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'Sicko's' Peeno Sees Few Gains in Health Insurance

Dr. Linda Peeno works out of her home office in Louisville, Ky., as a consultant on lawsuits against insurance companies and a lecturer on patient advocacy.
Vikki Valentine, NPR
Dr. Linda Peeno works out of her home office in Louisville, Ky., as a consultant on lawsuits against insurance companies and a lecturer on patient advocacy.
Humana spokesman Tom Noland says the movie <em>Sicko</em> gives an outdated look at the health insurance industry.
Vikki Valentine, NPR /
Humana spokesman Tom Noland says the movie Sicko gives an outdated look at the health insurance industry.
The Humana headquarters sits near the waterfront in downtown Louisville, Ky.
Vikki Valentine, NPR /
The Humana headquarters sits near the waterfront in downtown Louisville, Ky.

Director Michael Moore's frontal attack on the U.S. health care system hasn't exactly been among this summer's blockbusters. But a new poll from the Kaiser Family Foundation finds that the movie Sicko has boosted the national conversation about health care.

Nearly half of those surveyed said they had either seen the movie or heard or read something about it. And one in four people said the film prompted a discussion about the U.S. health system.

Those who did see the movie probably remember Linda Peeno. She's the Louisville physician who testified before Congress in 1996, during the height of the national debate over patients' rights versus HMOs. Here's a snippet of Peeno's testimony, as depicted in Sicko:

"I am here today primarily to make a public confession. In the spring of 1987, as a physician, I denied a man a necessary operation that would have saved his life and thus caused his death. No person and no group has held me accountable for this because, in fact, what I did was I saved the company a half a million dollars. "

Reigning in Medical Abuses

Now, 20 years after Peeno denied that heart transplant for a patient while working as a claims reviewer for insurance giant Humana, she's still haunted by the sense that she knew in her heart that what she was doing wasn't right.

"I was actually told at one point — we're using your medical expertise to validate our economic decisions," she says. "So I was already cued in to the fact that I was using my medical knowledge at times illegitimately."

Peeno reached that conclusion with some sadness, after she came to understand her misconceptions about managed care. She had thought it would correct the overuse of medical care she had seen as a resident in internal medicine and infectious disease.

In her physician training, Peeno said, she "saw abuses at the other extreme." She saw surgeons look for potential patients in other departments. They would then perform surgical procedures on the patients, regardless of whether the patients needed them, Peeno said.

Peeno reviewed care at a Louisville hospital before she worked at Humana.

Once there, she soon realized she would have to do a lot more than just rein in unnecessary care. Peeno says at Humana, she was expected to deny at least 10 percent of claims. Approvals were always questioned by superiors, but denials never were, she says. And then came the heart transplant case.

An Approval Reversed

"I actually called and approved it," she says, recounting the story. "And then it was just like all hell breaks loose. 'Oh my gosh, you approved it, you can't. It's a half a million dollars.' "

But within minutes came some surprising news. It turned out that the patient's employer had specifically excluded transplants from its benefits package. That meant it wasn't even Humana's decision to make. Peeno's initial approval was quickly reversed. She said she still had doubts. She wondered how a patient whose insurance didn't cover transplants had gotten on the transplant waiting list in the first place. But no one seemed to care, she said.

"I was told I'd done a good job. Congratulations. That I'd saved the company half a million dollars," she says. "It was just, as I came to understand it, you're sitting on the 23rd floor of a marble building 1,000 miles away, and all you're focused on are the numbers and the dollars. You can see how you get wrapped up and disconnect from the fact that this is a real patient."

An Arresting Work of Art

The pain of what she had done really hit home a few days later. Peeno was walking through the marble lobby of the vast Humana headquarters. She saw workers installing a sculpture.

"What struck me then, because I know so little about modern art and I didn't have a clue as to how much it cost, was how ugly it was," she says with a laugh.

But the very next day, she ran into a nurse who told her something she found not funny at all. The nurse's husband worked in the accounting department, and he had seen an invoice he thought was for that statue.

Peeno's nurse informant told her the statue cost a half-million dollars.

"That was the jolt," she says. "Here I've just saved the company a half a million dollars, and they've just invested a half a million dollars in this ugly piece of sculpture."

As it turned out, the nurse was wrong. The skinny bronze statue of a woman by the famed artist Alberto Giacometti actually cost more than $3 million. Peeno was told that some years later by the brother of a former Humana chairman.

By then, Peeno had long since left the company, and the statue had long since been sold. Yet Peeno and Humana remain linked. To this day, every time she pops up in public, a Humana spokesman is ready to shoot her down.

Today, it's Humana's Tom Noland. He takes issue with Peeno's segment in Sicko.

"She's represented in the film as having made a decision, to quote her, causing the death of a person. That didn't happen. The person was discharged from the hospital. He lived," Noland said.

Well, says Peeno, with a sigh — yes and no. It's an argument she's had again and again over the years. It's true that the patient was discharged from the hospital, she says.

"So that meant instead of him dying right away, he lived 20 months in cardiac hell before he did die," Peeno says, "so I thought that was a very heartless argument to make."

Not Your Father's HMO

Noland, however, fires back that the story is too old to still be a valid snapshot of the health insurance industry in general and Humana in particular.

"The phrase you hear a lot is, it's not your father's HMO. And that's an actual fact. It's a provable fact," he says. "The system has changed completely in 20 years, and it's changed, frankly, in response to consumer demands and needs. In the '90s, there was a tremendous amount of frustration because health plans were by-and-large in the business of saying no. Now, they're in the business of saying yes."

But Peeno says if that were the case, she wouldn't still see so many people being treated badly by their insurers. In just the first weekend after Sicko opened, Peeno says, she got dozens of e-mails from patients.

She says the e-mails have "the most horrible, complicated, tragic stories. And when I first would start hearing all these things, I would try to do whatever I could. I would help them. I would have them fax me material; I would help them write their appeals."

These days, Peeno works from a tiny office in the small house she shares with three cats and a black hamster named Matryoshka. She makes a living testifying from time to time as an expert witness in cases against insurance companies and lecturing on patient advocacy. For the past year and a half, she's also been studying ethics and theology at a local seminary.

Waiting for a New Approach

It hasn't been easy. Peeno says her emotional low point came last summer, when she was asked to deliver a talk to a religious group. Initially, she says, she was excited.

"I thought I would go in and ... I wouldn't have to argue for things like health care being a right, and our need to take care of one another. And I was really stunned by some of the people's response. Things like, 'Well, I don't want my tax dollars to go to take care of those people.' "

After the talk, Peeno went home, picked up her granddaughter, and went and sat in the park by the river.

"I don't think I ever hit a moment where I was so depressed," she says, "because I thought, if you can't convince people who, out of their religious faith, ought to be thinking differently, God help us."

At the moment, Peeno is one of those 47 million Americans without health insurance. At age 57, she says she can't afford the cheapest policy sold in the state. But Peeno says she's not ready to give up on trying to reform the health system just yet.

"For years, I kept thinking some health plan was going to call and say 'Linda, we really want to do things right, and we know that you have a deep understanding of how these things are, and you care about patients, and we'd love you to help put systems together that are patient-centered.' And then I could just actually do something positive."

She's still waiting for that call.

Copyright 2023 NPR. To see more, visit https://www.npr.org.

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