The Health Care Industry vs. Health Reform

By Wendell Potter for

I’m the former insurance industry insider now speaking out about how big for-profit insurers have hijacked our health care system and turned it into a giant ATM for Wall Street investors, and how the industry is using its massive wealth and influence to determine what is (and is not) included in the health care reform legislation members of Congress are now writing.

Although by most measures I had a great career in the insurance industry (four years at Humana and nearly 15 at CIGNA), in recent years I had grown increasingly uncomfortable serving as one of the industry’s top PR executives. In addition to my responsibilities at CIGNA, which included serving as the company’s chief spokesman to the media on all corporate and financial matters, I also served on a lot of trade association committees and industry-financed coalitions, many of which were essentially front groups for insurers. So I was in a unique position to see not only how Wall Street analysts and investors influence decisions insurance company executives make but also how the industry has carried out behind-the-scenes PR and lobbying campaigns to kill or weaken any health care reform efforts that threatened insurers’ profitability.

I also have seen how the industry’s practices — especially those of the for-profit insurers that are under constant pressure from Wall Street to meet their profit expectations — have contributed to the tragedy of nearly 50 million people being uninsured as well as to the growing number of Americans who, because insurers now require them to pay thousands of dollars out of their own pockets before their coverage kicks in — are underinsured. An estimated 25 million of us now fall into that category.

What I saw happening over the past few years was a steady movement away from the concept of insurance and toward “individual responsibility,” a term used a lot by insurers and their ideological allies. This is playing out as a continuous shifting of the financial burden of health care costs away from insurers and employers and onto the backs of individuals. As a result, more and more sick people are not going to the doctor or picking up their prescriptions because of costs. If they are unfortunate enough to become seriously ill or injured, many people enrolled in these plans find themselves on the hook for such high medical bills that they are losing their homes to foreclosure or being forced into bankruptcy.

As an industry spokesman, I was expected to put a positive spin on this trend that the industry created and euphemistically refers to as “consumerism” and to promote so-called “consumer-driven” health plans. I ultimately reached the point of feeling like a huckster.

I thought I could live with being a well-paid huckster and hang in there a few more years until I could retire. I probably would have if I hadn’t made a completely spur-of-the-moment decision a couple of years ago that changed the direction of my life. While visiting my folks in northeast Tennessee where I grew up, I read in the local paper about a health “expedition” being held that weekend a few miles up U.S. 23 in Wise, Va. Doctors, nurses and other medical professionals were volunteering their time to provide free medical care to people who lived in the area. What intrigued me most was that Remote Area Medical, a non-profit group whose original mission was to provide free care to people in remote villages in South America, was organizing the expedition. I decided to check it out.

That 50-mile stretch of U.S. 23, which twists through the mountains where thousands of men have made their living working in the coalmines, turned out to be my “road to Damascus.”

Nothing could have prepared me for what I saw when I reached the Wise County Fairgrounds, where the expedition was being held. Hundreds of people had camped out all night in the parking lot to be assured of seeing a doctor or dentist when the gates opened. By the time I got there, long lines of people stretched from every animal stall and tent where the volunteers were treating patients.

That scene was so visually and emotionally stunning it was all I could do to hold back tears. How could it be that citizens of the richest nation in the world were being treated this way?

A couple of weeks later I was boarding a corporate jet to fly from Philadelphia to a meeting in Connecticut. When the flight attendant served my lunch on gold-rimmed china and gave me a gold-plated knife and fork to eat it with, I realized for the first time that someone’s insurance premiums were paying for me to travel in such luxury. I also realized that one of the reasons those people in Wise County had to wait in long lines to be treated in animal stalls was because our Wall Street-driven health care system has created one of the most inequitable health care systems on the planet.

Although I quit my job last year, I did not make a final decision to speak out as a former insider until recently when it became clear to me that the insurance industry and its allies (often including drug and medical device makers, business groups and even the American Medical Association) were succeeding in shaping the current debate on health care reform. While the thought of speaking out had crossed my mind during the months leading up to the day I gave notice, I initially decided instead to hang out my shingle as a consultant to small businesses and nonprofit organizations.

I decided to take the shingle down, though, at least for a while, when I heard members of Congress reciting talking points like the ones I used to write to scare people away from real reform. I’ll have more to say about that over the coming weeks and months, but, for now, remember this: whenever you hear a politician or pundit use the term “government-run health care” and warn that the creation of a public health insurance option that would compete with private insurers (or heaven forbid, a single-payer system like the one Canada has) will “lead us down the path to socialism,” know that the original source of the sound bite most likely was some flack like I used to be.

Bottom line: I ultimately decided the stakes are too high for me to just sit on the sidelines and let the special interests win again. So I have joined forces with thousands of other Americans who are trying to persuade our lawmakers to listen to us for a change, not just to the insurance and drug company executives who are spending millions to shape reform to benefit them and the Wall Street hedge fund managers they are beholden to.

Take it from me, a former insider, who knows what really motivates those folks. You need to know where the hard-earned money you pay in health insurance premiums — if you lucky enough to have coverage at all — really goes.

I decided to speak out knowing that some people will not like what I have to say and will do all they can to discredit me. In anticipation of that, here are some facts:

* I am not doing this because my former employer was pushing me out the door or because I had become a disgruntled employee. I had not been passed over for a promotion or anything like that. As I noted earlier, I had a financially rewarding career in the industry, and I’m very grateful for that. I had numerous promotions, raises, bonuses, stock options and stock grants over the years. When I left my last job, I was as close on the corporate ladder to the CEO as any PR person has ever climbed at the company. I reported to the general counsel, the company’s top lawyer, whose boss is the chairman and CEO, a man I like and worked closely with over many years.

* The decision to leave was entirely my own, and I left on good terms with everybody at the company. In fact, I agreed to postpone my last day at work by more than two months at the company’s request. My coworkers gave me a terrific going-away party, and I received dozens of kind notes from people all across the country including friends at other companies and at America’s Health Insurance Plans, the industry trade association.

I still consider all of them my friends. In fact, the thing I have missed most since I left is working as part of a team, even though I eventually came to the conclusion that I was playing for the wrong side. Being a consultant has its advantages, but I have missed the camaraderie. After a few months, I thought that maybe I should consider working for another company again. At one point, a former boss told me that another insurer had posted a PR job and encouraged me to contact a former CIGNA executive who worked there about it. Against my better judgment, I did, but I immediately decided not to pursue it. The last thing I wanted to do was to go from one big insurer to another one. What the hell was I thinking?

I’m writing this because, knowing how things work, I’m fully expecting insurers’ PR firms to quietly feed friends of the industry (which include a roster of editorial writers and pundits, lawmakers and many others who fall under the broad category of “third-party advocates,”) with anything they can think of to discredit me and what I say. This will go on behind the scenes because the insurers will want to preserve the image they are working so hard to cultivate — as a group of kind and caring folks who think only of you and your health and are working hard as real partners to Congress and the White House to find “a uniquely American solution” to what ails our system.

I expect this because I have worked closely with the industry’s PR firms over many years whenever the insurers were being threatened with bad publicity, litigation or legislation that might hinder profits.

One of the reasons I chose to become affiliated with the Center for Media and Democracy is because of the important work the organization does to expose often devious, dishonest and unethical PR practices that further the self interests of big corporations and special interest groups at the expense of the American people and the democratic principles this country was founded on.

After a long career in PR, I am looking forward to providing an insider’s perspective as a senior fellow at CMD, and I am very grateful for the opportunity to speak out for the rights and dignity of ordinary people. The people of Wise County and every county deserve much better than to be left behind to suffer or die ahead of their time due to Wall Street’s efforts to keep our government from ensuring that all Americans have real access to first-class health care.

Wendell Potter is the Senior Fellow on Health Care for the Center for Media and Democracy in Madison, Wisconsin.


  1. Nigel Baldwin on June 27, 2009 at 6:15 am

    As a UK resident I’m not familiar with the way your Health system works – or doesn’t work – as the case may be. I recently went through a minor heart procedure in hospitals in Portsmouth and Southampton (estimated cost £6,000)for which I didn’t have to pay a penny. But as an internet user I’ve become familiar with what’s being demanded by people wanting real health care of the kind we take so much for granted over here.

    Further to Mr. Potter’s article, let’s ask the question of where exactly the money being made by the US health insurance industry is going. I feel it’s only a matter of time before an Emil Savundra type character comes along, offering “cheap” health insurance for all, but when push comes to shove, the money from the premiums of hard working citizens from your country will have been found to have gone to places like Leichtenstein.

    If it hasn’t gone there already!!

  2. charles allen on June 27, 2009 at 8:19 pm

    Here is another reason for not having health care for profit. Ingenix, a subsidiary of United Health Group (think William McGuire $1.6 billion compensation package in 2006) has underpaid non network doctors so patients have had to pay billions of dollars that should have been paid by the health insurance companies. See Democracy Now! 6/25

    • Barbara Calder on July 8, 2009 at 4:42 pm

      William McGuire (United Healt) received a $1.1 billion golden parachute when, he was forced to resign. The reason for his resignation was options back dating (highly illegal and morally reprehensable). The year (2005) prior to this scandal estimates have him making between $59 and $124 million for that year alone.If he had been successful caring out the option back dating scheme, it would have netted him another $1.6 billion on top of his yearly salary which was never disclosed in any press reports (that I can find).Mr. McGuire had to pay back over $468 million and fines of over $7 million but never served any period of incarceration period. White collar crime certainly does pay in the USA. It is estimated that while CEO of United, for 700 dollars taken in by United Health, 1 dollar went to pay Mr. McGuire. He was also one of the large donors to many of our elected officials in DC.

      Corporatism is alive and well in the USA. Our elected officials retire as multi millionaires (or more) when their salaries average $174,000 per year). Never let people talk about the USA being a Democracy. It was founded as a republic and now functions as a Fascist State. (whether corporations run the government or government runs the corporations you end up with fascism).

      • Barbara Calder on July 8, 2009 at 4:49 pm

        I also meant to add that HR 676, single payer is the only cost effective way to insure all Americans. Corporations, by law, must only consider their bottom lines before everything else, even the public good. The elite have profitted enough from working class by their war machine. We are humans and our lives have value and worth. Profits by those who only broker care and do not administer it is inhumane.

  3. John Barker on June 29, 2009 at 8:22 pm

    The idea of for profit private health insurance is basically flawed. When insurance companies insure your house, the chances are slim that your house will burn down and a claim will be filed. With automobile insurance, the odds are higher that a claim will be filed but still very small compared to the 99.9999% chance that claims for healthcare will be filed at several points in the insured’s life. If there was a 99.999% chance that houses would burn down, would we find insurance companies insuring them? I don’t think so. What were insurance companies thinking, what sustainable business model did they have in mind, what stroke of illogic drove them into insuring healthcare? Certainly it wasn’t efficient, affordable healthcare or if these elements were part of it they haven’t materialized and cannot materialize. What are our congress people thinking when they seek to perpetuate this absurd system?

    Equally illogical is the system of the insured paying exhorbitant amounts of money to for profit insurance company middlemen who, unlike doctors and pharmaceutical companies, contribute absolutely nothing to healthcare. While administration will be necessary, there is no good reason for these for profit middlemen to be there.

    The nature of healthcare is such that for profit private insurance is not feasible. If it were, at some point in the past 80 years a reliable system would have developed. Instead we have a system for those under 65 that continues to deteriorate and fail. Healthcare should be in the province of the public domain and government where profits are not an issue. We need HR676 Medicare for all. Medicare is a uniquely American system that works.

  4. D Doucet on June 30, 2009 at 3:47 am

    I want to congratulate Wendell on his courage, insight and humanity. I find it interesting that Remote Area Medical, a non-profit group whose original mission was to provide free care to people in remote villages in South America organized the medical care that was given in Wise county. It is further evidence that our country is silently eroding into third world conditions. Health care is a basic human need and right and should never, ever be for profit, should never, ever make anyone wealthy. Yet, that is exactly what has happened in the U.S. Single Payer health care is the only moral and sustainable option. The rest is just greedy fingers grabbing for every last dime at the cost of peoples lives. If we do not have Single Payer health care in this country, expect to see more groups such as Remote Area Medical, Doctors Without Borders and charity organizations from other countries providing medical assistance to Americans. How sad.

  5. Christiane Sauter, RN on June 30, 2009 at 10:57 pm

    Thank you for your courage, Mr. Potter. Your decision was morally,ethically and karmically the right thing to do. I am so encouraged when I hear stories such as yours because I have always believed that most people are good, but it is not always easy to do the right thing and be a good person when there are so many conflicting interests in life.

    We are constantly manipulated by the self-serving, self-interested and greedy contingent of what passes for the “human race” via our sleazy media and advertizing industries which want us to buy this, that and the other pill to fix problems we didn’t even know we had!! And they tell us our “health” insurance will pay for them (maybe)!!! Fat chance.

    Thank you SO much for your courage & your enlightenment!! I’m in the trenches of “Health” Care every day as a hospital discharge planner and am constantly in a quandary when people ask me “how much is it going to cost me”. I call pharmacies & fax scripts to them but they can’t tell me what the copays or coveragees are until they run them through the computer & fill them — formularies change on an almost daily basis!! We can’t tell people ahead of time what costs to expect because pharmacists can’t tell us & so people go to get their scripts filled & then have to say they can’t afford it & don’t get it & then end up back in the hospital for “non-compliance”!!!! This also totally screws the pharmacies because of the waste of time of having to restock and account for dispensed medications which were not picked up and paid for.

    Because the Insurance Companies change policies on a daily basis and have infiltrated Medicare & Medicaid and formularies change daily & no one knows who has any answers because the agenda of the “big honchos” in charge is to deny care in order to preserve profits. PNHP says 60 people per day die because of not being insured and being under insured — don’t know where that statistic comes from, but my 20 years as an RN says it makes sense to me!

    So, THANK YOU!!! THANK YOU for speaking out from a position of being an “insider” from the Dark Side who has “seen the Light”!!!

  6. Stan on July 8, 2009 at 2:38 pm

    I just wanted to appreciate you, Wendell, for your stance, and willingness, to stand for what you came to see was right. Keep on bringing out good information, on ‘this’ side of the PR process. It’s long past time for major reform in this regard. It will come about, because of people like you, voting with their feet.

    Best wishes in your good work.

  7. jim on July 8, 2009 at 10:41 pm

    Thank you. This piece should be added to and read in every local newspaper. Eyes must be opened!

  8. It is a scam on July 9, 2009 at 3:38 pm

    The entire insurance, medical profession is a scam. I have excellent health care and these doctors milk it to high heaven.

    I think we should only have health care for catastrophic illness, not every day maintenance. However, everyday maintenance should be a 100% tax credit. Likewise, doctors should be able to have a 100% tax credit for uncollectable medical services after 3 years.

    For example, After 6 months of orthopedic visits, and physical therapy for painful feet, I went to a free local foot seminar and learned there was a night splint available to stretch the fascia. I went to a medical supply house to purchase the splint and was told I needed a prescription. I called the Dr. office and asked if I could pick up a script, and was told I needed to come in for an appt. When I went to the appt a few weeks later, they would not see me until they took another full battery of foot X-rays, which they did approx 1-2 months earlier. The doctor in all this time, never even touched my foot and he was/is the head of orthopedic surgery at a major hospital.

    This entire ordeal for the script, after the already 6 months of PT cost my insurance co. about $1,000 and now the splint is available online for abut $60 without a script.

    See and go to the NIGHT SPLINT page.

    Incidentally, with the internet, I discovered my condition is called Ledderhose’s syndrome and when it is on the hand it is called Dupytren’s syndrome. I had the classic large nodule on my foot and this high priced specialist never named the condition, nor treated it properly with the splint. I am now about 90% symptom free. The doc wanted to do surgery and remove all the fascia from my foot.

    If there was no insurance for all these incidentals and I could have written them off 100%, the entire system would have been better off.

    The medical profession raped the insurance company.

  9. Nikky on August 3, 2011 at 3:53 pm

    I worked for a company for almost 30yrs and the most I have ever demanced of my insurrance is an occasional cold (visit to the doc) or dental cleaning. Today I am faced with my first real need. I have back pain and the MRI says I may need surgery. UHC has already unleashed “IGENIX SUBROGATION SERVICES” on me. I googled them and, first I don’t like the tone of their questions because it is trying to blame someone for my back pain. Somthing that frankly happend so gradual I didn’t noticed until just recently becoming a problem. Second I read that UHC denies claims first see if it sticks….. Please could you provide me with guidance from here on….

    Nikki from Breckenridge Colorado

  10. Breckenridge CO Real Estate on April 18, 2012 at 2:31 pm

    Kudos for having the courage to speak out about this. I know this article is older, but sadly it’s still a pressing issue even 3 years later.

    Kelli at Summity County real estate.