Deadly Spin (9 page)

I didn’t realize until later that the
New York Times
had sent a reporter and a photographer to the Wise County expedition. The headline on the eight-page spread in the paper’s magazine summed it up well: “Patients Without Borders: What Do the Uninsured in America Do When They Need Health Care? Some Turn to a Volunteer Medical Group That Was Set Up to Provide Free Services in Third World Countries.”

In the article, Brock noted that despite the expedition’s three-day span, hundreds of people are turned away every year, and that the medical needs of the people who come for free care far outstrip what the volunteers can provide. He said, “There comes a point where the doctors say: ‘Hey, I gotta go. It’s Sunday evening, and I have to go to work tomorrow.’ ”

Brock estimates that by 2010 about twenty-six thousand volunteers for RAM had treated more than three hundred thousand patients during six hundred expeditions in the United States and abroad. Because the need for the services that RAM and its volunteers provide shows no sign of abating, Brock is trying to raise one million dollars to expand the organization’s capabilities. He hopes to use the money from RAM’s “Reach Across America” campaign to, among other things, buy and operate another airplane to fly volunteers “anywhere we’re invited.” One of the planes RAM currently uses, which Brock himself flies, is a DC-3 used by the U.S. Air Force in Europe during World War II.

As I took in the scene at the Wise County Fairgrounds, I realized that the folks in those lines and animal stalls could have been my relatives or my parents’ neighbors. I could tell from their faces that they were people with whom I shared cultural roots, but who—for whatever reason—simply hadn’t had the good fortune to land a high-paying job and a cushy office in a Philadelphia skyscraper. Quite unexpectedly, this spur-of-the-moment outing was starting to feel personal and even spiritual—and I didn’t consider myself to be much of a spiritual kind of guy. It was clear to me at that moment that I was having an epiphany.

As I noted earlier, one of the responsibilities of that high-paying job I had back in Philadelphia—a responsibility made all the more urgent as the health care reform debate intensified—was to try to convince the public that the problem of the uninsured was not so much of a problem at all. The real purpose of that document I had been working on for weeks was to sell the idea that insurers were the true good guys in the U.S. health care system, that they were blameless when it came to rising premiums, and that the growing number of people without coverage was not as serious a problem as many people believed.

I had used the U.S. Census Bureau’s reports on the uninsured, which the bureau updates annually, as the primary source of my information for the document. These reports are a treasure trove of statistics. While I was working on my document, a book that I had been assigned to read in college many years before came to mind:
How to Lie with Statistics
.
1
The teacher hadn’t asked us to read it to learn how to deceive people, but rather to learn to recognize the tricks that people and organizations often use to mislead by slicing and dicing numbers in certain ways.

Using 2006 Census Bureau data on health care coverage, I selected statistics I felt would lead people to question whether the problem of the uninsured was as big as reform advocates claimed. One such statistic was that more than 40 percent of the uninsured are young adults, many of whom probably believe that the risk of illness or injury is too low to justify the cost of insurance. Another was that more than 35 percent earn at least $50,000 (and consequently should be able to afford insurance). Yet another was that more than 20 percent are not even U.S. citizens.

The clear implication of the statistics I chose was that most of the uninsured people in this country were simply shirking their personal responsibility to buy coverage or shouldn’t be here in the first place. If the government would just force them to buy coverage from private insurance companies or enroll in a public program—or deport them—the problem would largely go away.

I knew that what I was writing would likely wind up in the hands of friendly members of Congress and conservative pundits who would use the statistics as part of their propaganda campaigns to keep comprehensive reform from ever happening. I also knew that the statistic about a fifth of the uninsured being noncitizens would really rile them. I knew that many people would interpret that to mean that they were all illegal aliens, while in fact many of those noncitizens were people in the United States legally, on either study or temporary work permits, who could not get or afford coverage. Many were performing jobs that U.S. employers had hired them to do because there were not enough Americans interested in or capable of doing them.

Probably the one sentence in the Kingsport newspaper story that had compelled me to go to Wise in the first place was this one: “Two-thirds of the people who avail themselves of free health services at the annual RAM event have jobs but no health insurance.” I did not really believe (as I was implying in the paper I was writing) that the folks attending the expedition were lazy, irresponsible bums. So I think I went to prove to myself that they really were hardworking people who either couldn’t get insurance or couldn’t afford it. I knew—although I didn’t mention it in my paper—that the median household income in the United States was just slightly more than $50,000.
2
(In Wise County, it was just a little more than $26,000. In Johnson County, it was just $23,000.) Another important fact I didn’t include in the paper was that the average cost of a family health insurance policy had risen to $12,106 in 2007. (By 2009, it had increased to $13,375.
3
The average income for a minimum-wage employee, meanwhile, was just $11,500 in 2009.)
4

Most of the employers in the southern Appalachians are small businesses—the Wise County Web site lists only four private employers in the county with more than sixty employees—and, as elsewhere in the country, more and more of them are dropping coverage for their employees because of the exorbitant rate increases that insurance companies have been imposing in recent years. Thousands of small businesses across the country have stopped offering coverage to their employees over the past fifteen years, in many cases because profit-driven health insurers have “purged” them from their rolls.

SCALES BEGAN FALLING FROM MY EYES

Among the many reasons I finally left my job at CIGNA was that with each promotion, I got a better understanding of how insurers get rid of enrollees they don’t want—the very people who need insurance—when they become a drain on profits. I could no longer in good conscience continue serving as a spokesman for an industry whose practices, I had come to realize, were swelling the ranks of the uninsured. Instead of being part of the solution to the crisis of the uninsured, as I had long tried to convince the public they were, insurers had become the leading cause of the crisis.

To help meet Wall Street’s relentless profit expectations, the for-profit insurers that now dominate the industry routinely dump policyholders who are less profitable or who get sick. Insurers use several techniques to cull the sick from their rolls. One is policy rescission, the common but until recently largely unknown practice in the insurance industry of retroactively canceling policyholders with large medical bills.
Los Angeles Times
reporter Lisa Girion stumbled upon the practice as she was gathering information for a story about a lawsuit that had been filed on behalf of a self-employed scrap metal hauler who was suing Blue Cross of California for canceling his policy retroactively after he underwent a procedure to clear blockages in his arteries. The insurer (now called Anthem Blue Cross) claimed that when he’d applied for coverage, he’d failed to disclose that he had suffered from heartburn in the past. After canceling his policy, Blue Cross told him he would be responsible for paying $130,000 in medical bills.

Girion wrote later that when her story appeared, in March 2006, “my in-basket overflowed with emails from readers telling me the same thing had happened to them or someone they knew. They all said their insurers had accused them of lying on their applications after they incurred significant medical bills.” Her stories on the practice prompted state insurance regulators and a congressional panel to launch investigations. They discovered that insurers scour the medical records of policyholders who start filing expensive claims, looking for reasons to cancel their policies.

The congressional investigation into the rescission practices of just three insurers revealed that they had canceled nearly twenty thousand policies retroactively over a five-year period after going back to look at the original applications of policyholders who were undergoing expensive care. Rescinding those policies enabled the companies to avoid paying three hundred million dollars in claims. If the investigation had been broadened to include more insurers and had covered a longer period of time, Congress undoubtedly would have discovered that the practice is far more widespread.

In May 2010, Reuters reported that WellPoint, the parent company of Anthem Blue Cross, “singled out women with breast cancer for aggressive investigation with the intent of cancelling their insurance.” WellPoint acknowledged that it had rescinded a number of breast cancer patients’ policies but denied that the women had been singled out. Reuters stood by its story. It noted that WellPoint was one of the three companies investigated by Congress (UnitedHealth Group and Assurant Health were the others) and that the investigation had revealed that WellPoint alone had profited by more than $128 million from canceling policies retroactively, a figure that investigators believed “might be largely understated because the company refused to provide information about cancellations by several subsidiaries.”

When members of Congress asked executives of the three companies if they would end the practice of rescission, they said they would not. That’s because dumping even a small number of enrollees can have a big, positive effect on the bottom line. (It literally took an act of Congress to force the companies to change their policies. It will become illegal under the Patient Protection and Affordable Care Act of 2010, except in cases involving intentional fraud.)

As I mentioned previously, another way insurers get rid of enrollees they no longer want is to dump small businesses when some of their employees’ medical claims turn out to be greater than the insurance companies’ underwriters expected.

All it takes is one illness or accident among employees at a small business to prompt an insurance company to hike the next year’s premiums so high that the employer has to cut benefits, shop for another carrier, or stop offering coverage altogether—leaving workers uninsured. This is the practice known in the industry as purging. The purging of less profitable accounts through intentional rate increases helps explain why the number of small businesses offering coverage to their employees has fallen from 61 percent in 1993 to 38 percent in 2009, according to the National Small Business Association.
5

CIGNA got some very unwelcome publicity a few years ago when it tried to impose such a hefty rate increase on one customer, the Entertainment Industry Group Insurance Trust, that some family-plan premiums would have exceeded forty-four thousand dollars a year.

Jacking rates up so high that customers don’t renew their policies is common. Aetna was so aggressive in getting rid of accounts it no longer wanted after a string of acquisitions in the 1990s that it shed eight million enrollees over the course of a few years. The
Wall Street Journal
reported in 2004 that Aetna had spent more than twenty million dollars to install new technology that enabled it “to identify and dump unprofitable corporate accounts.”
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Aetna’s investors rewarded the company by running up the stock price. Reuter’s investigation of WellPoint revealed that the insurer used a “fuzzy logic” program to help identify policies to cancel. Health Net acknowledged that it had paid bonuses to employees who found policies the company later rescinded.

Insurers take these actions because they want to get rid of risk—policyholders who are costing them more money in claims than they had anticipated. For-profit companies are most aggressive in doing this because of the constant pressure from Wall Street to meet their earnings expectations. After acknowledging in a 2008 conference call with financial analysts that her company had spent more on medical care during the previous three months than the analysts had expected, WellPoint’s CEO, Angela Braly, promised that in the future, “we will not sacrifice profitability for membership.” WellPoint and other insurers have shown, however, that they are perfectly willing to sacrifice their members for profits.

LET THEM EAT CAKE—AND SEND THEM
TO ANIMAL STALLS WHEN THEY GET SICK

When I went back to my job at CIGNA’s corporate headquarters after my trip to Wise County, my mind was in turmoil. I was trying to process what I had seen. I talked to some of my colleagues and even showed them pictures I had taken at the expedition. I was having a very hard time finishing the health care reform document I had been assigned.

The power of my experience in Wise County really hit home a couple of weeks later as I was boarding one of the two private jets CIGNA uses to fly executives around the country. I flew on those jets several times a year. With conference tables, video screens, leather seats, and deep carpet, they make first class on a commercial airliner look shabby. As usual, on this flight, which was taking me to a meeting in Connecticut, a uniformed attendant brought me lunch on a gold-rimmed plate and handed me gold-plated flatware with which to eat it.

My thoughts turned immediately to the people I had seen being treated in animal stalls just days earlier.

A few months later, I saw an article in
Architectural Digest
with a headline reading, “Romancing the Stone: In the Hills of Eastern Pennsylvania Rises a Prototypical French Farmhouse.” Amid a sequence of elegant photos, it described a twenty-four-room mansion inspired by “ancient stones of
la France profonde
” and featuring “an impossibly French” kitchen with a “white-walnut winery sorting table” and a separate “grandchildren’s cottage” of stone columns imported from Europe.