Wendell Potter's Defection From Health-Care Industry PR

Former Knoxvillian was one of the health-insurance industry's top fearmongers—until he decided to blow the whistle.

The name Wendell Potter has begun to pop up here and there in the national media and in political debates, almost like a metaphor. The former health-insurance insider testified before the Senate about his industry's influence on public policy in 2009, and two months ago released a book, a personal memoir of the life of a health-insurance-industry flack, offering an unusual glimpse into the inner workings of an effective propaganda machine.

Deadly Spin—so named because of Potter's allegations that insurance-industry policies result in 45,000 unnecessary deaths each year—is causing a stir. Sen. Jay Rockefeller praises Potter's "extraordinary courage," calling his story "essential reading for anyone trying to understand the American health-care system." Publisher's Weekly raves "Potter's street cred and deep knowledge of the industry make his indictment unusually vivid and compelling." Writing in The New York Times last week, Dr. Pauline Chen, a noted transplant surgeon and author, praised the book as "an evenhanded yet riveting account of the inner workings of the health-care insurance industry, a cautionary tale that doctors and patients would be wise not to miss."

Deadly Spin dissects corporate health-insurance publicity that has influenced the public health-care policy debate for 20 years. Potter claims insurance companies were deliberately responsible for twisting the public dialogue of the health-care debate, secretly backing "grassroots" organizations of citizens angered and mobilized by exaggerations and distortions. He includes, specifically, the tea party movement as a spawn of insurance-company propaganda, quoting figures concocted by insurance-company consultants. He cites some specific rhetoric concerning "death panels" and "government takeover" and "socialism" as useful parts of an anti-reform "playbook." He knows, he says, because he wrote some of that playbook himself.

As the top publicity executive for CIGNA, one of the giants of America's health-insurance industry, Potter was, until his quiet resignation in 2008, one of the industry's chief propagandists in the fight against sweeping health-care reform.

He writes, "if you are among those who believe that the United States has ‘the best health care system in the world,' despite overwhelming evidence to the contrary—it's because my fellow spinmeisters and I have succeeded brilliantly at what we were paid very well to do, with your premium dollars. In fact, the United States ranks 47th in life expectancy at birth, behind Bosnia."

It's a national story. CIGNA is based in Philadelphia, where Potter has lived for most of the last 20 years, and his book is national in scope—even international, as he outlines the surprising history of public health-insurance initiatives. But in his book, East Tennessee keeps cropping up. When he talks about anti-reform politicians who use rhetoric written for them by the insurance industry, he brings up former Congressman Zach Wamp.

Potter underwent, at age 56, a wholesale conversion, partly as a result of a startling spectacle, not too far from here, that as he describes it today sounds almost Biblical.

By now, the author's name may be ringing a bell. He made Knoxville one of the first stops, deliberately, in a national book tour that commenced two months ago. Potter once lived here. A quarter-century ago, Knoxville newspaper readers would have recognized his name for his association with other dramatic events, like a gubernatorial campaign, a World's Fair, and the collapse of a major bank.


Wendell Potter grew up rural in Johnson County, in the extreme northeastern corner of the state. His father was a farmer and country grocer and sometime factory worker; their family home lacked indoor plumbing. Potter came to Knoxville in 1969 to attend the University of Tennessee. By his senior year, he was editor of The Daily Beacon. Potter studied both journalism and public relations. In the book, he cites Sammie Lynn Puett as an influential mentor. (Puett, prominent at UT and Knoxville at large—her name is listed on the plaque on the front of the Tennessee Theatre, as a key supporter of its major renovation—died in a car-pedestrian accident in 2002.)

On the phone from his home in Philadelphia, Potter sounds relaxed and friendly, and speaks in even tones—some have described him as "fatherly"—as he recalls his youth at UT.

He remembers Puett, in particular, fondly and vividly. "She was striking in the way she presented herself, that incredible red lipstick she always wore, and a beehive of a hairdo. It was all strangely out of character." She was a serious scholar of public relations and "quite a disciplinarian."

He gives her credit for trying to show him the right way to be a publicist; in the book, his description of her foreshadows what was to come. "Not once during that time did I get any training in how to set up a front group or mount a deception-based, fearmongering campaign for a client.... [I]t never dawned on me then that I would do anything of which Puett would disapprove."

Though he'd concentrated on public relations, newspaper reporting was beginning to seem heroic in the wake of Watergate. After graduation, Potter found work writing for the Memphis Press-Scimitar and then, for two-and-a-half years, as Washington correspondent for the Scripps-Howard News Service. During that time, the News Sentinel ran his Washington legislative column. Union County banker Jake Butcher liked his column, and with the encouragement of one of his associates, former UT student-government president Karl Schledwitz, offered the 27-year-old Potter a position as PR flack for his 1978 run for governor.

Potter grew up in an all-Republican family, and says Howard Baker press secretary Ron McMahan offered him a job as assistant press secretary for the senator, then the Republican minority leader. But the Democrat Butcher offered him a higher position—the main flack—and a chance to return to Tennessee. He took the job.

He remembers driving his '74 Mustang up to the Butchers' country home, Whirlwind, on a day when the entire family seemed to be there for a photo shoot. "They were just warm, country people, to a big extent, with little pretense that I could see," Potter says. "Of course, the house was pretty showy, and they did entertain there a lot."

He describes his experience with the Butchers in a sub-chapter called "An Intro to PR Like No Other." In the book, Potter acknowledges that it's probably a good thing Butcher wasn't elected governor, but in 1978, he says, Butcher seemed "charismatic, attractive, personal—I thought he was a fair, level-headed fellow who would be good for the state. Coming from a part of the state that's not very wealthy at all, I thought that he could make a difference creating jobs."

After the narrow loss to the young Lamar Alexander, Butcher still nurtured political ambitions, and urged Potter to stay with him. Butcher offered him work in public relations for United American Bank, which had just occupied the new, glassy, Plaza Tower, East Tennessee's tallest building. "Soon I was pretty much on loan from the bank to the World's Fair," he says. He and Butcher traveled the world, to Egypt, Peru, Switzerland, recruiting nations to participate in a fair in a city many had never heard of. Potter's role was working as the detail man, trying to accommodate each nation's specific needs, in terms of pavilion square footage and accessories.

"It was just kind of a heady experience," he says of his years based in Plaza Tower. Through Butcher he got to know members of the Jimmy Carter presidential administration with whom Butcher was chummy. Potter spent a lot of time in Washington, lobbying for appropriations for the Fair, including money for construction of the U.S. Pavilion.

"I knew the delegation very well, especially John Duncan (Sr.)," he recalls. "I met Lou, who was working for Duncan as a legislative assistant." Daughter of a former Vol football player who later coached at Central High School, Lou Lloyd was from Fountain City, and part of her job was drafting letters for Duncan to sign.

Part of Potter's job was writing letters for Butcher's signature. "I realized I was writing letters to Lou, and Lou was writing letters to me." They married and moved into a modest house in Sequoyah Hills. They've been together now for about 30 years.

"It was an amazing time," Potter says of the Fair era. In the book, he calls the Fair "a six-month blast. I wrote speeches and press releases for Butcher, but mostly just had a great time hanging out with the Australians and Peruvians and Egyptians."

Butcher's spectacular collapse came three-and-a-half months after the Fair, when federal agents descended on the bank and discovered what they expected, that Butcher and his bank had been illegally concealing major problems, including the fact that they were out of money. Butcher himself spent seven years in prison on bank-fraud charges.

"I didn't know much about the banking operations at all," Potter says. "I knew nothing that was going on at the bank. I'm sure people might find that hard to believe."

Potter liked the Butchers, but sympathizes with those who haven't forgiven them. "I understand a lot of people lost a lot, life savings and jobs. I didn't have a lot of life savings to lose, but I lost my job, too."

Still a young man of 31 during the fall of the Butcher empire, Potter for a while considered writing a book about the Butcher years. Those dramatic times have been the subject of a couple of books, both fiction and non-fiction, but Potter says the story he had in mind has yet to be published.

Potter first moved to Atlanta to try to start a PR firm of his own, but his mother-in-law's illness brought him back to Knoxville. After a stint with the then-new medical-tech firm Digital AV, he took a job as head of publicity and advertising for Baptist Hospital. "They wanted to improve their image," Potter says. "It was my first real job in health care. The hospital had its own HMO. It was the first time I'd ever heard of an HMO, that I recall."

He represented Baptist for most of the '80s, until a former UAB president who worked as an executive for Humana, the large health-insurance company, offered Potter a lucrative position at their Louisville headquarters. In 1989, Potter left Knoxville and entered the national health-insurance business. He did his job well, and became head of communications.

In the introduction to Deadly Spin, he refers to the entire health-insurance industry as "what I consider now to be an evil system sustained on greed."


It didn't seem particularly evil, right at first, he says. "It was kind of a gradual thing, kind of a drift in certain regards. I came to accept that PR was an effort to see things in a certain light. I didn't have a problem with that in college."

At UT, he says, he was taught that publicity professionals were employed to facilitate a "two-way communication."

"In the real world, it's a one-way communication, an attempt to influence and persuade," he says now. "It became clear to me that there was quite a difference between for-profit and non-profit institutions." Baptist Hospital was a non-profit. Health-insurance companies that paid him well were for-profit. "Certainly non-profit organizations have to make ends meet. But they don't have the relentless pressure from shareholders to make a profit. There's a big difference in accountability, in my view. Non-profit hospitals feel accountable to their communities. That's not true with for-profit hospitals—and insurance companies."

Potter worked for for-profit insurance companies for almost 20 years. In the early days, he was idealistic about it. He moved from Humana to the larger corporation called CIGNA at a dramatic time for the health-care industry.

"I was quite proud to be a part of the effort to make sure the Clintons' vision of reform would never be realized," he says in the book. "At the time, I was still a true believer in both the concept of managed care and the idea that the free market could work in health care if the government would just get out of the way. It never occurred to me that fearmongering and fake grassroots initiatives were anything to get worked up about, because they were being used to defeat a reform plan that I thought would be bad for the country—and for the companies that enabled me to pay my mortgage."

If he had misgivings about much of what he was being paid to do, he says, he found reasons to rationalize it. Though his six-figure salary put him well ahead of most Americans, he says his motivations weren't very different from those of any family man with a job.

"It was no different from other people who have mortgages and cars," he says. "You're in debt, you have to make ends meet. I never got to the point that I didn't have to worry about that."

"And you become part of the machine, as well. There's a competitive culture. You want your insurance company to win in the marketplace, and that becomes ingrained in you. That becomes really all-important. You want to do whatever you can do to meet Wall Street's expectations. There are very unpleasant consequences if you don't."

The book is partly a tale of the industry's waste and excess, and the lavish excesses of the dozens of executives who receive more than $1 million a year in salary and bonuses.

Potter prospered materially, and by 2007 was the top publicist for CIGNA, one of America's largest health-insurance companies. By the time he arrived at the top, he says, he gained some perspective.

Over a period of two years, from 2007 to 2009, Potter says insurance companies and HMOs spent $586 million, derived from customers' premiums, in political contributions and lobbying expenses, most of it to attack health-care reform.

Perhaps the height of that absurdity was the insurance industry's frantic response to one motion picture. Long before the popular release of Michael Moore's pointed but sometimes loony documentary Sicko in 2007, insurance companies were making elaborate preparations for a response. "The campaign [against Sicko] cost hundreds of thousands of dollars, all of which came from premiums paid by health-plan members, but industry executives felt this was a good and appropriate use of those premium dollars."

"There's an enormous amount of rationalization that goes on. We say, ‘We provide care for 10 million, or 20 million, or 30 million.' And most of the time, those people are well served, and most of us think our coverage is good and adequate. But we don't think so much about disasters." People who aren't catastrophically ill don't think much about health insurance; people who are catastrophically ill are generally too distracted, often by the prospect of dying, to complain.

As wasteful and tyrannical as critics say a government-controlled health-care system would be, Potter claims it's already that bad, and often worse, at the hands of the private insurers he used to work for. "We have had a corporate takeover of health care, which in my view is worse than a government takeover. People aren't aware that a bureaucrat is between them and their doctor," deciding what will be paid for, often in life-and-death situations. "Death panels indeed do exist," he says. "They exist within corporations." Much of the book is taken up in describing one especially tragic example.


That extreme public-relations challenge landed on Potter's desk in 2007, and played a major role in prompting his extraordinary career change. A teenaged girl from California, suffering from leukemia, was recommended for a liver transplant. CIGNA declined the pricey claim, arguing that the surgery was "experimental," a response which, it turns out, is often used to excuse an insurancy company from paying for expensive procedures. When the case became public, at a delicate time early in the health-care debate, CIGNA reversed its decision, but too late: the girl died without having had the operation. Potter says CIGNA sent a "spy" to her funeral to gather information that might be useful to the company's intelligence.

That case was apparently one of many involving the private-insurance industry's status-quo equivalent of "death panels," but it coincided with an incident in Potter's life that was perhaps even more surprising. In summer 2007, Potter was visiting his parents in Kingsport when he heard about a three-day "health fair" nearby, in rural southwestern Virginia. It was the annual visit of Knoxville-based Remote Area Medical, a charitable non-profit founded by English-born philanthropist Stan Brock, once best known as the intrepid young adventurer on Mutual of Omaha's Wild Kingdom. He started RAM originally to deal with health crises in Third World countries, but found much work closer to home—RAM has become known for its work in Guyana, Haiti—and the Southern Appalachians.

Curious, Potter had a look. In his book, he describes the scene at the Wise County Fairgrounds as "surreal. I felt as if I'd stepped into a movie set or a war zone. Hundreds of people... were waiting in lines that stretched out of view.... I noticed some of those lines led to barns and cinder-block buildings with row after row of animal stalls, where doctors and nurses were treating patients." In that circumstance, volunteer doctors were cutting out skin cancers and conducting tests, including sigmoidoscopies, usually conducted—for Americans, at least—in hospitals. The RAM weekend treated hundreds, but in the end had to turn hundreds away.

Potter saw Americans converging on this fairground, waiting all day just to be treated in animal stalls. He seems especially impatient with the truism, once part of his stock in trade, that America has the best health care in the world. In the book he cites figures holding that in terms of "fairness"—that is, the extent to which health care is equitably available to all citizens—the United States ranks 54th, behind Bangladesh.

"As I took in the scene at the Wise County Fairgrounds, I realized that the folks in those lines and animals stalls could have been my relatives or my parents' neighbors," he writes. "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."

A few months later, he quit that job. He left CIGNA quietly in May 2008.

Some might wonder why he didn't quit earlier. One reason was personal. Both his children are grown—Alex and Emily Potter, who were born in Knoxville, are now in their 20s, and no longer dependents.

It also sounds as if the situation got much worse during the last 20 years. Though he and other insurance flacks have insisted insurance rates merely reflect rising medical costs, between 2000 and 2008, he says, insurance premiums for group plans almost doubled, rising at a rate two-and-a-half times faster than that of medical inflation, and 4.6 times faster that of general inflation, all while insuring fewer people. Partly by jettisoning unprofitable policyholders, a group of five companies, including Wellpoint, UnitedHealth Group, Aetna, Humana, and CIGNA, was insuring 2.7 million fewer Americans in 2009 than the previous year. Potter says their combined profits in 2009 totaled $12.2 billion, up 56 percent from the previous year.

Somewhere else, a recession was going on, but, Potter writes, "It was the best year ever for big insurance." At the same time, Potter says, the proportion of insurance revenue spent on actual patient care fell from 95 percent in 1993, the year he started at CIGNA, to 81 percent in 2007.

For months, Potter laid low, but in early 2009, he grew frustrated with the distorted representations of the issues, and especially with the assumption that insurance companies might favor reform. Part of what prompted him to go public was watching a television interview with then-Tennessee Congressman Zach Wamp, explaining away the 45 million Americans who lack health insurance as largely a matter of choice, and alleging that illegal immigrants were abusing health insurance.

"As I listened to Wamp's rant," Potter later wrote, "I knew exactly where he'd gotten his talking points: from me.... I was dismayed to hear Wamp's demagogic remarks—and not just because I'd had a hand in writing his script, but also because I know his district well." He says Wamp's Third District includes many underinsured people, with high percentages who can't afford health insurance. "Yet the Third District's representative—contrary to the best interests of his constituents—was saying exactly what the insurance industry wanted him to say."

The book comes down hard on Republicans, who might suspect Potter's politics. "I strongly supported George Bush in 2000. I was very persuaded by his commitment to ‘compassionate conservatism'" he says, and adds, "I considered myself, and in many ways, still do, a conservative. But I don't label myself anymore. I'm not ideological, not political, not partisan." But he says the politician he admires more than any other is Republican former Sen. Howard Baker.

In June 2009 Potter testified before the U.S. Senate. "My name is Wendell Potter, and for 20 years, I worked as a senior executive at health-insurance companies, and I saw how they confuse their customers and dump the sick—all so they can satisfy their Wall Street investors."

Though Time magazine called him "the ideal whistle-blower," his appearance got only the usual news coverage.

Then he wrote a book. Deadly Spin came out in November 2010, just after the mid-term elections. "It was frustrating. I had hoped my book would come out before the mid-terms. The publisher thought it would be better to wait."

What's his old employer's response? "The industry is doing what I would have advised them to do. That is, to ignore me, and to say as little as possible. They don't want to give me another day of media exposure. They've never agreed to have anyone appear on stage with me. I've said many times I would be willing."

The book is especially critical of Karen Ignani, the insurance guru who earns a seven-figure annual salary for leading what Potter calls a "duplicitous campaign" based on fearmongering. She seemed to agree to appear with Potter on CNN, but then backed out.

While the top dogs are mum, he says "lots" of his old colleagues have been in touch, agree with his points, and are quietly rooting for him. "It's hard for me to believe what I did," he says. "It's very frightening. I understand why people don't think they can do that."

About the health-insurance reform act, Potter says he's glad it was passed. "I think it was important to pass it, despite the fact the insurance industry got the two things it wanted out of the legislation: that is, the requirement that everybody has to buy health insurance, and the absence of the ‘public option,'" the once-promised government-run health plan in competition with private insurers. "But it has a lot of consumer protections in it," Potter says. "It helps more people get coverage. It will do a lot of good. I see it as the end of the beginning of health-care reform. We needed to get something, and it was a start."

He's currently on a national tour, promoting his book. For most of his time since giving up his salary almost three years ago, he's held an unpaid position as a senior fellow with the Center for Media and Democracy.

He'll soon be accepting a job with the Center for Public Integrity, in Washington, D.C. "I'll be a paid journalist again, believe it or not," he says.

Potter, who cites figures that say 45,000 Americans die yearly for lack of health insurance, believes meaningful health-care reform is inevitable. For now, he's telling his story—he was in a swing through the South last week, in Atlanta, Miami, Austin, Raleigh, Nashville—to mostly receptive audiences. He'll be in Memphis on Thursday, and Chattanooga on Friday.

"Our health-care system is complicated, so complex it makes your hair hurt," he says. "It was a challenge to write the book."

He concluded the text with this coda. "We will never be free of spin, but we can be wise to it, and we can push back against it. There is too much at stake not to try."