About that McKinsey study: What are consultants advising about health reform?

McKinsey survey doesn’t seem great. It raises an interesting question: What are consultants telling employers, hospitals, device makers, medical practices, others about health reform?

There’s a controversy brewing about McKinsey’s survey of firms regarding health reform. (See here and here and here for more on this controversy.) I don’t think this survey is great from a survey design perspective. To me that’s not the interesting issue. To my mind, the survey is some combination of sales pitch/market research for McKinsey’s own consulting practice. That’s probably true of most surveys conducted by consulting firms.

The more interesting question is simpler: What are consultants saying to employers, benefit management firms, insurers, hospitals, medical device makers, and others about health reform? What are they being asked about? Do these questions and answers match the questions policy wonks are asking and answering about health reform? Given the many large uncertainties out there concerning businesses’ perceptions and behavior, and regarding the on-the-ground impact of specific provisions, I’d really love to know.

Can any of you readers help me?

Author: Harold Pollack

Harold Pollack is Helen Ross Professor of Social Service Administration at the University of Chicago. He has served on three expert committees of the National Academies of Science. His recent research appears in such journals as Addiction, Journal of the American Medical Association, and American Journal of Public Health. He writes regularly on HIV prevention, crime and drug policy, health reform, and disability policy for American Prospect, tnr.com, and other news outlets. His essay, "Lessons from an Emergency Room Nightmare" was selected for the collection The Best American Medical Writing, 2009. He recently participated, with zero critical acclaim, in the University of Chicago's annual Latke-Hamentaschen debate.

6 thoughts on “About that McKinsey study: What are consultants advising about health reform?”

  1. Harold,

    This may be a bit off the topic of your actual question, but I wanted to add my two cents. Your comment about the combination of sales pitch / market research is essentially accurate. However, I think your question may imply a misconception about how consultancies think about issues like HCR. Consulting companies don’t generally have any interest in or incentive to view these topics as political questions as distinct from their prospective clients; whether or not health reform is a “good idea” per se is only a relevant subject insofar as it provides additional engagement opportunities or helps to bring them credibility and eminence in the market. (I’m being perhaps more cynical than is warranted – most consultants have a sincere interest in these issues and are genuinely concerned about managing them effectively – but at the end of the day, consulting companies are still companies, and they’re in the business of selling services.)

    As a result, clients are asking what you might expect about health reform: what are the major provisions which concern us, how will they impact my business (in the short- and long-term), how should I best react to them given my market position and competitive set, etc. Certain assumptions about political interests, impact on the economy, and so on are implicit in these questions and any good consultant will have an opinion on the subject. However, a consultant isn’t particularly worried about whether they are “good policy,” and they have a strong incentive to exaggerate the importance of any trend, let alone HCR. After all, “it’s not a big deal and you shouldn’t buy more work from us” isn’t a particularly compelling sales pitch.

    Additionally, consultancies don’t have massive proprietary research resources, and they are expected to be experts in many different areas; even those with significant research arms are stretched across multiple industries and/or topics. As a result, they tend to rely on the exact same “policy wonks” and “experts” to inform their opinions that you reference in your above question: they talk to the same people, read the same academic papers and journals, and generally have access to the same databases and statistical stores. Their job is to synthesize, not research. As a result, although there may be idiosyncracies, the average consultant’s opinion about the macro opinion of HCR is generally reflective of the market as a whole.

    The upshot: HCLS consultants are (as far as I’ve seen) generally reflective of the distribution of expert opinions in the market as a whole; they tend to emphasize change as a function of their incentive structure; and any specific recommendations are almost always reflective of current circumstances but are values-neutral. This is obviously somewhat general, but I thought it was worth pointing out.

  2. Thanks much. Quite interesting and sensible. I’m curious if there are conventional wisdoms or perceived sales pitches out there for business among consultants–independent of whether these consultants have additional expertise.

  3. However, a consultant isn’t particularly worried about whether they are “good policy,” and they have a strong incentive to exaggerate the importance of any trend, let alone HCR. After all, “it’s not a big deal and you shouldn’t buy more work from us” isn’t a particularly compelling sales pitch.

  4. As a result, they tend to rely on the exact same “policy wonks” and “experts” to inform their opinions that you reference in your above question: they talk to the same people, read the same academic papers and journals, and generally have access to the same databases and statistical stores.

  5. Harold,

    You’re being too kind when you say it’s not great from a design perspective. From a design perspective, if the purpose was to estimate corporate responses to the ACA, it stank. However, if the purpose was to gauge the status of the market for their services, the instrument and sampling design are pretty good. That’s got to be what the purpose was: how much potential business is out there? Can we meet the demand with our current staffing levels, or do we need to hire some more people?

    That’s why they fought like dogs to not release the instrument, the sampling design and the results. Some internal idiot-with-an-agenda took what was supposed to be an internal market study and said, “Wowee, look at this!” Then the idiot released the juicy agenda-driven bits and the fecal material hit the fan.

    I’ll lay money that Mercer, Accenture and every other large (and a lot of medium-sized) consultancy that works in benefits planning and design is going over McKinsey’s study with a fine tooth comb. Of course, they don’t have the data, so they can’t run custom cross-tabs, but what is already there is informative.

  6. One tidbit from a quick glance at the survey response tables: Over 50% of primary decision makers don’t know the per employee cost of health benefits *within a range of thousands of dollars*, 32% don’t know what share of premiums are paid by the company. As others have said, this is a survey of marketing opportunities, not a measure of expected public policy responses.

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