Rachel Maddow Show: Wendell Potter On The Health Care Industry Putting Soaring Profits Before People

Rachel Maddow talks to whistleblower Wendell Potter about the health care industry's rising profits while more and more Americans lose their health ca
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Rachel Maddow talks to whistleblower Wendell Potter about the health care industry's rising profits while more and more Americans lose their health care insurance.

MADDOW: Are you by any chance a health insurance company executive? No? Me neither. And you and I, therefore, even though I know nothing else about you, you and I have one thing in common for sure. We are both in the wrong line of work.

SEC filings show that between the year 2000 and the year 2007, profit of the country‘s 10 largest health insurance companies rose 428 percent. In 2000, they had $2.4 billion in profit. By 2007, it was $12.9 billion.

Now, of course, this is America, we are capital C “Capitalists,” nobody begrudges anyone a ginormous profit, particularly if they‘re serving an important national need, like providing health insurance to the American people.

So, while the 10 biggest health insurance companies were seeing their profits rise over 400 percent between 2000 and 2007, how were they doing at serving that important national need? How were they doing at the whole providing health insurance to the American people thing? Eww! Apparently, while they quadrupled their profits between 2000 and 2007, the number of Americans without health insurance grew by 19 percent.

That seems bad. But not for everyone - also by 2007, the CEOs of the 10 largest health insurance companies were taking home an average compensation of $11.9 million each every year, while the number of Americans without health insurance for whom a burst appendix can mean bankruptcy has gone through the roof.

It was the insurance industry that bankrolled efforts to kill the last effort of health care reform in Bill Clinton‘s first term. And now, the industry says they‘re OK with reform of a sort. They just want to make sure that they don‘t get any competition from a non-profit government-run insurance plan that patients could opt into if they didn‘t like what the private sector was dishing out. You know, if I was a health insurance company executive, I‘m sure I would want that, too.

Joining us now is a former health insurance executive-turned-whistle blower, his name is Wendell Potter, and he was the head of public relations for CIGNA, one of the nation‘s largest insurers. He‘s now a senior fellow on health care at the Center for Media and Democracy.

Mr. Potter, thank you very much for joining us.

WENDELL POTTER, CIGNA FRM. HEAD OF PUBLIC RELATIONS: Thank you for the invitation.

MADDOW: The leader of America‘s Health Insurance Plans, the industry association, says that the health insurance industry is being unfairly blamed as the president and Congress try to reform the health care system.

Do you think it is unfair to single them out for blame?

POTTER: I think that she‘s doing what she‘s paid to do. I think that the health insurance industry deserves a great deal of the blame because they‘re very much behind the town hall disruptions that you see and a lot of the deception that‘s going on in terms of disinformation that many Americans apparently are believing.

MADDOW: Why do you think it is that profits for health insurance companies have ballooned so dramatically over the past seven years or so? We‘ve seen since 2000 to 2007, we‘ve seen such a dramatic increase in profits. Why is that?

POTTER: Well, for one thing, since 1993, in particular, the amount of money that the insurance companies take in on premiums, less and less of that is going—they‘re using it to pay medical claims—in 1993, it‘s about 95 percent. In a couple years ago, it was down to just around 80 percent. So, that‘s one way.

Another is that they kick sick people off the rolls when they do get sick or when people get injured—either through, whether they have bought their insurance through the individual market or through small employers.

It‘s—and also, they‘re paying fewer claims.

MADDOW: Well, if the government were to provide a health insurance option to the public, for example, like a widening of Medicare so that anybody could opt into it if they wanted to do—could private insurance companies compete alongside a government-run non-profit plan like that?

POTTER: Well, they could, absolutely. I‘ve seen the health insurance industry change its business models many, many times. The insurance companies who operate now are very different from the companies that operated a few years ago. They adapt very quickly. And the one thing they know how to do is make money.

MADDOW: You worked for CIGNA for 15 years, you left last year.

What caused you to change your mind about what you were doing and to leave?

POTTER: Well, two things. One, it was kind of gradually. One instance or in one regard because I was becoming increasingly skeptical of the kinds of insurance policies that the big insurance companies are promoting and marketing these days. And they‘re really pushing more people into the so-called consumer-directed plans that feature high deductibles, and that is a leading reason why so many more people are in the category of the underinsured.

The other thing that really made me make this final decision to leave the industry occurred when I was visiting family in Tennessee a couple of summers ago, and I picked up the local newspaper and saw a story about the health care expedition that was being held across the state line in Virginia, in the coal mining area in southwest of Virginia. So, out of curiosity, I just went up there to check it out and was absolutely dumbstruck when I went through the fairground gates. This is being held at the Wise County fairground.

And what I saw when I went inside the fairground‘s gates were hundreds and hundreds of people who were lined up, waiting in the rain, to get care that was being provided to them by volunteer doctors throughout the state of Virginia in animal stalls. Other volunteers had come previously to scrub down the animal stalls to make sure that they were sanitary enough for these doctors to treat people who otherwise couldn‘t get any care.

MADDOW: And this is the system that the health industry has been able to construct and lead us into over the past—over the past generation and that they‘re fighting so hard to preserve now.

POTTER: That‘s right.

MADDOW: Wendell Potter, senior fellow on health care at the Center for Media and Democracy, a man who‘s been through a very big change in his life in recent years—thanks very much for joining us, sir.

POTTER: Thank you, Rachel.

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