When the consulting group McKinsey released a survey last month finding that some 30 percent of employers would stop offering health care coverage as a result of the Affordable Care Act, many speculated the firm was fishing for additional business contracts. But as the Government Accountability Office recently revealed, McKinsey is already benefiting from substantial government contracts associated with the new health care reform law:

“More than $790 million has been obligated to contractors from various federal agencies for the implementation of the health reform law. [...] A majority of the contracts were awarded to states for the purpose of implementing the reform law’s Pre-Existing Condition Insurance Plan program, but several other high-profile contractors — such as Booz Allen Hamilton, Mitre Corporation and McKinsey & Company– received funding as well [...]

“McKinsey & Company received two awards totaling more than $7.6 million for Affordable Care Act stand-up activities at IRS, including initial development of the agency’s strategic plan, facilitation services, review/analysis of legislative proposals, and information technology and overall implementation planning.”

The consulting firm has already drawn fire from the White House, members of Congress, and the health-care industry for publishing the study, whose questionable methodology led one survey expert to liken it to a “push poll.” After finally releasing its methodology following pressure from Congress, McKinsey qualified its findings by saying the study was “not intended as a predictive” analysis.

By publishing an ACA study incongruous with its “typical, meticulous methodology,” McKinsey risked its professional reputation. And yet the firm is benefiting government contracts derived from the new law. Makes you wonder just what game the firm is playing.

– Sarah Bufkin

Reports that lawmakers are considering some $340 billion in Medicare and Medicaid as part of a final deal to raise the nation’s debt ceiling have been rallying DC-based health advocacy groups, but now a coalition of health care interests in Massachusetts are also expressing concerns that any additional federal reductions in health care spending could undermine the state’s 2006 health care reform law and undermine economic growth:

While members of the hastily assembled coalition said they were still tracking fast-changing budget talks in Washington, D.C., some estimated the cuts being contemplated could drain $1 billion to $3 billion in annual health care funding from the state’s $30 billion budget, hurting everyone from the poor and elderly to doctors-in-training at teaching hospitals.

Standing on the State House steps, coalition members represented organizations including the Massachusetts Hospital Association, the Service Employees International Union, the consumer group Health Care for All, and the Greater Boston Interfaith Organization. Many held signs that read, “Fed cuts hurt care and jobs.’’ [...]

It drew support from powerful health care players who are sometimes on opposite sides of the table, such as Partners HealthCare System, which operates the Harvard-affiliated Brigham and Women’s and Massachusetts General hospitals, and Blue Cross Blue Shield of Massachusetts, the state’s largest health insurer. All of them said they worry that federal cuts could negate gains from the state’s 2006 health care law and derail efforts to overhaul health care payments.

In a letter to the debt ceiling negotiators, the National Governors’ Association (NGA) struck a similar tone, arguing that the proposed federal reductions for Medicaid “will result in a direct cost shift to states, which will result in reduced Medicaid expenditures, in increased state taxes or reductions in K-12 education, transportation, and public safety funding.” “If Medicaid spending is reduced, the most likely (if not only permissible) source of savings would be additional reductions in payments to doctors and hospitals, potentially running afoul of the proposed requirements regarding access,” the group wrote.

The economic impact of Medicaid cuts could also be significant. As Families USA noted in one recent report, “Every federal Medicaid dollar that flows into a state stimulates business activity and generates jobs. The loss of federal funding means there will be fewer dollars circulating through each state’s economy, as well as fewer dollars passing from one person to another in successive rounds of spending that drive economic growth.” It’s generally estimated that “every $1 million in federal funds generates $1.7 million in business activity on average, 17.1 new jobs, and $600,000 in wages and salaries.”

Columbus Biz Insider’s Carrie Ghose reports that Ohio Gov. John Kasich (R) didn’t just impulsively commit $2 million to foster collaboration among the state’s hospitals during a public event in Columbus, Ohio yesterday; he also endorsed two critical aspects of the Affordable Care Act: accountable care organizations (ACOs) and state-based health care exchanges:

Kasich had come to Children’s to talk about how the Partners for Kids program at Nationwide Children’s was the model for how children’s hospitals will work with Medicaid managed care plans and pediatricians statewide to better coordinate care for children.

“I predict to you the rest of the country will be studying what we’re doing,” he said.

That model is what’s known in the federal health reform law as an Accountable Care Organization, which makes Kasich a Republican governor actively implementing a law his party abhors. At first professing surprise that the ACO is part of health reform – it is a complex law, after all – Kasich said it doesn’t matter because care coordination is simply a good idea.

“I think an (insurance) exchange is a good idea as well,” signaling Ohio will implement another big part of the federal law even as his state insurance director, Lt. Gov. Mary Taylor, has been publicly blasting it.

“I don’t operate like, if it’s theirs, it’s not a good idea,” Kasich said. “Who cares? Let’s get it done.”

The exchanges and the concept of managed competition among private insurers actually originated at the conservative Heritage Foundation, and Kasich isn’t the first Republican to publicly endorse this particular ACA provision. Last month, Idaho Gov. Butch Otter (R) took credit for the new market places, claiming Democrats “co-opted” his idea and added it to the law.

Indeed, Ohio is moving forward in establishing health care exchanges, even as Republican state Attorney General Mike DeWine has signed onto the national lawsuit to repeal the health reform law.