by John Lawrence
In his book, "Deadly Spin," Wendell Potter lays bare the inner workings of the health insurance industry. It's another reason for Occupy Wall Street to exist because the private health insurance industry is dicated to by Wall Street which demands an ever increasing bottom line. The infamous Medical Loss Ratio (MLR) is a figure which Wall Street is determined to lower. It indicates how much premium money is spent on medical services versus how much is spent on overhead including advertising, CEO salaries, shareholders etc. At a MLR of 97%, Medicare spends 97% of its premiums on medical services and only 3% on overhead. The private health insurance industry under pressure from Wall Street has pushed the MLR down to around 80%. That means that 20% of premiums go to CEO salaries, advertising, and to investors. How the private health care industry manages to drive the MLR downwards is by denying health care to those it insures who develop sicknesses that are too expensive to treat.
After being enlisted by CIGNA to discredit Michael Moore's movie, Sicko, Potter found himself assigned to the spinning of the case of a California girl who needed a liver transplant in order to live. Nataline Sarkisyan was denied a liver transplant by CIGNA. Her family enlisted the media in its attempts to get CIGNA to cover the girl's plight. The situation became a cause celebre with CIGNA being the villain. Potter's job was to protect CIGNA's image, and quite frequently, when a "horror story" became known to the public, he would recommend that CIGNA reverse its decision and go ahead and cover the cost of the procedure in question. Such was the case in Nataline's situation. At the last minute, at Potter's request, CIGNA reversed itself and okayed the liver transplant. However, before the procedure could take place, Nataline died.
That was the last straw for Potter who had had moral qualms concerning his job for some time that required him to sedate himself nightly with a six pack of beer. He went to a free health clinic near his home in Tennesee at which he found scores of people who might have been his neighbors, some even with health insurance, being treated for free in animal stalls at the county fairgrounds. His moral anguish reached the point where he knew he had to resign his job. There is such a thing as "right livelihood" and some people just can't go on day after day in a job that they know is immoral even though it's perfectly legal. Other people have no such moral qualms. They are the ones including the CEOs of these health insurance companies who will do anything for money.
Potter said: "Not only was I no longer "engaged" in my responsibilities as chief flack for the company, but I also didn't see eye to eye [with his bosses], and I had simply had it with trying to "protect, defend and enhance" the company's reputation. I didn't have it in me to handle any more horror stories. Nataline Sarkisyan's life and death had affected me profoundly.
"My last day as a CIGNA employee was May 2, 2008, the day after we anonounced that we had earned $265 million, or ninety-four cents a share, on revenues of $4.6 billion during the first three months of the year. The stock price closed that afternoon on the New York Stock Exchange at $42.26, up 3.5 percent from the day before.
"CIGNA had had a very good day on Wall Street. Investors were happy because CIGNA had exceeded their expectations. CIGNA executives on the lead team, all of whom had stock options - me included - were richer financially.
"But I was richer in every way thinkable."
Potter points out how health insurance CEOs and other executives use stock options to enrich themselves. Their gains are tied to how well the stock does on Wall Street so they have every incentive to drive up the stock price in every way imaginable. The ways they do this are to deny health care to consumers and to drive down the amount they pay to providers. While the highest paid administrator in the Medicare program earns less than $200,000 a year, most health insurance CEOs take home on the order of $10 million annually. "In 2007, the CEOs at the ten largest publicly traded health insurance companies collected a combined total compensation of $118.6 million - an average of $11.9 million each."
So it's Wall Street again that is at the heart of the health care crisis in the US just as it's at the heart of the foreclosure crisis, the student debt crisis and just about every other crisis including the US national debt crisis because they were bailed out by the taxpayers to the tune of trillions of dollars.
Wendell Potter has gone on to become the health insurance industry's chief critic appearing on countless TV and radio shows and writing columns for magazines and newspapers. Fortunately, one man's moral qualms overpowered his greed. He is an exception, however. For most people avarice and the need to support their families overpower their moral qualms and so the system marches on deedicated to increasing shareholder value at the expense of human value.