When the former mouthpiece for two of the country’s largest health insurers starts spilling the beans on the secrets health insurance companies don’t want you to know, it’s time to start listening.
Private health insurers are completely beholden to Wall Street. Wall Street cares about one thing only: money. Not quality of care, not life expectancy, not access to medical treatment. Wall Street cares about money. And insurance companies care about Wall Street. This system is broken.
In this candid interview with Guernica, Wendell Potter reveals the deceptive tactics used by an industry that is totally devoted to defeating health care reform.
Guernica: During your time in the industry, you created health insurance front groups to mislead the public. Can you give me an example of one of these front groups?
Wendell Potter: When the Clinton plan collapsed [in 1994], there was an effort to pass legislation that would give enrollees in managed care more protections. The industry saw this as anti-managed care legislation, so they established a group called the Health Benefits Coalition. The Health Benefits Coalition, with the funding it got from the insurance industry, killed off the effort to get a Patient’s Bill of Rights passed. A more recent example of a front group I was involved with was trying to blunt the effect of [Michael Moore’s documentary] Sicko. Through a PR firm, the industry created a front group to disseminate misleading information about the healthcare systems featured in Sicko—particularly in Canada, the U.K., and France. This front group was set up specifically to try to counter [Moore’s positive depiction of them].
Guernica: What were your duties with these front groups?
Wendell Potter: To help form messaging and develop strategy with public relations firms. PR firms help create the front groups and serve as the back offices to get the work done. The insurance industry contributes advice and counsel and feedback, but the real work gets done by the PR firms that the insurance industry hires.
Guernica: Was it difficult for you to discredit a movie you felt was accurate?
Wendell Potter: It was very difficult. I was beginning to hate my job. I’d look in the mirror and say, “Who is this? How did this happen to you?” But I had a job to do and was being paid quite a bit, so I soldiered on. I wouldn’t have stayed as long as I did if I didn’t believe that the company I worked for was honest and trying to meet the needs of people. I believed I was making some kind of positive contribution. As I was climbing up the corporate ladder, I got to understand more about how the companies make money and how they are so beholden to Wall Street—both investors and Wall Street analysts—and the things that they do to meet Wall Street’s expectations.
Guernica: You worked in the industry for twenty years. It doesn’t seem like it should have taken so long.
Wendell Potter: You don’t really focus on it or understand the significance of it. I’ll admit I knew that Wall Street looked at the medical-loss ratio. I knew it was an important measure. I didn’t know until, frankly, very recently how important it was. As recently as fifteen years ago, the medical-loss ratio in this country was 95 percent. Since then, there’s been great industry consolidation to the point that now there are seven companies that dominate. They’re all for-profit. During the time that this consolidation, this shift to for-profit occurred, the medical-loss ratio has continued to drop. Now it’s around 80 percent. That means twenty cents of every dollar goes to something other than paying medical claims. Just fifteen years ago, ninety-five cents of every dollar went to paying medical claims. This trend is due to pressure from Wall Street. If a company misses Wall Street’s expectations—if the medical-loss ratio starts to inch up—the company will suffer. I’ve seen companies lose 20 percent of their stock value in one day by disappointing Wall Street with their medical-loss ratio.