News Release

Walter McNerney, health care administration program architect, dies at age 80.

August 1, 2005 press release from the University of Michigan School of Public Health.

ANN ARBOR, Mich.-- Walter James McNerney, an architect of Medicare and Medicaid and a member of the Health Care Hall of Fame, died of prostate cancer on July 29, 2005, in Winnetka, Illinois. He was 80. McNerney founded the University of Michigan’s Program in Hospital Administration in the School of Business in 1955, and the program’s curriculum remains the core of Michigan’s graduate degree program in health administration, which U.S. News and World Report has ranked #1 in the nation every year since 1993. The program is based in the UM School of Public Health Department of Health Management and Policy.

One of the most influential people in health care, McNerney “was a giant among giants,” said Chuck Lauer, publisher of Modern Healthcare magazine for 29 years. “He knew the industry cold. He had a great sense of the right things that should be going on in health care. He cared very deeply about the poor, the disadvantaged.”

McNerney received a bachelor’s degree in industrial administration from Yale University in 1947 and a master’s degree in hospital administration in 1950 from the University of Minnesota. He subsequently joined the faculty at the University of Pittsburgh Medical Center and the university’s Graduate School of Public Health, where his students included Bernard “Barney” Tresnowski. A 1955 graduate of the UM School of Public Health, Tresnowski went on to become both a friend of McNerney’s and his successor at Blue Cross and Blue Shield.

“Our lives intertwined many times,” Tresnowski said of their relationship. “He was probably one of the most articulate spokespersons in the health industry. He was able to understand what was going on and communicate it effectively. He was almost mesmerizing in his speeches.”

In 1955, McNerney moved to Ann Arbor, where at 32 he founded Michigan’s program in hospital administration. “ Walt’s contribution as a teacher and scholar pale only in comparison to his remarkable achievements as a national leader,” said his former colleague John Griffith, professor of health management and policy at UM SPH. “His concept for the curriculum for health care management remains at the core of the modern master’s of health services administration. He mentored dozens, taught hundreds, and served as an inspiration to thousands in health care management. His ground-breaking empirical research, conducted in the 1950s and published in two volumes in 1962, was a pioneering effort to understand the social, economic, and political framework of health care in Michigan. It became a model for subsequent investigation across the nation.”

McNerney left Michigan in 1961 as a full professor to become president of the Blue Cross and Blue Shield Association, a position he held for two decades. While president of the association, McNerney was a leading adviser to President Lyndon Johnson and helped create the Medicare and Medicaid programs in the 1960s. He oversaw the merger of Blue Cross and Blue Shield in the late 1970s.

McNerney was instrumental in getting HMOs and managed health care implemented at Blue Cross and Blue Shield because he thought managed care was inevitable and the wave of the future, his son Peter said.

After retiring from Blue Cross and Blue Shield, McNerney became a professor of health care policy at the Kellogg School of Business at Northwestern University as well as a consultant. He retired nine years ago due to a stroke.

McNerney is survived by his wife of 57 years, Shirley; five children; and 22 grandchildren. In 1999, the UM SPH established the Walter J. McNerney Leadership Award in his honor. Contributions in his memory may be made to this award, which supports innovative health care research and its applications.

Contact: Terri Mellow, Director of Communications
Phone: (734) 764-8094
E-mail: twm@umich.edu

UM SPH Development Office
109 S. Observatory St., 3508 SPH I
Ann Arbor, MI 48109-2029
Phone: 734-764-8093.

Walter McNerney