consulting connections
Pete Buttigieg's McKinsey consulting was followed by a premium hike at Blue Cross Blue Shield
Pete Buttigieg has some very presidential explaining to do.
As the South Bend, Indiana, mayor and 2020 Democrat began talking about his consulting work with McKinsey Co., former health insurance executive turned Medicare-for-all advocate Wendell Potter suspected Buttigieg worked with a client that would be "very significant in this campaign." And when Buttigieg's client list came out, Potter's hunch proved true: Buttigieg had worked with Blue Cross Blue Shield of Michigan just before it hiked its insurance premiums and axed nearly 1,000 employees.
Potter first shared his theory in a Monday Twitter thread, saying the health insurance company he'd previously worked for "had McKinsey on retainer," and that the consulting firm was brought in "when one division or another wasn't making enough profit." Buttigieg described his work for BCBS as "identifying savings in administration and overhead costs," which to Potter are "code words" meaning "cutting costs through layoffs, restructuring, and potentially denying health coverage." Buttigieg spent three months with the health insurance provider in 2007 — a year BCBS reported a 27 percent drop in net earnings. That exact loss was mentioned by BCBS exectuives when, two years later, the provider announced layoffs of up to 1,000 workers and double-digit premium increases.
Buttigieg's mysterious work for McKinsey had been a subject of criticism throughout his campaign, especially after a New York Times report showed McKinsey's work with U.S. Immigrations and Customs Enforcement led to severe cuts in detainee care. Buttigieg said he wasn't able to release the details of his work until Tuesday. After speaking with Buttigieg, The Atlantic reported he said he'd worked on "nothing having to do with policy or premium costs" at BCBS. "I don't know what the conclusions were or what it led to," Buttigieg said of his three months at BCBS when asked about the subsequent cuts.