Andrew Donahue: 4 reasons results of the 2024 election won’t matter for healthcare

There is a strange and underappreciated truth at the top of the American political system: Our president is remarkably powerless.

Except in the realms of foreign policy, executive agency action and judicial branch appointments, the president’s policy agenda is rarely guided by intention. Rather, it is defined by limitation. Savvy presidents learn quickly that their legacy and power is drawn from embracing — not outsmarting — the various social and economic realities they inherit.

As November has flipped the hourglass on the 2024 presidential election to one year and counting, healthcare leaders should consider the impersonal forces that will almost certainly define the next era of healthcare reform, irrespective of political party and/or individual ideology. Among these forces, four will predominate and will in some respects offer a degree of predictability that may be a welcome reprieve.

1 Changing U.S. demographics

According to the U.S. Census Bureau, 2030 marks the first year when all baby boomers (born 1946 to 1964) will be at least age 65.^a In economic terms, this means the largest base of taxable income in human history will soon evaporate from service. Behind them, smaller and less productive population cohorts will follow.

The next presidential administration thus will stand at the brink of a massive and uncomfortable economic transition. As increasingly costly governmental healthcare programs absorb diminishing tax dollars, policymakers will turn to the largest U.S. economic sector — healthcare — to close the divide. This period will mark the end of a golden era of proliferation in healthcare programming (more than 70 years). In its place, an era of multisector rationalization will inevitably emerge.

2 Expiring tax cuts

There was a time when the Congressional Budget Office forecast a federal budget surplus as far as the eye could see. Then, President George W. Bush took office (2000) on a promise to give those surpluses back to the American people, and Congress cut taxes in 2001 and 2003. The 2007-09 recession came and went, further reducing tax collection (and prompting unprecedented emergency spending). Congress then extended the extraordinary tax cuts, and the Obama administration prolonged them. President Trump cut taxes even further in 2017, advancing various tax laws that are set to expire in 2025 — just after the presidential election.

With rising concerns that national-interest costs might surpass a threshold to begin inflicting economic harm — deterring private investment and growth — the next presidential administration will inherit a deficit-spending spigot that must either be turned off or necessitate tax increases.^b Either scenario will fundamentally limit the breadth and depth of new or incremental health policies.

 3 An affordability mandate

It wasn’t that long ago, during the decade of 2008-18, that health policy was sharply divided along party lines. Today, however, fault lines on Main Street do not run as deep, and affordability has become a common theme. Consider, for instance, a Pew Research Center survey this summer that identified the top 16 “very big” national problems according to Republicans and Democrats alike.^c At the bottom of the list was unemployment (#16). At the top of the was inflation (#1). Sprinkled in between were issues such as racism (#12), climate change (#11), the federal budget deficit (#7) and gun violence (#5).

Where did “affordability of healthcare” fall? Number 2, just behind inflation. Historically, presidential administrations have leaned on partisan health policy agendas to motivate their base. The next administration, however, will oversee one of the most bipartisan, cost-conscious healthcare constituencies in modern history. The contours of inter-party consensus on affordability measures have already emerged in recent federal policies, such as price transparency, surprise billing, prior authorization and Medicare drug price negotiation, to name a few.

4 A regulatory revolving door

For the next presidential administration, once key personnel are deployed across the broad administrative state, there will still be the matter of mitigating outside influence. Although the impacts of such forces are difficult to foretell, a recent Health Affairs article explored the phenomenon within the realm of health policy, which it referred to as a “revolving door in health care regulation.”^d Specifically, authors analyzed the career histories of people appointed to the U.S. Department of Health and Human Services (HHS) between 2004 and 2020. Among those individuals, 15% were employed in private industry before their appointment. At the end of their tenure, however, nearly one-third exited to industry. The implication, the authors suggest, is that private industry is successfully leveraging favor with HHS, particularly given that departures to industry were most pronounced within key HHS departments. Assuming private industry continues to hold such sway, its impact is not likely to be reduced no matter which party takes office in 2025.

The takeaway for healthcare leaders

Collectively, these factors portend that healthcare is likely to become a chief target of bipartisan efforts to rein in government spending. Hospital and health system leaders should not stand idly by and watch policy evolve. Almost as never before, they need to become outspoken advocates in Washington for their organizations and the industry overall. 

Footnotes

a. America Counts staff, “By 2030, all baby boomers will be age 65 or older,” U.S. Census Bureau, Dec. 10, 2019.
b. For further discussion of this topic, see Rubin, R., “Tax cuts are here to stay—and so are exploding budget deficits,” The Wall Street Journal, Sept. 13, 2023.
c. Pew Research Center, “Inflation, health costs, partisan cooperation among the nation’s top problems,” June 21, 2023.
d. Kanter, G.P., and Carpenter, D., “The revolving door in health care regulation,” Health Affairs, September 2023.

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HHS offices with the highest government-to-industry exit rates:

• Office of the Deputy Secretary (55%)
• Centers for Disease Control and Prevention (54%)
• Centers for Medicare and Medicaid Services (53%)
• Food and Drug Administration (38%) Source: Kanter, G.P., and Carpenter, D., “The revolving door in health care regulation,” Health Affairs, September 2023

Source: Kanter, G.P., and Carpenter, D., “The revolving door in health care regulation,” Health Affairs, September 2023.