In an underreported story from last week, McKinsey & Co. published a study about the ACA. In this study, they claim that 30 percent of employers are planning to stop giving health insurance to their workers as a result of the Affordable Care Act. The study received a good deal of press coverage and was widely bandied about by conservative politicians and media outlets as proof that conservative warnings about the law are coming to pass.
Well, something's rotten in the state of McKinsey and Co. Their study contradicts studies by other independent groups that said just the opposite.
From BlueWave News:
This makes their extraordinary claims about the findings highly suspicious. For one thing, they starkly contradict every projection to date made by reputable nonpartisan organizations about the effect of the ACA upon employer-offered health insurance. In fact, on Wednesday Nancy-Ann DeParle on the White House blog characterized the McKinsey findings as "an outlier," citing studies from the nonpartisan Rand Corporation and the Urban Institute and the consulting firm Mercer (emphasis is mine):
The Rand Corporation: "The percentage of employees offered insurance will not change substantially, but a small number of employees in small firms (defined as those with under 100 employees in 2016) will obtain employer-sponsored insurance through the state insurance exchanges."
The Urban Institute: "Some have argued that the Patient Protection and Affordable Care Act would erode employer-sponsored insurance (ESI) by providing incentives for employers to stop offering coverage. Others have claimed that most businesses would face increased costs as a result of reform. A new study finds that overall ESI coverage under the ACA would not differ significantly from what coverage would be without reform."
Mercer: "In a survey released today by consulting firm Mercer, employers were asked how likely they are to get out of the business of providing health care once state-run insurance exchanges become operational in 2014 and make it easier for individuals to buy coverage. For the great majority, the answer was 'not likely.'"
Now, the plot thickens.
From The Plum Line:
Posted at 04:35 PM ET, 06/10/2011
McKinsey refuses White House request for info on study faulting Affordable Care Act
By Greg Sargent
The other day, the consulting company McKinsey released a startling study claiming that 30 percent of employers are planning to stop giving health insurance to their workers as a result of the Affordable Care Act. The study received a good deal of press coverage and was widely bandied about by conservative politicians and media outlets as proof that conservative warnings about the law are coming to pass.
But as a number of critics were quick to point out, McKinsey’s finding is at odds with many other studies — and the company did not release key portions of the study’s methodology, making it impossible to evaluate the study’s validity.
There’s now been a new twist in this story.
I’m told that the White House, as well as top Democrats on key House and Senate committees, have privately contacted McKinsey to ask for details on the study’s methodology. According to an Obama administration official and a source on the House Ways and Means Committee, the company refused.
A spokesperson for McKinsey — which does proprietary research regularly — declined comment.
It's a straightforward question from the White House. Nothing complicated about it, so why the stonewall?
From The Washington Monthly:
June 09, 2011 12:35 PM
What McKinsey & Company has to hide
By Steve Benen
An outfit called McKinsey & Company released a report this week making all kinds of discouraging claims about the Affordable Care Act. According to the study, nearly a third of American businesses will stop offering health coverage to their employees as a result of the new reform law. Several news outlets pounced on the release of the report, as did many Republicans.
The White House’s Nancy-Ann DeParle, in a rather understated response, urged caution.
A central goal of the Affordable Care Act is to reduce the cost of providing health insurance and make it easier for employers to offer coverage to their workers. We have implemented the law at every step of the way to minimize disruption and maximize affordability for businesses, workers, and families. And we agree with experts who project that employers will continue to offer high quality benefits to their workers under the new law. This one discordant study should be taken with a grain of salt.
That’s putting it mildly.
McKinsey claims to have done a survey of 1,300 employers. How was it conducted? We don’t know and McKinsey hasn’t said. What were the questions? We don’t know and McKinsey hasn’t said. How were the employers chosen? We don’t know and McKinsey hasn’t said. What were the statistical breakdowns among businesses of different sizes? We don’t know and McKinsey hasn’t said.
Who funded the study? We don’t know and McKinsey hasn’t said.
Kate Pickert noticed a small tidbit in the report: McKinsey acknowledged having “educated” those participating in the survey. And what, pray tell, did the company say to respondents that might have affected the results? You guessed it: we don’t know and McKinsey hasn’t said.
Politico added today that it “asked really nicely” to at least see the questionnaire McKinsey used to conduct the employers survey, but the company refused.
Raise your hand if you think the McKinsey & Company report has some credibility problems.
Once again, these are basic questions that McKinsey should be able to answer, but are not...why is that?
But multiple sources both within and outside the firm tell TPM the survey was not conducted using McKinsey's typical, meticulous methodology. Indeed, the article the firm published was not intended to give the subject matter the same authoritative treatment as more thorough studies on the same topic -- particularly those conducted by numerous think tanks, and the Congressional Budget Office, which came to the opposite conclusion. And that's created a clamor within the firm at high levels to set the record straight.
"This particular survey wasn't designed in away that would allow it to be peer review published or cited academically," said one source familiar with the controversy.
All sources were granted anonymity, in order to be able to speak candidly about the controversy.
Reached for comment today, a McKinsey spokesperson once again declined to release the survey materials, or to comment beyond saying that, for the moment, McKinsey will let the study speak for itself. However, McKinsey notes that the survey is only one indicator of employers' potential future actions -- that the conclusions remain uncertain and employers' future decisions will ultimately depend on numerous variables. The three authors of the report were not immediately available for comment.
Another keyed-in source says McKinsey is unlikely to release the survey materials because "it would be damaging to them."
Both sources disagree with the results of the survey, which was devised by consultants without particular expertise in this area, not by the firm's health experts.
A third source speculates that the firm may have reached its outlying conclusion by basing its questions on the firm's own advice to clients on how best to arbitrage the new reforms. Specifically, under the law, employers could devise their benefits packages in ways that makes them unappealing to lower-income employees, who would then have to enter the exchanges. Though TPM could not confirm this, the conclusion is supported by a disclosure within the McKinsey study itself.
"Our survey shows significantly more interest in alternatives to ESI [employer sponsored insurance] than other sources do, for several reasons," the report says. "Interest in these alternatives rises with increasing awareness of reform, and our survey educated respondents about its implications for their companies and employers before they were asked about post-2014 strategies. The propensity of employers to make big changes to ESI increases with awareness largely because shifting away will be economically rational not only for many of them but also for their lower-income employees, given the law's incentives.
Something is absolutely rotten about their study. WHO put up the money for it, and HOW did they do it?
Until they answer those questions, it should be given the side eye.