“When supply chain issues caused a baby formula shortage last year, Congress (eventually) cut tariffs to help get more formula onto American store shelves.
It worked! Imports of baby formula soared during the second half of 2022 after tariffs and other regulations were lifted. Stores reported lower out-of-stock rates and news stories about panicked parents being unable to feed their infants abated. In short, the government removed economic barriers and the market solved the problem.
Then, the government put those barriers back in place. On January 1, the tariffs on baby formula returned. Now, so has the crisis.
“It’s getting harder and harder” to find baby formula, pharmacy owner Anil Datwani told Fox News this week. “[Mothers] go from one store to the next store to the next store” looking for baby formula.
Meanwhile, some consumers are complaining on social media that prices for baby formula have suddenly spiked and availability is once again a problem. A Forbes investigation into a recent increase in the price of Enfamil baby formula noted that the increases “follow the expiration of the U.S. government’s suspension of infant formula tariffs in January, which opened the door for formula (both foreign and U.S.-produced) to become more expensive.” (Another contributing factor: Reckitt Benckiser, the British-based company that owns the Enfamil brand, issued a recall in February affecting about 145,000 cans of formula.)
Because that’s what tariffs do, of course. They are import taxes that protect domestic industries at the expense of domestic consumers, who are subjected to limited supply and higher prices as a trade-off for industrial protectionism.”
“Headlines bemoaning shortages of everything from PlayStations and Care Bears to medical devices are no longer a daily occurrence. Just six vessels were waiting to dock at the ports of Los Angeles and Long Beach on Tuesday — a tiny fraction of the 109 that were stuck outside the San Pedro Bay back in January. Meanwhile, the cost of sending a 40-foot shipping container from Asia to the West Coast is now under $3,000, far below last year’s high of more than $20,000.
Still, the structural problems that enabled many of the delays, price hikes, and shortages over the past few years haven’t gone away. Shipping prices have not quite returned to their pre-pandemic levels, truck drivers are still in short supply, and some in the logistics industry are already predicting that there will be problems during the upcoming holiday season. More broadly, the capitalist system responsible for manufacturing and delivering goods throughout the world has not been “fixed.” In fact, it remains as vulnerable to disruption as ever. Consumers are still seeing widespread inflation, not only for energy and food but also for products that often depend on Pacific shipping routes, including apparel and new vehicles, according to the consumer price index summary published by the Bureau of Labor Statistics last week.
“If the supply chain is a patient coming into the ER, then it’s not bleeding to death anymore,” said Daniel Maffei, the chair of the Federal Maritime Commission. “But there are still a lot of issues with the supply chain. Some of them and maybe even the bulk of them predate Covid.””
“A global fertilizer crunch is threatening to further starve a planet that’s already going hungry.
Officials at the United Nations and beyond are stepping up warnings about the mounting crisis for fertilizers — an essential substance to boost soil fertility — as vulnerable countries in areas such as Africa grapple with prices that have soared by 300 percent since Russia’s war in Ukraine began.
The continent, where smallholder farmers feed the majority of people, is already lacking 2 million metric tons of fertilizer, according to the African Development Bank. The high price of fertilizers will mean less food at a time when people need it most, with more frequent bouts of extreme weather and the Ukraine war still leaving import-dependent countries insecure. Farmers in Europe are feeling similar strains, though to a lesser degree.”
“Making fertilizers is an energy-intensive process, especially for nitrogen-based fertilizers, which use natural gas as an essential ingredient. That means the price of fertilizers tends to correspond with energy costs.
“The increased price is [a] burden for all farmers in the world, but the burden is even higher for those farmers in developing countries that have less financial capacities and organisation to purchase the fertilisers than the European ones,” an EU official wrote to POLITICO.”
“Fertilizer prices were high even before Russia invaded Ukraine, which prompted a further 50 percent spike, according to the European Commission.
The war in Ukraine has exacerbated the problem because of Russia’s outsized role in the world fertilizer market. It’s the world’s top exporter of nitrogen fertilizers, the second largest supplier of potassium and the third-largest exporter of phosphorus fertilizers.
Since its invasion of Ukraine in February, shipping costs and energy prices have gone up. Europe’s fertilizer producers now warn of shortages if the Continent’s imports of natural gas from Russia continue to fall.”
“Hospitals across the country are grappling with widespread staffing shortages, complicating preparations for a potential Covid-19 surge as the BA.5 subvariant drives up cases, hospital admissions and deaths.
Long-standing problems, worker burnout and staff turnover have grown worse as Covid-19 waves have hit health care workers again and again — and as more employees fall sick with Covid-19 themselves.”
“There’s a clear lesson emerging from the first cities that have legalized “missing middle” housing. The more rules you lift on the construction of these two-, three-, and four-unit homes, the more you’ll actually see built.
San Francisco politicians have absorbed this information and are now using it for evil. On Tuesday, the San Francisco Board of Supervisors passed an ordinance theoretically legalizing fourplexes in the city’s lowest density neighborhoods, but only under conditions that will ensure almost none of this housing actually gets built.”
“it’s the FDA’s unnecessary and protectionist rules that effectively ban foreign-made baby formula from being imported into the United States. On Wednesday, the agency announced plans to tweak those rules so foreign formula manufacturers can permanently import their goods into the U.S., giving American consumers greater choice in the marketplace and ensuring more robust supply chains.”
” When the Abbott Nutrition plant in Michigan was forced to close temporarily due to an FDA investigation into possible contamination, it created a supply shock that left store shelves empty and parents scrambling to find formula. Because of the FDA’s protectionist rules (and high tariffs levied on foreign-made formula), markets could not adapt quickly to the shortage here in America”
“In testimony to Congress, FDA officials admitted to botching the response to the contamination at the Abbott plant. But the real culprit of the recent shortage was a deeper and more pervasive one. No matter what nationalists like Sen. Josh Hawley (R–Mo.) might suggest, closing off the country to international trade is not a recipe for resilience. The baby formula crisis demonstrated that it is quite the opposite.
So it’s good to see the FDA admit those mistakes and crack open the door to allowing foreign formula into the U.S. on a permanent basis.
Unfortunately, the list of policy changes the FDA announced..mostly amounts to providing technical assistance to foreign firms that want to sell formula here. That is, offering help in navigating the complex approval process, rather than sweeping aside those regulations entirely. If a formula maker has passed muster under E.U. regulations, that should be good enough for the FDA.
There’s also the matter of tariffs on imported formula, which are so high that they effectively make any imported formula uncompetitive in the American market. Why would a foreign manufacturer like Holle or HiPP go through the complicated FDA approval process (even after the announced changes) if it knows in advance that its goods won’t be able to compete on a level playing field in America?”
“The country’s ongoing shortage of infant formula has been exacerbated and prolonged by a long list of counterproductive government interventions: from tariffs and trade restrictions to price-distorting subsidies and nonsensical labeling requirements.
New York City Mayor Eric Adams has decided to throw one more log on the fire by issuing an emergency order limiting price increases on infant formula.
“The nationwide infant formula shortage has caused unimaginable pain and anxiety for families across New York—and we must act with urgency,” said Adams on Sunday. “This emergency executive order will help us to crack down on any retailer looking to capitalize on this crisis by jacking up prices on this essential good.”
The mayor’s order invokes city rules that prohibit merchants from raising prices more than 10 percent from where they were 30–60 days preceding the emergency. Adams urged people to report potential gouging to the city’s Department of Consumer and Worker Protection.”
“sudden price hikes discourage people from engaging in harmful and unproductive hoarding.”
“Higher prices make once unprofitable activities suddenly lucrative. For example, it’s usually not profitable to drive 100 miles to sell people bags of ice. That calculation changes when a hurricane drives up the price of ice to $15 a bag.
Conversely, if price gouging laws force a bag of ice to be sold at $1, hurricane or not, a lot fewer potential suppliers are going to be induced to take that trip. The result is more people go without ice.
Adams’s order will similarly deprive New Yorkers of much-needed formula. Out-of-city suppliers who might have incurred higher transportation costs to reap the rewards of higher prices in the Big Apple will instead sell off closer to home. That’ll be particularly true if they’re located in a jurisdiction that hasn’t banned market prices on baby formula.
The federal policies driving the formula shortage—whether that’s prohibitive tariffs on baby formula or labeling rules that keep European products off the market—are outside the control of local officials like Adams, who are nevertheless expected by their constituents to do something.
The least the mayor could do, however, is not make the formula problem worse. His emergency order shows he can’t even clear that bar.”
“despite the great need for more doctors, there are still huge gaps between the number of aspiring physicians and the space available to train them, a dynamic that keeps perfectly well-qualified medical school applicants and graduates out of the pipeline.
In 2021, for instance, there were a record-setting 42,508 active applicants for residency programs — 3,741 more than in 2020 — but only 35,194 first-year positions, according to the National Resident Matching Program. Although the number of residency spots has been creeping upward in recent years, the growth has not been fast enough to close the gap.
At the root of the mismatch between physician supply and demand are decades-old limits on medical school enrollment and outdated rules governing the federal funding for most residency programs. While Congress has taken some baby steps toward increasing that funding, it has yet to make the kinds of bold changes necessary to create a sustainable and pandemic-resilient physician workforce.”
“The US medical system falls behind those of our peer countries in so many ways. We have higher administrative costs and worse outcomes than other high-income countries — and we also have fewer physicians available per person.
“If you take a look at EU countries that have sophisticated medical systems,” explained Janis Orlowski, chief health care officer at the AAMC, “they have between 30 and 40 physicians per 10,000 people. In the United States, we have about 26 to 27.”
It’s not an apples-to-apples comparison, in part because physicians use their time differently in different systems. But it’s clear the shortage is a burden, and it’s likely to get worse as the US population grows larger and older.”
“In a December 2021 survey conducted by the American Medical Association, one in five physicians said they would likely leave their current practice within two years, and about a third said they’d likely reduce their work hours in the next year.
The larger workforce trend has been dubbed the “Great Resignation,” and the reasons doctors are quitting echo the factors contributing to shortfalls among other health professionals, including nurses, medical assistants, physical therapists, and pharmacists. Burnout, fear of exposure, pandemic-related mood changes, and workload were all associated with intent to leave the profession.”
“It’s easy to imagine a simple solution for this problem: Incentivizing doctors from other countries to immigrate to the US. But this is not as quick a fix as it seems. Most states require doctors to complete residency training in the US, which takes at least three years. That applies even for doctors who practiced independently at expert levels in other countries; the chief of surgery at the fanciest hospital in India would still have to repeat residency in order to practice in the US.
About 13,000 of the residency match applicants this year were graduates of international medical schools, 8,000 of whom were not US citizens. But no matter how many additional doctors want to jump through the hoops necessary to practice in the US, long waits for visas and restrictive terms limiting where and for how long they can practice in the US make it unlikely many more will be added to the health care workforce in the near term.”
“One major bottleneck in the physician pipeline is medical school admissions, which are only graduating about 27,000 students each year. “That started in the 1980s with the freakout over a physician surplus,” said Robert Orr, a social policy analyst at the Niskanen Center in Washington, DC. At the time, miscalculations about population growth and changes in medical care delivery contributed to a moratorium on medical school enrollment that lasted until 2005.
Although medical schools have since continued to grow, expanding too quickly could result in a surplus of medical graduates with nowhere to do their residencies. That’s because of the other major bottleneck in the pipeline — the low number of residency positions. This year’s 36,000 first-year residency slots are inadequate to meet the US need for physicians and inadequate to provide training positions for all the applicants seeking them — and like the dearth of medical school seats, it is a consequence of restrictions created long ago with arguably good intentions.
Since the Medicare and Medicaid Act was first passed in 1965, medical residents have been paid for mostly by the Medicare and Medicaid programs. The goal was to ensure Medicare beneficiaries had access to the best health care, which was thought to be found in teaching hospitals.
In 1983, Medicare made changes to the way it reimbursed hospitals for residency programs. At that time, it created formulas that calculated the dollar amount of residency training funds it supplied to each hospital as a percentage of that hospital’s care expenditures and its volume of Medicare patients — sort of like a restaurant tip, said Orr.
Those formulas have never been updated — and because they tie funding to the cost of care, they have resulted in better funding for hospitals providing high-cost care in high-cost (usually urban) areas.
Over the years, this inequitable distribution of residency program funding has meant that hospitals prioritizing primary care services in rural areas get less funding and fewer residents than those that perform lots of expensive procedures in cities. That leads to fewer primary care specialists, and because physicians often practice near where they train, fewer rural physicians.
This fee structure also incentivizes hospitals to raise the cost of the care they deliver, and results in lower funding for residency programs at hospitals that treat younger populations less likely to be covered by Medicare.
Worse yet, to reduce Medicare expenditures, the Balanced Budget Act of 1997 capped the number of resident slots that could be funded by Medicare each year. It also capped the number of residents each hospital could have at their 1996 levels, which meant hospitals couldn’t get additional residents even if the population they served ballooned in size. Obamacare undid this restriction in 2010, and since then, the number of residency spots has grown modestly.
In 2020, Congress passed a federal budget bill that provided for 1,000 new Medicare-funded residency slots to be added over the next five years. But that’s nowhere near enough to close the current gaps.
Money donated by private insurers funds some residency positions at “the hospitals with the prestige and market power to extract it,” said Orr, but “it’s not a super-equitable way of trying to get residents out to different hospitals where maybe the population isn’t as well served.””
“There are also some solutions that sidestep the residency bottleneck entirely. One of the more promising fixes to the physician shortage is to allow other highly trained providers, like nurse practitioners, physician assistants, and pharmacists, to practice independently of doctors. The American Medical Association has vigorously fought this change for more than 30 years, and physicians who oppose the move often cite patient safety concerns, although they are not substantiated by safety studies.
Much of the real motivation to prevent these providers from practicing independently may be about money and professional sovereignty; private practice doctors in particular are financially disincentivized from expanding the scope of other practitioners.”