Episode 92 Recap – Think for a minute about Medicare for All (with Wendell Potter)

The Print Version of Episode 92 of the FLATLINING Podcast

This week Matthew and Ron talk with Wendell Potter, author and former Vice President of Corporate Communications for Cigna Healthcare about his reasons for leaving Cigna, and how we can get medical care to all Americans. Wendell hit the New York Times bestselling list with his 2010 book Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans. Since he resigned from Cigna in 2008 he has been a leading advocate for reforms to the health insurance industry, universal coverage, and Medicare for all. He has published several other books on healthcare and big money in politics. His most recent book The Rise of the Dental Therapy Movement in Tribal Nations and the U.S. is free to download. You can follow his Substack newsletter page at  HEALTH CARE un-covered.

Matthew starts the conversation by asking Wendell, the first former health insurance executive on the podcast, how he came to work in the health insurance industry.  Wendell explained that he started his career as a newspaper reporter in his home state of Tennessee then went to Washington D.C. to cover the Supreme Court, U.S. Congress, and the White House for Scripps-Howard Newspapers. He noted that reporters are notoriously underpaid and began to look for other work, not intending to move into healthcare, but he landed at the Baptist Health System of East Tennessee in Knoxville where he went to school. He was next recruited by Humana, which at the time owned hospitals, he said he felt like he was going to the “big leagues.”

While at Humana, they spun off the hospital segment to focus completely on “Managed Care”. Something Wendell said he was a believer in at the time. “I thought the techniques, as they began in this country, of coordinating care, making sure that people had access to the right care at the right time, was appropriate. But I became aware that in the hands of big for-profit insurance companies, it was quite corrupted.”

From Humana, he was recruited by Cigna and rose through the ranks to become the Vice President for Corporate Communications and chief spokesman for the company. He said, “I spent a lot of time with my peers in the industry in Washington creating PR [Public Relations] and strategic communications plans to push back against any reforms the industry did not like.” During this time, he gained insight into how the companies made money. He said since his name was on all the earning reports for ten years, he spent a lot of time with the investor relations team and gained a perspective few people get, and ultimately, he said, he became “sick at what I was seeing.”

Ron said that if you want to understand on how the insurance industry works, you should read Wendell’s book, Deadly Spin. He said that it is the kind of book you read and, in some ways, wish you had not read it, because now you know “how the sausage is made.”  Wendell thanked Ron and added that it does describe how the industry works, but it is also his personal story, hopefully making it more readable than just a book on public policy in the healthcare system. He said that it is important for people to know how we got where we are in regards to our current healthcare system and how these big companies operate and are beholden to Wall Street analysts and shareholders.  

Matthew asked Wendell about what was it that started his journey out of the health insurance industry. Wendell described an experience visiting a rural clinic when he was visiting family in his hometown of Kingsport in northeast Tennessee, near the Virginia border. He said there was a “health fair” of sorts being held at the Wise County Virginia, fairgrounds. He said it was called a “Healthcare Expedition” and he had never heard of such a thing. So he decided to check it out and said that this drive, from Kingsport to the fairgrounds, was his “Road to Damascus.” This was, he said, because when he arrived, he saw something he would never have expected to see in the U.S.

Once entering the fairgrounds on this rainy day, he said he saw lines of people, wet and waiting to be seen in the barns and animal stalls of the fairgrounds. Wendell said the volunteers did the best they could to clean and prepare these stalls to be used as examination rooms. He realized that if he hadn’t been so lucky, he could have been standing in one of those lines and it was “devastating” to see.

Wendel described his corporate role as one of purposely misleading people and obscuring information to ensure the company achieved the profits Wall Street investors and shareholders demanded. A role, he said, that paid him very well. He said this manipulation of information was in direct opposition to what he had done when he was a reporter, where he did his best to report the facts and seek the truth. He described feeling that he needed to take some responsibility for his role in this manipulation and he decided that day to figure out another way to earn a living.

Ron shared a conversation he had about his exodus from the payer side of healthcare and explained that he realized he did not have the needed “moral flexibility” to stay in the health insurance industry and continue to do what he did to collect a large salary. Wendell agreed, saying that those who stay in the industry do have the needed moral flexibility. He humbly followed up that he was not trying to be a paragon of virtue here, but admitted he had a “crisis of conscience” that led him out of the health insurance industry.  

He followed up that many people have left the industry to pursue other things, but those who have stayed in healthcare are trying to make it better. But he said of those that remain likely do what he thought Ron, and he did, compartmentalized their feelings toward their actions. Justifying that they were trying to make a living for the good of their families and admitted that often titles become intertwined with our own identity, he said. He said that the feeling of power in high-ranking corporate positions combined with really good money is hard to walk away from.

Matthew asked Wendell with more recent progressions in how we execute healthcare such as the Affordable Care Act (ACA) etc., if these have alleviated the need for the pop-up clinics Wendell saw at that fairground in Virginia. Wendell said he often stated that he wants to put those types of clinics out of business by improving our national healthcare system, “But sadly they are still going strong.” Noting that he went to a pop clinic sponsored by Remote Area Clinic (RAM) in January in Knoxville Tennessee. He said that the organization is based just outside Knoxville and started by flying doctors and medical personnel to very poor countries like Haiti and parts of South America that had limited or no access to care. Then they began getting calls from communities in the U.S. asking them to set up clinics because doctors or dentists had left, or people couldn’t travel to or afford medical care. He said, “Now the vast majority of those clinics are in this country, they don’t have capacity to do as much internationally as they would like to do.”

Wendell said it’s a travesty that RAM and organizations like them have to provide care in the U.S. and it is his goal to change our healthcare system so they can go back to doing what they were originally charted to do, provide healthcare to poor countries around the world, not here in our country.

Matthew shifted the conversation to Wendell’s advocacy of Universal Healthcare and asked him to explain it since there are a lot of different opinions of what Universal Healthcare is and means. Wendell said it is simply everyone having access to care that is high quality, affordable, accessible, and available when you need it. He shared an old insurance company talking point about those without insurance were said to “be shirking their responsibilities” which he said is not true. He said they used this message because insurance companies did not want to cover a lot of those people because of pre-existing conditions, something that the ACA addressed, he said.

Universal care is important he said because the uninsured and the underinsured get sick and go to the hospital too and that is an expense society has to bear. “It’s really foolish for us to have a system in which you have so many people not able to get the care that they need waiting until it’s an emergency, almost at death’s door, that is when care is most expensive, it just makes no sense.” It’s just the right thing to do and it makes economic sense along with the moral principle of it he added.  

Ron said he sees two parts to the Universal Care/Medicare for All problem. If you had Universal Care, he said, that takes care of the uninsured and underinsured problem, and it stops the ongoing medical debt accumulation on those that can least afford it. The harder part is how do we pay for it and how do we make sure we don’t destroy the delivery system in the implementation?

Ron asked Wendell how we go about making these changes from a practical point of view. Wendell pointed out that there is an estimated $5 trillion being spent on healthcare annually in the U.S. Of that he said, studies have shown about 30% is spent on administrative costs. He shared a comparison done on two hospital systems, one in Toronto, Canada, and the other in Durham, N.C., Duke Regional Medical Center. He said the Toronto hospital had 16 billing clerks and Duke had well over 1000. The way the system has developed, he said, with the multitude of insurance companies with their various plans adds to the complexity and it all becomes astronomically complex for hospitals and offices to deal with day in and day out. All this adds an incredible level of inefficiency to the system.

Additionally, when a doctor in the U.S. has to go back and forth between the insurance company advocating for a course of treatment it increases the stress on physicians and medical personnel, and time away from patients, he added. The insurance companies, he said, have created these barriers to treatment.  He shared many doctors refer to this process as contributing to “moral injury” to them as they try and treat patients.

Wendell said that by leveraging the administrative costs that are currently being eaten up in the system, we have more than enough to pay for Universal Healthcare. He said insurance companies often try and scare us that our taxes will go up, but if we look at what most Americans pay for their health premiums, we are already spending the money. We can think of these premiums as essentially a tax. Right now, he explained, instead of the money going to the government to pay for Universal Healthcare, it’s going to the pockets of health insurance executives and their stockholders. He pointed out that we already have nearly a 50-year track record of government health coverage through programs like Medicare, Medicaid, and the Veterans Administration. He said they work reasonably well although maybe not optimally. Right now, he said, we have one-half the country getting coverage from these government programs and the other from a wide variety of employer insurance, and the Obamacare exchanges all with various options, etc. and this creates massive inefficiency.

Ron proposed that even if you only captured 10% of the $5 trillion in administrative costs, that is still $500 billion to repurpose. He then explained that the current employer expense, speculated to be somewhere around $700 billion, if it did not go to insurance companies but was some type of tax to pay for the healthcare system, it would shift what was an expense to a tax. He further proposed some options mirroring our progressive tax programs to figure out how much an individual would have to pay. Also noting that if small employers were given a break, that might make them more competitive for talent since a healthcare package was taken out of the equation. He concluded by saying, “The proponents of Universal Healthcare haven’t done a good job of countering the spin of fear of ‘your taxes are going to double’ because we have to raise two trillion dollars.”

Wendell agreed, saying that a lot of people who advocate for Universal Healthcare are not messaging experts, they are passionate about this topic but don’t know how to convert someone who is not already in the choir. Wendell said that he wished more advocates for Universal Healthcare could hear this conversation, but even if you get the messaging right, he said, you are up against the other side who has a lot more money than you have. They use that money, he said to confuse people, make them fear a tax increase, and so on. According to Wendell, what is obscured is that you will actually pay less and get better care. Ron shared some recent statistics on lobbying dollars spent. He said pharmaceuticals, health care products, and insurance outspent medical providers about seven to one for a total of nearly $650 million to medical providers’ $93 million. Showing, he said, what Wendell was saying.

Wendell transitioned the conversation over to what he has seen recently with hospitals and medical providers. He expanded on his corporate time working collaboratively with pharmaceuticals, hospitals, and physician groups to defeat prior efforts to change our healthcare system. He said what he is seeing now is that hospitals and physician groups are coming to realize that they helped enable the insurance industry to grow to massive proportions which is now making their ability to do their mission of providing care more difficult.

He pointed out that he often explains to people that you have to look at the big money in politics. His said his second book, Nation on the Take, How Big Money Corrupts Our Democracy and What We Can Do About It, addresses this issue. Often he said, people get mad at the wrong entity in the system. He said, “People are mad at Congress, mad at our political system, when they should be mad at big corporations like the ones you worked for that pull their strings.” He said our political system has been corrupted in ways that make it very difficult for us to move forward but it is worth fighting for.

Wendell acknowledged that reimbursement rates for Medicare and Medicaid are likely lower than they should be, so it is necessary in this Universal Healthcare system that doctors and hospitals are adequately compensated, the working conditions are good and the medical professionals can do what they went into medicine for in the first place.  

Ron explained there are several pieces to how doctors are compensated. First medical practices are businesses with business expenses and must have inflationary increases to reimbursement.  Noting that the Medicare conversion factor is 11% lower today than it was 23 years ago is ludicrous he said.  He then proffered, that if you could eliminate the non-clinical time physicians spend with insurance companies, if the practice of medicine was made easier with the introduction of standardized coverage guidelines and if there was no bad medical debt that doctors had to chase after, he asked rhetorically, what would that fee schedule look like? Although he said he did not know the answer, he did think it could be figured out.  He also thought some tweaks could be made to the Medicare system to further improve the reimbursement rate for doctors. Many physicians, he thinks, might get on board for a little less pay, and cost of living adjustments, if they did not have the hassle of working with the insurance companies.

Ron suggested that hospitals could be treated like public utilities, where some governing body reviews their requests for rate increases, and he said that rural versus urban medical centers would have to be addressed differently. Wendell agreed with Ron's suggestions and pointed to a few other areas, like ensuring we had enough primary care physicians through incentives, to get to the desired outcomes.

Ron closed with the idea of introducing competition to which drugs may be the “frontline” drugs for standard treatments, setting up a scenario where manufacturers are competing to produce drugs that meet or improve performance, but at a lower cost to get them “frontline” or preferred status. Wendell agreed, saying that he is confident that this would create an environment where drugs would be cheaper and access to them would improve.

Wendell closed by encouraging everyone involved in this effort and thanked Ron for his podcast and his commitment to educating people about this issue.