Deadly Spin

by Wendell Potter

  The soft-spoken Ignagni was the public face of an eight-hundred-billion-dollar-a-year industry, and her mission was to see health care reform passed that would benefit insurance company shareholders and executives and to help them avoid increased public accountability. For Ignagni, it was the biggest challenge in a career that had taken her on a remarkable path from protecting the health benefits of middle-class workers to protecting corporate titans who abused and overcharged their sick customers.

  Ignagni grew up in Providence, Rhode Island, the child of a firefighter and a city hall worker. After graduating from Providence College in 1975 in the first class that included women, she was hired as a research analyst at the Social Security Administration. Two years later, she went to work for a group promoting national health insurance that was backed by Walter Reuther, the legendary president of the United Auto Workers. After two years, she joined the professional staff of Senator Claiborne Pell (D-R.I.) and worked on a panel that later became the Health, Education, Labor, and Pension (HELP) Committee. During her three years on Capitol Hill, Ignagni often worked with the staff of Senator Ted Kennedy, the nation’s leading advocate of universal coverage.

  While working for Pell, a social liberal and a labor favorite, Ignagni came to the attention of the AFL-CIO, and the huge labor federation hired her in 1982. For eleven years, she worked on pensions and health care, rising to director of the health benefits department, which served more than eleven million members. She reportedly spent much of her time helping negotiate new managed care plans.4 During this period, she also completed an executive MBA program at Loyola University, in Baltimore.

  In 1993, a headhunting firm recruited Ignagni to be the president of the Group Health Association of America (later renamed the American Association of Health Plans, or AAHP). Suddenly, she turned her back on years of progressive politics and became the leader of one of two rival trade groups that would eventually merge to make AHIP. Her first job was successfully fending off President Clinton’s Health Security initiative.

  As you may recall, a headhunter also recruited me to my new job at CIGNA in 1993, and I would work with Ignagni on the same side of many battles for the next fifteen years. Not only were we allies in the fight against the Clinton plan, but we were also allies in subsequent fights with lawmakers (who tried for years to pass a Patient’s Bill of Rights) and lawyers (who tried to force managed care companies to deal more fairly with both patients and their doctors). I also worked closely with her communications team in developing PR plans and talking points and coordinating countless media interviews.

  Ignagni quickly made a name for herself. She was frequently listed among the “top guns” and most influential lobbyists in Washington. In 2003, when AAHP merged with the Health Insurance Association of America to form AHIP, Ignagni prevailed over HIAA’s Chip Kahn to become CEO of the new group. Her compensation soared to $1.94 million in 2008,5 up from $400,000 in 1998.6

  Within months after Obama’s White House summit, AHIP, despite Ignagni’s promise to help the president pass health care reform, unleashed its sophisticated, multipronged attack to undermine it. The relationship between the White House and the industry changed from cordial and collaborative to hostile when it became clear to Obama and his reform team that AHIP was conducting a duplicitous campaign—saying one thing and doing another. Instead of further pledges of cooperation from the industry, the American people got fearmongering, misleading ads, coordinated attacks by conservative opinion columnists and health-policy experts for hire, deceptive studies and reports, and front groups that ran antireform ads or orchestrated Tea Party events, funded at least in part by insurers.

  From 2007 to mid-2009, insurance and HMO political contributions and lobbying expenses totaled a jaw-dropping $586 million, according to Public Campaign. At the height of the battle, the industries were spending nearly $700,000 a day to influence the political process.7

  The key goals of health care reform—and the battle lines—had been delineated by the end of March 2009. Top House Democrats pledged to pass a health care bill before the August recess. Democrats also favored reserving the right to use a common parliamentary budget maneuver called “reconciliation” to pass the bill in the Senate by majority vote rather than the sixty votes needed to block a filibuster. But Senator Max Baucus (D-Mont.), chairman of the Finance Committee, and Senator Kent Conrad (D-N.Dak.), chairman of the Budget Committee, said they opposed reconciliation, preferring to find the necessary votes from the GOP side to get the sixty supporters needed.

  House leaders reached consensus on the creation of a public option—vehemently opposed by insurers and Republicans—to function as an instant, formidable competitor in the reformed health insurance marketplace. The public option was the brainchild of Yale political science professor Jacob Hacker, whose arguments were detailed and compelling.8 Progressive activists, labor unions, and their umbrella group, Health Care for America Now (HCAN), embraced the public option as the only way to force millions of new customers to buy health insurance without creating a public backlash. Only if Americans were allowed to choose such a plan would there be broad public acceptance of the compulsory purchase of health insurance, they argued, and polls consistently backed them up.9

  It was an article of faith among liberals that a national public option would be the best way to curb soaring health care costs. The most prominent public plan, Medicare, had recorded annual spending growth significantly lower than private insurers’ over the previous decade, with per capita costs growing by 4.4 percent a year under Medicare versus 7.4 percent under private health insurance.10 But this superior cost-control performance was exactly why so many health care providers, from drugmakers to doctors and hospitals, were leery of health care reform. They all worried that a public option would underpay them and take away their power to charge what the traffic would bear—as they had long complained that Medicare did. The drug and hospital industries eventually cut deals with Obama that locked in limits on their own health care reform concessions (in return for their not attacking reform).

  Meanwhile, insurers worried—and rightfully so—that they would fail to compete against the superior provider networks, lower overhead, and lower premiums of a public option. And, a government-operated plan wouldn’t concern itself with surging insurance company profits and obscene executive pay, focusing instead on processing claims efficiently and setting reasonable rules on what services were covered.

  In the ensuing war, one of the most impressive and well-planned early maneuvers of Ignagni and her industry was performed by UnitedHealth Group, which in 2007—just as the political stars were aligning for health care reform—had bought its own think tank. The Lewin Group, a respected health-policy consulting firm in northern Virginia that had been working with governments and industry for forty years, became a wholly owned unit of a UnitedHealth subsidiary, Ingenix. A credible source of economic data and analysis in the health care arena, Lewin was now tarred with a perceived conflict of interest. John Sheils, a vice president, tried to limit damage by proclaiming Lewin’s editorial independence from UnitedHealth, but that didn’t square with its later conduct.

  In April 2009, just as it became apparent that the public option was being seriously considered by Democratic leadership, Lewin released a report claiming that a public option would force 119 million Americans out of their employer-sponsored health plans and into the government insurance plan. Republicans eagerly embraced the claim, which, as it turned out, wasn’t based on any specific legislation. Nevertheless, House minority whip Eric Cantor of Virginia used the data to bolster Republicans’ claims that the public option would doom the country’s employer-based health care system.

  A July 23, 2009, story in the Washington Post pointed out how ridiculous that framing was.11 The story even quoted a Lewin vice president acknowledging that Americans would not be forced into a government-run plan if a public option were created and that many people “might very well be better off” if they could ch
oose between a government-run plan and private options. After its analysis had been widely questioned, Lewin reduced its estimate of the impact of the public option, saying that “only” 88.1 million people would shift from employer-based coverage to the public option under the Democrats’ plan—whereas in late July the nonpartisan CBO found that the public option would draw only 11 million people from the 170 million covered by private health plans. That didn’t keep opponents from continuing to use Lewin’s disputed public option projections as supporting evidence that Obama and congressional leaders were bent on “a government takeover” of the health care system that would lead to long waits to see a doctor, care denied by government bureaucrats, and huge tax increases.

  The industry also used its vast information technology resources to provide “helpful” actuarial data to its friends. Virtually no one on Capitol Hill had the background or skills to question this evidence. Congressional staffers at the highest levels of the discussions confessed that they had to ask insurance companies themselves for comparative actuarial analyses of various scenarios to help formulate proposals for members of Congress. What else could they do? Not having access to the actual data, congressional offices couldn’t run such research independently. BusinessWeek captured the effectiveness of that approach in a cover story on August 6, 2009, which noted,

  The carriers have succeeded in redefining the terms of the reform debate to such a degree that no matter what specifics emerge in the voluminous bill Congress may send to President Obama this fall, the insurance industry will emerge more profitable. Health reform could come with a $1 trillion price tag over the next decade, and it may complicate matters for some large employers. But insurance CEOs ought to be smiling …

  The industry has already accomplished its main goal of at least curbing, and maybe blocking altogether, any new publicly administered insurance program that could grab market share from the corporations that dominate the business. UnitedHealth has distinguished itself by more deftly and aggressively feeding sophisticated pricing and actuarial data to information-starved congressional staff members. With its rivals, the carrier has also achieved a secondary aim of constraining the new benefits that will become available to tens of millions of people who are currently uninsured. That will make the new customers more lucrative to the industry.12

  Leading the fight against such overwhelming industry resources was HCAN, which had been launched in the summer of 2008 for the purpose of winning meaningful health care reform. HCAN ultimately comprised more than one thousand member organizations, including the nation’s biggest unions, civil rights groups, and progressive political organizations. HCAN would spend forty-seven million dollars in the battle, with its money coming from its members and grants from foundations. Atlantic Philanthropies was its biggest funder. Although they couldn’t compete with the money available to insurers and their allies, progressives were determined not to get steamrolled the way they had in 1993.

  Led by Richard Kirsch, a veteran organizer and political activist from New York, HCAN emerged as a focal point with local activist organizations under contract in forty-four states. “We represent the deepest single-issue coalition in modern American history,” said Jeff Blum, HCAN co-chairman and director of USAction, a leading progressive grassroots organization. Blum and Kirsch conceived of HCAN as a way to win universal coverage by enlisting local activists, providing them with solid funding and research, giving them continuous advice on how to exert influence, and running targeted television ad campaigns in their states.

  Blum and Kirsch started by recruiting the Service Employees International Union (SEIU) and the American Federation of State, County and Municipal Employees (AFSCME), each representing large numbers of health care workers. When HCAN debuted, the steering committee included unions, community groups, physician groups, and the influential Center for American Progress, seen by many as a Democratic shadow government before Obama’s inauguration. CAP president John Podesta led Obama’s transition team.

  When AHIP staked out its “pro-reform” position in December 2008, it proposed the acceptance by insurers of all customers regardless of medical history and the cessation of canceling customers’ coverage when they got sick—but only if all Americans were required to buy coverage from private companies. The group did not suggest charging everyone in a given community the same prices, and thus its proposal would have left millions of sick or high-risk residents in constant danger of being charged whatever insurers wanted. Kirsch aimed to kill this proposal as quickly as possible.

  All along, Kirsch knew that HCAN needed to embolden centrist Blue Dog Democrats, especially freshmen and conservative incumbents from districts where Obama had fared poorly in the election. In addition to buying millions of dollars of TV advertisements, HCAN planned to make use of an unprecedented progressive activist base with the help of coalition members such as the AFL-CIO, MoveOn.org, SEIU, AFSCME, Americans United for Change, the Center for Community Change, the American Federation of Teachers, Campaign for America’s Future, ACORN, True Majority, the United Food and Commercial Workers, USPIRG, and the Communications Workers of America.

  “The vision from the beginning was to bring together the largest membership groups in the country to form a coalition that combines impact in Washington with a massive field presence across the country,” said Kirsch. “We’re part of a lot of coalitions, but HCAN is edgy in a unique way,” said Lynda Tran of SEIU. “It has a ‘street heat’ that we’re known for as well. The combination of grassroots and new media and online organizing gives it a special force and energy.”13

  The tactics were tried-and-true, including bringing delegations of HCAN field partners to district offices of members of Congress, flooding their offices with handwritten letters, arranging for leaders of local grassroots groups to visit members’ offices in Washington, generating media coverage of protests and rallies, visiting newspaper editorial boards, releasing research reports, and organizing large-scale rallies in Washington. HCAN became a success because it adopted a coordination role that had never been used on the left as it had on the right.

  One of the biggest conflicts among progressives was between advocates of a single-payer system, like those in Canada and Europe, and those who believed that the public option would have a more viable chance of getting through Congress. Single-payer supporters thought that HCAN had joined the corrupt Washington establishment when it accepted the public option as an alternative to a completely government-financed system after it became clear that Obama and congressional leaders were not interested in pursuing what they believed would be too radical a proposal for even many Democrats.

  It was soon after Obama’s March 5 summit—when the president and members of Congress seemed to be falling for Ignagni’s pledge of cooperation—that I began, nervously, making calls to the few reform advocates I knew of to offer my help. I was paranoid at first, constantly worried that I would talk to someone who would mention what I was doing to someone who might have close ties to AHIP or CIGNA. Even though at the time no one outside of my family knew anything about what I was contemplating, I imagined that my phones were tapped and that my house was under surveillance. If the industry knew I was thinking about giving aid and comfort to the enemy, it would undoubtedly try to shut me up, I feared. I envisioned all kinds of ways they would try to do that. When the first calls didn’t seem to get me anywhere, I almost gave up. But the more evidence I saw that the industry was behind the efforts to kill or eviscerate reform, the more determined I became to do something. I just didn’t know what it would be—although I hoped I could do it anonymously.

  Among the people I contacted were the PR staffers at the California Nurses Association. They were cordial when we met, but I never heard back from them. They clearly didn’t see how I could help them. I searched the Internet for names of local health care reform advocates in Philadelphia. I met with one for lunch. We had a great conversation, and he offered to put me in touch with the leadership of Physicians f
or a National Health Program, one of the most prominent single-payer organizations in the country. They, too, were cordial but offered little help beyond their best wishes.

  One of the first people to see the potential of what I could bring to the reform effort was Michael Morrill, who several months earlier had launched a group in Pennsylvania called Keystone Progress. Morrill, I soon found out, was extraordinarily well connected. I mentioned to him that I was thinking of going to a meeting in Washington in early April that was being hosted by the Herndon Alliance, which billed itself as a coalition of minority, faith, labor, advocacy, business, and health care provider organizations that shared a common goal of “affordable health care for all.” A friend of a friend of a friend had put me in touch with Bob Crittenden, Herndon’s founder, and Crittenden had invited me to attend the group’s next meeting as an observer.

  It turned out that Morrill knew some of the people who would be at the meeting, and he arranged for me to talk afterward with three or four whom he described as heavy hitters. He even drove down to D.C. from his home in Reading, Pennsylvania, to introduce me to them in person. The one person who seemed more than marginally interested in me was Jacki Schechner, HCAN’s communications director.

  When Schechner returned to her office, she mentioned meeting me to some of her colleagues. As fate would have it, one of them was a former reporter I had worked with when I was at CIGNA, Avram Goldstein, who had covered for-profit health insurers for Bloomberg News. He’d been one of the best of a handful of reporters who covered the industry, and I had enjoyed working with him. I’d lost track of him after leaving CIGNA, and I’d had no idea he had left Bloomberg to join HCAN as its research director.

  A few days later, Goldstein arranged for me to meet Kirsch at the 30th Street Station in Philadelphia. Kirsch was heading to a meeting in New York but got off the train in Philly long enough for us to have a conversation about exactly what I could bring to the table. It was at that meeting that the idea of me testifying before Congress was first mentioned.