Study counts U.S. healthcare regulators in ‘revolving door’ with private industry

Study co-author Daniel Carpenter, the Allie S. Freed Professor of Government and chair of Harvard’s Department of Government. Harvard file photo

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For the first time, researchers have counted the precise number of US health care regulators who leave for jobs in private industry.

A new study, titled “The Revolving Door in Health Care Regulation” and published in the journal Health Affairs, found nearly one-third of appointees to the Department of Health and Human Services (HHS) leave their posts for new roles in the private sector. About 15 percent were employed in private industry prior to appointment.

“Some kind of revolution between government and the private sector is inevitable and perhaps desirable,” said co-author Daniel Carpenter, the Allie S. Freed Professor of Government and Chair of Harvard’s Department of Government. “But beyond a certain point one worries about the losses to the public sector and to good public policy.”

Another concern is the potential for increased pro-industry bias. “Laws passed by Congress get a lot of attention, but a lot of the real action actually happens at the regulatory level,” explained lead author Genevieve Kanter, a senior fellow at the University of Southern California Schaeffer Center and associate professor at the USC Sol Price School of Public Policy. “Regulatory agencies can decide the fortunes of many companies.”

HHS offices with the most exits to private industry include the Centers for Disease Control and Prevention, where just 8 percent of appointees came from the private sector while 54 percent left for industry positions. Likewise, more than half of appointees to the Centers for Medicare and Medicaid Services departed for employment in private industry.

Also revealed was an elevated rate of exits among high-level appointees. The Office of the Deputy Secretary, responsible for overseeing day-to-day HHS operations, saw 53 percent of its appointees depart for the private sector. “This may point to particular kinds of connections that people make in these high-level offices, connections that may be prized by private companies in the longer run,” Carpenter said.

Completing the study entailed tracking down HHS employees occupying noncompetitive appointed positions between 2004 and 2020. In the end, Carpenter and Kanter obtained two-year pre- and post- appointment employment histories for 95 percent of the 807 appointees they identified during that period. The researchers relied on the United States Government Policy and Supporting Positions listing of presidentially appointed civil-service position that is published every four years, also known as the Plum Book. They also combed LinkedIn for profiles that matched Plum Book entries while mentioning the HHS appointments.

Observers may have expected higher exit-to-industry rates from federal agencies dealing with innovative new technologies, Carpenter noted. “The fact that FDA does not stand out among U.S. health agencies suggests that market dynamics leading former government officials to be valued in private industry may rest with certain kinds of policy expertise and not just with technological expertise — or even regulatory expertise, per se,” he said.