McKinsey & Company is a global management consulting firm and a trusted advisor to the world’s leading governments, businesses, and institutions. McKinsey’s scale, scope, and knowledge allow it to address problems that no one else can. The organization has deep functional and industry expertise as well as breadth of geographical reach. McKinsey & Company is passionate about taking on immense challenges that matter to its clients and, often, to the world. For more information, visit www.mckinsey.com.
View McKinsey & Company’s Strategies
McKinsey & Company’s mission is twofold: to help its clients achieve distinctive, lasting, and substantial improvements in their performance, and to build a great firm that attracts, develops, excites, and retains exceptional people. McKinsey measures its success as a firm against these two elements. It cares about helping its people be healthy and well, to enable them to both better serve clients and develop to their full potential professionally and personally. A highly successful global management consulting firm that serves businesses, governments, and institutions around the world, McKinsey is known for its hard-working consultants who are passionate about problem-solving. The McKinsey workforce is relatively young, with an average age of about 35. More than 80 percent of the staff is under 40. The good news is that this workforce has much lower levels of obesity, diabetes, heart disease, and other chronic conditions than many other corporations must deal with. But most McKinsey consultants (including the many with young families) travel a lot and work long hours. These factors can affect their health and work-life balance. The firm places a very high value on the health and wellness of its workforce, and believes that supporting employees’ health helps them lead more fulfilling and productive lives, stay energized and focused on client needs, and deliver the best results for clients. Helping employees achieve better balance in their lives is not just good for the employees; it’s good for the firm as well.
McKinsey’s Strategies for Improving the Health and Wellness of Individuals
McKinsey targets its primary wellness efforts to the specific needs of its workforce. Although its 104 offices around the world offer employees conventional preventive health and wellness programs (e.g., flu shots, sponsored exercise events, in-office gyms or discounted gym memberships), the firm’s focus is on helping employees achieve a better work-life balance. It has developed a number of innovative programs to achieve this goal:
McKinsey employees can take advantage of several alternative working models that change the typical full-time work schedule to reduce stress and improve work-life balance. These include:
- “Take Time”: This program enables employees to take an extended block of time off between projects—in addition to their regular vacation time—to pursue personal interests. This leave is unpaid, but employees continue to receive benefits. Many employees take advantage of the program to spend the time with loved ones, participate in community service, or dedicate time to hobbies.
- Part-Time Roles: Employees can work 60 to 80 percent of full time by working three to four days per week, or by taking longer time off between projects. This can be either a permanent part-time role or can be a ramp-up period for people returning from a maternity or other leave.
- Leaves of Absence: Leaves are available for up to one year, and can be used to extend maternity leave or meet other family or personal commitments. The leave is unpaid but employees continue to receive benefits for up to six months.
- Support for Different Roles: McKinsey is increasingly working with its consultants to help them create “their own McKinsey” by playing to their strengths, and exploring the diversity of experiences the global firm has to offer.
- This may involve transitions between traditional consulting and other types of roles. Some consultants switch “tracks” to achieve a different work-life balance, while others do so to pursue particular interests, for example, those related to knowledge or people development
- Many types of roles are available that differ from the traditional, generalist consultant role, including client-facing expert roles, internal knowledge development roles, and practice management roles. Recruiting and people development/training roles are also available.
- Consultants have the opportunity to switch into many of these roles either for a specified period of time (e.g., six to twelve months) or as a semi-permanent or permanent career trajectory shift.
McKinsey has implemented several phases of a program called “The Way We Work” that encourages better work-life balance, stress reduction, and other aspects of health and wellness. These guidelines call for:
- Team Learning: At the beginning of each engagement with a client, consultants have a “Team Learning” session at which they discuss not only topics related to the client situation, but also their professional development and lifestyle goals, to ensure the project is set up to run successfully. The session includes a discussion of all team members’ lifestyle constraints (e.g., time constraints due to family, need for exercise, planned vacations, etc.)
- Team Norms: Each team also establishes “Team Norms,” guidelines that will govern how the team works together for the course of the engagement, including how the schedule will accommodate each team member’s work-life balance requirements, how the team will make time for healthy meals and exercise, etc. Each team member is responsible for ensuring that the team adheres to these norms over the course of the engagement and is evaluated on this at the end of the engagement.
- TeamTalks: Based on research into inspiring team experiences these 30- to 45-minute team discussions, held every two to three weeks, focus on team dynamics and ways the team can make its work more inspiring for each other and for the client.
Tailored, Tested Benefit Programs
McKinsey considers the needs of its workforce a primary driver for employee benefit strategy. Programs and features are often initially piloted with key populations and/or locations. For example:
- Caring for New Families: This comprehensive, voluntary maternity support program is designed to assist participants who are pregnant or considering pregnancy. Its goal is to help expectant mothers stay healthy during pregnancy. The program provides topical educational materials (about nutrition, breastfeeding, gestational diabetes, etc.) and puts the women in touch with a nurse specialist who can address any concerns they may have during the pregnancy.
- Upon enrollment, pregnant members undergo an initial assessment to identify possible health risks. Based on this assessment, targeted prenatal education and support is provided. Employees who enroll and complete the program are eligible to receive reimbursement of up to $300 for certain pregnancy-related services/products not ordinarily covered under the firm’s medical plan (e.g., lactation counseling, Lamaze classes, breast pumps, and nursing shields and gels). To be eligible for reimbursement, participants must have completed the program and submit the completion letter provided.
- Financial Wellness: McKinsey provides voluntary access to financial education services in an effort to support healthy financial wellbeing amongst its population. This free service is available online and also by phone. The phone option consists of a helpline staffed with Certified Financial Planners. The online portal offers a self-guided, customized assesment with follow up guidance and alerts.
- Stress Management: McKinsey uses a variety of more conventional approaches to stress management, including regional ombudsmen, coaching programs, and employee peer networks (e.g., women’s groups or other cohort groups).
Benefits and Impact
McKinsey’s flexibility options and work guidelines are gaining in popularity among its workforce. Currently, about 13 percent of consultants take advantage of flexibility options. The Take Time program, introduced globally in 2012, quickly became the most popular flexible working model, doubling overall participation in flexible programs. Over that same time period, a consultant survey showed a 16-point increase in the percentage who agreed that the firm is committed to flexibility. A survey of participating teams in Europe and the United States showed that, after implementing Strengths-based Teams initiatives, consultant time spent on non-value adding activities (such as travel) and time spent on individual work each fell by seven percentage points. Next-generation Strengths-based Teams initiatives, including TeamTalks, have led to an improved team experience across all eight of the client-engagement dimensions self-reported by teams.
The return on investments in employee wellness programs remains a source of discussion and debate in most corporations. Many believe the ROI is unknown or unknowable. McKinsey believes that for its programs to attract and support employees and provide an ROI for any organization, their design must be based on a deep understanding of the employee population’s specific health needs and a deep understanding of what motivates the workforce. McKinsey’s relatively youthful workforce has responded well to the programs aimed at helping them achieve better work-life balance. Says one McKinsey consultant, “It was a good idea to introduce ‘Take Time’ to allow consultants to spend more time with their families and friends.” Another agrees: “’Take Time’ has been critical to my satisfaction.”
Key Take-aways for Other Employers
The key lessons to learn from McKinsey’s employee wellness programs are not the specifics of the programs, but rather the need to tailor wellness programs to a workforce’s specific health needs. By understanding an employee population’s needs—through surveys, focus groups, analysis of claims data, etc.— employers can better design health and wellness programs that target those needs. It is also important to understand what rewards will motivate employees.
McKinsey & Company has worked with a range of health plans and health systems around the world to improve operations, increase efficiency, and develop and implement innovative approaches to health care payment and delivery. Its goals are to help these organizations strengthen their financial sustainability, encourage the delivery of higher-quality, higher-value care, and improve the health of societies as a whole.
McKinsey Insights on Strategies for Improving the Health Care System
McKinsey’s work to improve health care payment and delivery is extensive, ranging from helping private and public payers design and implement innovative, value-based reimbursement models, to helping health care providers make the fundamental shifts required to improve their efficiency and the quality of care delivered.
McKinsey has invested heavily in analytics tools, proprietary datasets, knowledge, and other intellectual capital to support this work. It conducts extensive research into the problems faced by payers, providers, and patients, and it shares the knowledge gained to promote learning and improvement efforts both within individual health care systems and across the health care systems of different countries. Each year, McKinsey’s health care practice invests heavily in research designed to support its clients on the most important issues facing the health care industry, and help establish a fact base for the industry and the public at large. These investments have enabled McKinsey to continue to innovate and increase its impact.
In addition, the firm has established a number of new groups that provide a deep level of focus and expertise. For example, the Mckinsey Advanced Healthcare Analytics (MAHA) group helps payers use big data analytics and conduct sophisticated actuarial analyses to understand book-of-business profitability and its evolution, maximize their customer acquisition and retention results, and optimize their products and pricing. Another group, Health Care Value Analytics (HCVA), has developed a series of comparative analyses of the total cost of care for a population of patients. These analyses are used by McKinsey clients and client service teams to design and test new payment models and set priorities for clinical improvement.
These capabilities have been used to support many health care stakeholders in their transition to value-based models. For example, McKinsey worked with a large health system, a local employer group, a payer, and a physician group to develop and pilot a new approach to health care payment and delivery. The goal was to see whether the creation of an ACO would hold down health care costs of members of a large employer group, while improving the quality of care. The firm also worked with the employer group to help it optimize, manage, and expand the ACO model to other regions.
In another example, McKinsey is working with a U.S. state government, along with the payers, providers, and employers in that state, to move health care payments from a fee-for-service system that rewards activity to an outcomes-based reimbursement system that pays for value through a combination of episode-based and population-based payment models. The episode-based model is based on retrospective payments for more than a dozen acute episodes of care (making one provider accountable for the total quality and cost of each episode of care). Prospective bundled payments are used for patients needing long-term services and supports and for people with developmental disabilities. Population-based models include an at-scale, multi-payer patient-centered medical home (PCMH) to provide preventive services and better manage care of the chronically ill, as well as health homes for the frail elderly, “dual eligibles” (patients covered under both Medicare and Medicaid), and severely and persistently mentally ill patients.
The implementation of new payment and delivery models can yield positive results. For example, in its first year, the ACO developed through the employer group exceeded its goal of $15 million in savings. By the end of its second year, total savings had reached $37 million. The ACO reduced patient readmissions by 15 percent and achieved a half-day reduction in average patient length-of-stay. Both the employer group and the payer have since implemented the ACO approach in several other regions of the state.
In the U.S. state, the program is being implemented at scale. During the initial wave of episodes (spanning more than 15 percent of total spend), the payments being made to more than 3,000 hospitals, physicians, and mental health professionals are predicated on results achieved. Initial evidence from the first year of this effort suggests that it has already achieved favorable impact against key quality and/or resource utilization metrics.
The level of change required to comprehensively address rising health care costs and quality concerns can best be achieved through multi-stakeholder coalitions that include employer input. For example, getting everyone on board with the creation of the ACO described above required the engagement of many stakeholders representing different parts of the system, including payers, providers, employers, and consumers. The employer group played a central role in aligning incentives to bring everyone together.
In the U.S. state, significant collaboration among stakeholders was central to success. The state’s Medicaid system and private payers had to agree on a single portal for clinical data entry and a common report design for provider cost, quality, and utilization. They also had to align on the design of a new value-based reimbursement model, one that offers providers both gain-sharing and risk-sharing incentives, depending on whether their performance was above or below certain thresholds. Thousands of providers throughout the state had to give input on how their performance would be measured.
Key Take-aways for Employers
Employers have an opportunity to work with the payers and providers in their markets to accelerate efforts to improve the quality and cost-efficiency of care delivery, as well as the outcomes achieved. For example, they can encourage new care delivery and payment approaches that focus on value rather than just volume. In addition, they can use their influence to help increase the alignment between payers and providers, whether by encouraging transparency, altering the incentives they offer to both groups, or simply “being at the table.”