Walter James McNerney
	Son of Kellogg benefactor dies W. Keith Kellogg II, son of John L. and Helen Kellogg, died Sept. 16 at his California home. He was 98. Mr. Kellogg was considered an ardent philanthropist who served as director of his family's foundation, named for his parents, after his mother died in 1978. It was a $10 million gift to Northwestern University from this foundation that, in 1979, provided the naming for the Kellogg School of Management. At the time, this gift represented one of the largest of its kind. Mr. Kellogg was the grandson of cereal magnate W.K. Kellogg, upon whose death in 1950 the John and Helen Kellogg Foundation was established.

In Memoriam

McNerney legacy huge in health industry management

By Rebecca Lindell

Few people have left as large an impact on their field as Kellogg School Professor Walter James McNerney.

President of the Blue Cross and Blue Shield Association at age 36, a key architect of the Medicare and Medicaid programs, an adviser to presidents and a pioneering advocate of managed care, McNerney died July 29 at 80.

As in the world of healthcare, his influence continues also at Kellogg.

"Wherever Walt went, he was a presence," recalled Professor Joel Shalowitz, director of the Kellogg Health Industry Management Program. "People truly listened to him. He was a universal figure who helped shape the healthcare industry."

McNerney's audience included many students who enrolled in his course on advanced healthcare policy at Kellogg. His classes were peppered with first-person tales of his years on the front lines of the evolving healthcare industry.

"He was a great raconteur and storyteller," said James Drury, assistant director of the Health Industry Management Program. "You learned how the levers of power worked in Washington and in other agencies. He was right in there, persuading people, getting things done on a monumental scale."

McNerney joined the Kellogg faculty in 1982, after 20 years as president of Blue Cross and Blue Shield. While at the helm of "the Blues," McNerney emerged as a forceful voice in the debate over Medicare. He was one of the earliest to urge a single-payer system for older Americans, arguing in congressional hearings that the nation should assume healthcare costs for the elderly.

McNerney served as an adviser to President Lyndon Johnson and as chairman of the Task Force on Medicaid under President Richard M. Nixon. He oversaw the merger of Blue Cross and Blue Shield in the late 1970s and was instrumental in adding HMOs and managed care to the company's menu of offerings.

After he retired from Blue Cross and Blue Shield in 1981, McNerney was offered teaching positions at a number of leading business schools, according to Health Industry Management Professor Edward F.X. Hughes. "His choice to come to Northwestern represented an external acknowledgement of the growing excellence of our program," Hughes said.

The move to Kellogg was a return to academia for the education-minded McNerney. Prior to his stint at Blue Cross and Blue Shield, he founded the graduate program in healthcare administration at the University of Michigan. He had also held administrative and faculty positions at hospitals in Providence, R.I., and Pittsburgh.

While at Kellogg, McNerney continued to play an influential role in the healthcare industry, consulting and serving on a number of boards, commissions and panels. He also encouraged Kellogg to broaden its curriculum from hospital management to healthcare, said Kellogg Professor David Dranove, who holds a chaired professorship named in McNerney's honor.

"He was instrumental in changing our thinking about what we could do as a business school," Dranove said.

Though a stroke in 1996 reduced McNerney's role at Kellogg, McNerney remained active, traveling to Antarctica and the Amazon with his wife, Shirley. His management style also remained an inspiration within the Health Industry Management Department, according to Shalowitz.

"When there's a tough problem to be solved, I often ask myself how Walt would have addressed it," Shalowitz said. "That's probably the best legacy someone can leave - a way of thinking about things and approaching issues."