PhillyDeals: Protecting the health insurance industry

The cost of health care (like college education) goes up extra fast because it's subsidized by taxpayers but run by private interests.

Doctors, scholars, sick people who can't get coverage, and employers whose insurance bills zoom each year complain about the uneven ways we buy and sell medical care. But attempts to set up a national health scheme - or a more competitive private system - keep dying in Washington, leaving costly partial reforms, like President Obama's Medicaid expansion.

Powerful forces don't want deeper change. As chief spokesman for Cigna Corp., the Philadelphia-based health insurer, Wendell Potter was part of those powerful

forces. But after fighting a national health plan for 20 years, he has ended up sympathizing with the idea.

In his new book, Deadly Spin, Potter tells the broad story of public relations - "corporate propaganda" to protect private interests from "democracy" - and how it gave him a comfortable life.

A visit to a crowded open-air medical clinic near his doctor-poor Appalachian hometown sparked a moral crisis that turned Potter against his corporate masters.

Potter introduces us to industry lobbyists such as Karen Ignagni, a reverse Potter: An ex-union bureaucrat, she became front woman for America's Health Insurance Plans, the industry's lobbying group.

In Potter's telling, Ignagni and the insurers promised a gullible Obama that they'd back reform, while fighting hard behind the scenes to stop government cost limits, and to discredit critics.

AHIP was half-successful: It killed the last wave of proposals for a government-run, low-cost health plan - but the fight made insurers look like evil villains, as Cigna's current boss, David Cordani, complained to Forbes columnist David Whelan.

Potter shows then-Cigna chairman Edward Hanway helping lead a "multimillion-dollar public relations and advertising campaign" to derail proposals for a government-run health insurance alternative in the run-up to the 2008 presidential election. Cigna declined to comment. Hanway didn't return calls.

Insurers worked to "divert the public's and the media's attention" away from the central fact of millions of poorly insured Americans, toward other problems that were harder to blame on the industry: aging population, extravagant doctors, expensive technology, and demanding consumers.

Hanway left Cigna in 2008, at age 57, "with a $111 million retirement package" of stocks and cash, Potter writes.