Pushback on McKinsey Health Benefits Study

As Business Finance reported last week, a new study by management consultancy McKinsey & Company came to some interesting conclusions about the potential future of employer-provided health benefits. But now, some questions are arising from the White House and, interestingly, from other McKinsey consultants about the survey itself and its methodology.

The key point of contention is the McKinsey study's finding that 30% of employers would "definitely" or "probably" stop providing health benefits to their employees in 2014 once the health insurance exchanges are up and running.

First, White House Press Secretary Jay Carney made the following statement at a press briefing:

...(the McKinsey) report is pretty starkly at odds with the experts from the Congressional Budget Office, the RAND Corporation, the Urban Institute, and it is also starkly at odds with history. History has shown that reforms motivates more businesses to offer insurance. Health reform in Massachusetts, for example, uses a similar structure as the Affordable Care Act with an exchange, a personal responsibility requirement and an employer responsibility requirement. And the number of individuals with employer-sponsored insurance in Massachusetts has increased. We are confident the Affordable Care Act will strengthen our existing system, employer-based system going forward. So we simply just disagree with those conclusions...We believe that the Affordable Care Act will reduce costs overall. It is one of the reasons why the president pursued insurance reform, because he wanted to address the burden that costs were placing on individuals as well as businesses. So yes, we disagree with the conclusions of the report.

A more detailed rebuttal from Nancy-Ann DeParle, assistant to the President and deputy chief of staff, calls the McKinsey study an outlier and questions McKinsey's methods:

McKinsey says they obtained their data after they "educated respondents" about reform and that their survey used proprietary research. We don't know what respondents were told or whether they had the chance to check with their colleagues or crunch the numbers for their business before responding.

It also seems that the study may be causing some internal questions about the study within McKinsey itself. Political blog Talking Points Memo cited anonymous McKinsey sources who question the survey's methodology:

...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 a way that would allow it to be peer review published or cited academically," said one source familiar with the controversy.

In response to questions about the survey methodology, a McKinsey spokesperson pointed to the information contained in this McKinsey Quarterly article. She also noted that, "the article reflects the opinions of the respondents at that point in time. Obviously the survey is only one indicator of the employers' view of likely future actions. Many uncertainties remain, and the actions and timing of actions of employers will ultimately depend on numerous variables."