McKinsey Backpedals on Health Care Reform Study

| Fri Jul. 1, 2011 12:10 PM EDT

Last week, global consulting giant McKinsey & Company released a study suggesting that 30 percent of businesses currently offering health care to their employees would probably stop doing so once President Barack Obama's Affordable Care Act goes into full effect. Conservative foes of health care reform eagerly lapped this up, asserting that the study clearly debunked Obama's promise that Americans would be able to keep their current health care coverage under his new law if they so desired. But health economists and supporters of the law quickly voiced skepticism of the study, asking the most basic of questions: what was the methodology?

McKinsey's explanation, via National Journal's Julie Rovner:

McKinsey conceded that its survey "was not intended as a predictive economic analysis of the impact of the Affordable Care Act." . . . [T]he survey was more of a point-in-time reading of employer opinion. "As noted, the survey only captured current attitudes," the firm explained.

"Employers’ future actions will be determined by many considerations. Among them: medical-cost inflation; the details of new state health insurance exchanges; employee attitudes toward compensation and benefits; a company’s ability to attract and retain talent; actions taken by competitors; and the state of the economy."

Eventually, McKinsey released its methodology—albeit, in incomplete form. And it only disclosed the survey's questions in response to a letter of inquiry from Sen. Max Baucus (D-Mont.). Apparently, there was a reason for the firm's reluctance, Rovner reports: 

[E]mployers were asked leading questions that made it seem logical for them to stop offering insurance. Respondents were told that the new health insurance exchanges would become "an easy, affordable way for individuals to obtain health insurance." Then they were given examples of how little their low- and moderate-income workers might have to pay for insurance, thanks to new federal subsidies. Only then were they asked how likely they would be to stop offering health insurance.

McKinsey stands behind its work. And its exalted, apolitical, professional reputation within corporate and policy circles isn't likely to suffer too much as a result of this episode. Yet the lesson is clear: given the never-ending controversies surrounding the ACA, lawmakers should tread carefully before blindly accepting declarative predictions predicated on less-than-transparent data. The same is true for bloggers and partisan food-fighters.

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