Revolving door behavior in HSS raises concerns over compromised decision-making

In the world of healthcare regulation, the line between public service and private sector interests has always been a delicate one. Recent research published in Health Affairs sheds light on a concerning trend that has persisted over the past three presidential administrations in the United States: a revolving door between the Department of Health and Human Services (HHS) and the private sector.

The study, hailed as the “first comprehensive study of the revolving door in the regulation of healthcare,” reveals that individuals appointed to positions within HHS have often come from or departed for roles in the private sector. This phenomenon has raised concerns about potential industry influence and favoritism within the agency.

The findings from this study, which span the years from 2004 to 2020, show that exits from HHS to the private sector were more common than to any other sector during this period. Moreover, more than half of those appointed to key positions within HHS entities such as the Centers for Disease Control and Prevention (CDC), Office of the Deputy Secretary, and the Centers for Medicare and Medicaid Services (CMS) ultimately left for roles in the private sector.

While appointments directly from the industry were found to be substantial but somewhat muted, the sheer scale of industry exits from certain HHS offices has raised eyebrows. The CDC, the Deputy Secretary’s office, and CMS stood out with the highest net industry exit rates, highlighting potential concerns about their objectivity.

The research, conducted by scholars from the University of Southern California, Los Angeles, and Harvard University, utilized data from the “Plum Book,” which details federal appointments open to noncompetitive selection. By cross-referencing these records with LinkedIn profiles, the researchers identified the employment history of 766 out of 807 individuals appointed during the Bush Jr., Obama, and Trump administrations.

The study also revealed variations in industry inflow between HHS offices, ranging from 0% to 32%. While most appointees came from other government positions, industry, at 15%, was the third most common source of appointees. Interestingly, the study found that the party of the president did not substantially impact exit rates to industry. Rather, predictors were more closely tied to changes in administration and prior employment in the private sector.

The implications of these findings are concerning. They suggest that there is an appeal for individuals with HHS positions to transition into the private sector, raising questions about the nature of this appeal. It could be driven by policy expertise, professional networks, or, more concerningly, the potential influence these appointees could exert on former colleagues or the favorable actions taken before their departure, which might compromise agency decision-making, researchers explained.

Federal laws and regulations designed to address these concerns exist but are described as “narrowly written” and primarily focused on a former employee’s activities as a representative of private parties concerning the government. The complexity and subtlety of industry influence mechanisms necessitate innovative legal and regulatory strategies. The findings of this study underscore the need for comprehensive reforms to address the issues surrounding the revolving door.