“The actual problem here is prices.
They’re not going up nearly as much as they were in, say, the middle of last year, but they’re by and large not declining en masse, either. And in most cases, they won’t get back to where they were in the Before Times.
“Inflation in the US is falling relatively quickly compared to all of our other peer countries, and we have the strongest growth out of the recession,” said Felicia Wong, president and CEO of the Roosevelt Institute, a progressive think tank. “But people don’t just want falling inflation numbers, they actually want deflation.”
Deflation probably isn’t in the cards (and the rub is we don’t want it to be). Higher prices might just be the sort of thing we’ve all got to get used to. The truth is we’re never going back to how things were in 2019 — we won’t be returning to the office at the same levels, we’ll never hear “corona” and only think of beer, and that night on the town is going to cost us more than it did before.”
“Basically, if I get a raise at work, I think it’s because I’m awesome. That may be partly true, but that’s not all that’s going on — it’s also that the labor market is tight and wages broadly are going up. My current employer doesn’t want to lose me, and my future employer would have to pay me a little more to lure me away.
While many people see their employment situations (good or bad) as something they’ve earned, they see inflation as something that’s happening to them and that it’s the government’s fault. “The reality is inflation takes away and it gives back. It takes away, prices go up, and it gives back, wages catch up,” said Justin Wolfers, an economist at the University of Michigan. “But you code what it takes away as inflation’s fault but what it gives back as your own genius.””
“The rate of inflation really is slowing (and, if all goes well, will continue to do so), and the disorienting nature of what’s happened in the economy over the past few years will likely fade. Post-pandemic prices will eventually feel normal, and post-pandemic wages should make those prices more feasible — or at least not significantly less feasible than they were before. Sooner or later, sticker shock will feel a little less shocking.”
“The series of subsidies and tariffs that the federal government uses to artificially inflate sugar prices in the United States cost consumers between $2.5 billion and $3.5 billion every year, according to a timely Government Accountability Office (GAO) report released today. Those protectionist policies aren’t the cause of the recent spike in sugar or candy prices, of course, but prices would absolutely be lower without them.”
“Those higher prices get baked—quite literally—into the cost of everything from Milky Ways to Sour Patch Kids. And, as the GAO also points out, this is a classic case of concentrated benefits for a special interest that results in huge, but very diffused, costs for everyone else: “Because the program guarantees relatively high prices for domestic sugar, sugar farmers benefit significantly, and sugar farms are substantially more profitable per acre than other U.S. farms.””
” The new study..compared the prices hospitals posted online (as required under new federal regulations) with the prices obtained in phone calls conducted by the team posing as potential patients.
They contacted 60 hospitals across the country, a mix of top-ranked facilities, hospitals that primarily serve low-income people, and the other hospitals in between. They asked about two procedures for which comparison shopping is more common: vaginal childbirth and a brain MRI.”
“It was rare for the advertised price on the web to be the same as the price quoted over the phone. Less than 20 percent of hospitals provided the same price through an online price estimator as they did when someone spoke to a member of the billing department. In many cases, the disparity was significant, with more than a 50 percent price difference depending on whether you checked on a website or called for a quote.
And in a handful of cases, the price more than doubled depending on how you asked. At two hospitals, MRIs were listed online at $2,000, but “patients” were given a price of more than $5,000 when they called. Five hospitals offered a price of $10,000 for vaginal childbirth over the phone, but the price posted online were twice that much.
There didn’t seem to be a clear pattern of which quotes were higher. Sometimes they were higher over the phone, sometimes higher on the website.
The researchers said they took pains to make sure they were getting apples-to-apples comparisons, going so far as to give specific billing codes during their scripted calls with hospital staff. It didn’t matter.”
“Research had already found prices for the same services vary wildly at different hospitals. The top-line findings of this new study reveal that it can be difficult to even determine what the price for a given service is at a given hospital. That is a problem both for the 10 percent of the US population that is uninsured as well as people enrolled in high-deductible health plans, which are becoming more common.”
“the researchers made one other note in their study: They found poor correlation between brain MRI and vaginal childbirth prices within an individual hospital. In other words, some facilities would have high MRI prices compared to others but low prices for delivering babies — with no discernible economic reason for that disparity. It’s chaos.”
“Later this year, the federal government is supposed to start a serious attempt to rein in drug prices: For the first time, Medicare will negotiate with pharmaceutical companies over the prices it’s willing to pay for a short list of drugs. It’s a long-awaited change that is supposed to save the government and patients billions of dollars over time.
But the drug industry is now launching a legal fight aimed at stopping Medicare’s negotiations over prescription drug prices before they begin. The stakes are higher than just a drug price reform: The case could set an important precedent for the government’s authority to try to constrain health care prices.”
“The Merck lawsuit focuses on the Constitution’s takings (or compensation) clause in the Fifth Amendment, which protects private owners from having property taken without “just compensation” by the government. It also raises First Amendment claims centered on the law’s requirements that drugmakers not disclose information they receive from the government as part of the negotiations. The Chamber of Commerce’s case rests on a constitutional right to due process, arguing that, because the Medicare negotiations are exempt from review by the courts under the IRA, drugmakers are being denied due process.
Taken together, the lawsuits give any judges predisposed to side with private industry over the federal government a few options for a legal foundation upon which to base a decision in pharma’s favor.
A number of legal experts say they are skeptical of these arguments. Merck’s takings clause case turns on defining a patent — an issuance from the government — as private property subject to the just compensation clause, said Robin Feldman, a law professor at UCSF, a difficult assertion. She also said the premise present in both cases — that the federal government as a health care purchaser through Medicare can’t say no to the companies it purchases drugs from and can’t dictate prices as the consumer — is “problematic.”
“It can’t be that the government as a buyer has to pay whatever a seller wants to charge,” she said. “That the government could be forced to spend itself into bankruptcy.”
Regarding the chamber’s due process claim, several legal experts have pointed out that Medicare’s various contracts with health care providers are already often generally exempted from judicial review. It is understood that this is necessary to allow the program to function; the government, as the administrator of the program, needs that authority without each of its decisions being subject to litigation.”
“An avian flu outbreak devastated the poultry industry throughout 2022. By the end of the year, according to the U.S. Department of Agriculture (USDA), there were 43 million fewer egg-laying hens than in February 2022. Egg inventories fell 29 percent from January to December. When demand outstrips supply, prices go up.
A similar outbreak in late 2014 affected more than 50 million birds. According to Fed data, egg prices rose from $1.96 a dozen in May 2015 to $2.96 in September 2015 before falling for more than a year afterward.
The 2022 outbreak, by contrast, persisted into 2023. At the same time, general inflation was unusually high: 6.5 percent in 2022, compared to 0.7 percent in 2015. “Like consumers,” the American Feed Industry Association noted in January 2023, “feed manufacturers are feeling the effects of inflation on the economy and are paying increased rates for energy, shipping, labor and ingredients.” So even as the number of hens dropped, the cost of feeding them rose.
The good news is that egg prices began falling after January’s high. Average egg prices fell from $4.82 a dozen in January to $4.21 in February and $3.45 in March. The USDA predicted that, barring an avian flu resurgence, prices would continue to fall throughout the year.”
“Pharmacy benefit managers are companies that, behind the scenes, determine what patients have to pay for medications. They manage insurance benefits for prescription drugs, dictating which drugs are covered by insurers and what costs patients will face when they fill their prescriptions.
To do that, they negotiate discounts, or rebates, with drug manufacturers and afford privileged status to the companies that give them the best deals.
And over the past few decades, as the prescription drug market has evolved and become more lucrative, so have PBMs. They run their own mail-order and specialty pharmacies. More recently, they have begun merging with health insurers, creating behemoth companies with the power to determine where and how billions of dollars are spent within the US health system.
Pharmacy benefit managers have become known as the mysterious middlemen of the pharma trade — and as a useful scapegoat for drug companies seeking to deflect blame from their own pricing practices.
Now the Senate, as part of forthcoming prescription drug legislation, appears poised to impose new rules on them. The committee overseeing health care debated last week a slew of measures requiring PBMs to be more transparent about their business and cracking down on some of their moneymaking practices.”
“Experts generally agree that these companies play a role in driving up drug costs for some US patients, even as they negotiate discounts with drugmakers that benefit others, and that the amount of secrecy about their financial arrangements warrants scrutiny.
But reforms to the PBM industry aren’t a cure-all for making drugs more affordable: Sanders said the PBM measures being considered in the Senate would not meaningfully lower the cost of medicine for most people, even if they would bring more accountability and transparency to the sector.”
“Consumer prices rose faster in April, driven by another round of sharp increases in rental prices—and raising ongoing questions about whether a return to 2 percent annual inflation is possible.
Overall, prices rose by 0.4 percent in April, according to data released Wednesday morning by the Department of Labor, after ticking upward by just 0.1 percent in March. The annualized inflation rate fell to 4.9 percent, down slightly from March’s annualized rate of 5.0 percent.
Even though those numbers are a far cry from the 9.1 percent annual rate posted as recently as last June, it’s a worrying sign that inflation seems to have settled into a range that’s significantly higher than it had been for decades. The average inflation rate between 1990 and 2020, for example, was about 2.3 percent.”