PriceWaterhouseCoopers Backs Away From AHIP
PriceWaterhouseCoopers spends most of its time as a fairly respected consultancy operation. It's entrusted with the audits for ExxonMobile, Ford, IBM, Walt Disney, CBS and many others. It also has a division where outside groups can pay a handsome sum to commission reports on a topic of their choice. It's a neat arrangement: The outside groups know the results they want and the variables and constraints that will ensure that answer. But they don't have the legitimacy to release that report on their own. So they pay a consultancy -- like PWC -- to launder the analysis through their credibility. The consultancy gets a paycheck, the outside group gets a press release, and everyone goes home happy. In Washington, it's a tried-and-true tactic.
But PWC was clearly unprepared for the firestorm that erupted over yesterday's report. And they have their own credibility to protect. Last night, spokesman David Neston sent out an unexpected press release backing away from the analysis, and blaming AHIP for its deficiencies. It reads:
America’s Health Insurance Plans engaged PricewaterhouseCoopers to prepare a report that focused on four components of the Senate Finance Committee proposal: -- Insurance market reforms and consumer protections that would raise health insurance premiums for individuals and families if the reforms are not coupled with an effective coverage requirement.
-- An excise tax on employer-sponsored high value health plans.
-- Cuts in payment rates in public programs that could increase cost shifting to private sector businesses and consumers.
-- New taxes on health sector entities.
The analysis concluded that collectively the four provisions would raise premiums for private health insurance coverage. As the report itself acknowledges, other provisions that are part of health reform proposals were not included in the PwC analysis. The report stated on page 1:
“The reform packages under consideration have other provisions that we have not included in this analysis. We have not estimated the impact of the new subsidies on the net insurance cost to households. Also, if other provisions in health care reform are successful in lowering costs over the long term, those improvements would offset some of the impacts we have estimated.”
In other words, PWC is saying that AHIP paid it to focus on four parts that AHIP didn't like and ignore everything else in the bill. On Page 1, PWC embedded a disclaimer essentially admitting that their report was woefully inadequate. Sort of "break glass in case of loud, public criticism." And now they're breaking the glass.
The disclaimer doesn't get PWC entirely off the hook; the methodological inadequacies of the report made the results nothing short of deceptive, and the final product still had PWC's name on it. But it makes it even harder for anyone to take the analysis seriously, and it leaves AHIP standing alone.
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