New York Times: Missing in Action on Health Insurance Lobby Duplicity

In the early days of this blog, I would often wind up comparing coverage of news between the Financial Times and the Wall Street Journal because the offender (almost without exception the Journal) had done a job so poor or misleading that it merited comment. Then the credit crisis forced the Journal to up its game, and the FT appeared to slip a bit (I wondered if it was catering, as in pandering, to US readers).

This time, the dubious reporting object lesson is the New York Times, on what is supposedly its most prized beat: Washington DC political reporting. The Times ran two articles that verged on sycophantic in its coverage of the health insurance industry as it moved its chess pieces on the health care reform game board. The Times acted as close to a PR outlet. From an early August post:

A similar charade is in motion on the health care front. My bullshit meter went into high alert earlier this week with this New York Times story, “For Health Insurers’ Lobbyist, Good Will Is Tested,” which was clearly a PR plant. It featured Karen Ignagni, a $1.6 million-a-year earning lobbyist to the health insurance industry as a heroine (I started getting nauseaous as soon as I saw the deliberately low-key picture of her in her office). And why should we see a representative of one of the biggest forces undermining democracy in America, the usually-successful efforts of well-funded industry groups to steam-roll legislative process, as a good guy, or in this case, gal? Because she supposedly talked a mean and obstructionist industry into playing nice.

Towards the end of August, in “New York Times Runs Yet Another Fawning Story on Health Insurance Industry,” I noted:

The latest salvo in the health care industry charm offensive is another story humanizing the health insurance industry, this one on the front page of the New York Times website, “Dealing With Being the Health Care ‘Villains’

So what is the story about? The author, Kevin Sack, interviewed a bunch of employees at Humana, the fourth-largest insurance company.

Let’s start with the basics. Why is this even a reasonable premise for a story? This is a perverse twist on a type of story the Times runs periodically, of dropping into a particular community, often in the heartland, to get the populace’s view on a pressing political or social issue.

Since when is it legitimate, much the less newsworthy, to get a company’s perception on its embattled status, at least without introducing either some contrary opinion or better yet, facts, to counter the views of people who will inevitably see what they are doing as right? I hate to draw an extreme comparison to make the point, but staff in Nazi concentration camps also thought they were good people. It is well documented that for all save the depressed, people’s assessments of their own behavior is biased in their favor.

Similarly, I don’t recall many examples of industries under attack having prominent members get flattering front page pieces. The now-famous AIG Financial Products “I Quit” letter was an op-ed. I will admit I could have missed it, but I did not see any New York Times front page pieces during the auto bailouts featuring GM or Chrysler execs and workers saying they were misunderstood. and were being maligned.

So what do we have here? You have a bunch of people whose livelihood depends on Humana. Of course they are gong to see the industry as benign.

And nowhere in this fawning piece do you see mention made of the ugly fact that as recently as the early 1990s, 95% of every dollar spent on insurance claims went to medical care. It is now only 80%. That is a simply stunning change, and shows how completely fact free the industry’s defenses are. The insurers are a major culprit in America’s high medical costs.. But no, we are supposed to take the mere opinion of employees who are deeply vested in the current system as views worth considering.

Back in the days when I did M&A, one of my clients was a frighteningly good negotiator. He knew part of his reason for success was that he did not look the part: he was short, genial, a bit rotund, and bespectacled. He would (to those who he was certain would not spill the beans on him) describe himself as the Antichrist and say things like ” I rub their bellies and only years later do they realize what I have done to them.” And I have to say, he was masterful in getting people to think his self serving view of things was the only sensible way to see a situation.

The insurance industry is not so adept, or more accurately, is less concerned about appearances than my old client. The Financial Times reports tonight that the health insurance industry, after its great show of making nice to the Obama administration, backstabbed it on the eve of a key vote. Do we see any coverage of this duplicity in the US media, much less the New York Times?

From “Health insurance lobby attacks reforms” in the Financial Times:

The White House and the health insurance industry on Monday descended into open conflict on the eve of a critical Senate vote that could determine the fortunes of Barack Obama’s healthcare reform plans.

Supporters of President Obama accused the health insurance industry of attempted “sabotage” after it issued a report by PwC, which estimated that premiums would rise much faster under the proposed reforms than they would have done otherwise.

The 26-page report marked an abrupt end to the unlikely alliance between Mr Obama and America’s Health Insurance Plans – the main industry lobby group, which has spent about $100m on advertising to support the reforms….

A spokesman for Max Baucus, chairman of the Senate finance committee, which is to hold a key vote on Tuesday on its $829bn 10-year healthcare reform plan, described the report as a “hatchet job, pure and simple”.

The Wall Street Journal did report on the insurer “push back” and indicated that the industry had cooperated earlier, ” attracted to the effort, in part, by the prospect of gaining millions of new customers.” So the Journal’s staff recognized this as a mere marriage of convenience from the get-go.

Update 4:30 AM: Robert Reich is more optimistic about the implications than I am, see “The Audacity of Greed: How Private Health Insurers Just Blew Their Cover.”

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20 comments

  1. kevin de bruxelles

    The Democrats are falling into their “Washington Generals” mode on health care. For those who do not remember, the Generals were the hard-luck “opponents” of the Harlem Globetrotters. The Washington Generals’ job was not to win, instead they were there to provide the illusion of an actual contest. Through deliberately futile opposition–they almost never won a game–they provided a useful service.

    On Health Care, Americans don’t just want to be told by a unitary elite that the less fortunate among them will continue to have third world health care while a wealthy minority maintains top quality service. No, it is much better to have a little political exhibition game where, after a simulated tough struggle, the Democrats lose a squeaker. And it is quite useful to establish a health insurance dolchstosslegende (stabbed in the back legend) to help maintain Democratic party loyalty in the wake of this approaching Democratic defeat (in the form of a meaninglessly empty bill) and the recriminations that will follow from some party members.

    As for the New York Times, we must remember that first and foremost they are a business and the health insurance industry is a major source of advertising revenue for them. So it only makes sense they would back their clients this way. The only potential downside for the NYT would be if the Obama Administration retaliated by cutting them out of the upcoming newspaper bailout. Taking this risk seriously presupposes that Obama and the Democrats are playing to win on Health Care. But everybody knows the Washington Generals never play to win. Thus the Valentine cards to the health insurance industry on the front page of the NYT.

    1. DownSouth

      kevin de bruxelles,

      Thank you for the wonderful metaphor.

      Where I live (Mexico), political theater is a highly refined art form, and is integral to what Mario Vargas Llosa, the Peruvian novelist, called the “perfect dictatorship.” Mexico looks like a democracy, headed by a president who cannot be re-elected, and equipped with all the institutional bells and whistles usually found in democracies, but in fact is ruled with an iron fist by a small handful of plutocrats.

      The metaphor they use here for the Generals is “Junkyard dogs”. As often as not they are paid and organized by the very people they criticize. Thus when a burglar breaks into the junkyard, the junkyard-dog barks and makes a grand show of things. But then he immediately goes back to sleep, allowing the burglar to carry off whatever he pleases. The powers-that-be of course love junkyard-dogs, because they give people the impression that their interests are being protected, when they’re really not. It gets people to let their guard down, making them easier to exploit.

      True subversives in Mexico, however–those that might jeopardize the status quo and aren’t part of the plutocrats’ political theater–are smashed with an iron fist.

      Another deployment of Junkyard dogs during the health care debate could be seen in the tea partiers and health care protesters. To confirm this, one only has to take note of the way they were treated vs. the way the protesters at Pittsburgh during the G-20 were treated. The establishment even provided the stage for the anti-health-care demonstrators in the form of a series of nationwide town hall meetings. And then we were treated to 24/7 news coverage ad nauseam for several weeks of their antics. In Pittsburgh, the protesters had to file a federal law suit to get a permit to protest, and then only in a very contained manner:

      http://www.nytimes.com/2009/09/18/us/18pittsburgh.html?em

      Then the police brutally suppressed any “non-authorized” protests, as this most recent missive from the Pitt students web page demonstrates:

      http://www.nytimes.com/2009/09/18/us/18pittsburgh.html?em

      All this of course was accompanied by an almost complete news blackout by the MSM.

        1. Skippy

          DownSouth you do realize that once your arrested you go on the terrorist list with out due process, and can never own a firearm again (hows my FICO score now lol). Plus they used national gaurd MPs and used Military personel to do snatch and grabs in plain sight ie: speeding car pulls up and snatch suspect, then bundle into car and burn rubber out of there.

          Skippy…if only I could ware my old uniform, then just stand there…um would be interesting.

          1. Vinny G.

            Yeah, people in uniform in this country all feel the urge to shout orders left and right. Even the as**oles driving this 19th Century subway train feel like General Patton.

            And yeah, once you have a criminal record and are caught with a weapon (or even a bullet, or a Civil War era rusted old rifle with half its parts missing), you’re looking at 20+ years at Club Fed for “felon with a weapon”. And, btw, there’s no such thing as having a criminal record expunged or sealed, even of they tell you it was. A judge and the police still have full access to one’s criminal history for the rest of your life. And they’ll use that as aggravating factor even for a speeding ticket.

            And don’t get me started on my monologue about the private prisons with sitting judges on the board of directors. You know, the French only had to tear down Bastille to redo their justice system. In this country they are building a brand new prison every month. There already are 3 million people in prison and another 10 million on probation. We’ll have a lot of Bastille’s to tear down before we can call this a free country.

            Vinny G.

  2. Vinny G.

    Health insurance companies and their lobbyists are precisely what you wrote: Nazis and Antichrists. If this president would just grow some balls already, he’d send them all to Gitmo for a little waterboarding therapy. I’ve dealt with those animals (no ofence meant to cats and dogs) for years and I’m just sick of them. Words like criminals and psychopaths don’t even come close to capturing the evil they represent.

    As far as The Times goes, I for one cancelled my subscription years ago. They’re becomming more irrelevant by the day, largely thanks to blogs like this. If we could only find a way to make Fox and Rush irrelevant too…

    Vinny G.

    1. DownSouth

      Viny G,

      The Mexican monopolist and reputedly richest man in the world, Carlos Slim, recently acquired a large stake in the NY Times and in addition loaned it the money to avoid declaring bankruptcy:

      http://www.nytimes.com/2009/02/16/business/media/16slim.html

      What do you think the chances are we’ll be getting any more opinion pieces like this from the NY Times?:

      http://www.nytimes.com/2007/08/27/opinion/27mon4.html?scp=1&sq=carlos%20slim%20august%202007&st=cse

      Take it from someone who knows, Mexicans are masters at running Banana Republics.

      1. Vinny G.

        Indeed, the Times is a dirty rag now. Can’t even use it for toilet paper, because the quality of the paper they use is too low…LOL

        I hear ya about the banana republic thing. I used to live in Greece, Spain, and Romania, so I’ve seen banana republic mentality in action there too. I still go to Greece and Romania a few times a year, and not much has changed over the years, especially in Greece. However, there are two major advantages that all those nations. First, they all know how to make a cappuccino the right way, and second, there’s nothing a bribe won’t solve. But I’m sure Mexico offers those benefits as well :)

        Vinny G.

  3. NS

    Thank you. Excellent article that cuts to the heart of the matter. The so called health care reforms will be just as fair and rewarding as the so called financial reforms. For main street, it will just make the worst of all worlds, even worse. The SPAM in the MSM is fooling only themselves.

    Health Care ‘reform’ bill(s) thus far have shown an even clearer example of how our government was hijacked by big money and power and does not represent public interest any longer. Real reform was written in 2007, all the spin and talk can be muted by HR-676.

    What congress and the lobbyists thinks is a fatted pig for eating for pharma and insurers is really just a skinny little starving mouse. People as commodities for profit have had their lives reduced, diminished, their dignity confiscated. The middle class cannot provide anymore as it was all taken, now there is no more left.

    MSM spin is only the same side of a coin; big industry that pays the bills, particularly pharma, need their support and love. Viva Viagra.

  4. Dan Duncan

    Why is there outrage that the health ins lobby now attacks the reforms?

    A few months ago, when health ins lobby “endorsed” the bill…you had to know the lobby was lying or that the bill is feckless.

    The moment that the health ins lobby and Health Care “Reformers” joined forces, all those who supported true reform should have know it was a croc: It’s as if the NYC Atty Gen received an endorsement from The Five Families over pending Vice Legislation.

    The outrage isn’t that the lobby no longer endorses a feckless Bill; rather it’s that Obama served up a feckless Bill that was so diluted and massive…that many in the media didn’t immediately realize that if the Politicians and Health Insurance Lobby “hook-up”, the result will be that the rest of us will get screwed.

  5. Skippy

    To repeat myself, only a monstrosity of such size and complexity could serve only one purpose.

    Skippy…pick your posion.

  6. rd

    Unfortunately, there are multiple Congressional committees and Administration posts that have been captured, or at least rented, by the corporations and/or unions for the financial, health, agricultural, military and education components of the economy. Since each of these is typically 10%-20% of GDP, the total chunk of the economy dominated by these various players is staggering. since everybody appears to be in bed with each other, including the media who get ad time from all of these players, they can say whatever pleases them to the public. That is where the whole Bank of America release of legal advice is going to get very interesting as that wall starts to break down.

    Personally, I have moved to the point of simply voting against incumbents, regardless of what they say they are doing or how much money they spend on their campaigns since I think we need to have a wholesale change of the make-up in Washington and the state legislatures. If politicians start seeing people get voted out, even if they are spending lots of money on their campaigns, then the whole value of campaign contributions by lobbyists will drop (market forces in play). It will be interesting to see what it will take to get that type of reaction from the general population – my guess is that we are closer than many people think

  7. Vinny G.

    Looks like the Senate Committee passed the bill. Ah well, I guess all the bribes, lies, threats, and the phony PwC report these health insurance criminals pulled yesterday didn’t do the trick, eh?

    But I still don’t think true reform will come to health care. Until the fat cats steal the very last fiat dollar out of this country, things will remain the same… unless we dust off the guillotine before then…

    Vinny G.

    1. rd

      Please remember that a bill is not truly done until it is out of a Senate-House conference committee. There have been too many instances of a lobbyist getting some provision put in or taken out at that point over the years to breathe a sigh of relief until that stage is complete. The Delay-Bush Admistration had some real doozies at that stage, but every Congress has pulled some fast ones.

      Unfortunately, the press does a horrible job of covering what the real final bills actually contain when they hit the presidents podium for signature.

      1. Vinny G.

        Indeed! As you say, they’ll likely pull a bait and switch at the last minute. Then Oh’bama will sign it into law, and voila, another 60 years of ripping off the American people is just starting.

        Vinny G.

  8. Jerry

    This is’t a “let’s insure people health bill. This is let’s cut health care to people bill because we want the money for something else bill. Everyone but Congress better watch out….we are forced to buy the basic plan from private insurance companies while Congress gets the luxury plan for nothing, plus gets their pockets stuffed…It is really interesting watching our government move from a representative one to one ran by the elite…..soon we will all be trying to get over the border going South….it is easier to live and barter in a country with warmer weather!

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