Health Insurance Reform, per an Industry Insider

Wendall Potter worked at health insurer Cigna for 15 years and left his position there as head of "the ultimate PR job" on good terms with the company. What triggered his resignation?

During a visit to relatives in Virginia, he was intrigued by a notice of a "health care expedition." The quotes below from the transcript of the July 10, 2009 installment of Bill Moyers Journal describe what Potter saw, and just some of the reasons why we MUST have a public option (much more, all worthwhile, in both video and transcript form, at the foregoing link):

POTTER: I didn't know what to expect. I just assumed that it would be, you know, like a health – booths set up and people just getting their blood pressure checked and things like that.

But what I saw were doctors who were set up to provide care in animal stalls. Or they'd erected tents, to care for people. I mean, there was no privacy. In some cases – and I've got some pictures of people being treated on gurneys, on rain-soaked pavement.

And I saw people lined up, standing in line or sitting in these long, long lines, waiting to get care. People drove from South Carolina and Georgia and Kentucky, Tennessee – all over the region, because they knew that this was being done. A lot of them heard about it from word of mouth.

* * * * *
POTTER: I thought that [Michael Moore] hit the nail on the head with his movie [Sicko]. But the industry, from the moment that the industry learned that Michael Moore was taking on the health care industry, it was really concerned.

MOYERS: What were they afraid of?

POTTER: They were afraid that people would believe Michael Moore.

MOYERS: We obtained a copy of the game plan that was adopted by the industry's trade association, AHIP. And it spells out the industry strategies in gold letters. It says, "Highlight horror stories of government-run systems." What was that about? [Note: You can download the documents by clicking here and here.]

POTTER: The industry has always tried to make Americans think that government-run systems are the worst thing that could possibly happen to them, that if you even consider that, you're heading down on the slippery slope towards socialism. So they have used scare tactics for years and years and years, to keep that from happening. If there were a broader program like our Medicare program, it could potentially reduce the profits of these big companies. So that is their biggest concern.

* * * * *
MOYERS: This is fascinating. You know, "Build awareness among centrist Democratic policy organizations – "

POTTER: Right.

MOYERS: " – including the Democratic Leadership Council."

POTTER: Absolutely.

MOYERS: Then it says, "Message to Democratic insiders. Embracing Moore is one-way ticket back to minority party status."

* * * * *
POTTER: Well, there's a measure of profitability that investors look to, and it's called a medical loss ratio. And it's unique to the health insurance industry. And by medical loss ratio, I mean that it's a measure that tells investors or anyone else how much of a premium dollar is used by the insurance company to actually pay medical claims. And that has been shrinking, over the years, since the industry's been dominated by, or become dominated by for-profit insurance companies. Back in the early '90s, or back during the time that the Clinton plan was being debated, 95 cents out of every dollar was sent, you know, on average was used by the insurance companies to pay claims. Last year, it was down to just slightly above 80 percent.

So, investors want that to keep shrinking. And if they see that an insurance company has not done what they think meets their expectations with the medical loss ratio, they'll punish them. Investors will start leaving in droves.

I've seen a company stock price fall 20 percent in a single day, when it did not meet Wall Street's expectations with this medical loss ratio.

For example, if one company's medical loss ratio was 77.9 percent, for example, in one quarter, and the next quarter, it was 78.2 percent. It seems like a small movement. But investors will think that's ridiculous.

* * * * *
POTTER: . . . [T]he people who are enrolled in our Medicare plan like it better. The satisfaction ratings are higher in our Medicare program, a government-run program, than in private insurance. But they don't want you to remember that or to know that, and they want to scare you into thinking that through the anecdotes they tell you, that any government-run system, particularly those in Canada, and UK, and France that the people are very unhappy.