Whistleblower tells of America's hidden nightmare for its sick poor
Paul Harris, The Observer, Sunday, July 26, 2009When an insurance firm boss saw a field hospital for the poor in Virginia, he knew he had to speak out. Here, he tells Paul Harris of his fears for Obama's bid to bring about radical change
Patients without health insurance get dental care at a free clinic in Wise, Virginia, held every July for the past three years. More than 25,000 were treated in a weekend Photograph: John Moore/Getty Images
Wendell Potter can remember exactly when he took the first steps on his journey to becoming a whistleblower and turning against one of the most powerful industries in America.
It was July 2007 and Potter, a senior executive at giant US healthcare firm Cigna, was visiting relatives in the poverty-ridden mountain districts of northeast Tennessee. He saw an advert in a local paper for a touring free medical clinic at a fairground just across the state border in Wise County, Virginia.
Potter, who had worked at Cigna for 15 years, decided to check it out. What he saw appalled him. Hundreds of desperate people, most without any medical insurance, descended on the clinic from out of the hills. People queued in long lines to have the most basic medical procedures carried out free of charge. Some had driven more than 200 miles from Georgia. Many were treated in the open air. Potter took pictures of patients lying on trolleys on rain-soaked pavements.
For Potter it was a dreadful realisation that healthcare in America had failed millions of poor, sick people and that he, and the industry he worked for, did not care about the human cost of their relentless search for profits. "It was over-powering. It was just more than I could possibly have imagined could be happening in America," he told the Observer
Potter resigned shortly afterwards. Last month he testified in Congress, becoming one of the few industry executives to admit that what its critics say is true: healthcare insurance firms push up costs, buy politicians and refuse to pay out when many patients actually get sick. In chilling words he told a Senate committee: "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's claims are at the centre of the biggest political crisis of Barack Obama's young presidency. Obama, faced with 47 million Americans without health insurance, has put reforming the system at the top of his agenda. If he succeeds, he will have pushed through one of the greatest changes to domestic policy of any president. If he fails, his presidency could be broken before it is even a year old. Last week, in a sign of how high the stakes are, he addressed the nation in a live TV news conference. It is the sort of event usually reserved for a moment of deep national crisis, such as a terrorist attack. But Obama wanted to talk about healthcare. "This is about every family, every business and every taxpayer who continues to shoulder the burden of a problem that Washington has failed to solve for decades," he told the nation.
Obama's plans are now mired and the opponents of reform are winning. The Republican attack machine has cranked into gear, labelling reform as "socialist" and warning ordinary Americans that government bureaucrats, not doctors, will choose their medicines. The bill's opponents say the huge cost can only be paid by massive tax increases on ordinary Americans and that others will have their current healthcare plans taken away. Many centrist Democratic congressmen, wary of their conservative voters, are wavering. The legislation has failed to meet Obama's August deadline and is now delayed until after the summer recess. Many fear that this loss of momentum could kill it altogether.
To Potter that is no surprise. He has seen all this before. In his long years with Cigna he rose to be the company's top PR executive. He had an eagle-eye view of the industry's tactics of scuppering political efforts to get it to reform. "This is a very wealthy industry and they use PR very effectively. They manipulate public opinion and the news media and they have built up these relationships with all these politicians through campaign contributions," Potter said.
Potter was witness to the campaign against Michael Moore's healthcare documentary Sicko. The industry slammed the film as one-sided and politically motivated. Secret documents leaked from the American Health Insurance Plans, the industry's lobby group, detailed the plan to paint Moore as a fringe radical. Potter now says the film "hit the nail on the head". "The Michael Moore movie that I saw was full of truth," he admits.
Potter was also working for Cigna when it became embroiled in the case of Nataline Sarkisyan, whose family went public after Cigna refused to pay for a liver transplant that it considered "experimental" and therefore not covered by their policy. Cigna reversed this decision only hours before the Californian teenager died. "I wish I could have done more in that case," Potter said.
Such sentiments are rare in an industry that has given America a healthcare system that can be cripplingly expensive for patients, but that does not produce a healthier population. The industry is often accused of wriggling out of claims. Firms comb medical records for any technicality that will allow them to refuse to pay. In one recently publicised example, a retired nurse from Texas discovered she had breast cancer. Yet her policy was cancelled because her insurers found she had previously had treatment for acne, which the dermatologist had mistakenly noted as pre-cancerous. They decreed she had misinformed them about her medical history and her double mastectomy was cancelled just three days before the operation.
Last month three healthcare executives were grilled about such "rescinding" tactics by a congressional subcommittee. When asked if they would abandon them except in cases of deliberately proven fraud, each executive replied simply: "No."
To Potter that attitude has a sad logic. The healthcare industry generates enormous profits and its top executives have a lavish corporate lifestyle that he once shared. Treating patients for their expensive conditions is bad for business as it reduces the bottom line. Kicking out patients who pursue claims makes perfect economic sense. "It is a system that is rigged against the policyholder," Potter said. The congressional probe found that just three firms had rescinded more than 20,000 policyholders between 2003 and 2007, saving hundreds of millions. "That's a lot of money that will now go towards their profits," Potter said.
A lot of that money also goes into contributions to politicians of both parties - $372m in the past nine years - and in lobbying groups to run TV ads slamming Obama's plans. Many of these ads deploy naked scare tactics. One report said that the industry was spending $1.4m a day on its campaign. In the face of that, it is perhaps no wonder that the Senate has delayed its vote, dealing a massive blow to Obama. "I have seen how the opponents of healthcare reform go to work... they are trying to delay action. They know that if they keep the process going for months, and turn it into a big mess, then the political impetus behind it will lessen," Potter said.
Potter, who now works at the Centre for Media and Democracy in Wisconsin, says the industry is afraid of Obama's reforms and that is why it is fighting so hard. It wants to deal him the same blow as it did Bill Clinton when it scuppered his attempt at reform in the 1990s. Potter admits that he is worried the industry might win again. "I have seen their tactics work. I have been a part of it," he said. He knows he has no chance of ever working again for a major firm. "I am a whistleblower and corporate America does not tend to like that," he said. But there is one thing Potter is not sorry about: leaving the healthcare industry and speaking out. "I have absolutely no regrets. I am doing the right thing," he said.
Comprehensive healthcare reform in the US has been an ambition of many presidents since the early part of the 20th century. None has succeeded in creating a system that gives all Americans the right to coverage. Barack Obama, below, is desperate to avoid the same fate.
Finding a cure
What is the current system?
It is a complex mish-mash of systems. Millions of Americans have their own private healthcare plans, either individually or through their employer. About 47 million Americans have none. However, systems do exist to cover the very poor and the old. The system is fiendishly complex and full of loopholes, so even those with coverage can have it withdrawn.
How bad is it?
US hospitals are the best in the world if you can afford them. Many cannot, and an accident or sudden illness can often bankrupt someone.
How does it compare with other countries?
It depends how you measure things. The US spends about 16% of GNP on healthcare, far more than France and Germany, which spend 11 to 12%. Yet those countries provide universal care.
What is the biggest problem?
Critics say the biggest issue is the profit motive that drives US healthcare. This ensures that costs are always rising as the incentive is there to provide expensive treatment. It also gives health insurers the incentive to refuse treatment to claimants, by seeking to withdraw their cover.
What is Obama's solution?
Obama has asked Congress to draw up a government option, allowing all Americans to get some sort of cover. The sheer size of the state plan should theoretically allow it to drive down costs by economies of scale.
What's happening now?
Obama has put his reputation on the line to persuade wavering Democrats and moderate Republicans to vote on legislation by August. The Senate has said this will not happen. That's a major blow, as it puts off the debate until September and could see the political momentum stall.
- guardian.co.uk © Guardian News and Media Limited 2009
Bankruptcy: The healthcare connection
Medical problems were behind two-thirds of personal bankruptcies in 2007. And that was before the economic crisis.
Andrew Leonard
Jun. 05, 2009 |
Americans filed for bankruptcy at a rate of 6,020 per day in May, reports Credit Slip's Bob Lawless. That's the first time the 6,000-per-day mark has been broken since the passing of the 2005 bankruptcy law, which made it hard for Americans to seek relief from their debts.
In related bankruptcy news, the results of a study to be published in the August issue of the American Journal of Medicine show that "medical problems contributed to nearly two-thirds (62.1 percent) of all bankruptcies in 2007." More strikingly -- "between 2001 and 2007, the proportion of all bankruptcies attributable to medical problems rose by 49.6 percent." (Found via Mark Thoma.
The authors of the study cite their findings as yet more evidence that the healthcare system in the United States is broken.
Dr. Deborah Thorne, associate professor of sociology at Ohio University and study co-author, stated: "American families are confronting a panoply of social forces that make it terribly difficult to maintain financial stability -- job losses and wages that have not kept pace with the cost of living, exploitation from the various lending industries, and, probably most consequential and disgraceful, a health care system that is so dysfunctional that even the most mundane illness or injury can result in bankruptcy. Families who file medical bankruptcies are overwhelmingly hard-working, middle-class families who have played by the rules of our economic system, and they deserve nothing less than affordable health care."
We don't know what factors directly accounted for 2009's swelling bankruptcies -- obviously, you don't need the impetus of a serious medical problem to push you into bankruptcy when you've lost your job and your home because of a cratering economy. But it's also safe to assume that a significant number of people who might have been able to afford their healthcare no longer can, given the current economic circumstances. So I think Thoma is right to wonder "how much a health care plan that protects people from losing everything when serious illness hits would have helped to soften the economic crisis."
-- Andrew Leonard
FOR IMMEDIATE RELEASE
August 4, 2009
Contact:
Robert Zirkelbach
(202) 778-8493
AHIP Statement on Status of Health Care Reform
Washington, DC – Karen Ignagni, President and CEO of America’s Health Insurance Plans (AHIP), gave the following remarks at a media teleconference this morning:
“At this point in the summer of 2009, the country should be in the midst of a transformative national conversation about health care reform. Instead, a campaign has been launched to demonize health plans and the men and women who work hard every day in their communities to provide health insurance coverage to more than 200 million Americans.
“For a country that is trying to accomplish what it has failed to do for a century – pass health care reform – the same old Washington politics of ‘find an enemy and go to war’ is a major step backward, not a step forward. Indeed, this is the playbook of consultants, not consensus.
“Attacking our community will not help get anyone covered, nor will it help our country bend the cost curve and make care more affordable for working families and small businesses. These are the issues that should be the focus of a national conversation this summer. That is what the country expected. Not politics as usual, but an effort to forge the consensus that will be necessary to get reform passed.
“For our part, we will set the record straight about our community’s contribution to the reform effort. It was with the hope of helping to create a more constructive climate that health plans began three years ago to develop a set of reform proposals linked by common themes – to build on the strengths of the current system, provide all Americans with health security, ensure that no one falls through the cracks, and put the entire health care system on a financially sustainable path.
“In recent days, policymakers have embraced health insurance reform – the concept we proposed in 2008. Health plans were the first of the stakeholders to come to the table with a comprehensive proposal to reform our own sector. Our proposal brings everyone into the system, guarantees coverage for all Americans, does away with pre-existing condition limitations, and ends rating based on health status and gender.
“We also pledged to earn a seat at the table and our members have been good faith participants in every significant reform effort involving stakeholders from across the spectrum.
“That did not mean that we would sit at any table in silence when confronted with proposals we knew to be flawed. For months, we have explained why we believe a government-run plan would dismantle employer-based coverage, bankrupt local hospitals, and break the promise that if you like your present coverage, you can keep it.
“A government-run plan would inevitably rely on its price-setting ability to offer artificially low premiums – effectively subsidized by the private sector through cost shifting. This would force employers to drop their coverage, creating a death spiral for private insurance and financial catastrophe for many hospitals and doctors.
“Physicians, hospitals, employers, and concerned citizens have joined us in voicing these concerns. As the American people have learned the facts, support for a government-run plan has plummeted. In response, there has been an all-out effort to make support of a government-run program the litmus test for reform.
“If the intent is to place the nation on a path to a single-payer system, as some have recently acknowledged, then that question should be debated candidly and openly.
“We believe that is not the path that the American people support. Instead, they want policymakers to recognize that neither the government nor the private sector can fix health care alone and that the stakes are too high to revert to the usual Washington poll-driven playbook that has been a barrier to progress and could create another missed opportunity to achieve health care reform.
“The country is at a critical juncture. August will be the month when the country decides whether it supports reform and what shape it should take. It is crucial that the American people understand the broad consensus that exists on the essential building blocks for bipartisan reform.
“With that in mind, there are five facts we believe all Americans should know:
- Health plans have proposed comprehensive health care reform to cover all Americans, make care more affordable, and improve quality.
- Health plans proposed health insurance reform last year.
- Health plans have proposed far-reaching initiatives to bend the health cost curve and make care more affordable for individuals, families, and employers.
- Health plans are advocating and advertising in support of bipartisan reform.
- Out of every dollar the nation spends on health care, one penny goes to health plan profits.
“Our community includes thousands of dedicated, conscientious Americans who are working hard across the country to try and improve health care. They are ordinary Americans from all walks of life who are raising their families and contributing to their communities. They do not deserve to be demonized or vilified as part of a campaign to distract attention away from the sinking support for a government-run program.”
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Providing Health Benefits for Over 200 Million Americans.
(click map to enlarge.-java)
CorrectionIn an interview, we said, "And when Germany became a nation in the 1880s, one of the first big things that the government did was to unite all of these what they call sickness funds into one system." In fact, Germany became a nation in 1871.
July 3, 2008
Mention European health care to an American, and it probably conjures up a negative stereotype — high taxes, long waiting lines, rationed care.
It's not that way in Germany. Very little tax money goes into the system. The lion's share comes, as in America, from premiums paid by workers and employers to insurance companies.
German health benefits are very generous. And there's usually little or no wait to get elective surgery or diagnostic tests, such as MRIs. It's one of the world's best health care systems, visible in little ways that most Germans take for granted.
Checking In With An Old Friend
Juergen in der Schmitten was a medical student when I first met him 17 years ago. Now, he's a 42-year-old general practitioner in a suburb of Dusseldorf.
On one particular night, Juergen was the doctor on call for the region. Any German who needs after-hours care can call a central number and get connected to a doctor.
Around 11 p.m., a woman with a fever called Juergen. She wanted him to make a house call. They talked for maybe five minutes, in the end agreeing that she would come into his office in the morning.
A situation like this would be unlikely in the United States. Americans might not get through to a doctor at all, let alone have a discussion about whether the physician should make a house call in the middle of the night to treat a case of flu.
The Patients' Perspective
Sabina and Jan Casagrandes say they've had really good care from the German health system. And they've used it a lot.
Sabina is American, Jan is German. They live in a fourth-floor walkup with their two little girls in Cologne, an ancient city on the Rhine in western Germany.
"I've probably been very expensive for the health insurance system here," Sabina says. "When I was 33 years old, I had a giant lump on my neck all of a sudden, where your thyroid is. And it was a big tumor."
It took two operations to remove her cancer. Luckily it was curable with surgery and radiation. Sabina says she had the best care she could imagine.
"Then I came home to my little daughter, who I couldn't really lift up because of my neck having been cut open," Sabina says. "So I asked my doctor, 'What can I do?' And she said, 'Well, your health insurance will pay for someone to come help you in the house.'"
Sabina's health insurer paid a friend to shop, cook and even help care for the baby until Sabina was back on her feet. That's not unusual in Germany. In fact, under the country's system for long-term care, family members can choose to be paid for taking care of a frail elder at home if they want to avoid nursing home care.
Coverage For All
The health care system that took such good care of Sabina is not funded by government taxes. But it is compulsory. All German workers pay about 8 percent of their gross income to a nonprofit insurance company called a sickness fund. Their employers pay about the same amount. Workers can choose among 240 sickness funds.
Basing premiums on a percentage-of-salary means that the less people make, the less they have to pay. The more money they make, the more they pay. This principle is at the heart of the system. Germans call it "solidarity." The idea is that everybody's in it together, and nobody should be without health insurance.
"If I don't make a lot of money, I don't have to pay a lot of money for health insurance," Sabina says. "But I have the same access to health care that someone who makes more money has."
But she acknowledges that nearly 8 percent of her salary is a sizable bite.
"Yes, it's expensive. You know, it's a big chunk of your monthly income," Sabina says. "But considering what you can get for it, it's worth it."
Actually, it's about the same proportion of income that American workers pay, on average, if they get their health insurance through their job. The big difference is that U.S. employers pay far more, on average, than German employers do — 18 percent of each employee's gross income versus around 8 percent in Germany.
More Added Benefits In Germany
Moreover, German health insurance has more generous benefits than U.S. policies cover. There are never any deductibles, for instance, before coverage kicks in. And all Germans get the same coverage.
For instance, the Casagrandes' insurance covers an expensive medicine Jan needs for a chronic intestinal problem. He says if they moved to America, they might not be able to buy insurance at all because of their pre-existing conditions — a nonproblem in Germany.
"He says for himself — or for us — the health care system in the United States is the major reason why we have never moved there, and never will move there. Because both of us have chronic illnesses that have to have a lot of medical attention, and we would go broke," Sabina says, translating for Jan.
Jan adds something else. "It's also the No. 1 reason in the United States that people personally go bankrupt," Sabina translates, "which would never happen here ... never!"
Coverage For The Family
On the other side of Germany, in Berlin, we meet another couple who know both the American and German health systems.
Nicole and Chris Ertl own Tip Toe Shoes, a children's shoe shop in a well-off area of the German capital. The Ertls sell high-quality European shoes — tiny Italian sandals, French and Danish boots and clogs in wonderful colors.
Chris is from San Diego, Nicole is German. She also works part time as a physician therapist and gets her health care through her job like the great majority of Germans. Like the Casagrandes, she's happy with her coverage.
"It's a good deal!" she says. "It's really good because it's a package."
It's a package many Americans might envy. Nicole pays a premium of $270 a month for insurance that covers her children, too. Nicole pays a single $15 copayment once every three months to see her primary-care doctor — and another $15 a quarter to see each specialist, as often as she wants. She pays no copayments for her children's care —-and her insurance even covers her daughter's orthodontia bill.
"They always have good care," Nicole says, "because for kids, everything is free. The drugs, it's always free" until they turn 18.
Different Rules For The Self-Employed
But even though her insurance covers the kids, it doesn't cover her husband. Because Chris Ertl is self-employed, he has to buy insurance on his own, from a for-profit insurance company.
About one in 10 Germans buy this so-called "private" coverage. It's not just for people who are self-employed. Civil servants and anyone who makes more than $72,000 a year can opt out of the main system. It's a kind of safety valve for people who want more and can pay for it.
But most people don't opt out. Chris says that's because there's a fundamental difference in the way Germans view health care and the government's role — which, in Germany, means refereeing the system and making sure it's fair and affordable.
"The general opinion in Germany is always that the government will do it for us, everything will be OK," Chris says. "In the States, I think you grow up knowing that no one's going to help you do anything. If you want health care, go get it."
It's important to remember that the German government doesn't provide health care or finance it directly. It does regulate insurance companies closely — the nonprofits in the main system and the for-profits where Chris gets his coverage. So Chris' insurer can't raise his rates if he gets sick or jack up his premiums too much as he gets older. The government also requires insurers to keep costs down so things don't get too expensive.
"Where am I better off medically?" Chris says. "I would probably say Germany."
In some ways, Chis Ertl's coverage is better than his wife's. He gets his choice of top doctors — the chief of medicine, if he wants. If he goes into the hospital, he gets a private room. When he goes to the doctor, he gets a free cup of coffee and goes to the head of the line. All this embarrasses him — and annoys Nicole.
"When he goes to the doctor, he has a lot more service," she complains.
Germans really hate any hint of unfairness in health care. The fundamental idea is that everybody must be covered and, preferably, everybody should get equal treatment. So the fact that 10 percent or so can buy some perks is an irritant — something Germans complain about but manage to put up with.
But it's unthinkable that 48 million people wouldn't have health insurance at all — the situation in America. As an American, Chris thinks that's shameful. "It's terrible," he says. "It's unbelievable. It shouldn't happen."
Germans, he says, would never tolerate that. And their system has been working pretty well for 125 years.
Radio piece produced by Jane Greenhalgh.
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