The Wall Street Journal reports on a McKinsey and Company study saying that Obamacare might result in as much as 30% of American businesses dropping health care coverage. The reason is because "the law will give Americans new insurance options outside the workplace, and carriers will no longer be allowed to deny people coverage because they have been sick."
This is being portrayed as a critique of Obamacare. The White House called it "one discordant study". Why exactly? Some would argue that we should move away from employer-based health care.
In any case, there is plenty of evidence that employers will continue to provide it. In Massachusetts, the Journal notes that employer participation increased after the similar Romneycare plan went into effect. At least three studies have projected that the same would happen with Obamacare. This McKinsey is a distinct "outlier."
Also, the McKinsey numbers, looked at from the other angle, say that 70% of employers will still offer coverage. Among the other 30%, many undoubtedly fell into the "probably" category, which means some will also retain it. The glass is at least 70% full, even according to McKinsey.
Steve Benen is right to ask about the particulars of the study. Who did they interview? What are the raw data? What motivated the study? Who paid for it? What questions were asked? What method was used? In fact, these questions are so basic, it's surprising that McKinsey didn't release this information to begin with.
Kate Pickert notes that a Wilson Quarterly article had said that “…(the McKinsey) survey educated respondents about [employer sponsored insurance] implications for their companies and employees before they were asked about post-2014 strategies.” She wonders: Exactly what form did this "education" take?
Pickert called McKinsey up to ask them about their methods. They interviewed 1300 employers, in both large and small business, they said, in various regions around the country. Beyond that, they didn't add much. When asked if a third party had funded the study, they said no, according to Pickert.
McKinsey and Company is one of the world's largest consulting firms, not that that's saying much. What do consultant really do? A few years back, Michael Kinsley asked a McKinsey recruiter exactly that question:
He said, "We provide expertise." I said, "But you're thinking of hiring me, and I have no expertise." He said, "We'll train you." Nothing about that interview dissuaded me from the view that consultants spend at least as much energy and brainpower selling themselves to clients as they spend doing whatever the client pays them to do.
A commenter at Washington Monthly said that, yes, McKinsey a large company 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.
If this is the same McKinsey and Company that made recommendations to Habitat for Humanity back in the 1990's, that observation is spot on.
The report they produced for Habitat read like it had been dished out to a couple of still-wet-behind-the-ears summer interns. Their "recommendations" had all the creativity and imagination of notes written on cocktail napkins late into happy hour.
The task was supposedly to bring Habitat International "closer" to the affiliate chapters. These brainiacs proposed to bring Habitat "closer" to affiliates by reducing the number of regional offices from 15 to 9, while increasing staff at those 9 "super centers." We lost a lot of good people in the easily-predicted chaos, and roiled the whole organization while failing abysmally to achieve the stated objective.
Yet, despite its contradictions, and frankly, its sophomoric analysis and lame recommendations, the "McKinsey Study" was received as if delivered from on high. The great McKinsey had produced it.
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