Wendell Potter on Pete Buttigieg and his work for McKinsey Client Blue Cross and Blue Shield.
Before Pete Buttigieg released the list of McKinsey clients he worked with, Wendell Potter wrote the following on his Twitter account:
BREAKING: As a former corporate exec who worked with McKinsey, I may be able to shed light on one of @petebuttigieg’s unnamed McKinsey clients, and why it’s very significant in this campaign.
(Note: I have not endorsed anyone in this race, nor do I intend to) 1/13— Wendell Potter (@wendellpotter) December 9, 2019
When I was a health insurance exec, my CFO had McKinsey on retainer. Every year or so, especially when one division or another wasn't making enough profit, McKinsey would be brought in to "assess" current operations. (2/13)
— Wendell Potter (@wendellpotter) December 9, 2019
Those of us who knew about McKinsey’s involvement at our insurance corporation knew it would lead to “cost cutting.” That’s consultant talk for laying off workers, offshoring, and hiking rates. The McKinsey efforts would have code names because it had to be kept secret. (3/13)
— Wendell Potter (@wendellpotter) December 9, 2019
Now what does this have to do with @petebuttigieg? In his description of his McKinsey work, he says he worked in Michigan at a “health insurance provider… performing analytical work… identifying savings in administration and overhead costs.” 4/13https://t.co/ObvSXcrDJi
— Wendell Potter (@wendellpotter) December 9, 2019
To an old health insurance exec, those are code words that translate roughly to cutting costs through layoffs, restructuring, and potentially denying health coverage to those in need. 5/13
— Wendell Potter (@wendellpotter) December 9, 2019
Important: You’ll notice @petebuttigieg describes his McKinsey insurance client as “a nonprofit” insurer. So that means it was a different kind of company, right? No. “Nonprofit” insurers behave just like “for-profits.” In fact, you might not be able to tell them apart (6/13)
— Wendell Potter (@wendellpotter) December 9, 2019
Blue Cross Blue Shield of Michigan is a “non-profit” health insurer, that fits the description of the @petebuttigieg client. Its financials in 2007 were not great, which is when execs call in firms like McKinsey to come up with tactics to right the ship. 7/13
— Wendell Potter (@wendellpotter) December 9, 2019
Based on this article below, BCBS laid off hundreds of people and increased premiums dramatically not long after. Those premium increases likely led to a lot of people losing their insurance. (8/13)https://t.co/INotSbek7i
— Wendell Potter (@wendellpotter) December 9, 2019
Why is this relevant to 2020? I’ll leave analysis of @petebuttigieg’s transparency, or his potential role in rate hikes and layoffs, to political experts. What I can speak to is how this experience might lead him to defend and protect health insurance companies now. (11/13)
— Wendell Potter (@wendellpotter) December 9, 2019
Pete is fighting to preserve the role & profits of health insurance companies, spending huge sums on ads slamming plans to rein them in. I'll be watching to see if my former insurance colleagues send him big campaign checks. He’s probably one of their favorite candidates (12/13)
— Wendell Potter (@wendellpotter) December 9, 2019
Speaking of Michigan BCBS, this from the Detroit Metro News:
The BCBS work occurred in 2007 as the insurance company was preparing to cut 10 percent of its workforce and raise premiums. In a Tuesday interview with The Atlantic, Buttigieg said he was not involved in the decision-making and says he was taken off the project after three months, before the layoffs were announced. The layoffs occurred in 2009.
“I don’t know what the conclusions were or what it led to,” he told the magazine of his work there. “So it’s tough for me to say.”
But while running for mayor of South Bend in 2011, Buttigieg seemed to claim ownership of his BCBS work, touting his ability “to reimagine our budget from the bottom up.”
“One of the things I did for a living was just that,” Buttigieg said during a candidate forum. “So I remember one client organization that was a large insurance firm that had grown in such a way that there was a great deal of duplication and some people didn’t even know what the people working for them were doing.”
Emboldened is my doing.
Buttigieg’s campaign responded to this report with the following statement:
“As we’ve said, Blue Cross Blue Shield of Michigan was Pete’s first assignment in his first job after graduate school in 2007, and he spent about three months working on it. He was part of a team of analysts that looked at overhead expenditures such as rent, travel costs, and utilities. He wasn’t a part of any decision making or in charge of making recommendations. While he was speaking about what he observed while on the Blue Cross Blue Shield assignment, his comments at this forum weren’t about any recommendation he made or analysis he provided. What he was offering at that moment was an observation about what large organizations like a city or an insurance company face.”
“I was assigned to a team that was doing an analysis on the overhead costs that they had, nothing to do with claims, or what they do with patients, but kind of as an organization — buildings, rent, utilities, travel, that kind of thing,” Buttigieg told MSNBC’s Rachel Maddow. “I certainly saw how big and complicated an insurance company can be.”
Buttigieg said that what he learned at BCBS was part of why he supports a public option for health care. He does not, however, call for replacing private insurance companies with public health care, as his Democratic rivals Bernie Sanders and Warren do.
Funny. He learned all that at BCBS, but Buttigieg was for Medicare for All, until he wasn’t. And he touted his work for BCBS, not mentioning them by name, while running for Mayor of South Bend. And his mention of the work implies — yes, it does Buttigieg fans — that he found areas to cut costs dealing with personnel at BCBS. In other words, layoffs.
Yeah, I know. “Prove it!” I don’t have access to his emails and work products, but I think you can draw your own conclusions from the inconsistencies in Buttigieg’s statements on healthcare and his run for Mayor. And I think we can rely upon Wendell Potter’s experience working in the health insurance industry as a guide to what was assigned to Buttigieg while his client was BCBS. McKinsey has an unsavory reputation, and I don’t believe for one second that the corporate culture at McKinsey suddenly turned for the worst after Buttigieg left there.
Note: Yes, I probably violated some copyright rules with the extensive links to Wendell Potter’s Twitter account, but I felt his remarks on BCBS and McKinsey are a critical read for everyone who is a Democratic voter.
