Last year, Georgetown University published a study by geographer Dr. Katie Wells on “The Instant Delivery Workplace in D.C.,” with Dr. Wells interviewing 41 delivery workers about their experiences working with on-demand delivery platforms such as DoorDash, UberEats, and Instacart. Since the gig economy is my area of expertise, I read the study with great interest.
I was surprised. I understand that Dr. Wells is a geographer, and perhaps in her field of study the methodology she used is deemed to be acceptable. But in the social sciences, the methodology she used (and especially how the results were drawn from the evidence presented) would not be considered as properly conducted research and would be in violation of our research norms.
Tomas Philipson, writing in the Wall Street Journal, explains just how Joe Biden “beat Medicare.” Two slices:
The president and his advisers don’t dispute those numbers, portraying them as savings that will help seniors rather than cuts that are already hurting them. In fact, the Inflation Reduction Act’s poorly conceived government price-setting will disrupt access to medicines for millions of Medicare patients with diabetes, cancer, atrial fibrillation, rheumatoid arthritis and other diseases. The law’s price controls are likely to raise annual out-of-pocket costs for 3.5 million Medicare beneficiaries who take price-controlled medicines, according to an analysis commissioned by the Pharmaceutical Research and Manufacturers of America. These cost increases stem from the interaction of price controls with mandated changes to how Medicare drug plans design their benefits.
The Inflation Reduction Act’s harmful effects extend beyond higher out-of-pocket costs to higher premiums. Its mandated changes to benefit designs clash with how the plans would otherwise work to serve customers, something a colleague and I warned about in these pages.
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The law’s flawed design also may threaten seniors’ access to doctors. Because of price controls, the clinics that administer intravenous or injectable medicines under Medicare Part B will lose out on crucial reimbursement revenue used to employ doctors, nurses and administrative staff. Clinics can expect a 47% decline in these payments, according to an analysis by Avalere, a healthcare consultancy. As a result, many facilities might have to close or join with large hospital chains—scenarios that could hasten concentration and push up prices.
Mr. Biden’s Medicare cuts aren’t limited to the Inflation Reduction Act. In April the White House cut Medicare Advantage payments for the second year in a row. These cuts will reduce seniors’ benefits by nearly $400 per year.
The damaging effects of governmental intrusion into the healthcare system haven’t gone unnoticed. More than 40 conservative organizations recently sent a letter to congressional leaders warning that the price controls threaten patients and the economy and set a dangerous precedent for “nationalizing entire industries.”
A few years ago, there was a panel on the legacy of the abolition of Britain’s Corn Laws following the publication of an ambitious article on the (positive) effects of the repeal on the living standards of Britons. One of the panelists, the historian Steve Davies, said that the suddenness and exhaustiveness of the repeal had a huge effect on popular opinion. The repeal “fixed in the minds of the British working class in particular, right up to the present day, the profound belief that free trade is good for the poor and the working man and woman and that protectionism is basically a conspiracy by the rich and special interests to screw over the working class.” To this day, he continued, “the lower middle class and the working class in Britain is and always has been solidly in favor of free trade.”
The lessons from the first age of globalization can serve the same purpose. The urge to trade and barter drives efforts to improve technologies, which, in turn, leads to greater economic connectedness and greater enrichment. During the first age of globalization, this advancement was impeded by governmental interventions, delaying significant gains in living standards by a century. Knowledge of this history underscores the importance of eliminating such obstructions to promote a future, even greater enrichment.
