Deal Flow

Getting stuck – and then unstuck in time

What role did McKinsey & Co. play as a pro bono consultant working for the state of Rhode Island in deciding how to invest resources to combat the COVID-19 pandemic? Who arranged for their services? And, why was their role not shared more publicly?

Photo by Richard Asinof

Commerce RI Secretary Stefan Pryor [file photo]

By Richard Asinof
Posted 11/15/21
The apparent hidden role that McKinsey and Company, one of the world’s largest private consulting firms, played in developing policies around Rhode Island’s response to the COVID pandemic, may be coming more into public view.
What would prompt the R.I. Attorney General’s office to investigate the role that McKinsey and Company played regarding its involvement in policy decisions around the COVID pandemic response? What will be the response of Gov. McKee if it is found that the awarding of the contract to ILO for educational consulting services violated state law? What studies are currently underway in Rhode Island about the long-term health implications from COVID? Should housing be moved to another government agency portfolio, different than CommerceRI?
This week, the Rhode Island Business Group on Health will host its annual health care summit, focused on what it calls the major issues impacting commercial health insurance in Rhode Island.
Among the participants will be: Martha Wofford, president and CEO of Blue Cross & Blue Shield of RI; R.I. Health Insurance Commissioner Patrick Tigue; Kristen Lewis, chief government and community affairs officer at Tufts Health Plan; Peter Marino, president and CEO of Neighborhood Health Plan of RI; and Neil Steinberg, president and CEO of the Rhode Island Foundation.
Not on the agenda, as best that ConvergenceRI can determine, is the fact that prescription drug prices are the leading driver of increased health care costs in Rhode Island. Also not on the agenda is the growing role of algorithms being used to make decisions around which medical procedures to cover with insurance. Another major concern not apparently on the agenda is the growing unmet need of behavioral and mental health services and the lack of parity by commercial health insurers, for which they were recently penalized by OHIC.

PROVIDENCE – I read the news today, oh boy. Britney Spears has been freed from her 13-year conservatorship. Taylor Swift has released her newly recorded version of her album, “Red.” Steve Bannon has been indicted for his failure to honor a Congressional subpoena.

R.I. Department of Education Commissioner Angélica Infante-Green has been awarded a new three-year contract extension, along with a signing bonus, despite her uneven record at best.

At the COP 26, the United Nations Climate Conference in Glasgow, nearly 200 nations from across the globe grappled with finding consensus about what steps to take to attempt to limit the increasingly dire climate threats from global warning, even as extreme weather events keep occurring in greater frequency, pounding away at any hope of a return to normalcy.

Witness the tornado warnings that flashed across all our social media screens on Saturday afternoon, Nov. 13, around 5 p.m. Tornado warnings in mid-November in Rhode Island? The National Weather Service later confirmed that two tornadoes had touched down in Westerly and in North Kingstown, the first tornadoes ever confirmed in November in recorded history in Rhode Island. A third tornado was later confirmed as having touched down in Foster. Can you spell climate change?

Here in Rhode Island, the largesse of federal resources – more than $1.1 billion in unspent funds from the American Rescue Plan Act, coupled with increased projections of state tax revenues – has resulted in sharpened political elbows about how best to invest that yet unspent money, as emergent crises in workforce shortfalls and housing shortages keep worsening.

Politics, of course, is still the practice of who gets what, when and how, as Harold Lasswell once wrote. The biggest problem with making decisions about how, where, and when to spend the $1.1 billion is that there is still little ini the way of transparent accounting of how the federal money that poured into Rhode Island in 2020 – roughly some $6.7 billion, mostly from the federal CARES Act, was spent.

Translated, there is no accounting of how effective the spending was in achieving desired outcomes related to “recovery” – the apparent push to have Rhode Island be a leader in a speedy economic recovery in reopening. So far, the state has successfully avoided balancing its checkbook when it comes to measuring actual results, in ConvergenceRI's opinion.

How much of that $6.7 billion was actually spent on providing direct services, as compared with payments flowing to private consulting firms or to major corporations? And, who was actually in charge of making those decisions about where to direct and invest those funds?

Indeed, one of the recommendations contained in the Rhode Island Foundation’s “Make It Happen: Investing for Rhode Island’s Future” was to create a new government office with authority to oversee the spending of the $1.1 billion in American Rescue Plan Act funds to implement accountability and oversight, in order to achieve “clear goals, performance metrics and transparency” – an acknowledgement that “state government currently lacks the organizational capacity to effectively plan and manage the very large streams of federal …funding flowing to Rhode Island.”

Before moving forward, accountability may involve looking backward as well. Hiding in plain sight underneath the ever-constant deluge of breaking news and extreme weather is an “impertinent,” unanswered question: What role did McKinsey & Company play as a pro bono consultant to the state of Rhode Island in decision-making around interventions to combat the spread of COVID-19?

Unraveling the mystery
ConvergenceRI has learned, through conversations with a number of credible, reliable sources, that an apparent shadow arm of state government was allegedly created by deploying the consulting prowess of McKinsey & Co. during the late spring and early summer of 2020, as part of a team of consultants tasked with organizing and coordinating the state’s response to the COVID-19 pandemic, under the direction of CommerceRI.

McKinsey & Co. allegedly served as an integral part of a team of consultants, which included the Boston Consulting Group, directing the ways in which investments were being made, according to a number of sources.

The involvement of Boston Consulting Group has been reported on and documented, to some degree, by the Rhode Island news media. Members of that firm were embedded into the working teams at the R.I. Department of Health, being paid with federal funds at the rate of $25,000 per person per week. [Annualized, that would be a fee of $1.3 million per person a year.]

As ConvergenceRI had reported: “[There were] millions spent on private consulting firms, including the Boston Consulting Group, to develop a better coordinated response to the coronavirus pandemic in the spring of 2020.

 At that time, the Boston Consulting Group had landed a lucrative contract to embed its own employees remotely, at $25,000 per person per week, within the state agency teams responsible for everything from hospital surge planning to COVID testing and contact tracing, according to reporting by The Providence Journal.
” [See link below to ConvergenceRI story, “Charting the rapid learning curve of Gov. Dan McKee.]

However, what has apparently remained in the shadows was the alleged direct involvement of employees of McKinsey & Co. as equal members of the team, working side-by-side with employees of the Boston Consulting Group, under the direction of CommerceRI, specifically under Secretary Stefan Pryor and his chief of staff, Hannah Moore.

How were the services of McKinsey & Co. acquired? Did the state of Rhode Island have a contract with them? Did former Gov. Gina Raimondo’s husband, Andrew Moffit, who had worked at McKinsey as Director of Industry Learning, become involved in any of the negotiations?

The arrangement with McKinsey & Co. was allegedly brokered through philanthropic resources, according to sources.

What did you know and when did you know it?
The state of Rhode Island, apparently, did not directly pay for the McKinsey & Co. services, as best as can be determined. Instead, the Rhode Island Foundation may have helped to broker those consulting services on a pro bono basis.

Last week, buried in the in-depth ConvergenceRI interview conducted with Stefan Pryor, Secretary of Commerce RI Corporation, was confirmation that during the height of the early onslaught of the COVID pandemic, the consulting firm McKinsey & Co. had been enmeshed with designing the response by the state of Rhode Island. [See link below to ConvergenceRI story, “One-on-one with Commerce Secretary Stefan Pryor.”]

ConvergenceRI: One of the things that I have heard, and you may or may not know about this, was that McKinsey & Company was also involved in this work. I have gone through the state’s transparency portal, and I haven’t seen anything related to McKinsey. So, was McKinsey involved?
PRYOR: I believe that they had a pro bono arrangement to work with the Rhode Island Foundation and with the state in the early stages of the pandemic, or early to mid-stage of the pandemic. I believe that was the case.

Pryor continued: “I don’t know if there were any compensated contracts, because again, that is not my domain. But I do believe that there was a pro bono arrangement.”

ConvergenceRI: And, that was through the Rhode Island Foundation?
PRYOR: I believe so.

ConvergenceRI reached out to the Rhode Island Foundation for clarification on Sunday, Nov. 14, asking “Did the Rhode Island Foundation pay for McKinsey through a philanthropic contribution? Did the state of Rhode Island ask the Rhode Island Foundation to do so?

Chris Barnett, spokesperson for the Rhode Island Foundation, responded with the following answer: "McKinsey worked pro bono. The state relied on a number of third parties like the Foundation as the administration moved swiftly to develop a plan for reopening the state."

A thorny issue
The growing relationship between state government and its contracts with private consulting firms has become an increasing thorny issue, involving both the former Raimondo administration and the current McKee administration.

Gov. Dan McKee is currently embroiled in a controversy related to his efforts to award a contract to ILO, a new consulting firm that was incorporated just days after McKee had been sworn in as Governor, involving former leaders of the nonprofit organization, Chiefs for Change, run by Michael Magee, a close ally of the Governor. Magee participated in conversations with state officials regarding the scope of the proposed contract, according to reporting by WPRI. R.I. Attorney General Peter Neronha is currently investigating the case.

McKinsey, in turn, has a checkered reputation regarding its advocacy on behalf of some of its clients, including Purdue Pharma and the Sackler family. [See link below to ConvergenceRI story, “The high cost of consulting firms making policy.”]

In February of 2021, McKinsey agreed to settle a lawsuit brought by 47 state attorneys general, including Rhode Island, for $573 million, that detailed McKinsey’s role in helping Purdue Pharma “turbocharge” the opioid epidemic. Rhode Island received $2.59 million in its share of the settlement, of which some $1 million was recently used to purchase additional supplies of Narcan by the state.

Questions to be answered
There are numerous outstanding questions that need to be answered, in ConvergenceRI’s opinion:

Did McKinsey & Co. receive any financail compensation for its pro bono work for the state? How much of the work of McKinsey & Co did for Rhode Island was shared with other government agencies – here in the U.S. and with other countries around the world?

Why wasn’t the state’s pro bono relationship with McKinsey and Co. made more public? Was there anything that might be construed as potentially unethical, improper or illegal regarding the use of philanthropic resources to broker pro bono consulting services from McKinsey on behalf of the state? Was the R.I. Attorney General’s office ever asked for an advisory opinion about the relationship?

• In what ways did the consultants from Boston Consulting Group and McKinsey & Company effectively replace or supersede the decision-making and policy authority of agencies such as the R.I. Department of Health on matters of public health?

Trepidations and tremors
Like a disrupted, unstable weather front, there are high levels of cognitive dissonance and practiced partisan misinformation when it comes to vaccines and mask mandates and the connection between policies and practice around public health. And climate threats. And cancer research.

On Friday, Nov. 12, Gov. Dan McKee and U.S. Sen, Jack Reed attended the 8th annual American Cancer Society Cancer Action Network Rhode Island Research Breakfast, at the Marriott on Orms Street.

“Today shows that when someone is fighting cancer, they’re not fighting it alone,” the Governor said, as tweeted by Boston Globe reporter Alexa Gagosz.. Further, the Governor said that there was a network of survivors, caregivers, business leaders and health care workers that are standing with them, Gagosz reported.

The courage of survivors and the important research conducted by the local health industry facilities are phenomenal treatment resources. But the avalanche of cancer cases continues unabated, despite advances in treatment. Why is that?

One of the top local cancer research scientists, Wafik S. El-Deiry, M.D., an Associate Dean at the Alpert Medical School, told the audience that in Rhode Island in 2021, there would be an estimated 7,000 new cases of cancer and 2,000 deaths, according to Gagosz. The doctor said that COVID-19 would increase the death count because of delayed screenings.

As important and as heartwarming as the testimony by survivors at the research breakfast was, what was missing from the conversation was the perspective of research scientists such as Sandra Steingraber, as detailed in book, Living Downstream, and in her autobiographical story, “Woman in the Woods,” in Orion Magazine, herself a survivor, and the connection to the fact that bladder cancer is an environmental cancer. [See link to story below.]

The context: We are not separate from the environment we live in, the air we breathe, the water we drink, and the food we eat.

Our economic policies around fossil fuels should not be separated from the perverse health consequences and climate threats caused by fossils fuels and the toxic feedstocks that are used to manufacture plastics.

Likewise, our policies around health care, particularly around public health, need to reflect a different kind of metric around outcomes, not dictated by corporate calculations made by consulting firms such as McKinsey and Company, in ConvergenceRI’s opinion.

These are conversations that need to be held in public, not behind closed doors, in the bright sunlight of transparency.


No comments on this item Please log in to comment by clicking here

© | subscribe | contact us | report problem | About | Advertise

powered by creative circle media solutions

Join the conversation

Want to get ConvergenceRI
in your inbox every Monday?

Type of subscription (choose one):

We will contact you with subscription details.

Thank you for subscribing!

We will contact you shortly with subscription details.