>> this week on bill moyers journal. moyers: what stands between you and healthare reform? >> t business that they are in is health care, certnly, but ep in mind that what they wa to do is enhance theirrofits. >> moyers: an insider lls it like it is stay tuned. captioning sponsored b public affai television

>> mers: welcome to the journal. the biggt medical drama on our tv screens this summer is no reruns of "house" or "grey anatomy." it's a high stak, life-and- death ectacle inside and outside e halls of congress, as lmakers attempt open heart surgy on that most fragile and stubborn of patients, heth care reform. on a bright summer d, these ousands of people have traveled to washinon from all arou the country. th're here in good spirits, on a serious mission. >> senats and congress people around ts land, it's time you stened to our demands.

♪ hear our voice, we want choice, ♪ we've come re today to make lots of noise! ♪ we nt... we want heth care! ♪ we want... we want health car we wt it now! >>oyers: they represent some 72% of allmericans who have told pollsters thewant health care refm to include a public insurance option that compet with private pla. many here are from the fnt lines, nurses li anita kuennen. >> evething is at stake from the perspective of proving healthca. when people can't affo insurance, when th can't provide or afford, you know,o get care for themselves, is a continuous lp. from a public health perspeive, the fact that we have such or outcomes in this country, it's ominable. >> moyers:here were doctors on the march. >> a lot opeople say america has the best healthcare syst. d in many ways we do. we have the be hospitals, we have good training. we have so much good equipme.

we have all thmedicines. we do all of the good search. and the fact there's so ny ople in this country... this is america. it's n okay for so many people in this country t to be able to get healthcare. >> this our best chance. we hen't had a chance like this in decades. and so we're hopinthat legislators put in a refm bill that does lo at quality of ca, that does look at cost and cost ctainment, d basically what best for our patients. >> what do you want? healthare! when do you want it? now! >> moyer reform's high on the enda of organized labor, too >> the probl is the skyrocketing cos of healthcare is making it..the ability for our employers to provide ito us is coming more and more difficult. it w only about ten years ago, when i was represeing groups in connecticut, the sts they were asking us to pay re 2%, mae $10 a week. didn seem like a big deal. but re we are ten years later, and they're asking for 1, 20%. we just can't affordt. it's time for health car reform. it has to happen n.

>> moyers: even people connt with their current covere but concerned about the fure were demandinreform. >> i have a very good an right now. but with one whip stitch, i could lo it all through bankptcy, through a job loss, througa medical injury or some tragedy. and i could be died coverage. we need a publ option where... that'll bring trueompetition and bring these people in li. do you think big pharmy and big insurance going to put anything on e table unless th are afraid? because they've d a lock on it fover? no, they're t going to give it up. we've got to takit from them. >> moyer this is where protesto hoped their voices would penetrate-- thinner sanctum of the citol. here, a congressiol subcommittee investigated e twisted tactics ed by health insurance companies dump customers and stk them with the bills. it's a praice known as reciion.

>> in may 08, i went to a dermatologist for acne, pimps. a rd was written down on my chart, which was consided to mean precancerous. in june 2008, was diagnosed with invasivher-2 genetic breast cancer, a very aggresve form of this ccer. i needed a double mastecto immediately. blue cross and blushield pre- certified meor my surgery and for a hospital sta the friday before i s to have my double mastectomyblue cross and bl shield called me by teleone and told me that my charwas red-flagged. >> moyers: red-flagg. the insurer ed inadvertent omissions on her original application-- data tt had nothing do with her current condition-- asn excuse to canc her health policy. without that insuran, she couldn't have e cancer surgery at she needed. >> i was frantic. i did noknow what to do.

i didn't know how to pay f my surgery. e hospital wanted a $30,000 posit. i was by myself. i didn't have that kinof money. >> moyers: in despair, robin beaton turd to her texas congressn, joe barton. his staff tried and got nowhe, unl barton picked up the phone and called t president of texas blue cross directl but mont were lost. >> my tumor grew from o to the centimeters all the way to seven. i had to have all my lym nodes moved in my arm, everything. delay in cancer eatment, it ly worsens the condition, costing more to treat, and treatment is much more intensive. so, the outcome is not as good. i think a company does have the right to make re that there's no fraulent information, but it'obvious to me, if a cizen acts in good fah, we should expect the inrance companies that take

thr money to act in good faith also. >> moyers: unfortunaly, it's not thatasy. the committee found otr insurers pulling the sam tricks. over the past five years, th coanies-- assurant, golden rule a wellpoint-- had cancelled 20,000 indidual policies. michigan congressman bart upak asked thr executives if they woulchange their ways. let me ask each of our c.e.o.s this questn, starting with youmr. hamm-- would you commit tod that your company will never rescind another licy unless there was tentional fraud, fraudulent misrepresentation the applicatn? >> would not commit to that. >> how about you, mrcollins? would you commit to not to rescind any licy unless there is an inteional fraudulent srepresentation? >>o, sir. we follow e state laws and gulations. and we would not stipulate t that. at's not consistent with eac state's laws. how about you, mr. sassi? would you commit that ur company will never rescind another policy unls there wa an intentional fraud, misrepresentation?

>>o, i can't commit to that. the intentional andard is not the law of theand in the majori of states. >> dsn't it bother you that people are going tdie, because yoinsist on reviewing a policy thatomebody took out in good ith and forgot to tell you that they were bei treated for acne? doesn't that bother yo >>es, sir, it does. and we regret the necessity at that has toccur even a single time, and we've madeuggestions th would reform the system such that at would no longer be neede >> mers: with the new push for reform, alth industry rporations are now pledging clean up tir act without government intervention. th'd stop charging women higher premiums th men. and, don't worry, a coalitioof the pharmaceutical, medil, hospital, and health iurance dustries told president obam in may, they'lbring those soaring costs down vuntarily. "tst us..."

>> these groups are voluntary coming togetr to make an precedented commitment. over the next ten ars, from 2010 t2019, they are pledging to cut the rate of gwth of national health care spendinby 1.5 percentage points ch year, an amounthat's equal to over $2 trillion. >> moyers: but before the ek was out, those hlth care c.e.o.s were bkpedaling, suggesting that, perhaps ihis enthusiasm, e president had erstated. ey hadn't agreed to hit the trillion target, butver time, they might aim at it. in the meantime, theare rking relentlessly to kill o efforts tonclude a public insunce plan in the health care bill. althoughhree quarters of ericans polled support a public option, the iustry is spending more than $1.4 millio a day to make su it doesn't happ. >> what will hpen to your fami's health care?

>> this government-run plan could crush all yourther chces. >> it could t a bureaucrat in charge of your medical decisions. >> moyers: for ext firepower, the indury has hired more than 350 form members of congress and government staffers,ho are up on capitol hill, back- slappi and glad-handing their old pals, hopi to preserve the huge pfits in health care. but business as usual iseing allenged by this man who kno the busiss all too well, from the inside out. >> i'm pleased to welcommr. wendell poer to the committee today. he is a former iurance executive who isoing to tell us about some of the ttics insurae companies use to keep insurance in the dark. i have a special respe for hi simply because he's doing something i think very courageous and verbrave. >> mr. chairman, thank y for the opportunitto be here this ternoon. >> moyers: until last year wendl potter was head of rporate communications for cigna, the coury's fourth

rgest health insurance company. altogether, potter spent nrly two decades playg for the side that has opposedealth care reform from the clinto forward. he sat on pocy committees, crted executive messages, cajoled e press, and witnessed firsand the promises made, and broken. ta the case of nataline sarkisyan. >> the insurance cpany is denying our case. she eds a liver transplant. >> moyers: at the end of007, potter defend cigna when it refused to pay f the 17-year- old's transplant surgery claimi the procedure was experimental. protests at a regional headquarters created a pubc relations nighare. >> heah care for all! health care for all! >> moyers:igna reversed its decision, but by then,t was too late. natalineied just two hou after hesurgery was approved. early last year, potr left cigna. this summer, bore the senate commerce committee, went public for the first tim

>> rently, it became abundantlylear to me that the industry's charm offenve, which is the most visible rt of a duplicito and well- financed p.r. anlobbying campai, may well shape reform in a way that benefi wall street far morthan average amerans. the indury and its backers are ing fear tactics, as ty did in 1994,o tar a transparent and accountabl publicly accotable health care option as, quote, "governnt-run health car" but what we ha today, mr. chairman, wall street-run health care th has proven itself an trustworthy partner to its ctomers, to the doctors and hoitals who deliver care, and tohe state and federal governmentthat attempt to gulate it. >> moyer wendell potter joins us now. welcome to the journal >> thank you vermuch for having mhere. >> moyers: y worked for cigna 15 years and left last year. >> i did. >> moyers: were you push out? >> i was not. i left... it was mdecision to leave, and my decision to ave when iid. >> moyers:ere you passed over for a promotion? >> absolutely not. no. >>oyers: had you been well-

paid and rewardeby the company? >> very wellaid. and i, over the years, had my job opportunies, many bonuses, salary increases. so, no, i was not. and in fact,here was no further place fome to go in the mpany. i s head of corporate communations and that was the ultimate p.r. job. >> moyers: didou like your ss and the people you work with? >> i d, and still do. i still respect them. >> moyers:nd they gave you a terrific party when you left >> they sure did, yeah. >> moyers: swhy are you speang out now? >> i didn't innd to, until it beca really clear to me that the industrys resorting to the same tactics ty've used over thyears, and particularly back in the early '90 when they were leadi the effort to kill the clinton plan. >> moyers: but during this5 years you re there, did you go to them and say, "you ow, i think we're on the wng side. i think wee fighting the wrong people here." >> you know, i didn't,ecause for mostf the time i was there, i felt that what we we doing was the right thing,nd that i was playing oa team that was horable.

i just didn't ally get it all that much until towa the end of my tenure at cign >>oyers: what did you see? >> well, i was beginning to questi what i was doing as the indury shifted from selling primarily managed re plans to what they refer to as conser- driven plans and they're ally plans that have very high ductibles, meaning that they're shiftina lot of the cost of heah care from employers and insurs, insurance companies, to individuals. and a loof people can't even afford to make tir co-payments when they go get care, aa result othis. but it rlly took a trip back home to tennessee for me to e exactly what is happening so many amecans. i... >> moyers: when s this? >> thiwas in july of 2007. >> moys: you were still working for cigna? >> i was. i went home visit relatives. and i picked up the lol nepaper and i saw that a healthare expedition was being held a few miles up e road, in wise, rginia. and i was intrigue >> moyers: so you dre there? >> i did borrowed my dad's car and

drove ... 50 miles up the road to wise, vginia. it was being hd at a wise coun fairground. i took my camera. i tookome pictures. it was very cloudy, misty day, it was raininghat day, and i walked through the frground gates. and i didn't know wh to expect. i just assumed thait would be, yoknow, like a health... booths set up d people just getting theiblood pressure checked and things like that but what i saw were doors who re set up to provide care in anim stalls, or they'd erected tents, to careor people. i an, there was no privacy. in some ses... and i've got me pictures of people being treated on gurneys, on rain- soaked pement. and i saw ople lined up, standing in line or tting in these long, long lines, waing to get care. people drove frosouth carolina and gegia and kentucky, tennessee-- all ov the region, cause ey knew that this was being done. a lot of them heard out it fromord of mouth.

there could have been pele, and probably were peop, that i had grown upith. they could have been peoe who grew up at t house down the road... in theouse down the ro from me. d that made it real to me. >> moyers: what diyou think? >> it was absolutely stunng. it was likbeing hit by litning. it waslmost-- "what country am i in?" i just... it just didn seem to be a possibili that i was in the unit states. it was le a lightng bolt had hit me >> moyer people are going to say, "how can weell potter sit here and say hwas just finding out that there we a lot of americans who di't have adequate insuran and needed heal care? he'd been inhe industry for over 15 years." >> and thawas my problem. i had been in the instry and i'd riseup in the ranks. and i had a great job, and had a terrific office in a higrise building in iladelphia. was insulated. i didn't really see whatas going on. i saw the data i ew that 47 million people were unsured, but i didn't put

faces with that number. just aew weeks later, though, i was backn philadelphia, and i would often fly on aorporate aircrafto go to meetings. and i just thought that was great way toravel. it is a great way to travel. you're sitti in a luxurious corporate jet,eather seats, very spacious. and i was seed my lunch by a flight aendant who brought my lunch on a gold-rimm plate, and she handed me goldlated silverware to t it with. d then i remembered the peop th i had seen in wise county. undoubtedly,hey had no idea that this went on at t corporate levels of heal insurance compans. moyers: but you had, all these years,een premiums rising. people purged from the rls, people who couldn't afford t health care that cignand other coanies were offering. and this is the fit time you came fe to face with it? >> yeah, it s.

you know, certainly, i knew people, and i taed to people who re uninsured. but when you're in the exetive offices, when you're gting preped for a call with an analyst in the financial medm, what you think about a the numbers. u don't think about individu people. you ink about the numbers, and whether or not you're gog to et wall street's expectation at's what you think about, a that level. and it helps to thk that way. that's why you... th enables you to stay the, if you don't really think that you're tking about d dealing with real human beings. >>oyers: did you go back to corporate headquarters a tell them what u had seen? >> i wt back to corporate headquarters. i was trying to process all this, and trying tfigure out what ihould do. i did ll many of them about the experice i had and the ip. i shed them some pictures i took whi i was down there. but i didn't know exactlwhat i should do. yoknow, i had bills of my own. anit was hard to just figure ou "how do i step ay from this? what do i do?" and this was one of thosthings

that made me dece, "okay, i can'do this. i can't keep... can't." one of the bks i read as i was ying to make up my mind here was prident kennedy's "profiles courage." and in the forward, rort kennedsaid that one of the president's...ne of his favorite quotes s a dante quote that, "theottest places in hell are reserved forhose who, in times of mor crisis, maintain a neuality." and when i read that, said, "oh, jeez, i... yoknow. i'm heed for that hottest place in hell, unlesi say something. >> moyers: youown resume says, and i'm quotin "wh the chief medical officer and his staff, potter deloped rapid respse mechanisms for ndling media inquiries pertaining to colaints." direct quo. "this was high successful in keeping most such inquiriefrom becomi news stories at a time wh managed care horror stories abounded." i mean, you knew tre were

horror sries out there. i did. i did. >> moyers:ou put these techniques to wo, representing cigna doing e nataline sarkisn case, right? >> that'right. >> moyers: and that s a public relatis nightmare, you called it, right? it was. itas just the most difficult. we call th high profile cases, en you have a case like that a family or a patit goes to the news med and complains about having some covege denied that a doctor had recommended. in ts case, nataline sarkisyan's doctors at ua had recommended th she have a livetransplant. but when the coverage reques was reewed at cigna, the decision was made toeny it. it was around th time, also, that the familhad gone to the media,ad sought out help from the california nses association and some oths to really bringressure to bear on cigna. and they were very successl in getting a lot media attention, andothing like i had ever seen before. >> sme on cigna!

shame on cigna! >> it got everyone'sttention. everyone w focused on that in the coorate offices. >> moyers:ou were also involved in the campaign by e industryo discredit michael moore anhis film "sicko" in 2007. that film, moore went to several countrs around the world and rerted that their alth care system was better than our health care system-in particular, nada and england. take a look at ts. >> i wenacross the city to a crowded hospital wting room. how long did you have to wt here to get he? >>0 minutes. >> 45 minutes. >> i got helped right away. >> you c see how crowded this is. th really do an amazing b. >>id you have to get anyone's rmission to come to this hospital? no. >> n >> no. >> we can go anywhere want. >> you don'tave to get pre- approved? >> no, no. you just... >>y your own iurance company? oh, no. oh, heavens, no. >> can you choose your own doctor? >> oh, sure. oh, s. >> wt's your deductible? >> notng. >> i don think we have any. >> i don't know.

i don't thinthere's any, as far as i know. >> it's really a fabulous syem fomaking sure that the least of us and thbest of us are taken care of. >> oh, reay, it's not like that in the u.s. no. not atll, no. >> so, what do you payo stay here? >> no one pays. th're asking, "how do people pay? d i said, "well, there isn't you don' you just leave." >> it's ju the insurance. there's no bill athe end of it, as it were >> even with iurance, there's und to be a bill somewhere. sohere's the billing department? there isn't really a billin department. there's no such thing as a billing department >> what did they crge you for thataby? >> sor? >> you've got to pay before u can get out ofere, right? >> no. >> no, no, no. everytng's on n.h.s. >> this is n.s. >> younow, it's not america. ( laughs ) moyers: so what did you thi en you saw thafilm? i thought that he hit the

nail on the ad with his movie. but the industryfrom the moment that e industry learned that michael moore was taking on the heth care industry, it was really concerned. >> moyer what were they afraid of? >> they we afraid that people would believe michael moor >> moyers: we obtaed a copy of the game plan th was adopted by the industry's ade association, a.h.i.p. and it spells out thindustry strategies in gold lters. it says, "highlight horror stories of government-run systems." what was that about? >> the industry s always tried toake americans think that govement-run systems are the worst thing at could possibly happen tthem; that if you even nsider that, you're heading down on the ippery slope towas socialism. so ty have used scare tactics foyears and years and years to keep that from hapning. if tre were a broader program like our medicare program, i could pontially reduce the

profits of these big compani. so that is the biggest concern. >> moyers: and the was a political strate. "position 'sicko' as a teat to democrat larger agenda." at does that mean? >> that ans that part of the effort to discret this film was to use lobbyists and tir own staff to go ontoapitol hill and s, "look, you don't want to believe this mov. you don't want ttalk about it. you don'want to endorse it. and if youo, we can make thin tough for you." >>oyers: how? >> by ruing ads, commercials inour home district when you're running for reelectn, not contributing to your campaigns again, or ntributing to youcompetitor. >> moyers: this is fasnating. you know, "bld awareness among cerist democratic policy organization" right. >> moys: "...including the democratic leadership counci" >> absolutely. >>oyers: then it says, "message to democrat insiders: embracing moore one-way ticket back to minity party status." >> yeah. >> moyers: now, that's exaly what they di didn't they? they... absolutely. >> moyers: ...dicalized moore, so that his meage was discredited because the messenger was seen to be

radical. >> absolely. in memos tt would go back within the iustry... he was ver, by the way, mentioned b name in any mos, because we didn't wanto inadvertently write something that would wd up in his hand so the memosould usually... the subject line would b.. the emails wou be, "hollywood." and we would do the media aining, we would always have someone refer toim as "hollywood eertainer" or "hollyod moviemaker michael moore". >> moyers: why? >> wel just to... hollywood, i think peop think "at's entertainment, that's moe- making. that's n real documentary." they don't want you think at it was a documentary that had some truth. they wou want you to see this as just some fantasy that hollywood filmmakehad come up with that's part the strategy. >> moyers: so you would actuly hear piticians mouth the talkg points that had been circulatedy the industry to discredit michael moore. >> absutely. >> mers: you'd hear ordinary people talking tt. and politicians well, right? >> absolutely.

>> moyers: so your plan work. >> it worked beautifully. >> moyers: the film s blunted, right? >> the filwas blunted. it... >> moyers: wast true? diyou think it contained a great truth? >> absoluty did. >> moyers: what was it >> that we shodn't fear government involment in our heal care system. that tre is an appropriate role for gernment, and it's been pron in the countries that were in that movie. yoknow, we have more people who are uninsurein this untry than the entire population of canada. and at if you include the peop who are underinsured, more people than in the uned kingdom. we have huge numbers of pele who are also just a lay-off ay from joining the ranks of e uninsured, or being purgedy thr insurance company and winding up there. and another thing is tt the advocateof reform... or the opponents of reform are the who are saying that we nd to beareful about what we do re, because we don't want th government to take away yo

choice of a heal plan. it's more likely tt your employer and your insurer going to switch you from plan that you're in now tone that you don'want. you might be in thplan you like now but chances e, pretty soon, yore going to be enrolled in e of these high deductible plans in whichou're going to find tt much more of the cost being shifted to you than y ever imagined. moyers: i have a memo from frank luntz. he's the republican rategist whwe discovered, in the spring, has itten the script for opponents of health ca reform. "first,"e says, "you have to pretend to support it. then, use phrases like, "government takeover,"delayed cares denied care," "consequenceof rationing," "bureaucra, not doctors prescribing medici." that was a memo,y frank luntz, to thepponents of health care reform in this debate. now watch this clip. >>he forthcoming plan from democratic leade will make health care more expensive limit treatments, tion care, and put bureaucrs in charge of medical decisions ratherhan patientsnd doctors.

americans need to realize that whesomeone says "governmenoption," what could really occur is a govement takeov that soon could lead to government bureaucra denying and delaying care, and telng amicans what kind of care they can have. >> washington-run healthca wouldiminish access to quality care, leading to dials, shortages and long delays fo trtment. >> how will government-run health pn not lead to the same raoning of care that we have seen in other countrs? >> wdon¡t want to put the government, we don't want tout buaucrats between a doctor and a patient. >> moyers: why do policians puppet messages like that? >> well, they arideologically aligned th the industry. they want to believe tt the free mket system can and should work in ts country, liket does in other dustries. so they don't unrstand from an insider's persctive, like i have, what that tually means,

and the consequences othat to american they parrot those comments, without really rlizing what the real situati is. i was watching msn one afternoon, and i saw cgressman zach wamp fromennessee. he's jusdown the road from where i grew up, ichattanooga. and he was talking... he was asked a question abo health care refm. i think it was just a y or two after the presidens first heth care reform summit. anhe was one of the ones republicans put on t tube. and he was sayinthat, you know, the heth care problem is not necessarily bad as we think-- th of the uninsured people, half othem are that way because th want to "go nake" >> halthe people that are uninsured today choose tremain uninsured. half of them don'tave any choice, but half othem choose to, what's called, " naked," and just take the chancef getting sick. they end up in the emergen room costing you and me whole lot moreoney. >> he used the wd "naked." it's an industryerm for those who, psumably, choose not to

buy insurance because they d't want to. they don't want to pay t premiums. so he s saying that half... well, first ofll, it's nothing like that. it was an absolute ridiculous commt. but it's an example of a memr of congress buying whathe surance industry is peddling moyers: back in 1993, the republican propandist william kristol urgehis party to block any health care propal, in order prevent the democrats from being seen as theuote, enerous protector of the middle class." but today, you've got some democratwho are going along with the industry. max baucus, the senator from montana, for example, thmost important figure rightow in this health care legislati that's bei written in the nate-- he's resisted includi a public insurce option in the reform bill, right that's right. >> moyers:hy is the industry so powerful on both des of the aie? >> well, moneynd relationships, iology.

the relationship.. an insurance company can hire a does hire many difrent lobbying firms. and ey hire firms that are predinantly republican and predominantly democrat. and they do this bause they know ty need to reach influential mbers of congress like max baucu so there a people who used to work for max baucus who are lobbyi firms or on the staff of companies like cigna or t association itse. >> mers: yeah, i just read the other day, in "the washingn post," thamax baucus's staff met with a groupf lobbyists. two them had been baucus's former chis of staff. >> rht. >> moyer i mean, they left the government. they go to work for the industry. now, they're back with an insider stat. they get an access, right? >> oh, they do, ey do. d these lobbyists' ability t raise money for these folks so is very important as wel lobbyis, many of the big lobbyists contributed a lot money themsees. one of the lobbyists for onef

the big health insurce company is heaer podestathe podesta group, andhe's married to tony podesta, who's a brotherf john podesta. >> moyers:ho used to be the whithouse chief of staff. >> right. right. and they're democrats. and my executis wanted to meet wi... and when i say "my," the people i used to wk for... >> moyer at cigna. >> yeah, wanted to meet wi hillary clinton,hen she was still in theenate and still a ndidate for president. well, at's hard to do. at's hard to pull off, but s did. at just shows you that you n, through the relationships that are formed and that t insurance dustry pays for by hiring the lobbyists, you can get your foot in the door. you caget your messages across to theseeople in ways that the average americ couldn't possib. >> moyers: so it's mon that n buy access to have their arguments heard, rht? >> that's ght. >> moyer when ordinary cizens cannot be heard. >> absolutely right. it the way the american system has evolved, the political system. but does offend me that the veed special interests, who

are so profitable and so powerful, are able to influee puic policy in the way that they he, and the way that they've done over the year and the insurancindustry has been one of the most scessful in beating back any kinds of leslation that would hinder or affect therofitability of the companies. >> moyers: why ipublic insurance, a public tion, so ercely opposed by the industry? >> the iustry doesn't want to have any competitor. inact, over the course of the last few yearshas been shrinking the nuer of coetitors through a lot of acquitions and mergers. first of all, they don't wa any more competition, riod. they certainly don want it fr a government plan that might beperating more efficiently an they are, that they operate. the medicare program thawe have here is a governmt-run program th has administrative expenses that e like 3% or so. >> moyers: comred to the indust's... >> they spend out 20 cents of every premm dollar on overhead, which is adnistrative eense or profit.

so they don't want to compe against a more eicient competitor >> moyers: you told coress that the iustry has hijacked our heth care system and turned it into aiant a.t.m. for wall street. you said, "i sawow they confuse theicustomers and dump the sick, all they can satisfy their wall street investors." how do they satisfy their ll street invesrs? >> well,here's a measure of profitability that invesrs look to, and it's called a medical ss ratio. d it's unique to the health insurance industry and by medical losratio, i an that it's a measure that tes investors or anyone else how ch of a premium dollar is used by the surance company to actually p medical claims. and that has been shriing, over the years, sie the industry's been minated by or become dominated by for-ofit insurance coanies. back in the earl'90s, or back during the te at the clinton plan was being debat, 95 cents out of every dollawas sent...

you know, on average, s used by the insurance cpanies to pay claims. last year, it was down to ju slightly abo 80%. so, investors wa that to keep shnking. and if ty see that an insurance compy has not done what ty think meets their expeations with the medical loss ratio, they'll puni them. investors will starteaving in droves i've seen a coany stock price fall 20% ia single day when it did not meet wl street's expectations with thisedical loss ratio r example, if one company's medical lo ratio was 77.9%, for ample, in one quarter, and the next quaer, it was 78.2%, it sms like a small movement. but investors will think tt's ridiculous and it's horrle. >> moyers: that they're spenng more money foredical claims. >>eah. >> moyer and less money on profits? >> exact. and they think that is company has t done a good job of managing medical eenses.

it has not denied enou claims. it hasot kicked enough people off the rolls. and that's what. that is what happen what these companies do, to me sure that they satisfy wall street's expectatio with the medical loss ratio. >> moyers: and thedo what to make sure that ty keep diminishing the dical loss ratio? >> rescission is one tng. denyinclaims is another. being, you kw, really careful as they review claims, particularly for tngs like liver transplants,o make sure, from their point oview, that iteally is medically necessary and not experiment. that's one thing. and that w that issue in the nataline sarkisyan cas but another way to purge employer aounts that... if a small siness has an employee, for example, who suddenly s to have a t of treatment or is in an accint, and medical

lls are piling up, and this employee is fili claims with the insurance mpany, that'll be noticed bthe insurance coany. d when that business is up f renewal, and it typilly is once aear for renewal, the underwriters will lo at that. and they'll say, "we nd to jack up the tes here, because the experice was"-- when i say "experience,the claim experience, the number of aims filed was mo than we anticipate "so weeed to jack up the price. jack up thpremiums." often they'll do ts, knowing that the employer ll have no alteative but to leave. and th happens all the time. >>oyers: so, the more of my premium th goes to my health claims, pa for my medical corage, the less money the company kes. >> that's ght. exactly right. >> moyers: so ey want to reversthat. they don't want my pmium to go for my health care, right? >> exactly right. they... >> moyers: where does it g >> well, a big chunk of goes into sharehoers' pockets. it's retned to them as part of

thinvestment to them. it goes into t exorbitant salaries that a t of the executiv make. it goes into paying sas, marketing,nd underwriting penses. so a lot of it goes pay those kinds of admistrative functions, orhead. >> moyers: when a memberf congre asked the three executives who appeared befo e committee if they would en the practice of caeling policies f sick enrollees, ey refused. why dithey refuse? >> well, they we talking to walltreet at that moment. they were ying that because... i guesthey might have to spend some additional dollars toe moreigilant, to make sure that they were not reinding a policy inappropriate. it makes no sense. the only rson they would have said that is to cor themselves, and to send a sial to wall reet that, you know, we'rgoing to continue business as usual here. >> moyers: you kw, i've been around a lg time, and i have to say, i just don't get thi i just don't understanhow the corporations can oppe a plan that gives the unhealthy peoe a chance to be covered. and ey don't want to do it themselves.

>> well, keein mind, what they want to dos enhance their profits, enhance shareholder value. that's number one. and the way that the busess that ty're in is health care, certainly. butheir primary motivation is to reward their sheholders. most of the sheholders are large institutiol investors and dge funds. hedge fund managers arthe ones who look at the stoc and investors for large organizations. it's not mom a pop investor. >> moyers: you wrote aolumn withhe headline, "obama's false iends of health reform." you use a prime example a man named ron williams, who at the top of the lt of insurance executives in terms of the compensation. we actually w ron williams at president obama's town hl meeting. >> i would commendhe president for the commitment he's de to really t to get and keep eryone covered. and i think, aa health insurance company, we are committed to that. >> moyers: who is rowilliams,

and why do y use him as the example of what wa street excts and wants from the insunce companies? >> hhas, apparently, had a seatt the table of health care discussion. he was recruited by aea from wellpoint. aetnhad gone on a buying binge. there's been aenormous amount of consolidati in the health insurae industry over the last several years. tna bought a lot of competitors. it reached 21 milliomembers. and... but what it realized d what invesrs began to see is that a lot of the sinesses that it had ught were not all that profitable. so they were in... ana was in a pick. and they saw the stock price starng to plummet. so they brought... amo the thin they did was bring ron williams in. and lliams, among the first thing he did was oer a revamp of the i. system, so that... >> moyers: the information technology system. exactly, so that the compan

could deteine more about which accounts were not profitab or marginally pfitable. so, with that new syem, he was able, and e other executives, to intify the accounts that they wanted to g rid of. and over theourse of a very few years, they shed eight million members. >> moyers: eig million policy lders? >> eight milon people-- men, women, and children, yes. me of them were shed by intention. some, i'm sure, probably wked cause the... or left for whatever othereason, but they inteionally had this program to purgehese accounts. eight million fewer peop were enrolledn aetna's plans. many othem undoubtedly joined the nks of the uninsured, because their employerhad been purged. >> moyers: swhat happened to tna's stock? >> went , and it has... >> moyers: and so diron's... >> and... >> moyers: ...mpensation, righ >> ron's cpensation and his stock on wall street. >> and so i thk, in the context of thinking abt a governmentlan, what we say is, let's identify t problem we're

trying to lve. let's work collaborative with physicians, hospitals, a other healthare professionals, and make certain thawe solve the problem, as opposed tontroduce a new competit who has the rulemang ability that government would have. >>oyers: you know, there's an ony, because you hear the compies and their trade groups talking about w we don't want a public optiothat would put a bureauat between a patient and his doctor. but you've just descrid a situation in which a c.e.ois actually between aoctor and the patient. >> it's true. and that same thing happed in e nataline sarkisyan case. you had a corpore bureaucrat making a decision on covage. so, they are trying make you worry and fear a gernment burecrat being between you and your doctor. whatou have now is a corporate bureaucrat bween you and your doctor. moyers: whose motive is ofit-- understandably, natully, is profit.

right. >> moyer but companies, any company is in businesso make a profit, right? >> oh, absolutely. >> moyers: so how cayou object? how cawe object when an insurance company wants to increase its profi? that's a serious question. i mean, it sous like a set-up, but it's a serious queion. >> it's a very serious qstion. and i thk that people who are strong advocates of our heal care system remaining it is, very mh a free market health care system, fail to rlize that we' really talking about human beings here. and it doesn work as well as ey would like it to. yeah, thers nothing wrong... and i'm a capitalist, as wel i think 's a wonderful thing that companies can make a profit. but when you do it in ch a way th you are creating a situation in which these companies are addi to the mber of people who are uninsured ancreating a problem of the underinsured, then th's when we have a pblem with it, ort least i do. >> moys: this is the key question for me. can health reform at includes

a public plan actually ridur system of the fincial incentive on the parof the insurance industry to pride less for mor >> it will help. it would help. would it rid it? no, i don't think itould, because of the for-profi struure that is now dominant in this country. but the public plan wod do a lot toeep them honest, because it would have to off a standard benef plan. it would have to opera more efficieny, as does the medicare program. it would be struured, i'm certain, on a level aying field, so that it woul't be unfair advantage tthe private insunce companies. but because it cou be adminiered more efficiently, then t private insurers, they would have to operate mo efficiently. and that 20 centin that medil loss ratio we talked out earlier might get narrower. and theyon't want that. >> moyers: as is debate unfolds in the nexmonth, into

the fall, at should we be tching for? tell us, aan insider, what to look for that isore than meets theye? >> well, what happens ishey will continue this crm offensive, until there'sctual legislativlanguage. and what that mean of course, is that, rig now, you're not really seeing the bills befo the house anthe senate that will actlly be voted on. when we see thactual legislation, when thers something before congress,nd it will happenpresumably, with the next few weeks, you'll start seeing a lot re criticism of it. and the spial interests will be attacking this or that. the m.a. will be upset about something. the pharmaceutical industrwill be upset abo something. the insurae industry will not like this or that. it's... you kn, a lot of money isade in this country off sick people. and then, you'lltart seeing a lot more of the behind-the scenes attacks on this legislation in an attempto kill it.

the status quo is whatould work best for the industries. >> moyer in other words, if the industry is ab to kill form, or the democrats and t republans can't agree on a proposal, that's what th industry really nts. >> exactly and itappened in '93 and '94. and just abo every time there has been snificant legislation before cgress, the industry has been able to kill it. ye, the status quo works for them. they don't like to havany regulation ford on them or lawsorced on them. they don't want to havany coetition from the federal government, or anydditional regulation from e federal governnt. they say they will accept . but the bevior is that they will not... you kn, they'll not do anything after... say this plan fails, say notng happens. they're saying nowhat they did in '93, '94. "wthink preexisting conditions is a bad thing,"or example. les watch and see if they rely take the initiative to do ything constructive. i beyou won't see it. th didn't then. >> moyers: well, on thbasis of

the past perrmance, and on the basis of your own experiencen the industry, can weelieve them when they say they wi do these thingsoluntarily? >> i don't think youan. i thinthat they will implement things thamake them more efficient and that enhan shareholder value. and if whathey do contributes to that, maybe so. but now, they do say ty are in favor of an individu mandate. they want us all to be insur. >> moyer for the government to require every one us to have someolicy. >> ectly. and that sounds eat. it is an iortant thing that everyone be enrolledn some ki of a benefit plan. they don't want public plan. theyant all the uninsured to have to be enrolled in a pvate insurance pl. they want... they see ose 50 milln people as potentially 50 million new customer so they're in favor of tt. they s this as a way to essentlly lock them into the system, and sure their profitability in the fure.

e strategy is, as it was in 1993 and '94, toonduct this arm offensive on the surface but behind the scenes, to us front groups a third-party advocates d ideological ales. and thoson capitol hill who are aligned with the philosopcally, to do the dirty work, to demeaand scare people about a government-run plan,ry to make peop not even remember th medicare, their medicare program, is a governnt-run plan that has operated aot more efficient. and also, the people who a enrolled in our medicare pn like it better. the satisfaction ratings are highern our medicare program, government-run program, than in private insuran. but ey don't want you to remember that or to know tt, and they want tocare you into thinking tt, through the anecdotes they tell you, tt any government-r system, paicularly those in canada and u.k. and france, tt the people are very unhappy. and thathese people will have to wait in long lines toet care, or wait a longime to get care. i'like to take them down to

wise count i'd ke the president to come downo wise county and see some realines of americans standing in line to get their ce. >> moyers: wendell potte thank you very much fobeing with me onhe journal >> thank you for invitg me. >> moyers: quali, affordable health care's on theritical list in erica. anso is the newspaper business. so, maybe it's n surprising that one of the st powerful papers in thcountry attempted an unholy alliance, trng to turn a profit fromts newsroom's covere of the fight fohealth care reform. you may have missed thstory beuse it broke on the eve of the ly 4th weekend. the publisher of "thwashington post," kathari weymouth- one of theost powerful people in

the nation's capital- invite top officials from t white us the cabinet and congress to her home for an iimate, ofthe-record dinner to discuss health care reform wh some of her reporters aneditors coveringhe story. but she then invited c.e.o.snd lobbyists om the health care industry to come, too,roviding they fork over $,000 a head, or a quaer of a million if they want to spoor a whole series of the cozy little get- togethers. d what is the inducement she offers them? nothinless than-- and i'm quing the invitation verbatim: "an exusive opportunity to participate in the health ca reform debatamong the select few who will actlly get it ne." the invitation rinds the c.e.s and lobbyists that they will be buying access to "ose werful few in business and policy-making who e forwarding, legislating,nd reporting on the issues." remember, the intation promises ts private, intimate,

and off-threcord dinner is an extensio"of 'the washington post' brand of jrnalistic inquiry into the issues, a unique opportuni for stakeholders to he and be heard." let that sink . in this se, the "stakeholders" in heah care reform in this case do not incle the rabble, the lks across the country who actuly need quality health care but can't afford it if any of them showeup at the kitchen door on the night of this littlsoiree, a bouncer uld drop kick them beyond th beltway. in otherords, before you can cross the thshold in washington to ach "the select few who ll actually get it done," y must first cross the palm of some ostretched hand. the dinner wasanceled after thinvite was leaked to the web te politico.com, by a health care lbyist, of all people. but it was enough toive us a impse into how things really work in washingtona clear insight intohy there is such a grt disconnect between

democracy and governmentoday, between washington a the rest of theountry. acrding to one poll after another, a majority americans not only wt a public option in healthare, they also think that growing ineality is bad fothe country, that corpations have too much power over policy, that money potics is the root of all evil, and that wking families and or communities need and deservpublic support when the market fai to generate shared prperity. but when thensiders in washingt finish tearing worthy intentionspart and devouring flesh from bone,one of these reformhappen. "oh," they say, "it'all about compromise, all in the nure of thgive-and-take of representative democracy." that, people, isull, the basic nutrient of waington's high anmighty. it's notbout compromise. it'sot about what the public wants. it's about money, the lden ticket to "the selt few who

tually get it done." and noing will change-- nothg-- until the money- lenders artossed out of the tele, and we tear down the sign they've placed on government, the e that reads: "for sale." i'm ll moyers. >> there's more at our wesite. log onto pbs.org andlick on "bill moyers jrnal." you cawatch wendell potter's mplete congressional testimony, review the differt proposals r health care reform, and follow the mon the heth industry is lavishinon friendly liticians. that's at pbs.org. caioning sponsored by public affairs televisn captioned by media acss group at wgbh