Deadly Spin

by Wendell Potter

  I did try, but the school wouldn’t let me ditch Puett, for which I will always be grateful. She was indeed demanding, but she became my first-ever mentor. I soon realized that she was strict because she wanted her students to learn and to succeed. In addition to being my student adviser, she was my first journalism teacher. Believing that I might have some potential, she encouraged me to continue in journalism and to get a job at the student newspaper, the Daily Beacon. I did, and I fell in love with being a reporter. I spent more time in the Daily Beacon newsroom than anywhere else during my last two years at UT. I eventually worked myself up to editor during my senior year.

  Puett always had a lot of irons in the fire, and one of her ambitions was to develop a first-class public relations program at the university. Like many other Puett groupies, I wanted to take every course she taught, even her PR courses. By the time I graduated, I had taken all the PR courses the university offered, including the graduate-level classes, and was torn between going into journalism and pursuing a public relations job when I left school. I was a charter member of the UT chapter of the Public Relations Society of America’s student arm, and I helped drive a UT van carrying Puett and several other PR students to the 1972 PRSA national conference in Detroit.

  Not once during that time did I get any training in how to set up a front group or mount a deception-based, fearmongering campaign for a client. I do remember discussions about the importance of behaving ethically in both journalism and PR—and the distinction between propaganda and “good” PR—but it never dawned on me then that I would ever do anything of which Puett would disapprove.

  Journalism won over PR as my career choice because of Watergate. I fancied myself a great investigative reporter, maybe even the next Bob Woodward or Carl Bernstein. I had been lucky enough to get a summer internship between my junior and senior years at the Memphis Press-Scimitar, an afternoon paper. Offered a full-time job there after I got my B.A. in communications, I didn’t think twice about accepting—even though by then I’d talked to a couple of PR agencies.

  A few months into my career at the daily, I stumbled upon a great story about corruption in the city auto-inspection department. My reporting caught the attention of the managing editor, Ed Ray, and within months I was offered a job in the paper’s Nashville bureau, covering the state legislature. Two years after that, I was promoted to Scripps Howard’s Washington bureau. Scripps Howard owned the Press-Scimitar (which closed in 1983) as well as the Commercial Appeal in Memphis and the News Sentinel in Knoxville. So, at the age of twenty-four, I was covering Congress, the White House, and the Supreme Court.

  AN INTRO TO PR LIKE NO OTHER

  I liked Washington but, frankly, never got over being homesick for Tennessee. In 1978, a college friend introduced me to a wealthy Knoxville banker by the name of Jake Butcher, who was running for governor of Tennessee. When Butcher asked me to be his press secretary, I took the job, seeing it as a ticket back home. Butcher won the Democratic primary but lost the general election to Lamar Alexander, now the senior senator from Tennessee. (I was devastated when Butcher lost, but it was probably a good thing for the state that he did, because five years later his banking empire collapsed and he went to jail on bank fraud charges.)

  I continued to work for Butcher after the campaign—in a very different role. As it turned out, Butcher (whose brother, C. H., also had a growing banking empire, which stretched from Kentucky to Georgia) headed a group of civic and business leaders trying to bring a World’s Fair to Knoxville. He asked me if I would be interested in working in one of his banks and doing some lobbying and PR work for the World’s Fair group. Not having anything else lined up after the campaign, I agreed.

  It was a great gig while it lasted. I represented the group in Washington as a lobbyist because the Bureau of International Expositions, in Paris (which decides where World’s Fairs are held), insists that a city have its federal government’s backing and financial support before even being considered. After helping secure a congressional authorization for the fair, I got to travel around the world helping recruit countries to participate in it. The event itself, the 1982 World’s Fair and Energy Exhibition, was a six-month blast. I wrote speeches and press releases for Butcher, but mostly just had a great time hanging out with the Australians and Peruvians and Egyptians. My wife, a Knoxville native whom I met in Washington while I was lobbying, even got a job as manager of the Egyptian pavilion.

  After the fair closed in October 1982, I continued to work in the PR department of Jake Butcher’s flagship bank in Knoxville, United American. Everything fell apart four months later—and ten days after our first child was born. Federal and state bank examiners were suspicious that the Butchers were moving problem loans from one bank to another to avoid detection. The Feds decided to mount a massive examination of all the Butcher banks at once, and they found what they were looking for. After attempts by Governor Alexander and others to keep the banks from failing, regulators shut them down on Valentine’s Day in 1983. One of C. H. Butcher’s banks was a savings bank not insured by the FDIC, meaning that thousands of people lost their life savings. Hundreds of people, including me, lost their jobs. It was a heck of a learning experience. As the spokesman for a failing banking empire, I learned the hard way what crisis communications was all about.

  Luck smiled on me again, though, a few months after that. The Butchers had hired Hill & Knowlton Public Relations to help with both the fair and the bank, and I had gotten to know a lot of the firm’s executives in Chicago and Atlanta. Two of the Atlanta account executives, Kay McKenzie and Betty Rider Gordon, decided to hang out their own shingle, and they invited me to join them. Once again, having nothing else lined up, I said yes, and I moved to Atlanta with my family and helped launch McKenzie, Gordon, and Potter.

  We made a good go of it for a few years, but eventually we dissolved the partnership. My family and I moved back to Knoxville, and I took a job as head of PR and advertising for the nonprofit and church-affiliated Baptist Health System of East Tennessee, which comprised three hospitals, a few clinics, and an HMO. I don’t think I’d ever heard of an HMO until then, but all of a sudden I was the PR guy for one. After doing that for a couple of years, I was given a chance to make a lot more money by moving to Louisville, Kentucky, and joining the PR team at Humana, a big for-profit company. At that time, in 1989, Humana had a huge division that owned and operated scores of hospitals in the United States and Europe and another division that operated managed care plans.

  One of the executives at Baptist begged me not to go “to the dark side,” meaning cross over to for-profit health care. But I didn’t fully understand yet how different it would be, and I saw it as a great career opportunity. Taking a well-paying job with great benefits at a Fortune 500 company seemed like a no-brainer.

  So, it was off to Louisville (four of us this time: myself, my wife, our six-year-old son, and our two-year-old daughter) for my first exposure to the corporate world. I adapted well and was pretty proud to be working for one of the city’s biggest and most prominent employers in the city’s most conspicuous office building: a twenty-seven-story Michael Graves–designed postmodern pink-granite skyscraper with a pair of Giacometti sculptures in the lobby. My digs at Baptist were nothing compared to my office in the Humana building.

  I supported the hospital division until Humana decided that operating both hospitals and managed care plans wasn’t working out as planned. For the hospitals to make money, they had to have a steady stream of paying patients. For the managed care plans to make money, they had to keep people out of the hospital—including Humana’s hospitals. When investors and Wall Street analysts told Humana’s executives that they needed to focus on one business and sell the other, they decided to spin off the hospitals. I was asked to stay with Humana, now a managed care company, and soon became head of communications.

  MY TRIP TO THE MAJOR LEAGUES

  A few months later, I got a call from another recruiter about an even
better, higher-paying, and more prestigious job in Connecticut. How could I say no to CIGNA, one of the biggest and most highly respected insurers in the country?

  CIGNA in 1993, the year I joined the company, was a large multi-line insurer that traced its roots back to the eighteenth century, when a predecessor company, Insurance Company of North America (INA), started selling fire and marine insurance in Philadelphia. This historic company merged in 1982 with the Connecticut General Insurance Company, known as Connecticut General (CG). (The name CIGNA is an anagram of the acronyms of the two companies.)

  Although it was much larger than Humana and had become a big player in managed care as a result of acquisitions, CIGNA was still known primarily as a property and casualty company. I was hired to help boost awareness of CIGNA’s health care business. Moving from Kentucky to Connecticut (where CIGNA’s health care operations are based) and from Humana to CIGNA really felt like moving to the major leagues.

  I hit a home run about a year after signing on when I arranged for a reporter with Modern Healthcare, the leading industry trade magazine, to do a big feature story on CIGNA. She wanted to “look under the hood” of a managed care company but hadn’t been able to get any of the others to let her do it. After persuading senior management that it would be worth the risk, I invited her to Bloomfield, Connecticut, to spend a day with us. I, of course, had spent many hours preparing the executives she would interview and made sure she only talked to people on an approved list. She was so appreciative that she wrote a glowing multipage story about the company and its “customer-focused” approach to managed care. It was so popular among CIGNA’s sales force that I couldn’t keep enough reprints in stock. Within three months, they ordered thirty thousand copies of the story to send to clients and use in sales presentations.

  I also got noticed for developing a “rapid response” approach to handling media calls about member complaints, which we called “horror stories.” I worked closely with the chief medical officer to set up a kind of SWAT team to be called into action at a moment’s notice when a reporter called with a potential horror story. The objective was to get as much information as possible—as soon as possible—about the complaining member so my team and I could respond to the reporter with a statement or background information before the reporter’s deadline. We were able to keep many stories out of print or off the air just by being so unusually attentive to reporters when they called. It was media relations at its best, at least for CIGNA.

  One of the horror stories that we could not keep from being published, and that led to the creation of our rapid-response system, appeared in the Hartford Courant on August 8, 1996, under the headline “New Health Care Concern: Drive-Through Mastectomies.” Reporter Diane Levick, one of the country’s most knowledgeable and aggressive health care journalists, reported that at least two HMOs in Connecticut were requiring hospitals to discharge breast cancer patients on the same day they underwent a mastectomy unless their surgeon could prove that an overnight stay was “medically necessary.” The two HMOs were CIGNA and ConnectiCare.

  The HMOs had instituted the discharge guidelines after an actuarial firm that publishes guidelines on medical practices and procedures had noted that mastectomies were being done in some parts of the country on an outpatient basis. The move outraged local surgeons and lawmakers. After Levick broke the story, dozens of other reporters did similar stories across the country.

  Word of these “drive-through mastectomies” and of “drive-through deliveries” (insurers were also telling hospitals to discharge new mothers on the same day they had their baby) touched off a national backlash against HMOs that led to laws in many states mandating a stay of at least one overnight for breast-surgery patients and new mothers.

  In 1997, after handling dozens of horror stories and keeping many others out of the media, I was rewarded with a promotion to the corporate PR staff, which meant I would have to relocate my family from Connecticut to Philadelphia. They were not happy to leave our home in West Hartford, but the increase in salary was too good to turn down. I thrived in my new role, and by 2002 I was leading the corporate communications department. When I left the company in May 2008, I was its top PR executive.

  During my years at CIGNA, in addition to my responsibilities at the company, I became increasingly active at the industry level. I really felt I had arrived at the top of my profession when I became a regular on the Amtrak Metroliner to Washington. I worked closely with my counterparts at other big insurers on numerous trade association committees and task forces. We often met at the offices of the PR firms we hired to set up coalitions and front groups to promote the industry’s political agenda, which was mostly an ongoing effort to keep what the industry considered “anti-managed-care legislation” from being enacted.

  By then, the HMO backlash had reached Congress, and several bills were introduced every year to force insurers to change or stop using entirely many of the practices that enabled them to pay less for medical care, such as refusing to include certain doctors and hospitals in their provider networks and refusing to pay for certain doctor-ordered care unless they could be convinced that it was necessary. To ensure that the bills would never pass, my peers and I hired some of Washington’s biggest PR firms to plan and implement stealth campaigns to manipulate public opinion on one issue or another as part of a broader strategy to kill any legislation the industry didn’t like.

  One of the most successful stealth campaigns we launched was in response to bipartisan efforts in Congress to pass a Patient’s Bill of Rights. The insurance industry was opposed to many of the consumer protections in the bill, one of which would have forced insurers to make an external review process available to enrollees who were denied coverage for doctor-ordered treatments. Insurers also didn’t like the fact that the bill would have given enrollees an expanded right to sue their insurer and employer for wrongful denials of coverage. Using a PR firm, Porter Novelli, we formed a front group called the Health Benefits Coalition, which conducted a fearmongering campaign to convince the public—and lawmakers—that enactment of a Patient’s Bill of Rights would lead to a tidal wave of frivolous lawsuits that would cause health insurance premiums to skyrocket.

  I didn’t feel then that we were doing anything unethical or underhanded. We were all well read and well educated and could hold our own at any cocktail party, regardless of the subject. We were charming and articulate and sophisticated. We all wore nice clothes and ate at the best restaurants and had kids in good schools and houses in the right zip codes. We knew people in Congress and the White House. We talked every day to reporters at the Wall Street Journal and the New York Times. We were powerful and influential—not nearly as much so as our CEOs, of course, but what we did and said mattered. The American dream didn’t get any better than this.

  In my job, I talked about people who were uninsured, but only in terms of their numbers. They were all numbers—they didn’t have names or faces or families. I also talked about CIGNA’s millions of members—who likewise had no names or faces or families.

  I talked about the billions of dollars in premiums and fees that CIGNA took in from those millions of members and the hundreds of millions of dollars that the company earned from these premiums and fees every single quarter.

  I talked about the company’s business model and things like earnings per share and the medical-loss ratio and what was going on in Washington.

  I lived and worked in this abstract world, far away from my days on Spear Branch Road and in Kingsport. But I had begun to ask myself whether managed care—especially as it was being administered by big for-profit corporations—was really the solution to the country’s worsening health crisis.

  It took a movie, a trip back home to Tennessee, and the tragic death of a seventeen-year-old girl—just three years younger than my own daughter—for me to see that it was not.

  What happened next made me see the world and the work I was doing from an entirely different perspective. I was
about to undergo a fundamental shift that would change the direction of my life.

  C H A P T E R I I

  The Campaign Against Sicko

  MOST of the two thousand people who crowded into the Grand Théâtre Lumière at the Cannes Film Festival early on Saturday morning, May 19, 2007, for the world premiere of Sicko, Michael Moore’s indictment of the U.S. health care system, rose to their feet at the end of the film and gave Moore and his new documentary an astonishing fifteen-minute standing ovation.

  One young man, however, could not stay to applaud because of an urgent assignment. Largely unnoticed, he slipped out of the theater and made his way to his hotel room, where he placed a call to the organization in Washington, D.C., that not only had covered his trip to the French Riviera and his ticket to the premiere but also paid his salary.

  Dialing America’s Health Insurance Plans, he was immediately patched into a conference call where dozens of insurance executives, including me, waited anxiously on the line. All knew of the threat to the industry; none knew any specifics. Moore had kept such tight control over the release of his film that none of us knew exactly what it was about. Would it focus on big pharmaceutical companies, as early rumors had suggested, or on the insurance industry?

  As he read from the extensive notes he had taken in the back of the dark theater, AHIP’s reconnaissance agent confirmed our worst fears: Private health insurance companies played the role of the villain.

  Which companies were in the movie, we wanted to know, and how badly were they portrayed?

  I was cautiously optimistic. Because there had not been a single Moore sighting at any of CIGNA’s facilities or any reports that he had interviewed anyone associated with the company, I thought there was a good chance he had chosen other targets. I was hoping especially that archrival Aetna had been in his sights.