Shoddy McKinsey Survey Draws Democrats’ Wrath

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From Talking Points Memo:

Sen. Max Baucus (D-MT)

Brian Beutler| June 20, 2011, 6:08PM

Democratic members of Congress who pressed the consulting giant McKinsey & Company to open the books on its disputed health care study are piling on, now that the firm’s released its survey materials.

Senate Finance Committee Chairman Max Baucus (D-MT), who took a leading role in the pressure campaign, just lambasted the firm for inadequately addressing the controversy. Baucus also provided new details about a private meeting the firm’s representatives had with members of his own staff about the survey.

“McKinsey has long held a reputation for fair-minded analysis, so it is particularly disappointing that this study does not live up to that reputation — or even come close. McKinsey made clear and definitive predictions, and, in the face of tough questions, simply changed their story” said Baucus. “This report is filled with cherry-picked facts and slanted questions – it did not provide employers with enough information for them to make honest choices and fair evaluations. Rather than correct the major deficiencies in their report, McKinsey has chosen to again stand by their faulty analysis and misguided conclusions.”

He’s joined by Reps. Sander Levin (D-MI) and Pete Stark (D-CA) who, in an official joint statement, said “[N]ow that the company has revealed the methodology it used, we have a sense of why: the respondents in McKinsey’s telephone questionnaire knew very little about the law. As McKinsey concedes, its survey is not of the same caliber as earlier CBO, Rand and the Urban Institute research – studies that found little change is expected regarding the number of employers that will continue to offer insurance after 2014.”

McKinsey’s study concludes that employers are fairly likely to drop or restructure their health care benefits as a result of the health care law — a conclusion that’s at odds with numerous other economic analysis.

According to the background info included in Baucus’ official statement, McKinsey admitted to Finance Committee staff — as they did in their official statement, that their study isn’t comparable to those sorts of studies. “That is a major reversal of the position McKinsey took in its article,” the statement reads.

The article stated:
Our research suggests that when employers become more aware of the new economic and social incentives embedded in the law and of the option to restructure benefits beyond dropping or keeping them, many will make dramatic changes. The Congressional Budget Office has estimated that only about 7 percent of employees currently covered by employer-sponsored insurance (ESI) will have to switch to subsidized-exchange policies in 2014. However, our early-2011 survey of more than 1,300 employers across industries, geographies, and employer sizes, as well as other proprietary research, found that reform will provoke a much greater response.

McKinsey admitted to Finance Committee staff today that the company would have used a different method if it was actually trying to make a prediction.

While the firm claims to stand by their findings, it also acknowledges that their survey isn’t intended to be predictive. However, in its official statement, McKinsey linked to the report with the following teaser: “The shift away from employer-provided health insurance will be vastly greater than expected and will make sense for many companies and lower-income workers alike.” Emphasis added.

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