Friday, July 11, 2014
Inquirer Daily News

Potter vs Hanway: Cigna rebel tells all in book

Former Cigna spokesman Wendell Potter's book Deadly Spin shows how Cigna's Ed Hanway and other insurance bosses manipulate public opinion and pay themselves millions to prevent national health care

Potter vs Hanway: Cigna rebel tells all in book

Wendell Potter's years as chief spokesman for Cigna, the Philadelphia-based health-insurance giant, ended by making Potter sympathize with people who support nationalized health care.

In his new book, Deadly Spin, Potter tells the history of public relations - "corporate propaganda as a means of protecting corporate power against democracy" - and how it made him comfortably wealthy, before a visit to an overcrowded Third World-style medical clinic near his doctor-poor Appalachian hometown started a crisis that led to his turning against his corporate masters.

He also tells the 80-year story of plans to reform America's innovative but complex and raggedly uneven healthcare system, stymied at every turn, he argues, by organized greed and covered by smooth doublespeak, by well-paid lobbyists like Karen Ignagni, whose journey reads like Potter's in reverse: A former union bureaucrat, she's now the relentless frontwoman for America's Health Insurance Plans, the industry's lobbying group, which promises reform while fighting hard to stop it and discrediting critics like Sicko filmmaker Michael Moore.

Potter shows then-Cigna chairman Edward Hanway's leading role in "a multi-milllion-dollar public relations and advertising campaign" in the run-up to the 2008 presidential election, designed to "divert the public's and the media's attention" away from the central fact of millions of uninsured and underinsured sick people, toward other problems that were harder to blame on insurers: aging Americans, extravagant doctors, expensive technology, and consumers demanding costly operations they don't need.

Hanway left the company in 2008, at age 57, "with a $111 million retirement package" of stocks and cash, Potter writes. By then, Potter himself was gone.

Potter traces his final break with Cigna to the 2007 death of Nataline Sarkisyan, a sickly California teenager who Cigna initially turned down for a liver transplant. Her doctors protested, claiming to Cigna she had a nearly a two-thirds chance of living five years with the operation. But Cigna "was not persuaded that there was enough documented evidence" the operation "would be appropriate."

Potter shows he and Cigna were defeated by the family's intense publicity campaign, backed by the California Nurses' Association and other influential groups. As Potter's office was overwhelmed. Hanway asked then-Cigna Healthcare president David Cordani to weigh the costs and benefits of reconsidering. Cordani agreed that Cigna should pay for the operation. Potter calls it "the right decision, but a little too late." Sarkisyan died before doctors could operate. (Cordani now runs Cigna; while Hanway occasionally met with reporters, Cordani won't even let the press into his annual shareholder meeting.)

Over beers with his pastor, Bill Golderer of Center City's Arch Street Presbyterian Church, Potter told me he hasn't talked with Hanway since Potter's public break with the company, his pro-reform testimony in Congress, and his book have made him modestly famous. Cigna declined to comment on Potter or his book.

After Sarkisyan died, Cigna hired Apco, the public relations spin-off of Washington law firm Arnold & Porter, to deal with the public relations fallout. Hanway met regularly with Apco agents,  top Cigna lobbyist William Hoagland (a former aide to Sen. Bill Frist, R-Tenn.), and Karen Ignagni of America's Health Insurance Plans to oversee recruitment of "conservative think tanks, big-business organizations" and other insurer allies to convince "the media, politicians and the public" that national healthcare wouldn't have saved the dead teen.

Cigna was professionally pleased by Forbes' resulting story, "Does Cigna deserve all the blame?" by reporter David Whelan. Potter write that Whelan "left out a quote I was praying he would not use:" Cigna medical director Jeffrey Kang's admission that companies like Mercedes-Benz, which employed Sarkisyan's father, will switch insurers if one agrees to pay too much in claims, boosting the company's costs.

(Though it's based here, Cigna has few local customers; the Inquirer wrote about Cigna's shrinking employment base and business reversals, but seldom about its healthcare decisions, preferring to cover Independence Blue Cross, the rival, mostly for-profit insurer that dominates the local market.)

"We also got lucky with the Wall Street Journal," where reporters Laura Meckler and Vanessa Fuhrmans wrote a story that was "closet to perfect from our point of view" by accusing Democrats of "oversimplifying" Sarkisyan's story. The Journal also gave an American Enterprise Institute commentator space to use the girl's death to bash the idea of a national health care plan.

It was then, Potter writes, that "I had had enough."

Potter doesn't engage an obvious question: Would wiping out Cigna's $100 million CEO parachutes and billion-dollar annual profits make it possible to transplant livers in all the Nataline Sarkisiyans, including those whose families weren't so PR savvy?

No, there is not enough money in the world to pay for all the longshot lifesaving operations we might perform. The death panels are always out there; there is an end to dollars; someone eventually has to say No, whether paid by the people or private industry.

But cutting out the profit motive from an industry that can't afford it would, Potter clearly believes, be a step in the right direction.

Soon after, Hanway left the company, at age 57, "with a $111 million retirement package" of stocks and cash, Potter writes. While Hanway gave the occasional interview to trusted reporters, his successor, David Cordani, hides from the press.
Joseph N. DiStefano
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PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

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