Deadly Spin

by Wendell Potter

  My support of the bill led a few on the far left to call me a “corporatist” and a double agent for the insurance industry. I hope this book will explain—by putting the recent debate in historical perspective and by providing a behind-the-scenes look at how the advocates for reform were often out-maneuvered and out-“messaged”—why scrapping the bill, despite its flaws, would have been the worst thing Congress could have done. Had the legislation failed, the industry and its political allies would have been further emboldened, and neither Congress nor any future president would have taken the political risk of attempting meaningful reform for years, as was the case after the Clinton plan failed. The perception of health care reform as the untouchable “third rail of American politics” would have been solidified.

  This book will also explain why the enactment of the Patient Protection and Affordable Care Act of 2010 is only the first halting step in the direction we need to keep moving in to make the U.S. health care system better, in terms of quality of care, cost efficiency, and equitability. It will detail some of the serious problems that lawmakers must tackle next—and soon. It will describe the disturbing trends in health insurance—which the new law only partially addresses—that are pushing more Americans into the ranks of the underinsured. It will explain how a law enacted almost thirty years ago to protect employee pension benefits has made it nearly impossible for 130 million Americans now enrolled in employer-sponsored health insurance plans to seek relief from the courts when their insurance companies deny coverage—and why many of the provisions of the new law will not apply to them. It will also chronicle the ascendancy of corporate PR in general at a time when the mainstream media is in decline and the Supreme Court has given corporations the freedom they have long sought to spend unlimited amounts of money to influence elections and, as a result, public policy.

  Finally, this book will describe what the latter trends mean not only for our health care system but also for our democracy and way of life—and explain why we will continue down a fast track to losing both unless we start paying attention to these trends.

  In conclusion, I will suggest ways we can fight back.

  For I believe that unless we do fight back—and with urgency—the twenty-first century will be dominated by the retrenchment of democracy and the unbridled growth of corporate power, enabled by increasingly unchallenged propaganda.

  C H A P T E R I

  The Beginning

  MY name is Wendell Potter and for twenty years, I worked as a senior executive at health insurance companies, and I saw how they confuse their customers and dump the sick—all so they can satisfy their Wall Street investors.”

  That is how I introduced myself to the U.S. Senate Commerce, Science, and Transportation Committee on June 24, 2009. The committee’s chair, Senator Jay Rockefeller (D-W. Va.), had asked me to testify as part of his investigation into health insurance company practices that for years had been swelling the ranks of the uninsured and the underinsured in the United States.

  I explained how insurance companies make promises they have no intention of keeping, how they flout regulations designed to protect consumers, and how they make it nearly impossible to understand—or even obtain—information needed by consumers. I described how for-profit insurance companies, in their constant quest to meet Wall Street’s profit expectations, routinely cancel the coverage of policyholders who get sick, and how they “purge” small businesses when their employees’ medical claims exceed what underwriters expected.

  I knew that as soon as I said those words my life would change forever. It did—but in ways I never could have imagined.

  I had quit my job as head of public relations at CIGNA—a job that had paid me deep into six figures—because I could no longer serve in good conscience as a spokesman for an industry whose routine practices amount to a death sentence for thousands of Americans every year.

  I did not intend to go public as a critic of the industry. But it gradually became clear to me that the industry’s duplicitous PR strategy was going to manipulate public opinion and likely shape health care reform in ways that would benefit insurance company executives and their Wall Street masters far more than most other Americans.

  I was eventually compelled to pull back the curtain on the industry’s deception-based PR strategy, which comprised two active fronts. One was a highly visible “charm offensive” designed to create an image of the industry as an advocate of reform—and a good-faith partner with the president and Congress in achieving it. The second front was a secret, fearmongering campaign using front groups and business and political allies as shills to disseminate misinformation and lies, with the sole intent of killing any reform that might hinder profits.

  I had left my job at CIGNA in May 2008, but it wasn’t until ten months later that I realized I couldn’t stay on the sidelines. As it turned out, it would be a fellow Tennessean who gave me one of the final shoves off the sidelines and into the spotlight and the new role of whistle-blower, as many people have called me.

  It was March 5, 2009, and I was channel surfing for some news about the health care reform summit that President Obama was holding at the White House that day. Of the 120 or so people at the summit, many were from special interests that had the largest stakes financially in a reformed health care system: doctors, hospitals, drug and medical-device manufacturers, and, of course, insurers. Knowing that these groups had played a lead role in killing Bill and Hillary Clinton’s reform plan fifteen years earlier, Obama wanted to keep them from doing the same this time around. Having campaigned as someone who could bring people with diverse points of view together to work toward the common good, Obama had brought the top lobbyists of each special interest group to his kickoff reform “table”—which the Clintons had not done—and openly solicited the groups’ support and cooperation. To win their support, his administration would eventually cut side deals with some of them, most notably the drugmakers.

  I flipped to MSNBC just as Tamron Hall was getting ready to interview Republican representative Zach Wamp, from Tennessee’s Third Congressional District. I’m also from east Tennessee, although I have lived in Philadelphia since CIGNA relocated me to the company’s headquarters there in 1997. I grew up in Mountain City and Kingsport, both in the northeastern part of the state near the Virginia line. Wamp lives in Chattanooga, in the southeastern part of the state near the Georgia line.

  When Hall asked Wamp about his views on the president’s ideas for reform, he just about called Obama a Marxist: “It’s probably the next major step towards socialism. I hate to sound so harsh, but … this literally is a fast march towards socialism, where the government is bigger than the private sector in our country, and health care’s the next major step, so we oughta all be worried about it.”

  He then started accusing the Democrats of wanting to redistribute wealth in the country by taking money away from those who already had health care to pay for those who didn’t have it, many of whom, in his view, were just irresponsible bums waiting for a handout.

  “Listen,” he said. “The forty-five million people that don’t have health insurance—about half of them choose not to have health insurance. Half of ’em don’t have any choice, but half of ’em choose to, what’s called ‘go naked,’ and just take a risk of getting sick. They end up in the emergency room, costing you and me a whole lot more money. How many illegal immigrants are in this country today, getting our health care? Gobs of ’em!”

  As I listened to Wamp’s rant, I knew exactly where he’d gotten his talking points: from me.

  He was using the same misleading, intentionally provocative, and xenophobic talking points that I had helped write while serving on the Strategic Communications Advisory Committee of the insurers’ biggest trade group, America’s Health Insurance Plans (AHIP). We PR types had created those talking points, with help from language and polling experts, and given them to the industry’s lobbyists with instructions to get them into the hands of every “friendly” me
mber of Congress. Most of the friendly ones were Republicans, and most were friendly because they had received a lot of money over the years in campaign contributions from insurance company executives and their political action committees.

  (In spirited remarks on the House floor shortly before the vote on final reform legislation in 2010, Representative Anthony Weiner [D-N.Y.] called the Republican Party a “wholly owned subsidiary of the insurance industry.” As someone who had managed CIGNA’s PAC contributions for several years, I knew Weiner’s remark had the ring of truth. CIGNA and other big insurers have contributed considerably more to Republicans than to Democrats.)

  I was dismayed to hear Wamp’s demagogic remarks—and not just because I’d had a hand in writing his script, but also because I know his district well. If anybody in America could benefit from the Democrats’ vision of reform, it would be those who live in the counties he represents. Many are rural and remote, with high percentages of people who are either uninsured or underinsured. The per capita and household incomes in most of his counties are far below the national average. Yet the Third District’s representative—contrary to the best interests of his constituents—was saying exactly what the insurance industry wanted him to say.

  Later that evening, I saw a couple of TV reports about the summit. One of the clips featured Karen Ignagni, AHIP’s president, standing up at the summit and telling the president he could count on her and the health insurance industry.

  “Thank you, Mr. President,” she said. “Thank you for inviting us to participate in this forum. I think, on behalf of our entire membership, they would want to be able to say to you this afternoon and everyone here that we understand we have to earn a seat at this table. We’ve already offered a comprehensive series of proposals. We want to work with you. We want to work with the members of Congress on a bipartisan basis here. You have our commitment. We hear the American people about what’s not working. We’ve taken that seriously.”

  Turning in one of her best performances to date, she added, “You have our commitment to play, to contribute, and to help pass health care reform this year.”

  The president—having just been played like a Stradivarius by one of the best lobbyists ever to hit Washington—said, “Good. Thank you, Karen. That’s good news. That’s America’s Health Insurance Plans.”

  The crowd cheered and applauded. They all seemed to be buying it—but I wasn’t, not by a long shot. I wasn’t surprised, either, at the president’s and the crowd’s reactions to what she had said.

  Ignagni is one of the most effective communicators and—with a salary and bonuses of $1.94 million in 2008—one of the highest-paid special interest advocates in Washington. I’ve known her since she left the AFL-CIO in the early 1990s to lead one of AHIP’s predecessors, the Group Health Association of America, an HMO trade group of which Humana was a member when I worked for that insurer. I knew from the first time I met her that she was the perfect choice to lead the insurance industry. She is smart, telegenic, articulate, charming, a strong leader, and a brilliant strategist. Following her success in shaping to her industry’s liking the legislation creating the Medicare prescription drug program, Princeton economist Uwe Reinhardt commented, “Whatever AHIP pays her is not enough.”

  I realized after watching the exchange between Ignagni and Obama that I had seen both sides of the industry’s duplicitous PR campaign in a single day. Ignagni was saying what she knew the president and the inside-the-Beltway crowd wanted to hear, while Wamp was saying what the industry wanted him to say to the rest of the world. He was a tool in the industry’s effort to use “third parties” to kill key elements of the president’s plan, if not all of it, by scaring and lying to the public.

  But it was another televised interview the following Monday that pushed me from the sidelines and into the fray. Four days after the White House summit, Chris Matthews was interviewing Mike Tuffin, AHIP’s executive vice president of strategic communications, on his MSNBC show, Hardball. “The same people who helped kill the Clintons’ efforts back in the ’90s are on the other side now,” Matthews said in introducing Tuffin. “Times have changed. The worm has turned. The cosmos has shifted. Some of the bad guys are becoming perhaps the good guys.”

  There was no doubt about it: Tuffin was on the show as part of AHIP’s charm offensive.

  “This time,” he told Matthews, “we’re coming to the table with solutions. We want to be part of the process. We pledged that to the president. We’re calling for new regulations on our industry to make sure everyone has guaranteed access to coverage.” He thus joined Ignagni in spinning the fiction that, for the first time ever, insurers were willing to accept more regulations and change their ways so that everybody in America could “have access to affordable, quality care” (a favorite term of industry leaders).

  And just like Obama, Matthews seemed to be falling for it.

  THE TIME HAD COME TO MAKE A MOVE

  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. I immediately began making phone calls to people I thought might help me connect with organizations advocating for real reform. My first thought was that I could be an anonymous adviser who could help them expose the industry’s dirty tricks. I wasn’t yet sure I wanted to play a visible role at that point. I was afraid the industry would retaliate in some way.

  To explain why I changed my mind and decided to go public as a critic of the industry, I need to explain where I came from and how I wound up being an insurance company flack in the first place.

  I was born in Banner Elk, North Carolina, on July 16, 1951, not because my parents lived there but because they didn’t have access to “affordable, quality care” in the tiny town where they did live, on the other side of the Blue Ridge Mountains—Mountain City, Tennessee. There was no hospital in Mountain City, or the entire county for that matter. My parents, Blaine and Pearl Potter, were born and raised in Johnson County—Mountain City is the county seat—one of the most beautiful places on earth, in my opinion, but where, even today, it is hard to make a living. There were only two doctors in all of Johnson County when I was born. Mom didn’t want either of them to have anything to do with bringing me into this world. She had heard good things about the hospital in Banner Elk, so that’s where Dad drove her, over thirty miles of winding, mountainous roads, when she went into labor.

  Affordable, quality health care wasn’t the only thing my folks didn’t have easy access to. Money was another. I’ve never met a smarter, harder-working, and more resourceful man than my dad, but I probably earned more in one year at CIGNA than he earned in the twenty-some years he worked in a brutally hot factory before retiring in 1980. Before his factory job, when I was born, he and Mom had a small farm (the main money crop was tobacco) and ran a little country store, Potter’s Grocery, on Spear Branch Road in Mountain City. Dad built both the store and our first house, next door to it, with help from a couple of my uncles. Like most of the houses on Spear Branch Road at the time, ours did not have an indoor bathroom. We would not have one, in fact, until we moved when I was six to what seemed to me a huge city, Kingsport, about fifty miles to the west.

  For more than a year before we moved to Kingsport, Dad “commuted” to the Blue Ridge glass plant, where a relative had been able to get him a job while Mom tended the store. Sometimes Dad was so tired after working a double shift that he would sleep in the back of his 1949 Willys Jeep wagon rather than risk driving, exhausted, all the way back home to Mountain City. I didn’t see him a lot during that time. When Potter’s Grocery became a money loser, they had to close it and look for another way to support us. (It seems that Mom and Dad had let their out-of-work customers, all of whom were neighbors and many of whom were relatives, run up tabs they could never pay off.)

  After that, we lived in a duplex close to t
he glass plant until Mom and Dad had saved enough money to make a down payment on a run-down house a few miles outside of town that Dad would spend months fixing up.

  Dad never knew much about his own father. One day when Dad was in the third grade, his father walked away and never came back, leaving my grandmother to raise nine children herself. They all had to get odd jobs to help put food on the table. When he was in his early twenties, Dad joined the Civilian Conservation Corps, a Great Depression–era work program created during the Roosevelt administration. The CCC put him on a train and sent him across the country to help build a public works project in Doty, Washington. He mailed almost everything he made back home to his mother, as he did later when the army sent him to Europe and North Africa during World War II.

  Mom and Dad were introduced by Dad’s older sister Frances and Mom’s older brother Otho, who were married in the mid-1930s. Mom and Dad dated for years before the war but decided not go get married until Dad returned (they hoped) from his tour of duty. While Dad was overseas, Mom got a wartime job working on an assembly line at a chemical plant in Kingsport. They were married a few days after Dad got back home. I didn’t arrive for another six years.

  Neither of my parents was able to finish high school, having to work instead. They wanted nothing more than for me to have an easier life than they’d had, and they knew I wouldn’t have a chance unless I had a good education. They sacrificed years to save enough money to send me to college. I will never be able to repay them or thank them enough.

  I became the first person in my family to earn a college degree when I graduated from the University of Tennessee in 1973.

  After a rocky start—I was far more interested in going to frat parties than attending lectures during my first few months in Knoxville—I finally settled into a good enough routine to begin making decent grades. I’ve had many lucky breaks over the years, but none luckier than being assigned an adviser named Sammie Lynn Puett. She had a reputation of being so strict that some of my fellow students in the College of Communications told me that if I were smart, I would get another adviser.