June 15, 2011: From the desk of SHADAC Director Lynn Blewett
McKinsey and Co. recently released a report on the likely impact of the Affordable Care Act on employer-sponsored insurance (ESI). The report received a lot of play in both the national and local press due to its conclusion that as many as 30 percent of employers will stop offering coverage in response to reform—a finding that differs dramatically from that of the Congressional Budget Office, which puts the number at approximately 7 percent.
A closer consideration of the McKinsey report reveals that it is based on “proprietary research” packaged for the McKinsey Quarterly, which is the business journal of McKinsey and Company—not a peer-reviewed academic journal, as one might think. We only know that the survey of 1,800 employers upon which McKinsey bases its conclusions “educated” respondents about the implications of reform, provided them with alternatives to ESI, and then asked them their opinion. Since the research is proprietary, we don’t have access to the survey questions or the sampling methods used, and we can only guess what the “education” of survey respondents involved. Based on McKinsey’s economic interests, some of the questions might have gone like this: “If we offered to help you set up a defined contribution model and limited your company’s financial exposure in the future, would this be an option for you?”
The McKinsey report is clearly suspect, but what’s arguably more disappointing is that the press coverage didn't consider the economic agenda of the report’s authors or the lack of transparency about the “proprietary research” from which they draw their conclusions.
Follow this link to read a piece by Kate Pickert on exactly what information is needed in order to properly evaluate the McKinsey study.