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Whistleblower Wendell Potter says the death of a young woman denied care by the insurance company he worked for was a turning point in his life; he says these practices are still taking place under the Affordable Care Act – on Reality Asserts Itself with Paul Jay

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PAUL JAY: Welcome back to Reality Asserts Itself. I’m Paul Jay on The Real News Network.

We’re continuing our discussion with Wendell Potter, who’s the author of Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Healthcare and Deceiving Americans, and the book Nation on the Take: How Big Money Corrupts Our Democracy and What We Can Do About It, which he did with Nick Penniman. And he now joins me in the studio. Thanks.

WENDELL POTTER: Thank you, Paul.

PAUL JAY: So we’re going to pick up from our story. If you haven’t watched part one and part two, you really should, because part two we started the biographical story, and we’re going to pick it up. But in part one we got to Wendell had joined the private insurance industry, where he worked for about 20 years, rising to a big position. So we didn’t quite get the rise, but I assume you did really well.

WENDELL POTTER: I did well. A lot of promotions.

PAUL JAY: And your job was, essentially, helping the private insurance companies create a layer of bullshit to cover up for how they were making money out of people’s illness, and disease, and death.

WENDELL POTTER: And I did a pretty good job. I lasted 20 years. And yeah, I absolutely was a master of spin and helping to obscure a reality.

PAUL JAY: Hence the title of the–Deadly Spin.

WENDELL POTTER: Exactly. And it absolutely is deadly spin. It continues to this day.

PAUL JAY: Let’s talk about being inside that culture. You and I once talked off camera, and I said to you, this feels to me like it would have been something similar to kind of naively joining a tobacco company. And once you’re there long enough, not only do you learn about the tobacco company knowing that smoking causes cancer, but you so internalize the culture of the success of the tobacco company you even let your children smoke.


PAUL JAY: Is it like that in the private-

WENDELL POTTER: It is like that. And it probably is in most corporate cultures. You are made to want to be a part of the team. In fact, if you are showing signs that you’re not a team player, you’ll be winnowed out. So it’s important to to be a team player, and to buy into what the company is doing, and not to rock the boat. People have asked me a number of times why didn’t I try to effect change from the inside? You really can’t, because if you start to do that, if you start to question the company’s strategy and suggest that there is something unethical going on here, you’ll be out the door. It just doesn’t work that way.

PAUL JAY: And part of the job of the insurance company is to make money, and part of the spin you need to do is to decide when some people actually get expensive treatment or not. Insurance companies, in fact, are making life and death decisions.

WENDELL POTTER: No, they are. And while I was still in the industry and in my jobs, they controlled the health care system in many ways–even more than they do now, although they still pretty much had complete control of the health care system. But back then, before the Affordable Care Act was passed, they could declare you uninsurable. They could refuse to sell you a policy because of a preexisting condition. Or if you had one and they were willing to sell you a policy, they would charge you a lot more for it than they would someone who was exactly your same age who had not been sick in the past or had that preexisting condition.

And you’re right. They truly are set up to have death panels within these companies. And that was certainly a term, also, that was used during the debate that led to the Affordable Care Act by Sarah Palin and others who were saying that Obama and Democrats wanted to establish death panels within the government. There was no truth to that, but the reality was that they do indeed exist, and still do, because in this country, if you have private insurance, there is someone at the company, your insurance company, who will be making decisions as to whether or not you’ll get coverage for a procedure, or medication, or whatever it is your doctor says you need.

PAUL JAY: And some people are deciding so-and-so, who’s most likely to be poor, isn’t worth treating because they won’t live long enough anyway.

WENDELL POTTER: It happens that way. In fact, the case that contributed to or made–I just couldn’t do it any more–involved a 17-year-old girl who was in a health plan that my company had, and it covered transplants. But a medical director at CIGNA said, in his opinion, he didn’t think the transplant was medically appropriate for this girl.

PAUL JAY: But the doctors did.

WENDELL POTTER: The doctors did. The doctors, her treating physicians, certainly did. And they appealed that decision, and to no avail.

PAUL JAY: This is exactly, as you are saying with Palin and others, this is what the right claims happens in Canada and other places with government health insurance, which, in fact, it doesn’t. Like, in Canada the doctors decide. The plan doesn’t get to decide. But here the insurance companies can.

WENDELL POTTER: They do. And they still do. The Affordable Care Act did nothing to change that. In fact, I think it’s gotten even worse, because it did–the Affordable Care Act did do some good things. But I knew as soon as it was passed that the insurance companies would do other things to make sure that they met Wall Street’s profit expectations. That is the most important thing to these companies. And I can assure you that it’s the case. I, for 10 years, was responsible for handling financial communications to the media. And I know that what is most important is meeting Wall Street’s financial expectations every three months when you announce your earnings. And if you miss it by a penny, earnings per share, then you’ll see the value of your stock more than likely take a hit.

PAUL JAY: And a lot of these executives own a lot of stock.

WENDELL POTTER: Exactly. And I did, too. And I saw exactly what happened. There were a time or two when we did miss the consensus estimates.

PAUL JAY: Which I guess is one of the reasons they want executives to own stock, because they have such a self interest in maintaining the stock price.

WENDELL POTTER: Oh, it’s true. In fact, one of the days I dreaded most was when we released our proxy statement that list the salaries, the total compensation, of the five most highly compensated executives. I dreaded that, because I knew I’d probably get some calls from reporters asking how I would–how I could justify the CEO’s salary. But one of the things I used to justify it was that, look, 90 percent of his compensation is what we referred to ‘at risk,’ which meant that his salary was–it was significant. But he got most of his salary in stock grants and stock options. And so he had great incentive to make sure that he was meeting Wall Street’s profit expectations because of that.

PAUL JAY: Which means you want to say no to expensive procedures more than otherwise because of the self-interest you have in the stock price.


PAUL JAY: So you’re seeing this, you realize this. In the earlier segment of our interview you talked about pushing this Wendell who is kind of more conscious about all this stuff down. But I’m guessing that Wendell is yelling at you, and striving to break out. Over the course of years you’re wrestling with this.

WENDELL POTTER: I was. I was, indeed, wrestling with that. And then over the last year that I was there, it was intense. And there were some things that I was asked to do that made it increasingly more difficult for me to stay in that job.

PAUL JAY: Well, talk more about the case of the 17-year-old girl, because that was one of the breaking points for you.

WENDELL POTTER: It was. And I’d handle a lot of these cases that we referred to as ‘high profile cases.’ Sometimes we would call them horror stories, because they were horrible. And they almost always involved a case in which someone who was enrolled in a CIGNA health plan was going to the media to complain about a decision that they were not getting coverage for something that they felt they were entitled to. And in many cases, their lives depended on this.

PAUL JAY: So this girl needed the transplant.


PAUL JAY: Doctors say they needed it. Insurance overseer says it ain’t worth it, because she’s going to die anyway.

WENDELL POTTER: Right. She was–she was in Los Angeles, UCLA Medical Center. The guy who made that call, who said no, we’re not going to cover it, was 2,500 miles away in Pittsburgh. He had never treated her, never laid eyes on her. And he was just as much of a corporate executive as I was, or a corporate employee.

PAUL JAY: So the person making life and death decisions owns stock.

WENDELL POTTER: Yes, absolutely. There is incentive for those employees if–when you reach a certain level within these big companies you become eligible for stocks, stock options and stock grants. And so you have an incentive. The other thing, too, you don’t have to have a memo that says you will deny X number of transplants this quarter. You know, though, that if you are out of line, if you become an outlier, then your job is going to be in jeopardy. So you don’t have to send a memo out.

PAUL JAY: And you get pressure from all the other stock-owning executives, hey, you’re screwing all of us.

WENDELL POTTER: Right. Exactly.

PAUL JAY: So this girl died.

WENDELL POTTER: She died. Now, it became a very highly publicized case. And I thought that I was playing a role in her getting the transplant that she needed. I started getting calls from reporters all across Los Angeles, and then it became a national, even an international, story.

PAUL JAY: What year is this in?

WENDELL POTTER: This was in 2007. And … Yeah, it’s 2007. It was December of 2007. And these calls started coming in. I had to tell our executives, our CEO and a few others, that this was going on, and that this was becoming a real PR problem for the company. A real PR … disaster.

PAUL JAY: So how did you spin this?

WENDELL POTTER: Initially it was pretty easy. We would spin these initially–Look, this is, I can’t even acknowledge that she is someone who is enrolled in a CIGNA health plan because of HIPAA, federal laws pertaining to privacy. So I thought that would chill this, and it had–it had done the trick many times before. But the reporters were unrelenting. They wanted to know more than my little statement would–we were trying to handfeed them.

And the family began to get a lot of support from activists. The California Nurses Association took up the fight, and they were beginning to stage a protest in front of CIGNA’s regional offices in Glendale, California. CNN was there. And when I learned that, that’s when the decision was made, very quickly after that. After I told the CEO and others that this was happening on live TV, they very quickly reversed that denial. And one of the jobs I had was to try, then, to make sure that the family, as they were on TV, got the word that CIGNA had changed that, and it was reversing that denial, and was going to allow the transplant to go forward.

And I saw that happening. I got someone to go and tell Mrs. Sarkisyan–the family name was Sarkisyan. And I could see someone whispering in Mrs. Sarkisyan’s ear something that clearly made her happy. So I knew I’d gotten the word to the family. And I felt pretty good about that. I thought, well, maybe this girl is going to get that transplant. She’ll probably live. She died five hours after that.

PAUL JAY: Because it was too late.

WENDELL POTTER: It was too late. Enough time had passed since the original request was made, you know, she got sicker. And initially there was a liver waiting for her. A perfect match had been found. That was not the case when the decision had been reversed, that denial. So she died.

PAUL JAY: And, in fact, the outcome of similar cases that did get transplants, on the whole, was actually pretty good.

WENDELL POTTER: Yeah. In fact, her doctors believed that there was at least an 80 percent chance that she would live–you know, I think five years was what they said they felt pretty certain, that she would live at least that long, and probably longer. So they were confident that this would–this would save her life.

PAUL JAY: So where are you when you hear she died? What were you sitting-

WENDELL POTTER: I had gone home. I had gone home thinking that, wow, you know, I’m a father, and I could just imagine what this family was going through. And I felt pretty good. I felt that, you know, this family was rejoicing. They thought their daughter was going to get this transplant. I got a call that evening from someone who told me within the company that you better get ready with another statement, because Nataline Sarkisyan had just passed away. Just died.

It was so devastating to me. I could not–I had gotten emotionally involved in this case, more than most. And I just couldn’t do another one. I just didn’t have it in me to handle another high profile case. So soon after that I went into my boss’s office and turned in my resignation.

PAUL JAY: There was another experience you had I read about where you went South, and saw people lining up for free health care because they couldn’t afford insurance.

WENDELL POTTER: That was–Exactly. That was just a few months. That was in the same year as 2007. And I went there–I was back home visiting visiting family in Tennessee. And I picked up a newspaper and saw something called the health care expedition was being held just a very few miles from where I grew up. And I went there out of curiosity. I think that was something that was, you know, this Wendell that had been submerged, there was something that was happening to me.

And I went there out of curiosity. I had been–I was kind of frustrated, because at this time I was having to write a whitepaper for my company and for the industry on the problem of the uninsured, which this whitepaper was seeking to diminish that as a problem, to try to make people think that the people who are uninsured were that way by choice. And I would write it, and the drafts would come back I wasn’t making the case strong enough. So I guess I might have been compelled to go to this outdoor clinic at a county fairgrounds. And, Paul, that road between Kingsport, Tennessee and Wise County, Virginia, which is just on the other side of the state line, that was the road to Damascus for me. It truly was. And when I got to those fairground gates and I walked through them, it was like I had somehow left this country and walked into a third world country.

PAUL JAY: Describe what you saw.

WENDELL POTTER: Well, there were people who were–people were lined up by the hundreds in lines that stretched completely out of view.

PAUL JAY: So these are–This is like a free clinic that some doctors are giving for people that can’t afford health insurance.

WENDELL POTTER: Right. And at a county fairgrounds. And there were tents that had been set up. It looked sort of like a MASH unit that–I’ve never seen one, except on TV. And it was raining, and those folks were wet. They were soaking wet, but they were not about to lose their place in line. And I noticed that a lot of those lines were leading to barns, and animal stalls. This was the county fairgrounds, and people were being treated in animal stalls. Volunteers, I found out later, would go in days ahead of this thing and scrub them as much as they could, and put up sheets on the stalls to give some privacy.

PAUL JAY: And where did the people come from?

WENDELL POTTER: They would drive for hundreds–from hundreds of miles around. This little bitty town in the middle of Southwest Virginia in the coal mining section, the mountains of Virginia. And people to this day, they still do this every July. People drive from–hundreds–from Ohio, and Michigan, and Florida.

PAUL JAY: And some of these are pregnant women.

WENDELL POTTER: Yeah. Yeah, exactly. And people of all ages. And I found out later that some of those people had insurance, but they are in high deductible plans. They were in high deductible plans. They didn’t have enough money to meet the deductible so they could use their insurance. And I was actually told about some of the volunteers that people had called them up and were telling them that when they had called their insurance companies to see if there might be some way they could get the care that they needed before they met the deductible, they were told no, but you might see if Remote Area Medical is going to have one of these free clinics in your area. Insurance companies were telling people to go to these charity events to get care. It was stunning.

PAUL JAY: And these are kinds of people you grew up with.

WENDELL POTTER: There were people–I realized that moment, when I said it was kind of a road to Damascus, I knew immediately it was an epiphany for me. I knew immediately that had I not been lucky, had mom and dad not saved money so I could go to college and get a good job, I could have been one of those people in those long lines. And I also knew that, at that very moment, that I had to take some responsibility for that. Because my job was to get people to believe things that just simply were not true about the U.S. health care system. And that was–That, truly, was the beginning of my change.

PAUL JAY: It’s not long after that this young woman dies on your watch.

WENDELL POTTER: Yeah. Yeah. And I’ve sometimes said this has been kind of a spiritual journey for me. I don’t know why these things happened so close together, but they were impactful to me. And I knew that I couldn’t keep doing what I was doing. I didn’t know what I was going to be–what I would do next. I didn’t have another job lined up. I just knew I couldn’t keep doing that.

PAUL JAY: OK. Well, the next segment with Wendell Potter we’ll talk about his year after he quits, and what’s next is the testimony at the Senate hearing. So please join us for a continuation of our series with Wendell Potter on Reality Asserts Itself on The Real News Network.

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Wendell Potter is a journalist and former health insurance executive. His books include the New York Times bestseller "Deadly Spin, An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans," and "Nation on the Take: How Big Money Corrupts Our Democracy and What We Can Do About It." His most recent project is, a nonprofit investigative and solutions news site that will launch later this year.