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June 11, 2011 8:00 AM The McKinsey plot thickens

By Steve Benen

We talked Thursday about a controversial McKinsey & Company report, which generated quite a stir this week with a survey 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 findings were sharply at odds with all available evidence, leading reporters to want to examine the report’s methodology. McKinsey & Company refused requests for additional information, shielding the study from scrutiny, which further raised suspicions about its validity.

Greg Sargent reports that White House aides, as well as leading Democratic officials in the House and Senate, have also reached out to McKinsey with questions about the survey’s methodology — if the report is accurate, it stands to reason officials need to know more about this — and again the consulting firm refused all requests.

Brian Beutler takes this story a little further still, noting that even within McKinsey & Company, there are officials unhappy with how their own firm has conducted itself.

[M]ultiple 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 a way that would allow it to be peer review published or cited academically,” said one source familiar with the controversy. […]

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.

McKinsey has to realize it has a lot of explaining to do. This is the sort of controversy that can do lasting damage to a firm’s credibility.

Indeed, the questions are piling up. How was the survey conducted? What were the questions? Who wrote them? Why did McKinsey abandon its usual methodology for this one project? When McKinsey “educated” survey participants, what language was used that might have affected the results? And who paid for all of this?

As Paul Krugman added yesterday, “[I]f you ask me, this is a lot more important than some sex scandal.”

In the meantime, any Republicans citing this McKinsey report as evidence of the ACA’s flaws are obviously not to be taken seriously.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.

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  • DAY on June 11, 2011 8:09 AM:

    They saw how lucrative Standard & Poor was in rating mortgage derivatives, and thought, "Hmmm, we want a piece of that pie."

    Any bets on who commissioned/funded that "report"?

  • c u n d gulag on June 11, 2011 8:15 AM:

    "In the meantime, any Republicans citing this McKinsey report as evidence of the ACA’s flaws are obviously not to be taken seriously."

    Aye, but there-in lies the rub.

    This report will be cited by Repbulicans from now until the end of time, whether it is true or not.
    And it will stick - whether it is true or not.

    If this is some sort of a one-off where "its usual methodology for this one project" was corrupted or wrong, this reminds me of what the rationale was by the SCOTUS in Bush v. Gore: 'Oh, we're breaking precedent and doing this just this one time - HONEST! We'll go back to being neutral tomorrow..."

    Why break precedent, unless it's to create a new precedent?


  • Domage on June 11, 2011 8:28 AM:

    In the meantime, any Republicans citing this McKinsey report as evidence of the ACA’s flaws are obviously not to be taken seriously.

    Gulag beat me to it, but it's true: Republicans will continually cite this report. And the press WILL soon take it a gospel.

    Consider all the other "facts" that Republicans have injected into our discourse. Like the "fact" that taxes were lower under Reagan. and the "fact" that Reagan never, ever, ever raised taxes. These "facts" are demonstrably false, and many of us who lived through those times recall Reagan raising taxes 6 out of his 8 years as president. Yet, the media now accepts that St. Ronnie was a great tax cutter, and that taxes today are orders of magnitude higher than they were under Reagan.

    All because Republicans have learned that if you repeat the lie often enough and loudly enough, the truth is eventually completely obscured.

  • Danp on June 11, 2011 8:33 AM:

    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

    Jon Kyl, anyone?

  • davidp on June 11, 2011 8:39 AM:

    The signs accumulate that a kind of coup is being planned for next year. The GOP in Congress and the corporate and financial lobbies are working hand in glove to prevent any economic recovery. Lies are being systematicallly disseminated about Obama's record, as in this McKinsey report. The Supreme Court has made sure that limitless corporate funds will be spent. Bogus anti-voter fraud initiatives will proliferate to depress the Democrats' vote. The intended result will be a right wing takeover of all branches of government that is not meant to be reversed and which will return the US to the days of Herbert Hoover.

  • Kathryn on June 11, 2011 8:53 AM:

    davidp speaks for me. The vast right wing conspiracy that Hillary Clinton spoke of is fully operational.

  • hell's littlest angel on June 11, 2011 9:04 AM:

    I'm noy getting this at all. How could McKinsey have not anticipated that they would be asked to back this up? A third of all businesses? That will completely change the economic and labor landscape of the entire country. Workers all over the nation will be besieging management with questions. This will cause a panic.
    Unless, of course, it's bullshit -- and Occam's Razor says it's bullshit.
    But again, McKinsey is not a couple of right-wing provocateurs with a website. They can't have assumed they wouldn't be asked questions, can they?
    I think there's a lot more to come on this story, and I think someone's going to come off looking very, very bad.

    Yes, dishonest shit-heads like Palin and Santorum will repeat this forever, and the fools who listen to them will believe it. But that group of fools grows smaller by the day.

  • Mr Serf Man on June 11, 2011 9:13 AM:

    hell's littlest angel I agree. How could they think no one would ask. Up next Sacrificial staffer. Someone who will be fired for releasing the report.
    And I know it will get at least as much attention as Wienergate.
    and as said by david p This report will be cited by Repbulicans from now until the end of time, whether it is true or not.
    And it will stick - whether it is true or not.
    But repeating lies is what they do. It is their MO

    War is peace
    Freedom is Slavery
    Ignorance is strength

    You know the drill

  • Marc in Denver on June 11, 2011 9:16 AM:

    Why do the words "push polling" come to mind?

  • Extreme Liberal on June 11, 2011 9:18 AM:

    Should ANY Republican really be taken seriously these days? They have become a parody of a parody of a political party.

  • Patrick Star on June 11, 2011 9:33 AM:

    A commenter on another thread (yesterday, maybe?) had a great idea - the Dems should start an ad campaign with the title "They Think You're Stupid" and use stories like this as an example. Maybe if you appeal to people's pride, you just might be able to get through to them - assuming, of course, that they can be persuaded at all.
    I find stories like this very depressing. It really does seem like the Republican Party has been taken over by borderline fascists who are trying to take over the country in a very deliberate and coordinated fashion. And for the most part, they're getting away with it.

  • ManOutOfTime on June 11, 2011 10:33 AM:

    In the meantime, any Republicans citing this McKinsey report as evidence of the ACA’s flaws are obviously not to be taken seriously.

    I think you meant to write "In the meantime, any Republicans are obviously not to be taken seriously." There was a bunch of redundant stuff there. Fixed it.

  • ComradeAnon on June 11, 2011 10:48 AM:

    Just another example of a McKinsey screw up. Throw it on the stack of failures. I'm sure Jeff Immelt of GE would be more than happy to defend them.

  • Michael on June 11, 2011 10:51 AM:

    Not that I have any personal experience of them, but scuttlebutt on the web seems to indicate that hiring these McKinsey bozos to develop a "master plan" for your business is the surest way of destroying it. Sort of a corporate version of Geo. W. Bush, with opinions every bit as valuable. Just saying.

  • davidp on June 11, 2011 11:00 AM:

    Another participant in the projected coup (see above, 8.39) is of course AIPAC, and behind AIPAC the government of Israel. Netanyahu's recent visit was orchestrated by the GOP as a means of attacking Obama. His pay-off from the next GOP administration will be the green light for full annexation of the West Bank.

  • Bob Calder on June 11, 2011 11:16 AM:

    Why wouldn't a small business with less than 25 employees trash a lousy play with significant preexisting coverage limits and perhaps other irritating limitations like a 90 day waiting period? These things can significantly limit your ability to hire a very good applicant. Also, the less-than-25 market is very expensive compared to the true group market where you must have more than 25 employees. This may be an issue as well.

  • jrosen on June 11, 2011 12:32 PM:

    The organization where I worked for 27 years had an encounter with McKinsey. It was the Boston Symphony, and they (McK) offered their services pro bono to find out why the organization was so dysfunctional. (The main reason was a Music Director who could not make decisions and also was unable to make his wishes clear, not--- in some 40 years of working in the US --- having ever really mastered English.) McK interviewed several hundred people (I was one of them) over some months and then presented their findings to the assembled masses in a Power Point session. It might have been a skit out of "The Office" or SNL; the "findings" were a collection of empty cliches about "better communication" etc. etc. I left after about 25 minutes, the whole episode was quickly forgotten and nothing changed until said Music Director retired. The only positive in the whole sad affair was that we didn't have to pay for the fiasco, which is not saying much.

    It certainly didn't enhance my opinion of the highly touted McKinsey operation, and although one occasion is not fair to make a generalization, it would be interesting to hear from others who have had dealings with them. This present business stinks from the basement to the penthouse, and it would be nice to see a bulldog investigative reporter like Sy Hirsch dig into it.

    From another angle, may I point out that the technique of the "Big Lie", i.e. endless repetition of a falsehood until it is believed by enough fools was described in uncharacteristically clear passages in "Mein Kampf" and the author of that seminal work credited American advertising with showing him the model. Plato advocated a similar ploy, but he had the honesty to call it the "Noble Lie" and used it to keep the underclasses in their proper place. Plus ca change...

  • rob on June 11, 2011 1:41 PM:

    Who paid for the 'study'?

  • bdop4 on June 11, 2011 3:08 PM:

    ANY study that does not disclose its methodology isn't worth the paper it's written on. You will as well use it to wipe your ass.

    THAT should be the response every time it is cited.

  • bdop4 on June 11, 2011 3:10 PM:

    correction: you MIGHT as well use it to wipe your ass.

    God, I wish this site had an edit feature.

  • rtyecript on August 23, 2011 1:36 PM:

    I really liked the article, and the very cool blog

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