Industry whistleblower Wendell Potter: Health insurers thrive on denial

In just a couple of years, Wendell Potter has earned a reputation as one of the country’s most outspoken critics of the health insurance industry. His outspokenness includes testimony in 2009 before a U.S. Senate panel investigating the industry — testimony that came a year after he quit a high-level position in corporate public relations at CIGNA Corp., an $18 billion health insurance giant.

He launched into his Senate testimony with this statement: “My name is Wendell Potter, and for 20 years, I worked as a senior executive at health insurance companies, and I saw how they confuse their customers and dump the sick — all so they can satisfy their Wall Street investors.”

Potter discloses his industry experiences and his knowledge of industry practices in a book titled “Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR is Killing Health Care and Deceiving Americans” (Bloomsbury Press, 2010).

Wendell Potter was a high-level PR executive at CIGNA Corp. before transforming into an industry whistleblower.

In an interview with InsuranceQuotes.com, Potter — now a media analyst and watchdog — explains why he decided to become a whistleblower, how health care reform will benefit insurance companies and what Americans need to know about health insurers.

InsuranceQuotes.com: Why did you want people to hear your story?

Wendell Potter: My hope is that people will understand how the insurance industry operates by pulling the curtains back to reveal practices that I don’t think people have been aware of. I want to just assist people as they make decisions, both in assessing information they get and also in dealing with insurance companies.

InsuranceQuotes.com: Why does obtaining and using health insurance appear to be frustrating for some people?

Potter: It’s to the insurers’ advantage for it to be complicated and confusing and hard to deal with insurance companies. They profit as a result of the confusion.

InsuranceQuotes.com: Did you have concerns about becoming a whistleblower?

Potter: It was a crisis of conscience. I had to be cognizant of what could happen to my family as well as to me. I was confident … I wouldn’t be able to get a job in a corporation again, certainly not in the insurance industry. I was concerned how I would be potentially attacked. I knew that very bad things could happen to my family and me. I went back and forth for months as to whether or not I would begin to speak out.

But I couldn’t not do it. There was too much at stake. I had to do something beyond self-interest, and I felt that this would be my opportunity and maybe the only opportunity of a lifetime to do something … that could make a huge difference.

InsuranceQuotes.com: What are the main tactics that insurers use so their companies perform well, according to Wall Street’s expectations?

Potter: Deny requests. It happens all the time. It happens a lot more often than people realize, that coverage for needed operations or transplants or other procedures are denied by corporate bureaucrats who are thinking more about meeting Wall Street’s expectations than the medical needs of the people who are enrolled in the health plans.

Insurance companies also have a history of canceling insurance altogether when people get sick. It’s called rescission. Health care reform makes it illegal. They’ve done this as a matter of practice for many years. Other tactics are raising rates for small businesses so high that they have no alternative but to drop insurance.

InsuranceQuotes.com: Will health care reform provide a solution?

Potter: I think that what was enacted when the president signed it in March … that was the end of the beginning of health care reform in a certain sense. We’ve been trying to get meaningful health care reform done for decades. But it’s a beginning. There’s more that will need to be done.

InsuranceQuotes.com: How did insurers win with reform?

Potter: They won very much. I hope people — even those who are saying this legislation will be repealed — understand that this reform is vital for our private health care insurance to continue. This legislation provides a mandate that all of us get coverage, and that if we can’t afford the premiums, that the government will subsidize those premiums so that more people will have access to coverage.

Because there’s no public option available … we will be required to buy from private insurers. They need this. This was a big victory for them.

If the bill were to be repealed or declared unconstitutional, the insurance industry would have a huge, huge problem. I think that the long-term prospects for their viability would be very much in doubt.

–Lori Johnston