Government taps McKinsey to help manage $175 billion payout to hospitals

Consulting firm McKinsey & Company has been hired by the Department of Health and Human Services (HHS) to help manage $175 billion in federal relief funds for hospitals impacted by the coronavirus pandemic.

The $4.9 million contract was awarded in late April. According to the HHS, McKinsey will help implement, manage, and monitor relief payments, while also creating internal controls and audit strategies.

A June 20 article from Politico highlighted that McKinsey has worked for at least 10 hospitals and chains that have received relief payments. Those previous clients include Cleveland Clinic, Dignity Health, Intermountain Healthcare, SSM Healthcare, and Novant Health.

McKinsey made as much as $20 million in a single year from one of its hospital chain clients. The consulting firm, which is based in New York and has a global footprint of 27,000 employees, has a sizeable healthcare business which consists of 1,700 advisors.

Government taps McKinsey to help manage $175 billion payout to hospitals

A McKinsey spokesperson told Politico that it was not determining which organizations receive money under the CARES Acts, and that no project personnel were concurrently serving healthcare providers or fund recipients. The spokesperson also said that the partners leading the project had not worked with healthcare providers in the last four years, and that most project employees had not worked for healthcare providers.

An HHS representative responded that “McKinsey does not determine payment methodology or priority of how payment should be made. The purpose of this contract is to develop and implement a framework for project management and project planning, which will be applied across the Provider Relief Fund portfolio of projects.”

McKinsey provides consulting services to numerous federal, state, and local governments and agencies. The prestigious consulting firm advises public sector clients across the globe – attracting particular criticism for its work with Saudi Arabia and South Africa in recent years.

The firm in April was tapped by New York Governor Andrew Cuomo to create a science-based plan for reopening the state’s economy.

The New York-based firm suffered a setback in May when the General Services Administration (GSA), the contracting and property management arm of the federal government, terminated a multiple award schedule (MAS) contract with McKinsey.

Source Article