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Naked Capitalism, Tuesday, October 13, 2009

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

Link:   http://www.nakedcapitalism.com/2009/10/new-york-times-missing-in-action-on-health-insurance-lobby-duplicity.html