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Wall Street demands medical insurance companies maintain their profits under the Affordable Care Act, which means they get even more aggressive in denying coverage and creating insurance models that under-insure patients – Wendell Potter on Reality Asserts Itself with Paul Jay

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PAUL JAY Welcome back to Reality Asserts Itself on The Real News Network. I’m Paul Jay. And we’re continuing our discussion with Wendell Potter about the health care system, and his own life, and how he came to decide he couldn’t work in the health insurance industry anymore.

Now joining us again in the studio is Wendell Potter. Thanks for joining us again.

WENDELL POTTER Thank you, Paul.

PAUL JAY Wendell is the author of Deadly Spin: An Insurance Company Insider Speaks Out on how Corporate PR Is Killing Healthcare and Deceiving Americans.

In an earlier segment we talked about your road to Damascus, your coming to understand you just couldn’t stomach the kind of stuff you had to do for the private insurance company you were working for. You talked about the death of a young woman. And we’re going to play a little clip from that part of the interview.

WENDELL POTTER [CLIP] 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 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 So, Wendell, since that happened, the Affordable Care Act has been passed. Would that woman still die under the ACA? Could insurance companies still make a decision like that now?

WENDELL POTTER Oh, absolutely. And probably more people are dying now than even then.


WENDELL POTTER Because one of the things that I knew was that when the Affordable Care Act was passed, the insurance industry, they could no longer engage in some practices, like refusing to sell coverage to people with preexisting conditions. But they had this obligation to meet Wall Street’s financial expectations. So there is a profit expectation that they have to meet, that they’re under the gun to meet. So there would be other things that they will do to avoid paying claims. One is, as we’ve talked before, shifting more and more people into high deductible plans. But another is more aggressive prior authorization, which means that doctors and patients have to essentially beg, in many cases, to get the coverage that they’re entitled to. In the Nataline Sarkisyan case, her father’s policy covered transplants, but the medical director said no, we’re not going to pay for it, because he felt it, in his opinion, was medically unnecessary or inappropriate. That happens day in and day out. That was one case that got a lot of attention.

PAUL JAY Because a lot of the critique of Medicare for All is government bureaucrats are going to decide these questions of life or death.

WENDELL POTTER Yeah. Which is–which is not true at all. And in the current Medicare program, the traditional Medicare program, this doesn’t exist. It only exists inside private insurance companies when they set up this mechanism. And that is what, when I talk about insurance companies coming between doctors and their patients, that’s exactly what I mean. Insurance companies have hired tens of thousands of nurses that are often referred to as denial nurses and doctors to serve as medical directors. These are people who’ve decided they don’t want to practice medicine or treat patients anymore. So they’re working for these big corporations, and their main responsibility, in many cases, is to say no. And that goes on day in and day out.

PAUL JAY I should say in Canada, where I grew up, doctors decide. There is no government bureaucrat that can decide whether you get a particular care. Once the classification of care is considered legitimate, then it’s up to the doctors to decide whether you get it or not.

WENDELL POTTER And that’s what we should have here. And it’s what an expanded and improved Medicare program would be like in this country. In fact, as I said, the traditional Medicare program is like the Canadian system, the Canadian Medicare program. There is no government bureaucrat who calls those shots, who makes those decisions.

PAUL JAY So, just to be clear, you’re saying the case we’re talking about, the young woman that died, there could be even more now than then, because the pressure of making up the profitability of the company when they can no longer deny preexisting conditions, they’ve got to find it somewhere else. And the somewhere else is to deny more expensive procedures.

WENDELL POTTER Right. There’s a term that you probably have not heard, and I’m sure most members of Congress have not heard, certainly members of the public have not heard. It’s called benefit buydown. And this is a term that’s used to–it’s a term that encompasses all the various ways that an insurance company can avoid paying out the premiums that they collect from individuals and families and employers. And it includes moving more people into high deductible plans. It includes shifting some drugs from one tier to another in their formularies so that beneficiaries or enrollees have to pay more for the drugs. And it includes prior authorization, more aggressive prior authorization. Increasingly, the insurance companies will determine whether or not you get coverage for even a drug that your doctor recommends that you get, or if you get a treatment that he or she says you need.

PAUL JAY So I guess one can understand why, when the ACA was passed, the stocks of private insurance companies went up, not down.

WENDELL POTTER Yeah. In fact, since the debate on what became Obamacare started, the drug companies have made out like bandits, or their stockholders have. The share price of Cigna has gone up about a thousand percent.

PAUL JAY Drug companies or health insurance companies?

WENDELL POTTER Health insurance companies. Drug companies, too. I mean, they-

PAUL JAY They were left alone in the whole thing.

WENDELL POTTER They were largely left alone. In fact, the first deal that the Obama administration cut was with drug companies, because they are so powerful, so influential, and they spend so much money to influence public opinion that they figured, well, let’s just cut a deal, hold them largely harmless. And that’s exactly what happened.

PAUL JAY In one of our earlier segments you talked about going in southern Virginia, where you found a lineup of hundreds of people getting free health care out in a parking lot, where the doctors had volunteered. And this was another sort of coming to Jesus moment for you. Here’s a little bit of that clip of that part of the interview.

WENDELL POTTER [CLIP] 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 [CLIP] Describe what you saw.

WENDELL POTTER [CLIP] Well, there were people who were—people were lined up by the hundreds in lines that stretched completely out of view.

There were tents that had been set up. It looked sort of like a MASH unit—I’ve never seen one, except on TV. And it was raining, and these 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.

PAUL JAY So uninsured people lining up for volunteer doctors, health care. We’re now past the ACA and Obamacare. Is that still happening?

WENDELL POTTER It’s still happening. In fact, there have–some of these clinics, even more these clinics are being held than ever before. When I went there it was 2007. It was a couple of years before the Affordable Care Act was passed. It was stunning to me to see that Americans were having to resort to getting care in barns and animal stalls. I went back recently, and it’s the same thing. In fact, if anything, the need is greater. And in many cases, a lot of people who are showing up for care at these charity events are people who have insurance. They just are in these high deductible plans.

I just a few days ago talked to some of the folks that-

PAUL JAY So just to be clear, these are people who have insurance.


PAUL JAY But the deductibles are so high they can’t use it.

WENDELL POTTER Exactly. And in fact, the organizers of some of these events at Remote Area Medical–that’s the name of the organization that puts these on–told me that some people have called and told them that their insurance companies have suggested that they call Remote Area Medical to see when they might have a charity event in their neighborhoods.

PAUL JAY Insurance companies are telling their own clients this.

WENDELL POTTER Yeah, because they were in these high deductible plans. But the need is even getting greater. The organizers of–some of the folks at Remote Area Medical have told me just within the last couple of weeks that they are going to be having this year–holding about 100 clinics around the country. That’s about one every three days. Most of them in this country–this organization was established to fly American doctors to remote areas in South America and Africa, and to Haiti. And then they started getting requests to have these clinics in this country. And now the vast majority of them are here.

Just in February of this year, they had their 1000th clinic. And every few days there was another one somewhere in this country.

PAUL JAY What do you see as the other deficiencies of the Affordable Care Act, Obamacare?

WENDELL POTTER Well, one, it doesn’t do anything to control costs, or anything substantial. We’ve seen health care costs continue to go up. The lawmakers back in 2009 and 2010 in the Obama administration decided that they could do–they couldn’t address both the uninsured and health care costs. So they settled on let’s see if we can reduce the number of people who don’t have insurance in this country. And they’ve, you know, that helped.

PAUL JAY How many people have insurance now more than before ACA?

WENDELL POTTER About 20 million more have coverage now than-

PAUL JAY Except you’re saying a lot of the people that have it can’t use it because of the deductibles.

WENDELL POTTER Can’t use it, exactly, because it’s–I wouldn’t say it’s worthless insurance, but it certainly is not insurance that really protects you from bankruptcy if you get sick, in many cases. So yeah, people have insurance, and it will cover after you need it–it will cover things after meeting the deductible. But a lot of people are just not using it, because they don’t have the money to cover their deductible.

PAUL JAY So it’s not–it’s not controlling costs in the way it was suggested it would.

WENDELL POTTER No. And the fallacy was that lawmakers had this notion that insurance companies could or had the desire to control health care costs. They have neither.

PAUL JAY Which I don’t get. I mean, you would think insurance companies, it would be in their own interests to control costs. But I know I go to, like, Johns Hopkins to go–I get some simple brace or something that the insurance companies cost. And the same thing that sells for like $29 on Amazon, I’m paying $125 at Hopkins. Insurance is covering it if I paid my deductible. But they don’t seem to mind paying ridiculous amounts of money for these things.

WENDELL POTTER They don’t. And it is unique to our multipayer system. There’s no other country in the world that finances health care like we do. The thing you have to realize is the competition doesn’t work in health care, certainly not in health insurance, like it does in any other sector of the economy. When you have multiple insurance companies in a given market, and you have very large hospital systems in that market, those–none of those insurance companies are really large enough to negotiate all that favorable, very favorable rates, with those big hospital systems. And hospitals have been consolidating, sometimes in self-defense, because you’ve also had consolidation on the insurance side, as well, too. So you’ve kind of had this arms race of mergers and acquisitions both on insurance, the insurance side, and the provider side.

But as a consequence, insurance companies just can’t control health care costs. They also don’t really care about it, because the more health care costs go up, the more they’re able to demand in premiums from the customers that are still with them. So that means they get more revenues.

PAUL JAY Is there another part to this? I mean, as we know, it’s Wall Street, big capital, big finance, that owns, that predominantly owns the big health insurance companies. But they also own a lot of the companies that are selling the stuff to the hospitals. So they get it on both sides of this.

WENDELL POTTER They do. They do. The winners in this country are the shareholders of–when it comes to health care in this country, the big winners are the executives and the shareholders of the big companies, whether we’re talking about insurance companies, or hospital companies, or drug companies, or medical device manufacturers. They’re making out like bandits. The rest of us are being robbed.

But the thing is that we have a system that is really controlled by Wall Street, by shareholders and a small group of financial analysts. And I’m sure there are very few people who are watching this who know the name of a single financial analyst who covers the health care sector. But they’re incredibly influential.

PAUL JAY OK. In the next segment of our interview we’re going to dig into the debate: Fix ACA–Wendell has outlined the deficiencies of ACA, but a lot of people in the Democratic Party are saying fix it, because Medicare for All is either unaffordable, it’s too hard to pass, so fix what we already got–versus move to Medicare for All, get private insurance companies out of the health insurance business altogether.

So join us for that as we continue 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.