keep the insurers honest, because they would have to offer a standard benefit plan. They would have to operate more efficiently, as does the Medicare program. There would need to be a level playing field so the public option wouldn’t be at an unfair advantage to the private insurance companies. But because it could be administered more efficiently than the private insurers, they would have to operate more efficiently. And that 20 cents in that medical loss ratio we talked about earlier just might narrow. That’s what they don’t want. They don’t want competition.
As this debate unfolds, what will be the industry’s strategy?
To keep scaring us. To make us afraid that if we get a public option—something like Medicare—the American people will be forced to stand in line for health care. Well, I just wish they would go with me down to Wise, Virginia. They would see all those people already standing in line waiting for health care.