June 22, 2011 Leave a comment
Dear US News Media,
Do you understand that the world does not revolve around you and your do whatever it takes, ruin as many people’s lives, so long as you can make a name for yourself as an investigatory journalist, no matter how many friends you lose or people you leave dead and bloodied along the way, just so long so you can make a name for yourself as an investigatory journalist, no matter how many friends you lose or people you leave dead and bloodied and dying along the way?
McKinsey & Company
You (should) recognize the above quote from Zoolander, a fine film about the perils of the status quo’s fleeting and shallow obsession with fame and beauty. It came to mind given the recent controversy over a report released by McKinsey & Company on the effects of the Accountable Care Act (read: Obamacare) on levels of employer coverage. The usually solid management consulting firm really bit it on this one. A brief history:
- McKinsey & Company released a report two weeks earlier that definitively forecasted that about a third of employers would “definitely or probably” drop coverage for employees when the mandate takes place in 2014.
- This was a very bold, out of left field prediction that was not in line at all with other analysts’ predictions. The Congressional Budget Office (CBO), who scores and evaluates policy, and the Urban Institute, had entirely different predictions, even indicating that a class of small businesses may see improved coverage due to reform.
- As this study was such an eyebrow raiser, a slew of “investigatory journalism” ensued over the next few weeks, revealing a flawed methodology, controversy about the study’s authors and dubious conclusions all around. Some of these were described in a blog post by Nancy Ann DeParle, Deputy Chief of Staff at the White House.
- McKinsey posted a proviso in response. The thing is, it does not own up to the poor scientific rigor or their shoddy conclusions – rather they backpedaled about the “intent” of the survey, saying it was never intended to be compared to economic analyses.
In a nutshell, the report claimed hard impacts based on soft reasoning. The report turns out to be based on qualitative, casual surveying of employers – which is okay, and useful as a barometer in many cases – but carried strong language that suggests employers will be dropping coverage. The people surveyed did not all even understand what the ACA mandates meant, did not know their firm’s own medical insurance situation, and were not provided with any of this information as part of the “research” before being asked their opinions or assessments.
The real story here is one of PR and leadership. McKinsey dropped the ball on handling this situation properly. Everyone makes mistakes, and the way these large consulting firms often work, a team releases a story, the abstract gets sent to leadership, gets approved, and the piece is published. Fact checking is part of the process, but this particular report had few facts to begin with. We can at least give credit to McKinsey for not throwing their own people under the bus.
However, in an era where crowdsourcing has upped the ante on accountability, give credit to the investigatory journalism that called out McKinsey for the sham facts they tried to inject into an already confusing and politically explosive health care reform environment. McKinsey’s brand will take a hit for this, and that’s a good thing. I suspect they’ll regain credibility soon enough however, so it may be too soon to start Eugoogoolizing them.