Individuals appointed to positions in the Department of Health and Human Services (HHS) across the past three administrations often came from or departed for positions in the private sector, a trend that researchers said raises concerns about industry influence and favoritism.
Findings from the “first comprehensive study of the revolving door in the regulation of healthcare,” published Monday in Health Affairs, show that HHS appointee exits to industry were more common than any other sector from 2004 to 2020.
The study also found that more than half of those appointed to the Centers for Disease Control and Prevention (CDC), the Office of the Deputy Secretary and the Centers for Medicare & Medicaid Services (CMS) left for the private sector.
Appointments directly from industry were “muted, although still substantial,” researchers from the University of Southern California and Harvard University wrote.
Nearly a quarter of CMS appointees hailed from the private sector, as did almost a third of those appointed to the Office of the General Counsel. Just 8% of CDC appointees came from industry.
Across all HHS offices, industry entrances represented 15% of appointments while exits rose to 32%, according to the study. These numbers are likely underestimates of the revolving door’s true scale, researchers noted, since they don’t capture nonprofit employers representing industry interests or departures among HHS’ non-appointed civil servants.
High rates of industry exits aren’t particularly surprising considering the private sector’s higher compensation and the broader benefits of information exchange between the public and private sectors, the researchers wrote.
However, it was the CDC, the Deputy Secretary and CMS’ relatively high rate net industry exits—or the largest difference between industry entrances versus exits—that drew the researchers’ attention as potential spoilers to the offices’ objectivity.
“The sheer scale of the revolving door that we have identified … is troubling and merits further scrutiny,” they wrote in the journal. “The risks posed to the functioning of and public trust in HHS warrants study into how these government-industry flows are affecting agency decision-making, especially in offices with the highest net exit rates.”
The researchers built their analysis on post-election publications of the so-called Plum Book, which details the staffing of all federal positions open to noncompetitive appointment. The researchers then manually matched the names in these records to corresponding LinkedIn profiles to identify employers during the two years immediately before and after their appointments, which they said yielded usable histories for 766 of the 807 people appointed under the Bush Jr., Obama and Trump administrations.
Industry inflow varied widely between the HHS offices, ranging from 0% to 32%, the study showed. Most appointees (49%) came to their roles from other government positions, with the nonprofit sector (20%) and then industry (15%) the next two most frequent origins.
Though Republican presidents were more likely to appoint individuals directly from industry (18% versus 11%), exit rates to industry “did not differ substantially” by appointment characteristics such as the president’s party or the level of appointment, the researchers found.
More likely predictors were changes in administration (25% versus 36%) and whether the individual had previously been employed in the private sector (30% versus 41%), according to the study.
The researchers noted that HHS’ industry exit rate surpassed that of the Department of Defense (the only other agency for which a revolving-door estimate was available). Appointees left for a broad range of health, biopharmaceutical and technology roles as well as for those among real estate firms with medical property portfolios and consulting firms.
What’s clear in the numbers, researchers wrote, is that “there is value added to HHS positions that makes appointees attractive to industry.” That value could come from policy expertise or professional networks, they wrote, but could also represent “the potential influence that these appointees can exert on former colleagues post-departure, or [the] favorable actions taken before departure, that could compromise agency decision making.”
Federal laws and regulations are in place that aim to address these concerns, they wrote, but tend to be “narrowly written” and “focus primarily on the former employee’s activities as a representative of private parties vis-à-vis the government.”
”Given the complexity and subtlety of mechanisms of industry influence, regulation of the revolving door will require innovative legal and regulatory strategies,” the researchers concluded.