The Man Who Wasn’t There, Part I: Meet Wendell Potter, Healthcare Executive Turned Whistleblower

From Phawker.com, an interview with Wendell by it’s editor in chief, Jonathan Valania.

This is the first installment of a massive, 30,000 word, three-part Q&A with Philadelphian Wendell Potter*, former mild-mannered Cigna health insurance executive turned whistle-blowing superman standing up for truth, justice and the American way. You may have seen Mr. Potter testifying before Congress or talking about the ills of the health insurance industrial complex on CNN or MSNBC or PBS, or in the pages of The New York Times, Wall Street Journal or Time magazine, to name but a few. Last year he published Deadly Spin, an authoritative takedown of a sick and dangerous healthcare system and the incredibly powerful and phenomenally profitable industry that games it for billions; the dark arts of modern corporate P.R.; and an impassioned call for substantive reform, basic mercy and common decency.  In this first installment we discuss the crisis of conscience that turned him from loyal, not to mention highly paid, company man to crusading reformer and all-around thorn in the industry’s side. Having long thought he was on the side of the angels he increasingly came to realize that he was in fact playing for the other team, that the point of for-profit healthcare insurance is not paying for customers’ medical costs but avoiding doing so whenever possible. That for-profit health insurance corporations have a legal obligation to prioritize enhancing shareholder value over saving the lives of its customers. That he had blood on his hands. That he was an apologist for a system that denies medical care to more than 50 million Americans, and as a result more than 48,000 people die prematurely every year. Potter was tasked with writing an official-sounding report that minimized the problem and shifted all the blame on the uninsured. He helped craft reform-killing talking points for the healthcare lobby’s Congressional stooges to repeat into the cameras of Fox News and CNN. He spearheaded the effort to smear Michael Moore and discredit Sicko, his 2007 critique of the iniquities of the healthcare industrial complex, even though deep down he knew Moore was dead-on. The final straw was having to serve as company spokesperson through the resulting media firestorm when Cigna denied 17-year-old Nataline Sarkisyana liver transplant and she died less than a week later.

*In the interest of full disclosure, let the record show that Wendell Potter does not smoke nor does he wear a noir-ish fedora, we just thought this Cohen brother movie poster was cool artwork to go with this interview. He actually looks like this…

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[Photo by ROBIN ODLAND]

PHAWKER: You start off your book Deadly Spin with this very dramatic statistic: About 45,000 people will die in America every year because they have no health insurance. Can you explain that?

WENDELL POTTER: That’s based on a study conducted by researchers here at the time at Harvard, Dr. David Himmelstein and Dr. Steffie Woolhandler. It was a very scientific based study to determine mortality rates, why people die. I think, probably, it’s understated. The reason for that is because uninsured people don’t have access to care in the proper setting and often at the right time. They suffer as a consequence. People forgo routine care and wait until it’s often too late to save their lives. Consequently, a lot of Americans are dying prematurely. The reason I say the number is understated is because I think there are a lot of Americans dying because they are underinsured. They have insurance but they have no idea it’s inadequate until it’s too late. They realize they can’t afford to make co-payments or they have such limited benefits they can’t get what they really need. There’s no other country in the developed world that even has to have a study to determine that. We’re unique in that regard, that just doesn’t happen in any other developed country in the world.

PHAWKER: Why is that?

WENDELL POTTER: Because the other countries have at some point in their history addressed healthcare issues and developed the healthcare system with some central government role that has been significant in shaping the healthcare system. We never did that. We allowed so called market forces to shape what we call a system here. I have a doctor friend who says we shouldn’t even call it a healthcare system, he refers to what we have here as a sickness industry. The reason he says that is a lot of money can be made off of treating people once they get sick if they have insurance or the means to pay for it. We’ve really let for-profit corporations shape our so called system to the point that they make a lot of money once we get sick, again if we’re insured and have the means to pay for it. Insurance companies make a lot of money insuring the healthiest and trying to avoid the sickest. Most people don’t really think about that, that our system here is set up to be at a disadvantage to people who really need insurance. It’s because the free market system just simply doesn’t work as people think it probably should in healthcare. I think the majority of Americans think that the free market mechanism will make for the best healthcare system, but they don’t really stop to think exactly how it doesn’t work in healthcare and how it works to the disadvantage of consumers or patrons, whatever you want to call people.

PHAWKER: You mentioned all these other industrialized Western countries, Canada, etc., the defenders of the for-profit healthcare like to paint them as http://farm8.staticflickr.com/7147/6464338099_91ae600cd0.jpgbeing these grossly inefficient socialist hells where people get terrible medical care and have to wait in line six months to get treated for a heart attack. Can you speak to that at all?

WENDELL POTTER: Yeah, and the insurance companies are behind that, they want us to believe that. And then most of us will not take the time to determine the truth. They say that kind of thing knowing that a lot of people will believe it, believe it for a variety of reasons. One, the insurance companies themselves are not the messengers, they create the messages, they create that misinformation and get others to misinform people about it. They’re very skillful in doing that. Americans, they know too, are likely to believe if it’s not invented here it’s not good enough, “how could anyone have a system better than ours?” So we’ve got this American exceptionalism or whatever you call it here. People believe it as a matter of national pride. Plus, Americans don’t travel as much as many people in other countries travel. In other words, not enough of us travel to really see that other systems really do work better than ours does. So we’re very susceptible to that misinformation to start with. It’s purposeful because the insurance companies make a lot of money off the current system, they don’t want it to change to be more like another country’s healthcare system because it would either put them out of business or make them less profitable.

PHAWKER: Just to be clear, speaking as a former healthcare insurance executive, you are saying Canadian system and healthcare systems in most of Western European countries are superior to the United States?

WENDELL POTTER: In many ways, it absolutely is. No system is perfect. There is no system that isn’t struggling with cost, with aging populations, and that will always be. As a society we’re getting older, not just our society but almost every society in the west. The cost of treating people is always going to be going up, probably. So we’re always going to have those problems, but those other countries have been able to address those concerns in more effective ways. We have in this country the most expensive healthcare system in the world. But we’re also one of the most inefficient. One of the most inequitable. We spend so much more on administrative functions, much more than any other country in the world and it’s because of the way it’s set up. One of the reasons why we spend almost 17 percent of our gross domestic product on healthcare is not because we’re getting all that great care, it’s because a big chunk of that goes to administrative functions that do not make us feel better or keep us well.

PHAWKER: How did that happen?

WENDELL POTTER: Because of the way we let our system evolve. We have a lot of middle men in our system, if you will. Insurance companies being the most visibly prominent. We have the opposite of a single payer system, we have a multi-payer system. We have multiple insurance companies that compete for business. But each one of these health insurance companies has its own set of rules, and its own way of doing things. They negotiate separate contracts with doctors and hospitals. Every healthcare provider, every doctor, every physician, organization or practice, every hospital in this country has to deal with multiple insurance companies, unless they refuse to take insurance. They have to have a different system with dealing with each one of them. They have to hire a significant staff just to deal with it. That’s not the case in other countries, we’ve created this layer of bureaucracy that doesn’t exist anywhere else. The way it’s set up, it makes it necessary for both the healthcare providers and the insurers to set up a massive administrative bureaucracy to deal with all these different systems. We also have these organizations called PBMs, pharmacy benefit management companies, another middle man that makes a lot of money and provides some function, but it’s largely administrative. So we just have a lot of companies that make a lot of money and a number of individuals that make an enormous amount of money off of the way things are because of the high overhead. We just allow this to happen here.

PHAWKER: If elections were publicly financed in this company, would it end the healthcare cartels’ choke hold on policy in this country?

http://farm8.staticflickr.com/7029/6464344085_8a7cdbe2e3_o.jpgWENDELL POTTER: Yes, and you hit on something that’s really a problem. Public financing of campaigns would go a long way toward removing the influence of special interests from our government. People are under the illusion that we’re in control of our government, or even that our elected officials call the shots in Washington or the state capitals. They don’t. The agenda is set and determined by the special interests. They have that much power to influence elections and influence what politicians do once they’re in office. Until we address that, we will continue to have a healthcare system that is dysfunctional as ours.

EDITOR’S NOTE: Edward Hanway (pictured, left) retired in 2009 with a $111 million golden parachute.

PHAWKER: How long has it been like this? For all of the 20th Century or just after WWII?

WENDELL POTTER: I think it got worse after WWII. The origins of our current healthcare system date back to the late 20s early 30s, when health insurance kind of developed as a concept in this country. It was really hospital insurance that developed first. The original health insurance companies were nonprofit. They were mostly statewide in their coverage, not national, and called Blue Cross plans.

PHAWKER: When did health insurance become a for-profit enterprise?

WENDELL POTTER: When the large life insurance companies in this country started to notice there’s some money to be made in health insurance, and they realized they could make some money by cherry picking the healthiest, by selling insurance only to people who were healthy. They could do that by offering policies with lower premiums to people that were younger and healthier. They refused to sell coverage to people who were older and sicker. That began to skew the whole system. That’s continued to be the case and even more so now than it was initially, but that’s how these insurance companies make money. They try to cherry pick as much as they can to avoid paying for care and they make tons and tons of money.

PHAWKER: In the book you point out the United States ranks 47th in life expectancy at birth, right behind Bosnia, and 54th in fairness, behind Bangladesh. Can you explain those rankings?

WENDELL POTTER: For life expectancy we’re ranked lower than almost any developed country, we’re way down there in the rankings below some of what we would consider Third World countries. It’s because we don’t focus on keeping people healthy. Again, this goes back to us having a sickness industry. We don’t have a national structure that promotes wellness and that incentivizes healthcare providers to keep us healthy in the first place. So we don’t have this in place like other countries do, that’s one reason why life expectancy and infant mortality rates are much worse here than they are in any other developed country.

PHAWKER: These other countries, do they incentivize wellness?

WENDELL POTTER: They absolutely do. In the UK for example, each person is assigned to or has a general practitioner that looks after their well being and the incentive is on keeping folks healthy. There is a mechanism better than ours to compensate positions for keeping people well. In this country another reason for that is most insurance companies and even the medicare program pays for services rendered. That means that doctors and hospitals will want to do more services, perform more tests, do more things, because that increases their compensation. The way we compensate doesn’t create much of an incentive to keep us well. Plus the insurance companies don’t have much incentive to focus on wellness either. We have an employer based system of healthcare coverage in this country, and Americans change jobs on average right now every 4.4 years. That means you will probably change your insurance carrier that often as well, if not even more often. So insurance companies know that, they won’t make a significant investment in keeping you healthy because most likely in four years you won’t even be on their rolls anyway. We rank even lower than Bangladesh in fairness because we have a very inequitable system, and that’s very important, too. It’s one of the most inequitable systems in the world.

PHAWKER: What do you mean by inequitable?

WENDELL POTTER: It means that countries that rank higher than we do, any given citizen of those countries has more equal access to care regardless of http://farm8.staticflickr.com/7006/6464344213_8a0485f25a_m.jpghow poor or wealthy they are. In this country, we have more stratification, the wealthier you are the more likely you are that you will have access or will be able to plea for care. If you are insured you have access to care that people who are uninsured don’t have. We 50 million people who are uninsured and another 30 million who are underinsured. That’s one in every three Americans who don’t have as good access to care as people who are fully insured, and that’s why it’s an inequitable system. Most every other system in every other developed country there is no significant chunk of people who are uninsured. Because of them, all the citizens of these countries have access to care.

PHAWKER: Have we dropped in the rankings over the years? Were we ever at the top of some of these categories?

WENDELL POTTER: We’re losing ground. The Commonwealth Found just a few weeks ago, they do an annual survey of how we rank against other countries and we’re falling behind. We’re falling further behind because of this profit motive we have here that works against us improving access to care and quality of care.

PHAWKER: “The health insurance industry is dominated by a cartel of large for-profit corporations. By necessity and by law, the top priority of the officers of these companies is to ‘enhance shareholder value.’ Explain that to people who might not understand how corporations work and how companies operate and prioritize their obligations to customers and shareholders.

WENDELL POTTER: In the for-profit world, if you are a publicly traded company, you have a legal obligation to think first of your shareholders. That’s just the way it’s structured in this country. By law that’s the way it is. (There has recently been this development in some states that companies can become a ‘beneficial corporation,’ where it is recognized you have a focus on more socially responsible activities, it’s not a single focus on profit, but no insurance company that I’m aware of has applied for that kind of a legal structure.) So it’s just a legal requirement that you have to keep your shareholders’ interest first in mind. If you don’t do that you’re liable, you set yourself up to be sued by your shareholders for being negligent and not looking after their interest. You know that is always a reality, that you can be sued by your shareholders. As a result of that, and the way that works in the insurance industry is you will do whatever it takes to make sure your shareholders are happy and that you’re looking after their interests first. They have to meet those shareholders’ expectations, and in this country it’s expected that for-profit companies will announce earnings results every three months. Every quarter you have accounting to your shareholders how you’ve done over the previous three months with their money. If they don’t like what you’ve done, if they think your performance hasn’t been what they expected they’ll sell their shares. Selling their shares in mass will drive the stock price down and the company is worth less. So you don’t want that to happen. So there’s a constant awareness among the executives of any corporation that you need to keep those shareholders in mind. Otherwise, if they’re not happy your stock price will suffer and if you’re an executive and you get stock options, that means your net worth will go down if you have a lot of stock in the company and you’re not likely going to get rewarded in terms of a raise or a bonus. So it’s all about satisfying your investors. That’s job number one.

http://farm8.staticflickr.com/7169/6464344259_b22ee64809_m.jpgPHAWKER: Isn’t that flat out immoral. These companies are paid by their customers to assume the financial responsibility for the health and well being and prolonged existence of said customers – but that’s not their top priority.

WENDELL POTTER: You’re right. And I’ve come to believe that that is immoral, that is not a moral way to run a healthcare system, it is not. The things these companies have to do to make that money are to a disadvantage of a growing number of people. I spent 10 years handling financial reports for Cigna, I know what this is like. I worked very closely with the CEO and the Chief Financial Officer and the investor relations people on the financial reports and the pressure is intense, it’s unrelenting. That is why they have to focus on making sure they avoid insuring people who actually need it. That’s why this cherry picking persists. It’s why they will avoid paying for care even of the people who have insurance if they can get away with it.

PHAWKER: But come 2014 when Obamacare kicks in, that will no longer be the case, it will be illegal to turn people down for pre-existing conditions, right?

WENDELL POTTER: Exactly. They don’t like that, the insurance companies will be doing anything they can between now and 2014 to try and change the law to their benefit. But you’re right. And that’s why it’s important in my view to keep going forward with this law, it will make some of the most egregious practices in the industry illegal. That will undoubtably compress their profit margins and they don’t want that, and the shareholders don’t want that. So they are working much behind the scenes, but they’re working to try to influence the elections next year, which they will and they’re trying to influence the way the regulations have to be written as a consequence of Obamacare. As we speak, they are working in Washington and in the state capitals to try to make sure that the law, if it goes forward, is implemented in ways that favor them. And they’re very very influential, they’re very very influential.

PHAWKER: In the book you write, “It was not until later in my career that I became aware of the lengths to which insurance company executives will go to meet Wall Street’s expectations. The further up the corporate ladder I climbed, the more I saw and the more disillusioned I became with my job, my profession, and my industry.”

WENDELL POTTER: I think most of us who have jobs and work for big corporations, if you’re not working with the CEO and those who report to him, you often don’t have a very clear understanding of how exactly your company makes money. You got your job to do, and I was doing my job, I felt that I was doing my job well and I took some pride in that. I would be rewarded if my boss thought I was doing a good job, I’d get a raise or I’d get a promotion. So that’s what typically happens I think in almost any kind of a job, you want to do your job well because you want to get rewarded. You want to keep getting those financial rewards and the recognition of the bonuses and the promotions. You’re also sheltered from a lot of the things that really go on at the upper levels of the company, and I certainly was. I was a firm believer for a long time, I guess I was a believer in ideology to a certain extent, I felt that the free market should work in healthcare just like it works in every other sector of the economy. I think most people do. Why not? But unless you see how it works up close you don’t really understand why it doesn’t work.

PHAWKER: The free market will spur innovation which would spur better healthcare, better treatment, better coverage, etc. But it doesn’t necessarily play that way…

WENDELL POTTER: No, it doesn’t in healthcare. That’s the theory, the free market will always lead to some improvement or enhancement but it does not in http://farm8.staticflickr.com/7035/6464344329_b07b82d063_m.jpghealthcare. It works, in many cases, in the opposite way. It rewards inefficiency in this country, the proliferation of things that are done that do not improve the quality of care, but that enable some individuals to make a lot of money. It just doesn’t work. That goes back to the ideology, I wouldn’t say I was an ideologue, but at least I was buying into that. I also felt that, I guess it was something I told myself, ‘I am doing my job,’ I was doing my part in helping some people to get the care that they need. I don’t begrudge, I don’t say everybody who has insurance is disadvantaged, insurance companies do pay a lot of claims, it does work a lot of the time. But I’ve began to see how it does not work for growing numbers, and how that is going to be more and more of a problem and how more and more are joining the ranks of people for whom the insurance system doesn’t work anymore.

PHAWKER: Can I ask what your political affiliation was then or is now?

WENDELL POTTER: I’ve been all over the place, I grew up in a Republican family, I grew up in a Republican part of the country. I’m from Eastern Tennessee which is historically one of the most Republican parts of the country. Everybody I know and that I’m related to is a Republican. I don’t think I even knew a Democrat growing up, there was that much of a Republican culture. And it was a culture, you were born into being a Republican just as I was born into being a Baptist.

PHAWKER: It’s a very poor part of the country and yet the Republican party makes no bones about it that they’re the party of the rich. I’m curious how they’re always able to convince people to vote against their own best interest.

WENDELL POTTER: They’re very skillful about that. And part of it is, in sections of the country like that it’s cultural, you are a Republican and you’re suspicious of anyone who’s not like you. But it goes back, frankly, to the Civil War. There were a lot of people who, in my family and much of that part of the country, did not have slaves, they were Lincoln Republicans. So it goes back to that time. As it changed, they are also very social conservative folks. The corporations understand that, they know how to create wedges, how to exploit that. And they’ve exploited that. They’re extremely skillful at getting people to vote against their own self interest. It’s very hard also to persuade someone who’s grown up as a Republican to switch sides, we’re not necessarily independent thinkers many of us, we believe what we think you’re supposed to believe. So I grew up in that environment, when I was in college I began to become more of an independent political thinker, I began to question a lot of what I had been told was the way to be and think when I was growing up. I went to work, actually, after I had left my job as a journalist, to work for a Democrat who was running for governor of Tennessee. But I voted for George Bush when he ran for president in 2000 because I was buying into his…

PHAWKER: Compassionate conservatism?

WENDELL POTTER: Compassionate conservatism, absolutely. I’m still very much a believer in managed care and the idea that my company and companies like mine could do a better job than the government. Now I do not consider myself a Democrat or Republican, a conservative or a liberal, I just don’t want to label myself. I just don’t want to do that, to me it’s not the right thing to do. I heard someone at a conference this past weekend who said that ideology is a false faith and I tend to agree with that. People who adhere to certain ideologies are so susceptible to being manipulated and I just don’t want to label myself.

PHAWKER: Fair enough. Let’s talk about when you started to have a change of heart about all of this. Not that long ago, it was after 2000. What was the first a-ha moment?

http://farm8.staticflickr.com/7153/6464344377_efb458d6e1_m.jpgWENDELL POTTER: It began when insurance companies started shifting from the managed care model, which I thought was a solid model, to what they referred to as consumer driven care, which is just a euphemistic expression for shifting people into plans with high deductibles, or in other words, shifting the cost of care from us to them. The term that was very popular at the beginning of that movement was ’skin in the game,’ as in ‘Americans need to have more skin in the game, they need to have more of an awareness of how much healthcare costs.’ If they did, if they had to pay more for it, they would become better consumers of healthcare. That implies we’re consumers of healthcare. You are not a consumer of healthcare if you have cancer or had a heart attack, you are a patient and you’re not likely to go out and shop for care when you have a critical need for it. I was beginning to see the fallacy in my view of that business model.

PHAWKER: When did that shift happen?

WENDELL POTTER: It was happening toward the end of the 90s but it didn’t really catch on in a significant way until the middle of the last decade, but it’s growing very rapidly. More and more employers are shifting their workers into these high deductible plans. That points to another failing in an employer-based system. Most employers want to stay in the game of offering benefits, but they’re being priced out of it and the only way they can stay in it is to shift more and more of the cost onto their employees. It’s a cost shift that is not sustainable. That’s one of the reasons I decided to leave. I could see that this was a way for insurance companies and employers to make money, to continue the profits they’ve been making. It’s very profitable for insurance companies because you’re able to unload the risk by doing this. The peer-reviewed Journal of Health Affairs in September had an article, a research project about incomes in this country. Income gains for the last decade have been completely wiped out because increases in healthcare costs. Completely wiped out. We’re losing ground. The medium household income in this country is less now than it was in 1999 when you adjust for inflation, and a big part of that is because money that would have gone to raises has been going to pay for healthcare. So we’ve been losing ground and as we’ve been losing ground the insurance companies have been getting wealthier. I began to see all this, I was doing my own research. It was one of the things that was part of my job, I had to stay informed of all the trends in healthcare, I was in charge of a daily news summary we put together for all of the company’s executives. So I was as knowledgeable I guess on the healthcare system as anybody because of my constant reading and doing research. I realized I was no longer believing my own PR, I was seeing the evidence that the insurances were not a part of the solution as I was trying to make people believe, but they were actually contributing to the problems and were absolutely the main reason why a growing number of us don’t have coverage.

PHAWKER: How does this evolve? Around what time are we talking here that you were coming to these realizations?

WENDELL POTTER: I guess it was really 2007. It was significant because I was actually doing better in the company, I had been made head of corporate communications, I was reporting to the general council, I had the top PR job in the company, I was made a member of the Public Policy Council – that was important because it was a small group of executives led by the CEO. What we were doing was developing the company’s positions on healthcare reform. This was the year before the 2008 elections, the campaigns for president were already obviously under way, we were paying close attention to what the candidates from both parties were saying about healthcare reform, I was being tasked with developing a position paper on what the company’s points of view were on various healthcare issues, and one of the things I was asked to write was a white paper on the uninsured. The expectation was that what I would write would lead people to believe that the problem with the uninsured is not quite as significant a problem as the Democratic candidates would lead us to believe, that the majority of Americans have insurance and they’re happy with their insurance so let’s not screw things up for those who have it. I was trying to, in a certain way, make people think that those who were uninsured were that way by choice, that they were shirking their responsibility.
PHAWKER: They wanted you to whip up this official-sounding report that make it look like the uninsured problem wasn’t as big of a problem as it really was, there were a lot of people who were happy to be uninsured.

WENDELL POTTER: That’s exactly right, that’s how it was being shaped. It became increasingly clear to me that they weren’t interested in an objective piece of analysis, they wanted a piece of persuasion. I was just not liking that, I didn’t think it was appropriate. I was having the beginning of a crisis of conscience. I became increasingly aware of what I was doing was the opposite of what I had been trying to do as a journalist at the beginning of my career. I was spinning the truth. It wasn’t that data that was wrong, but it was the selective disclosure, the picking of certain things to create a picture that wasn’t necessarily a complete picture. It dawned on me that ‘Geez, this is pretty much what I do these days.’ I just was not happy with myself. I was literally having a hard time looking at myself in the mirror sometimes. I would look in the mirror and sometimes, honest to God, and ask ‘who are you and how in the world did this http://farm8.staticflickr.com/7141/6464485245_114222f7ca_m.jpghappen to you? How did you get here?’ I loved being a journalist and I loved the mission of journalism, but I was being paid for handsomely for what I was doing. But even though I was growing increasingly unhappy with what I was doing and not at all proud of what I was doing, there were times where I thought, ‘Well I can just keep doing this, I can see retirement out there, I’m moving in that direction so maybe I can just hang in here and ride it out.’ But then I went back home to visit my parents in Tennessee in July of 2007 while I was in the midst of writing this paper. I picked up my hometown’s newspaper and read about this healthcare expedition that was being held across the state line in Southwest Virginia. There were two big stories on the front page, one was about the expedition and the other was about the fact that John Edwards had been there the day before, he had made a campaign stop there.

PHAWKER: Just to explain what a healthcare expedition is, this is where doctors and nurses volunteer to come to these very poor sections of the country where people have little or no access to medical attention and set up a two day temporary clinic, and there’s thousands that come out for these thing.

WENDELL POTTER: The story said this was the eighth time this was being held. It’s always a three day weekend in July, Friday through Sunday. I went there out of curiosity and I was just stunned. This organization was started by a guy who started flying doctors from the US to third world countries and word started getting around, he was being invited by people in the US to bring these expeditions to their counties. I couldn’t believe it when I got there because people were lined up by the hundreds.

PHAWKER: You actually went out to see it firsthand?

WENDELL POTTER: I did. I borrowed dad’s car and drove up there the next morning, I got up early and it was about 50 miles from where I grew up, I didn’t realize it was about that far, I might not have gone if I had known but I just kept going. I finally got to the Wise County fairgrounds and it was just unbelievable. I saw people of all ages, although they weren’t really senior citizens, those senior citizens have coverage from Medicare, it’s mostly working adults who were there and in fact most of them had jobs I found out later, they just didn’t have any insurance and didn’t have enough money to be able to pay for care out of their own pockets and so they had to wait until this event came around once a year to get care. They drove from hundreds of miles away to get there and they were spending the night in their cars and their trucks. I had no idea this was going on. It struck me to the point where I teared up.

PHAWKER: And this happened in the middle of you crafting this paper that was trying to whitewash this issue?

WENDELL POTTER: Right. And it was almost as if I was supposed to be there to see this. I will never ever forget the moment I walked through the fairground gates it was almost like things started swirling around me. There was so much activity and just the awareness of all these people who were lined up and it was clear that those lines led to barns and animal stalls. It just felt like an electrical shock or something, I have never before and haven’t since experienced something quite like it. It was a sudden realization of what was going on.

http://farm8.staticflickr.com/7012/6464584667_ee2db108a2.jpgPHAWKER: Like Paul on the road to Damascus?

WENDELL POTTER: Absolutely that. That road I took to get there was my road to Damascus, it was my epiphany, and it truly was in many ways kind of a spiritual journey. I don’t think I would have had that reaction, I don’t think I would have even gone there if it weren’t for the way I was brought up. I’m a compassionate person, my parents are, and I was raised in a church setting. I knew the road to Damascus story, I knew that what was happening to me was more than just a coincidence. I knew at that moment sooner or later I was going to have to do something else. What I was doing for a living was not right, I was part of the problem myself, I was in my own way perpetuating a system that was making it necessary for people to resort to getting care that way, people I could have grown up with.

PHAWKER: They were getting medical care in animal stalls and barns?

WENDELL POTTER: Absolutely, it’s a county fairground where the livestock go. They judge livestock there. The animal stalls, other volunteers had come and cleaned out the animal stalls, sanitized them best they could, they were clean settings but at other times this is where animals were being kept. They strung up sheets to serve as curtains to provide privacy to people being examined. It was beyond anything I ever thought I’d see in this country. It was like a M.A.S.H. unit because they also had to set up tents because of the size of the crowd, there weren’t enough barns and animal stalls to take care of everyone so they had tents as well. You could just walk around and see people being cared for in many different ways, there was just no privacy. I was just stunned. I’ll never ever forget it, it was truly a life changing moment.

PHAWKER: How old were you at the time?

WENDELL POTTER: I had just turned 56, I’m 60 now.

PHAWKER: So you were 10 years off from retirement age.

WENDELL POTTER: I was, yeah I was. But I could see it. It was not impossible to see it. I thought, well that’s a long way but I can probably just hang in there. Have a good retirement and you know.

PHAWKER: If you worked until 65, surely there were advantages to you sticking it out as a company man.

WENDELL POTTER: I had a pension, I was vested, the longer I stayed the more would be in my pension fund, I had a 401K that I was contributing to and the company matched. I guess I would have continued to get bonuses and stock options as I had in years past. So I was building up what I thought would be retirement, how could I walk away from that? 56? It’s not so easy to walk away from that kind of a job and demand one somewhere else. What made it necessary for me to quit, and I think I wrote about this in the book, a couple of weeks after I got back to work I had to fly to Connecticut on the company plane and I was just paying attention to things more than I had before. I was flying on a plane that cost about $5,000 an hour to operate. I was being served lunch on gold rim china by a flight attendant who worked for the company. Even though I’d been on the company plane many times before, I just never paid much attention to it, but I was seeing things through different eyes this time: How unbelievable this is. No wonder those people have to stand in line to get healthcare in animal stalls because of what I’m doing this very minute with my CEO in the plane there. When you’re at that level you can go through your day to day without realizing the consequences of what you’re doing. I had to go out of my way to go see that, I was drawn to that. I wouldn’t have necessarily known about that if I hadn’t gone to Tennessee and read about it and then driven up there. I lived on the Main Line and in my daily existence I didn’t really know people who were uninsured. I probably did but it just wasn’t anything I thought about. I didn’t see them by the hundreds and thousands like I did that day in Wise County. At the end of the year, December, I served as spokesman for the company when Cigna denied coverage for a transplant for a 17 year old girl in Los Angeles.

PHAWKER: What was her condition again?

WENDELL POTTER: She had leukemia. She had it first when she was 14, she was in many remissions and it came back when she was 16, treatments were just not working, she had to have a bone marrow transplant which weakened her liver and her doctor said she’d have to have a liver transplant.

PHAWKER: Which would cost how much?

WENDELL POTTER: About $200,000 – $250,000 plus aftercare which would be a lot more and an ongoing expense.

PHAWKER: As you write in your book, the cost of the transplant was roughly the same amount Cigna spent for travel, catering and hotel rooms for its annual Investor’s Day meeting in New York City.

WENDELL POTTER: Correct.

PHAWKER: Where does this fit in the timeline after the…

WENDELL POTTER: The healthcare expedition. Remote Area Medical was the organization that puts them on, by the way. That was in July and it was http://farm8.staticflickr.com/7165/6464543453_8027f9a6d3_m.jpgDecember when the Nataline Sarkisyan case developed. I first heard about it when I was back in Tennessee again visiting relatives and I got a call from my secretary about the first reporter who called about it. I didn’t really think a lot of it, I thought it was an odd call, the reporter had misunderstood or had at least been led to believe that Cigna had denied coverage because Cigna had learned that the family owned a second home somewhere and were denying coverage for the transplant because the family could afford to pay for another home. It didn’t make any sense, and it did turn out that was erroneous information, that was true the reason Cigna had denied coverage. The reason Cigna denied coverage was because a medical director for Cigna in Pittsburgh had reviewed the request from Nataline’s doctors at UCLA and in his opinion, he didn’t think it would be an appropriate procedure so he refused to pay for it.

PHAWKER: What do you mean appropriate, the transplant wouldn’t work?

WENDELL POTTER: Yes.

PHAWKER: Just explain what the medical director does, he is a doctor and he has the kind of expertise that he can make these decisions from Pittsburgh?

WENDELL POTTER: Yes, in fact he was a medical director in Cigna’s transplant unit, so what he dealt with were requests for coverage for transplants of various kinds. The company does cover a lot of transplants, this one he felt was, in his view, not appropriate and did not meet the medical necessity guidelines. Her doctors said they felt that the transplant would be effective, it would give her I think a 65% chance of living five years. The medical director in Pittsburgh for Cigna said he didn’t think so, he didn’t think the medical literature supported that. Of course, he never examined her and never saw her in person, he was relying on the information faxed to him or sent to him electronically.

PHAWKER: So she’s denied care and the family had managed to get a lot of media attention for their daughter’s plight?

WENDELL POTTER: Yeah, the family was very resourceful. It’s an Armenian family, there’s a very close knit Armenian community in Los Angeles I learned, a fairly large community, they rallied behind the family, they were very well connected. They helped the family find an attorney, actually Mark Geragos who was an attorney at one point for Michael Jackson.

PHAWKER: He knows how to work the media.

WENDELL POTTER: He does, absolutely. They also got connected with the California Nurses Association, they’re very politically active and media savvy. They had a relative who worked for a TV station, I think. With all that, they were able to get a lot of attention in the Los Angeles media. That’s where all the calls were coming from initially. Stories started appearing and it quickly became a national story. CNN started covering it, NBC started covering it, then it became an international story. My phone was just ringing off the hook. I came back up here and it was just snowballing, there was so much at stake for the company from a PR perspective, we certainly needed to make sure that the CEO was aware of what was going on. We had a meeting early in the day on December 20th, and later that day the Sarkisyan family had planned to have a protest in front of Cigna’s regional offices in Glendale, California. CNN was planning to be there, all the local media, and that’s what happened. It was being televised live and I let my CEO and my boss know about it and very quickly, within an hour or so, the decision was made that we needed to make this go away. The company had decided to go ahead and cover the transplant.

http://farm8.staticflickr.com/7020/6464543327_a47dcf2201_m.jpgPHAWKER: I was going say, surely the cost of the transplant would be worth the…

WENDELL POTTER: Oh yeah, the company realized the potential reputational damage of the company could far exceed the cost of the transplant. We had to spin it in a way that limited legal exposure and try to make sure the employer involved in this was not at risk. So it was tricky, I was involved in crafting the media statement.

PHAWKER: At risk of what, if the procedure went wrong or from negative media fallout?

WENDELL POTTER: Both, we knew that Mark Geragos was a resourceful attorney and knew the chances could be great that litigation could be brought against the company either way. So we wanted to make sure we had a legal strategy, a PR strategy, and they were working very close together, I was wanting to make sure whatever we said in the media wasn’t an admission that we had screwed up in the first place. Essentially what we wound up saying was that we agreed to pay for it out of the goodness of our hearts, we don’t think we made a mistake in the first place but because of the specifics of the case we would go ahead and cover it and that Cigna would pay for it rather than having the employer pay for it. I thought, well that’s the right thing to do. Everybody was hoping that would make the story diminish and the transplant would happen and hopefully she would come through OK. The problem was, of course, that it was coming days after her doctors requested it.

PHAWKER: How many days?

WENDELL POTTER: About a week I guess. During that time, her other organs began to shut down, her health was deteriorating. I was watching TV while all this was going on, in real time, CNN was covering it live, I had a TV in my office and I was watching it unfold. By this time, I knew that Cigna was going to pay for it but the family didn’t know yet, we were trying to figure out how to get the word to the family in an appropriate way. I told everybody you’re not going to find them at home because they’re on their way to Cigna’s headquarters so I called someone in Glendale to make sure there was someone there to get the word to the family. I was watching on TV as someone whispered in Mrs. Sarkisyan’s ear something that made her happy and I knew she had finally gotten word.

PHAWKER: You literally saw this happening on television in real time?

WENDELL POTTER: Yeah, they whispered in her ear something to the effect of “Cigna will pay for it,” and she was just overjoyed. She began hugging her husband and saying, “Cigna will pay for it!” I’ve forgotten the exact words, but it was just unbelievable to see this all played out right on TV, and of course the family was just thrilled that Nataline was going to get the transplant. But, I learned about a year later that Mr. Sarkisyan had already learned from the doctor that she had just gotten too sick. They couldn’t even go forth with the transplant. Mrs. Sarkisyan hadn’t been told that yet so she was still so hopeful that the transplant would save her daughter’s life. But just within hours after that celebration, Nataline died. Just incredible.

END OF PART I

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