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Wendell Potter and Health Insurance Industry Misinformation

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In America, there's nothing wrong with political disagreements, even angry ones.

The more sides we hear from on an issue the more likely we are to choose the best solution; that's the guiding theory behind American democracy. But that doesn't hold true when one side is being deliberately misinformed. And that's exactly what's happening in the case of those opposed to healthcare reform.

Just ask Wendell Potter.

Until just over a year ago, Potter was vice president of corporate communications for Cigna, the fourth biggest health insurance company in America, when he decided to resign and become a public advocate for reform. One of Potter's duties at Cigna was to help form "messaging" that shined a favorable light on the health insurance industry. Potter worked with public relations firms to mold this messaging, and he became privy to all the dirty tricks used by the industry and its PR shills.

Now, as a former insider, he is as credible a source as you will find who says the health insurance industry is behind the majority of the misinformation out there. His erstwhile colleagues, he asserts, are not only spreading lies and half-truths in order to defeat reform - they may even be busing people to town hall meetings in order to disrupt them.

I recently interviewed Potter for Guernica magazine. Here is what he had to say about the health insurance industry's role in spreading misinformation:

Potter: One of the big PR firms [for] the insurance industry is APCO Worldwide. They've represented the industry for quite a long time. They're skilled at setting up front groups to spread disinformation to challenge proposals...When you see stories about the meetings and how the participants are so concerned about government takeover of our healthcare, they use the very words that were fed to them by the health insurance industry, not realizing that they are unwitting pawns of the industry. Because they hear that stuff from people they believe are credible, like Rush Limbaugh or Glenn Beck.

Me: What are the chances that the industry is actually busing people in to disrupt the meetings?

Potter: I think indirectly they are. APCO and other PR firms do stuff like that. It would be hard to trace it directly because they go through a lot of trouble to funnel the money in ways that it's not directly traceable to them. When I say money, of course we're talking about insurance premiums that people pay, and it's being used for these purposes.


Many objections to reform indeed seem rooted in a paranoid vision of socialist plotting rather than in anything that the Democrats are actually proposing. For example, when it's pointed out that a "government takeover" of medicine is not, in fact, being proposed, but rather a government-run "option," you may hear a reply like one that was recently posted on Facebook: "It's not going to be just an option for long."

For the "public option" to become not just an option but rather the only health care plan available, one of two scenarios must occur. One would be the realization of the paranoids' nightmare -- that Obama and the Democrats are secretly plotting to turn our entire health care system into one that's government run, and the "public option" is just the first step on "the slippery slope to socialism."

There is absolutely no basis in fact for this fear. Obama has accepted millions of dollars in campaign contributions from health care companies and has already demonstrated his dedication to the capitalist system by doing everything he could to prop up our banking sector -- without attaching nearly as many conditions on the bailout money as many liberals would have liked. Indeed, to the dismay of some on the left, it's quickly become business as usual on Wall Street, and there isn't any indication that Obama plans to change that.

The second scenario in which the public plan would become universal is based on efficiency, and this is the scenario that really scares the health insurance industry. If the public option worked well enough, then one could imagine an increasing number of citizens choosing to drop their private plans in favor of the public one. In this scenario, however, the private plans would be forced to become more efficient in order to compete with the public one -- and this would be a boon for patients. This concept -- that increased competition is good for everyone -- is at the heart of conservative philosophy, and so one would think that a public option should be welcomed by Republicans who believe that the private sector can do everything better than the public sector can.

Here is Potter's take on the public option:

Me: Do you think the public option is important?

Potter: It's essential. Reform without the public option would be far less meaningful and effective. The public option may not go as far as people would like in some ways, but we need a mechanism that controls costs and makes healthcare more available to citizens. It would go a long way toward keeping the insurance industry more honest.

Me: Conservatives' opposition to the public option is confusing. Shouldn't conservatives welcome a system that gives more choices to the consumer, which is supposed to be a tenet of conservatism?

Potter: It doesn't make a lot of sense. On the one hand, they're saying that [a public option] would put the private sector at an unfair disadvantage, while they're also saying that the private sector can operate more efficiently. They are trying to have it both ways. But the reality is that the free-market simply does not work in the health care sector as it might in other sectors. A public insurance plan wouldn't need to have the sales, marketing, and underwriting expenses--and would certainly not need to pay executives exorbitant salaries, and would not need to set aside a significant chunk of every premium dollar to pay shareholders--that private plans do.

Another of the nightmare scenarios promulgated by the health insurance industry involves the idea that Obama wants to put a government bureaucrat between a doctor and a patient. Potter addressed this point, too.

Potter: ...our current reality is far scarier. What people have now is a corporate bureaucrat who stands between a person and his or her doctor. That's much scarier than the specter of more government. In any event, there is nothing in any healthcare plan that is being proposed that would put a government bureaucrat between a person and his or her doctor.

Me: Why is a corporate bureaucrat scarier?

Potter: Because every person who works for a for-profit company knows that the company has to meet Wall Street's expectations. Every manager of the company has to pull his or her weight to make sure he and his team are doing all that they can to help the company meet that objective.

Me: So in other words, corporate bureaucrats have a profit incentive to deny care to people who are enrolled in their plans?

Potter: Absolutely. It doesn't have to be stated directly to them that you will be paid a particular bonus if you deny X number of claims; it's known, and it's part of the culture.


Potter left the health insurance industry for a handful of reasons - the increasing importance of the medical-loss ratio in decision-making, the increase in high-deductible plans, and because he was being asked to advocate plans he knew were not in the best interest of patients. But it was a trip he made to a free health care expedition being held in Wise County, Virginia, in 2007, that affected him most.

Hundreds of citizens of the richest country in the world stood in the rain for free health care in scrubbed down animal stalls. Tents pitched around the fairgrounds made the scene look like "something that could've been happening on a battlefield or in a war-torn country."

Recalling this scene led to the most emotional moment of our interview.

Potter: When you're in an executive office in a skyscraper, and you've got people bringing your lunch, who take you home in a company-owned limousine with a driver on the company payroll, you get a very skewed understanding of America. You are removed from the reality of how most people live. And the number -- 46.7 million people without insurance -- remains just a number when you're in that environment. It's only when you let yourself be around people who are without insurance, who are underinsured, who wait in line... [long pause]

Me (thinking I lost the connection): Hello?

Potter: [Choked up] Yes, I'm here. It's crazy but I still get choked up when I remember the Wise County experience. Talking about it brings back the vision of all those people standing in line in the rain to get care in animal stalls.

There are some legitimate questions to be asked about the Democrats' plans for health care reform -- the cost, to name one. But let's hope the debate, and finally the decision, is based on facts and not straw men -- phony "death panels" and "government takeovers" and other misinformation that the health insurance industry is disseminating.

Our fellow citizens who stand in the rain for free care in animal stalls deserve that much.