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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.

But here’s the angle to keep an eye on. How soon will Republican talking points simply incorporate this highly dubious claim into all arguments about health care policy? That’s usually how this game works — sketchy outfit tells the GOP what it wants to hear; Dems point out how baseless the claim is, and the media presents the information in a he-said-she-said format, leaving the public to think “both sides” have merit.

Keep this in mind the next time you hear a Republican claim on television, “We recently learned that a third of American businesses will stop ensuring their workers.” It won’t be true, but that won’t matter.

* edited for clarity

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.

Comments

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  • bignose on June 09, 2011 12:39 PM:

    I'm sorry, but informing respondants that HCR was "Written by that commie negro imposter" doesn't count as "Education"

  • bdop4 on June 09, 2011 12:47 PM:

    Until they fully disclose their methodology, the only conclusion one can reach about this (or any) report is that the data was pulled from author's ass.

    In my dream world, that would be the standard reply from Dem leadership.

  • c u n d gulag on June 09, 2011 12:50 PM:

    Why is it that I'm not surprised by any of this?

    Let's see, a "Double Secret" poll was taken!!!

    It could have asked left-handed albino Aborigine's in Australia.

    Or the blood relatives of Republican politicians.

    Or an octopus pointing to certain sentences.

    Or Rasmussen poll questioners.

    We don't know.

    They won't tell us.

    They ask us to trust them.

    But Hey, it's a poll!!!!!!!!!!!!!!!
    And we all know how much the MSM loves polls!!!

  • JS on June 09, 2011 12:59 PM:

    Well, McKinsey is not a disreputable 'outfit' but rather the world's most prestigious management consultancy. They produced the famous climate change abatement cost curves that are widely used to promote renewables and the sustainability agenda. I doubt they have a political agenda, although like all consultancies they work for fee-paying clients.

  • Mudge on June 09, 2011 1:02 PM:

    Of course the alleged one-third that drop health insurance will transfer the savings into their employee's paychecks. Or do many businesses look at this as a way to increase income and shove employees into the exchanges? I always choose the option with maximum greed.

  • John Puma on June 09, 2011 1:03 PM:

    First, I'm no fan of Obama/Romnet care. The answer was and still is HR 676+Medicare for all.

    But is there any hint as to who, exactly , is this "outfit called McKinsey & Company"?

    Any previous credible (or incredible) reports from them? For whom do they do their "investigations"?

    Last, but not least, any Koch-roach money here?

  • atlliberal on June 09, 2011 1:05 PM:

    "It won�t be true, but that won�t matter."


    This is true for many republican talking points that make it to "mainstream" media. As long as they sound certain and forceful they can say anything without being challenged and once it's repeated enough it becomes true.

    That's how Republicans became known as the party of "fiscal responsibility" while quadrupling the national debt.

    That's how they became the party that was "strong on national security" while ignoring the terrorist threat before 9/11 and overreacting to it, and starting two wars without a plan to get out of either one.

    They have mastered the art of creating their own reality. And if the "mainstream media does challenge them on any point, well then, that doesn't matter either because "nobody trusts them anymore" They have been discredited in the eyes of conservatives.

  • Rick Massimo on June 09, 2011 1:06 PM:

    If we acted like Republicans do, we'd say, "Well, good - that means we're 'starving the beast' that is the private health-care market (don't call it a system) and paving the way for eventual REAL public health insurance."

    Sigh ...

  • Ish on June 09, 2011 1:06 PM:

    McKinsey is hardly just some sketchy outfit. It is a very highly regarded (and usually very highly compensated) management consulting firm. It has an excellent reputation in the business world. It isn't known as a chop shop for ideologically slanted research.

    That makes this report, and McKinsey's unwillingness to disclose its contents, methods and funders, all the more worthy of scrutiny.

  • toowearyforoutrage on June 09, 2011 1:14 PM:

    Biggest campaign donors historically and recently went to Democrats.
    http://www.opensecrets.org/indivs/search.php?name=&state=&zip=&employ=McKinsey+&cand=&all=Y&sort=A&capcode=fb7mp&submit=Submit


    http://www.opensecrets.org/indivs/search.php?name=&state=&zip=&employ=McKinsey+&cand=&c2010=Y&sort=A&capcode=wm6k3&submit=Submit

    The firm is legit, but the question about methodology is too. Whassup McKinsey & Co?

    We're Democrats. We can eat crow, if we must. Spill it.

  • dal20402 on June 09, 2011 1:15 PM:

    McKinsey is big and prestigious and no one ever got fired for hiring it, but it's not "highly regarded" by anyone other than clueless CEOs.

    Their typical practice is to parachute in a bunch of young, insanely overworked associates, who listen to the people on the ground for a few hours at most and then produce a report full of hard-to-verify claims and blue-sky ideas. Anyone who has actually worked for a company that took a McKinsey report seriously knows it would be a disaster.

    This looks to me like a big company with an anti-HCR agenda hired McKinsey and instructed them to use a bunch of questionable assumptions, in order to get the "McKinsey" tag on the result. McKinsey or no, it's garbage in, garbage out.

  • Equal Opportunity Cynic on June 09, 2011 1:17 PM:

    Yeah, there are some very real concerns about this research, and it wouldn't remotely pass muster in the academic (or hopefully public policy) world. But to imply they're some sort of sketchy outfit just makes participants in this discussion look ill-informed.

    @JR: Without a doubt, whatever's demanded by their client IS their political slant. Benen's right, though, i'm sure the media will jump all over this without exercising any critical thinking, because critical thinking is biased.

  • Equal Opportunity Cynic on June 09, 2011 1:19 PM:

    Yeah, dal20402 pretty much nailed it. Prestigious but not worth listening to.

  • Mark on June 09, 2011 1:26 PM:

    I would echo those vouching for McKinsey in general. The context will be important. Typically their research / "thought leadership" is going to be above and apart from their clients' interests. It would be pretty scandalous if this were a political hack piece. More likely, there was no/little/insufficient education of the respondents -- that the respondents were operating under mistaken assumptions and that the research really just tells us how impulsively, reflexively anti-HCR a segment of the population is.

  • jeri on June 09, 2011 1:30 PM:

    I'm really getting tired of this. And I'm especially tired of the lack of effective pushback by Democrats. If the press won't do its job, the only way to handle the steady stream of nonsense from Republicans is a tit for tat strategy.
    How is it possible to compete if the two sides are playing by different sets of rules?

    By the way, I tried and tried to correctly enter the upside-down CAPTCHA word, but no matter what I did it still came out right side up. I even tried rotating the keyboard 180 degrees, but that didn't work either. I finally gave up and got another set of words. I hate CAPTCHA.

  • bob h on June 09, 2011 1:34 PM:

    The Koch brothers paid for the study? Or the RNC?

    The top corporations have to compete for talent, and while many have thrown out 401k matches, retiree healthcare and pensions, none of them has discarded employee healthcare to my knowledge. So why would they do so in the future when they can continue to offload the increasing costs onto their employees?

  • shoeflyin on June 09, 2011 1:37 PM:

    dal20402 knows what he/she is talking about.
    "Prestigious", yeah kind of like Arthur Anderson used to be. My experience with McKinsey - they developed a business plan for a major corporation I used to work for. The CEO said it was brilliant and they proceeded to dismantle a 7 billion-a-year business. By the time they were done the business was destroyed. I left the company voluntarily a couple years later - a good move since they ended up laying off most of that division. The final twist was the corporation was bought by the Koch brothers. So glad I'm not there anymore. My clue was that management was happy to turn over their business to outside consultants full of idiot MBAs who really had no idea how our business worked.

    The only consolation - in theory McKinsey got paid based on the results so I assume they got nothing.

  • Danp on June 09, 2011 1:37 PM:

    This poll is far more like other polls than unlike them. At the risk of beating a dead horse, polls are propaganda tools. In fact the biggest difference is that in this case someone asked about their methodology. Polls are easy to manipulate, and the only ones that can be tested are those right next to elections. The kid knows when the test is, guys.

  • drkrick on June 09, 2011 1:38 PM:

    As someone who's been the victim recipient of a few McKinsey studies in my time, they're pretty good at the "conclusion in search of a justification" game when that's what the client wants. I can't imagine any reason to take a study like this one seriously unless the funder and the methodology is revealed.

  • neil b on June 09, 2011 2:11 PM:

    I suppose it's the same company (check though, similar names aboud), look at this from http://www.cnbc.com/id/41868799/Will_Rajat_Gupta_Destroy_McKinsey

    "Will Rajat Gupta Destroy McKinsey?
    Published: Wednesday, 2 Mar 2011 | 11:22 AM ET
    Text Size
    By: John Carney
    Senior Editor, CNBC.com

    * Twitter
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    * More Share
    *

    Rajat Gupta
    Umesh Goswami | The India Today Group | Getty Images
    Rajat Gupta
    McKinsey & Co is reeling from the revelation that the Securities and Exchange Commission believes one of its most high-flying alumni gave corporate secrets to a hedge fund manager who is now accused of being at the center of a large and complex insider trading scheme.

    For a firm that thrives on its reputation, proximity to misdeeds of this sort could be fatal, according to former McKinsey consultants who spoke on the condition of anonymity.

    Rajat Gupta stands accused of violating insider trading rules by leaking confidential information about two companies—Procter & Gamble [PG 65.37 0.52 (+0.8%) ] and Goldman Sachs [GS 134.3601 2.7701 (+2.11%) ]—on whose board’s he was serving. So far a lot of the public attention has been focused on Gupta’s roles at Goldman and P&G.

    But Gupta has a far longer and more important connection to the world’s most prestigious consulting firm, McKinsey. He worked at the firm for 34 years, eventually rising to become its managing director—the McKinsey equivalent of chief executive. He was elected to the top job at McKinsey by his fellow partners at the firm for three consecutive terms—the maximum allowed by the firm’s rules.

    RELATED LINKS

    Current DateTime: 11:07:30 09 Jun 2011
    LinksList Documentid: 41866755

    * Is Rajat Gupta a Lunatic, Logo, or Luckless Innocent?
    * Rajat Gupta: Bigger Than Madoff?
    * Rajat Gupta Had Inside Information on $61 Billion P&G Deal in 2005

    Now some of those partners and other consultants feel betrayed and baffled that the man they trusted to run McKinsey. The McKinsey alumns and staff are a tight knit group, who literally refer to their firm as “The Firm”—like Harvard Law School graduates refer to their school as “The Law School.”
    ~~~~~~~~~~~ end quoted ~~~~~~~~~~~~~~

  • sublime33 on June 09, 2011 2:31 PM:

    Jeffrey Skilling was a partner at McKinsey before getting hired by Ken Lay as managing director and CEO of Enron.

  • Steve on June 09, 2011 2:40 PM:

    The most important point, as the White House emphasizes, is that three other studies by reputable organizations - Rand, the Urban Institute, and Mercer - have all come to the exact opposite conclusion.

    None of these are shady outfits. None of them should be regarded as automatically wrong - or automatically right. But without any details on the McKinsey study, there is surely no reason to assume that they are right and the three other studies are all wrong.

    We would do better to focus on the lack of detail from McKinsey, and the existence of three competing studies that reached the opposite conclusion, than to imply McKinsey is some kind of sketchy Rasmussen-type hack operation.

  • jjm on June 09, 2011 3:02 PM:

    McKinsey is compromised. I recall that it had great involvement with Enron, and that its advice was considered by many as the source of its less than excellent working ethics: see http://en.wikipedia.org/wiki/McKinsey_%26_Company

  • bigtuna on June 09, 2011 4:18 PM:

    McKinsey et al are a pretty well known outfit, as has been pointed out above. They seem to thrive on young hard charging minions to "study" companies. From 2007 Time article:

    "Mitt Romney told the Wall Street Journal last week that if he is elected President, he will "probably" hire McKinsey, the management-consulting firm, to tell him how to reorganize the government. "I'm not kidding," he said, tactfully adding that it might be another management-consulting firm such as Bain (where Romney worked for years and where he got rich) or the Boston Consulting Group. Or he just might call on Jack Welch"

    Read more: http://www.time.com/time/magazine/article/0,9171,1684521,00.html#ixzz1OoOVE9sW

    Like Bain, BCG, and others, they also serve as outside consultants to help businesses focus, refocus, etc., develop new strategies. A lot of the time, this means spinning off assets [aka, firing people], developing new business models, etc.

    I have never studied them much, but they had a pretty credible cost of CO2 avoidance study [which showed it wouldn't cost much] that was publically released but then buried. I had a very hard time determining their methodologies.

  • Eric on June 09, 2011 4:19 PM:

    Yes, McKinsey is legit, but let's not forget that one of their most famous gigs ended with their recomendation that Ford fire Lee Iacocca.

  • LB on June 09, 2011 4:57 PM:

    McKinsey (usually considered the biggest and the best business consulting company in the world) is very good at what they do. Chelsea Clinton used to work for them, for example. However, they tend to tell the client what the client wants to hear. Sometimes, they do surveys like that without external client funding it, just to promote themselves and keep their name in the news. Details matter though. It could have been just a brief chat with CEOs of these companies.

  • Jon on June 09, 2011 6:06 PM:

    Don't count on the press to question the results. They lap up whatever they are fed. Like the zany report a while back that a Hummer is more energy-efficient than a Prius. Absurd on its face, and a train wreck of poor methodology and dubious data, from a Detroit pawn, but the press totally bought into it. That's why it's so easy to be a Republican nowadays. Critical thought isn't part of the curriculum at journalism school, and not a requirement to get a job in the press. Those that can't do, pass on PR releases.

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