WALLY'S WORLD: Former executive blows whistle on industry
March 29, 2010 · 3:42 PM
By Wally DuChateau
Do you know who Wendell Potter is? I suspect not.
That’s because our elected representatives back in the other Washington – whether Republican, Democrat or independent – have decided it’s in their mutual interest not to give the fellow much publicity. It’s one of the few things they’ve been able to agree on.
Wendell Potter used to be a corporate executive with the Humana and Cigna medical insurance conglomerates. He reported directly to company presidents and major stockholders who composed the board of directors. In other words, Potter was one of those “high rollers” we’ve heard so much about in the last several months. For nearly 20 years, he flew in corporate jets to high-powered business meetings in Aspen, Colo., or on company vacations in Cancun. He was chauffeured in stretch limousines from his suite in the Hilton to business functions in the Sheraton. On top of his salary, which was in the upper six-figures, he received those celebrated year-end bonuses and stock options worth millions of dollars.
In the insurance game, they didn’t get much bigger than Potter.
So, what happened? Well, he quit his job. Why he would do such a fool thing isn’t entirely clear but, in part, unlikely as it may sound, he apparently became disillusioned with the whole business, owing to the nagging of his conscience.
Five or six months ago, he was called before a Senate committee investigating the insurance industry. And the things he said are enough to anger a Hindu holyman. Alas, you may think I’m exaggerating his assertions, as I have in the past taken such liberties for the sake of humor. But in this particular case, I’ll exaggerate nothing. Difficult as it may be to believe, this is exactly how his testimony came down in the Congressional Record.
Potter said insurance companies are not only determined to increase their profits but, above all else, are absolutely obsessed with sustaining the companies’ stock prices and maintaining their execs’ annual bonuses. These three ends can be reached, in large part, by increasing premiums and/or paying fewer medical claims.
To do this, companies often deny coverage for expensive procedures and pre-existing conditions. They also use a policy’s small print to cancel coverage of people with expensive procedures. (Blue Cross of California used this technique to cancel more than 20,000 policies in five years.) Another tactic is for companies to sharply increase premiums for a small business after an employee is found to have an expensive illness, which forces the business to drop coverage.
Potter flew in those posh corporate jets to meetings with no other purpose than to plan how to block government attempts at medical insurance reform. He rode in those limousines to meetings that had no other purpose than to concoct messages to scare the public about reform. Thus, insurance companies organized and financed campaigns to spread fears of a “government takeover” and “socialized medicine.” They literally spent millions of dollars financing the two -martini lunches and the lobbyists who snag the ears of our elected representatives.
Of course, insurance companies are open to some reform. They like the idea of forced, mandated universal coverage, with subsidies to citizens who can’t afford the premiums, that’s contained in the Health Reform Act passed by Congress last week. This will give the companies more customers and more profits. But, needless to say, they are staunchly against any public option and new insurance regulations.
Do you notice that odor? Something stinks.