Deadly Spin (14 page)

The reputation of HMOs would never recover. The public came to believe that instead of improving care, as insurers had promised, HMOs and other managed care plans had actually reduced the quality of care in the United States. They were finding that their doctors were spending less time with them during appointments because HMOs’ limited networks meant that network doctors had to take on more patients and, consequently, had to see more patients during a given day than they had in the past. And they were finding that HMOs were forcing doctors to adhere to what many of them referred to as “cookie-cutter” guidelines in delivering patient care. If they didn’t follow the guidelines—or take the time to prove to the HMOs why certain treatments were appropriate for certain patients—they wouldn’t get paid.

In response to the backlash, big insurers launched a major effort in 1998 to put a positive spin on managed care. The companies banded together to finance a front group they named the Coalition for Affordable Quality Healthcare (CAQH). They then hired Goddard Claussen, the firm that created the “Harry and Louise” commercials to help sink the Clinton reform plan, and the Hawthorn Group, a PR firm, to develop a campaign to improve the image of managed care. Knowing that doctors were much better liked and respected than HMO executives, the consultants recruited physicians to appear in a series of ads and commercials to testify why they thought managed care was a good thing for their patients.

The insurers funneled six million dollars into the campaign to counter what CAQH called “misperceptions” about managed care generated by media reports. In its first press release, CAQH said its ads would emphasize the message that managed care “keeps people healthier because it focuses on preventive medicine and provides the same high quality care at lower cost than traditional insurance.” The campaign, it said, “will remind people of why they like their HMOs … It provides the health care you want at a price you can afford.”

Despite the millions spent on the campaign, it didn’t really “move the needle,” as the industry’s pollsters said a little more than a year after its launch.

This was an especially difficult time to be a PR guy for an HMO. I learned to avoid telling people at Little League games and holiday parties what I did for a living. Just saying that I worked for CIGNA was often all it took to get an earful.

I was conflicted. On the one hand, I felt that HMOs were getting a bum rap in the media. It seemed as if every reporter felt an obligation to bash managed care. On the other hand, I was beginning to have doubts that I was on the side of the angels. Defending my company and the industry was beginning to take a toll on me psychologically. For the first time, I started questioning whether for-profit insurers really did play a constructive role in our health care system, as I insisted publicly. But it was all self-talk. I never told anyone I was having doubts. I found that alcohol helped to keep those thoughts at bay, so I drank more than I ever had—although never at work—to keep from dealing with recurring thoughts that I had sold out.

As part of my rationalization, I told myself that at least I was occasionally able to make a positive difference in a few people’s lives. One of my responsibilities, when a health-plan member complained to the media about a treatment or procedure that CIGNA had refused to cover, was to make sure the company’s executives understood what the PR consequences could be if the company didn’t pay. While medical directors always said they would never change a coverage decision based on what the media might or might not do, denials that attracted media attention were often reversed. Whenever that happened, I took some satisfaction in thinking that I might have helped save someone’s life.

I came to realize that many of my fellow employees engaged in the same kind of self-talk to get through the day. They were good people who had families and needed to keep their jobs just as much as I needed to keep mine. We told ourselves that for every horror story we heard, there were many more success stories, many more cases in which CIGNA paid hundreds of thousands of dollars for urgently needed care. And, we reminded ourselves, the media cover the few big wrecks on the freeway, not the thousands of people who make it home safely every day. To remind CIGNA’s customers of that, my staff and I began producing a newsletter called
Proof That’s Positive
. It consisted of anecdotes about people whose health had been improved and whose lives had been saved because their insurance company—CIGNA—had been there for them in their time of need.

My newsletter didn’t seem to move the needle any more than the CAQH campaign. The backlash from members and the unrelenting negative publicity eventually forced insurers to loosen some of their coverage guidelines and restrictions and to broaden their networks of providers. Employers, fed up with complaints from their workers, pressured insurers to design “mixed model” benefit plans, like PPOs, that allowed enrollees to go out of network if they wanted to.

There is no shortage of irony here. Insurance industry executives contended that if the government would just get out of the way and let the invisible hand of the market work, managed care plans would reduce the number of people without coverage, improve quality of care, and be a permanent solution to rising health care costs. The promise was that the techniques of managed care would make government intervention into the financing and delivery of care unnecessary.

The invisible hand did work, but the results were the exact opposite of what the insurance industry executives had promised. When the marketplace responded, insurers had to sacrifice many of the very techniques that had briefly enabled them to control costs.

Rather than admit responsibility for the failures, insurance executives pointed the finger of blame at their customers, the “consumers” of health care, and, of course, the providers of care. In introducing the concept of their new silver bullet—consumer-driven health care—insurance executives claimed that the “real drivers of health care costs” (one of my CEO’s favorite expressions) were the people who sought care when they really didn’t need it and the doctors and hospitals who were all too willing to provide this unnecessary care. Sure, the aging population and expensive new technology were also factors, but the main culprits were people who just didn’t realize how expensive health care had become.

There was one “mistake” that insurers were more than willing to admit to making, and this was that they had been charging HMO members way too little. Those modest ten-dollar copayments that once had been the centerpiece of HMOs’ marketing strategies actually made Americans irresponsible consumers of health care. “What didn’t work in managed care was that we separated the consumption of care from the cost of care,” Hanway said at the CIGNA Consumerism Forum. “People didn’t care what things cost anymore.”

Hanway, who left CIGNA in 2009 at age fifty-seven with a $111 million retirement package,
3
was a leader in what Yale University political science professor and author Jacob Hacker calls the “personal responsibility crusade”—a euphemism for pushing risks, and costs, formerly borne by institutions onto individual Americans.

In his 2006 book,
The Great Risk Shift
, Hacker wrote that consumerism was part of that crusade, which grew during the administration of George W. Bush when Washington was “abuzz with discussions of Social Security privatization, Medicare reform, Health Savings Accounts, and scores of exotic new tax breaks to encourage families to set up private accounts to deal with economic risks of their own.”
4

Hanway, who gave ten thousand dollars to the Republican National Committee in 2003 and hosted a fund-raiser for John McCain during his bid for the presidency in 2008, rarely missed an opportunity to connect with his new personal-responsibility spiel. “The concept of consumerism … engenders personal accountability,” he told corporate-benefits managers in a 2004 speech in Washington.

Another leader of the crusade was John Rowe, former chairman and CEO of Aetna, who left with a golden parachute of his own. “We are giving people some skin in the game,” Rowe told financial analysts in 2002. Having people put more “skin in the game,” Hacker wrote, is what the personal-responsibility crusade is all about. And the crusade leaders are well-paid CEOs and politicians.

DRINKING THE KOOL-AID

Consumerism in health care actually started in 1996, when the Republican-led Congress passed legislation creating a pilot project to encourage Americans to open medical savings accounts. The response was underwhelming. The bill’s sponsors had hoped that 750,000 people would open such accounts, but only about 100,000 ever did.

Then in 2002, the IRS gave a new lease on life to what insurers would soon market as “consumer-driven care” when it ruled that the personal-spending accounts associated with these plans (called health savings accounts, or HSAs) were tax-exempt. The effect of that ruling was to turn HSAs tied to high-deductible, “consumer-driven” plans into tax shelters for people who made enough money to sock some of it away every payday. Proponents of HSAs argued that by spending their own money for care instead of relying on an insurance company, people would become more prudent “shoppers” of health care.

During the recent debate on health care reform, Republicans in Congress and other allies of the insurance industry said that Congress should scrap the Democrats’ reform legislation and start over. When President Obama asked Republicans during his February 2010 bipartisan summit on reform what ideas they had to solve the country’s health care crisis, Senator John Barrasso of Wyoming said that Congress should do more to encourage people to set up HSAs, which by law can be used only with high-deductible plans.

“John,” Obama replied, “members of Congress are in the top income brackets of this country, and health savings accounts, I think, can be a useful tool, but every study has shown that the people who use them are folks who’ve got a lot of disposable income. And the people that we’re talking about don’t.”

Obama was right. Just about every credible study has concluded that high-deductible plans are best suited for relatively young and healthy people who have a few dollars left over after they pay their bills. For the rest of the population, they frequently turn out to be a very bad deal.

At a leadership retreat I attended a few years ago, a vice president of a large insurer was trying to explain the benefits of consumer-driven care to about one hundred of his colleagues who were hearing about their company’s consumerism strategy for the first time. He was having a hard time convincing them that consumer-driven plans would be good for certain segments of the population.

He was peppered with questions about how the plans could be a good deal for people with chronic conditions and people who didn’t have extra money to put in a savings account or otherwise meet high deductibles. After about thirty minutes of nonstop questions, he finally said, “Look, you’re just going to have to drink the Kool-Aid.”

That was the end of the Q&A.

HYPE THIS, HIDE THAT

Knowing that studies on the underinsured like the ones from the Commonwealth Fund and the Center for Studying Health System Change would slow—if not halt—the trend toward consumerism, the big insurers began churning out their own “store-bought studies” to counter reality. As head of corporate PR, I was expected to hype CIGNA’s proprietary studies—so from the very first such study, in 2006, our objective was to create the impression that a vast majority of enrollees were saving money and leading healthier lives.

A February 2, 2006, news release we sent out claimed that CIGNA’s analysis of 42,200 of the company’s first-time users of consumer-driven health plans—who were compared with users of HMO and PPO plans—found that they “generated an 8 percent reduction in medical costs” and “made positive changes in their behavior,” such as increasing their use of medications to treat chronic health care conditions.
5

The release quoted Michael Showalter, CIGNA’s head of consumerism, as saying, “These study results show that given greater choice and control, the right incentives and actionable decision support, CIGNA Choice Fund [a consumer-driven plan] members are becoming more involved in their health care and health care decision-making, while not compromising needed care.”

This release, however, omitted important information that actually reinforced the studies it was seeking to refute. One thing not revealed in the release was that the CIGNA Choice Fund group was younger than the comparable HMO and PPO groups; another was that the CIGNA Choice Fund group had a 20 to 25 percent lower “illness burden.” In other words, the CIGNA Choice Fund group was younger and healthier than the older, sicker people who had stayed in their HMOs and PPOs. (In fairness, this information was provided in the appendix to the study, on page 17, deep in the Study Methods section.)

And then, there was this: While the news release claimed that people who switched to a Choice Fund plan realized cost savings “across all categories, with the most pronounced savings occurring among medium and heavy users of care,” a more detailed analysis on page 8 of the study showed that heavy users actually fared worse. A graph on that page showed that the heavy users of care in the Choice Fund plan (those with medical claims of eight thousand dollars or more per year) actually paid
more
out of pocket than if they had been in traditional plans.

Because a business communications staffer had written and disseminated the release (my corporate PR team and I didn’t have to approve all of the business units’ communications), I hadn’t noticed these differences between the study and the news release until after it had been sent out. While this certainly wasn’t the first time in my career that I had seen or been at least partially responsible for the selective disclosure of information to support a particular point of view, it was the first time I became concerned that my colleagues and I might have crossed what for me was an ethical line. I began to think about my days as a reporter, when I’d felt it was my duty to make sure that the stories I wrote were factual and honest. Had I become the antithesis of what I’d tried to be as a journalist?