Several years ago, when I was still a health insurance company PR guy, I was accused by a furious CNBC producer of withholding important information when I cajoled her into having my CEO on Squawk Box to talk about some new initiative we were rolling out.
"You played us like a Stradivarius!" she screamed at me when she realized that while my CEO was fielding softball questions from her show's host, our chief financial officer was signing off on a disclosure the company was obligated by the SEC to make by the close of business. Because the news we had to announce was so bad it would have a "material effect on earnings" (translation: cost shareholders a bundle), the big bosses ordered us to wait until after the New York Stock Exchange closed at 4:00 p.m. -- and many hours after the Squawk Box interview -- to release it. They wanted to postpone the trauma it would cause the company.
Sure enough, when the markets opened the next morning, the company's stock price began a long slide. The CEO was quoted in the bad-news news release about how the company was taking steps to make sure nothing like that would ever happen again, a statement written for him by the company's lawyers and PR people, but he was nowhere near a TV camera. Every time he was asked for an interview, we "declined" to make him available. We were not about to make him answer what we referred to as "rude" questions from a reporter.
That episode came to mind as I read story after story in the mainstream media last week about the decision by UnitedHealth Group to "honor" some of the provisions of ObamaCare even if the Supreme Court declares the law unconstitutional.
The Stradivarius playing I was accused of was nothing compared to the virtuoso performance turned in by UnitedHealth's PR team. I have seen a lot of masterful work in purposeful misdirection over the years, but I can't recall a PR coup to top this one.
Here's how it was planned and executed -- with brilliance.
It was important to have the initial stories appear on Monday, typically a slow news day. To ensure that positive stories would make it into the country's leading publications, the PR team "leaked" the news release to a few key reporters Sunday night with a strict embargo until Monday morning.
It was clear to me that UnitedHealth "declined" to make any company official available -- at least "on the record" -- Sunday night because "rude" questions would have been asked. So the stories that appeared Monday and over subsequent days did not have answers to critically important questions about whether the company would "honor" the many other provisions of the reform law that will benefit most Americans if the Court rules against it. Since reporters obviously were not able to interview UnitedHealth CEO Stephen Hemsley, they were stuck with the quote attributed to him in the news release: "The protections we are voluntarily extending are good for people's health, promote broader access to quality care and contribute to helping control rising health care costs." That happy talk was published, verbatim in most cases, by the New York Times, the Wall Street Journal, the Washington Post, the Los Angeles Times, Forbes, CNN, MSNBC, the Associated Press, Bloomberg and Reuters, to name just a few.
What's worse is that most reporters didn't bother to mention that what UnitedHealth said it would do would apply to just a small fraction of the 36 million people the company says are enrolled in its various medical plans. The company said that regardless of the Court ruling it would continue to allow young adults to stay on their parents' policies until age 26, offer preventive services without co-payments, eliminate lifetime coverage limits, not "rescind" policies except in cases of fraud and provide "clear and timely options for appeals." Most readers of the company's press release would probably assume that it was talking about all 36 million. I did the first time I read it. As it turns out, though, the vast majority of people enrolled in plans administered by UnitedHealth could find out that none of those assurances would be applicable to them.
One of the few reporters who pointed that out was the Washington Post's N.C. Aizenman, who wrote that the announcement "applies to the roughly 9 million consumers in plans that they or their employer have purchased from United Health... " For the other 27 million, "it would be up to the employer to decide which provisions to continue offering voluntarily." That's because most of the people enrolled in UnitedHealth's plans work for big companies that make the ultimate decisions on what and who will be covered. If ObamaCare bites the dust, those companies could tell UnitedHealth to go pound sand, that they had no intention of "honoring" those provisions.
In addition, no reporter was able to get anyone at UnitedHealth to answer the incredibly rude question of what the company would do about the other -- and to many people, far more important -- consumer protections in the law. As the New York Times' Reed Abelson wrote: "UnitedHealth declined to say what it planned to do regarding some of the more significant changes now required by the law in 2014, when insurers will no longer be able to deny coverage to someone with a pre-existing condition or ask those in poor health to pay more."
UnitedHealth "declined" (translation: refused) to answer that because if it did, truthfully, that answer would be the headline, not the, "Health Law Ruling Won't Alter Plans by Insurer" which topped Abelson's story. As someone who spent 20 years working for insurance companies, I know there's not a snowball's chance that any insurer will abide by the other provisions of ObamaCare unless it is required by law to do so.
So what was the purpose of UnitedHealth's big announcement? The industry is worried that the Court will strike down only the provision of the law insurers really like, which is the one that requires Americans to buy coverage from them, and leave the consumer protections in place. The Stradivarius was brought out to keep that from happening, to try to get members of Congress and one or two Supreme Court justices to buy the industry spin that it can regulate itself just fine, thank you, that it will "step up" and do the right thing, all the while purposely obscuring its real intentions. Which, if you are rude enough to try to get a CEO to be honest, are to scuttle the most important consumer protections, the ones most likely to have "a material effect on earnings."