GAO-21-465Published: May 25, 2021. Publicly Released: Jun 14, 2021.
The US Postal Service’s financial viability has been on our High Risk List since 2009. Declining mail volumes and increased costs have made it harder for USPS to cover all its costs. USPS cites quality customer service as important to sustaining its business.
We looked at USPS’s process for addressing residential customer complaints. In fiscal year 2020, USPS received 10.7 million complaints, with 69% of those related to missing or delayed packages.
USPS started using a new software system in 2019 to track complaints and customer service issues. The system collects more detailed data and may help identify the causes of some problems.
What GAO Found
The United States Postal Service (USPS) delivers mail to about 147-million residential addresses. To help it serve customers, USPS has a 5-step process for addressing and resolving residential customers’ complaints. USPS defines a complaint as a reported service issue that is not resolved in a customer’s initial contact with USPS and requires additional action to resolve. (See figure.) Once a complaint is received it is assigned to staff best positioned to respond to the issue. For example, a complaint about a missing package might be referred to a local Post Office for investigation and resolution if that Post Office was the destination facility for the package. USPS collects and tracks a range of customer service and complaint information using a new software system known as Customer 360 (C360). According to USPS officials, the C360 system, which USPS started using in 2019, captures more detailed data and has additional data fields, such as root cause, which may help officials identify service issues and analyze issues resulting in complaints. USPS officials also noted ongoing efforts to educate employees on the C360 system through trainings as well as efforts to collect feedback from users to help enhance the C360 system.
U.S. Postal Service’s Five Step Customer Complaint Process
Most of the 10.7-million complaints USPS received in fiscal year 2020 concerned packages, and USPS analyzes C360 data to monitor timeliness in addressing these complaints. GAO’s analysis of USPS’s fiscal year 2020 residential complaints data found a total of 10.7-million residential customer complaints were reported by about 5.6 percent of the residential addresses USPS served. Most of these complaints—69 percent—were related to packages, such as missing or delayed packages. GAO found that about 21 percent of addresses that reported a complaint had more than one complaint. Of those addresses, a majority of complaints occurred less than one month apart, and many had two complaints with the same USPS-assigned root cause. USPS officials are currently reviewing whether the root cause field is accurately capturing the cause of a complaint. Across USPS, multiple officials told GAO they use the C360 system’s reporting capabilities to access, review, and analyze complaints data. USPS officials said that given the size of their operations, it is not realistic to eliminate all complaints. The Office of Customer Experience monitors and assesses performance related to timeliness in contacting customers and closing complaints. Delivery operations staff use complaints data in conjunction with delivery operations information to identify service issues or specific causes for increases in complaints.
Prices are Spiking for Homes, Cars and Gas; Don’t Be Alarmed, Economists Say
Edward Lempinen| JUNE 10, 2021
The cost of homes is soaring — and so is the cost of the lumber to build them. The price of cars and gas are up sharply, too, as are prices for products ranging from corn to computer chips. Now worries are rising that as the post-pandemic economy comes back to life, a sustained surge of inflation could undermine the recovery.
The US Department of Labor reported … that the Consumer Price Index rose 5% in May, following a 4.2% jump in April. But at UC Berkeley, high-level economists are offering some calming advice: A measure of inflation is inevitable as the US economy comes back online, but it will likely be modest. And it will almost certainly blow over as the economy stabilizes.
“Alarmists point to past periods of very high inflation, so we imagine inflation of 5%, 6%, maybe higher,” said Berkeley professor Maurice Obstfeld (right), former chief economist for the International Monetary Fund. “But I don’t think it’s very likely that we would get much above 3% after a couple of years.”
“People have this idea that inflation is something we have to be frightened about,” added Berkeley economist Yuriy Gorodnichenko. “When we have some inflation, that means we have a lot of action in the economy, and the economy is recovering. It’s good. It’s a sign of health. … It doesn’t mean we’ll return to the 1970s.”
Yuriy Gorodnichenko (right)
The UC Berkeley economics department features some of the nation’s most influential scholars in monetary and economic policy, many of them with experience at high levels of government, international institutions and academic centers. In a series of interviews, they cited a range of challenges as policymakers try to restore some normalcy to the economy — continuing high unemployment, for example, and an economic realignment away from brick-and-mortar retail stores.
Inflation forecasts are inherently uncertain, but they said today’s higher prices are likely to be a blip that lasts a year or two, at most.
The new inflation numbers are roughly double the annual inflation rate of the past decade, but far below inflation that averaged 7.9% annually in the 1970s, before peaking at nearly 14% in 1980.
That inflation caused deep, long-term damage to the U.S. economy. Tens of millions of Americans saw dramatic erosion in the value of their earnings and savings. Businesses faced price increases and broad uncertainty that made it difficult to budget for the costs of supplies and labor. Unemployment rose and stayed high for years.
Without doubt, the 1970s economy left scars that remain painful four decades later — and, the Berkeley scholars say, that likely accounts for some of the alarm in recent weeks.
Waking the economy from an induced coma
For generations, Econ 101 students have learned that inflation is a straightforward process: When an economy is strong, a lot of people are working, and their wages are rising. That means more people with more money are competing to buy apples or pickup trucks or homes. The competition causes price inflation.
New housing construction in the US has lagged for years, but during the pandemic, lumber shortages and rising demand for new homes have driven a spike in prices, economists say. (Photo by the National Institute for Occupational Safety and Health via Wikimedia Commons)
But the economic conditions caused by the pandemic have been unlike anything in modern U.S. history. In effect, the lockdown put much of the economy in an induced coma so that, where possible, workers would stay home and be protected from the coronavirus.
Brad DeLong (UC Berkeley photo)
The lockdown saved thousands of lives, and government relief programs prevented mass poverty. Still, restaurants, tourism and retail sales took a massive hit. Rental car companies sold off their fleets, rather than let vehicles sit idle. Microchip manufacturers reduced production. Housing starts plunged. Hundreds of thousands of businesses reduced or suspend operations, which meant reduced hours or furloughs for millions of workers. Other businesses closed permanently.
As more Americans get vaccinated and health threats retreat, it would seem simple to flip the switch and turn the economy back on, said Berkeley economist J. Bradford DeLong, who served as deputy assistant Treasury secretary in the administration of President Bill Clinton.
“You give people lots of purchasing power, and you say, ‘Go out and spend it,’” DeLong explained. “And if there are lots of people running around waving money in the air saying, ‘I want to buy things,’ businesses will respond, and you will get back to full employment quite quickly.”
Kaiser Family Foundation: FDA’s Approval of Biogen’s New Alzheimer’s Drug Has Huge Cost Implications for Medicare and Beneficiaries
Alzheimer’s disease is often characterized by amyloid plaques (brown) and tau fibrils (blue) that ultimately lead to brain cell death. Biogen’s aducanumab targets amyloid plaques.… National Institutes of Health illustration
Alzheimer’s disease is estimated to affect about 6 million Americans, the vast majority of whom are age 65 and older and therefore eligible for Medicare. As an intravenous infused medication administered by physicians, Aduhelm will be covered under Medicare Part B, which generally covers FDA-approved physician-administered medications that are reasonable and necessary for the individual patient. (In contrast, Medicare Part D covers retail prescription drugs.) With FDA approval in hand, attention now turns to decision-makers at the Centers for Medicare & Medicaid Services (CMS) who may opt to undertake a National Coverage Determination process that could set some limits on the conditions of Medicare coverage for Aduhelm based on the drug’s clinical effectiveness.
Medicare’s long-standing practice is to make coverage determinations without taking cost into consideration. While Medicare sets rates for hospitals and other providers, it does not set its own rates for drugs covered under Part B. Instead, Medicare reimburses providers 106% of the Average Sales Price (ASP), which is the average price to all non-federal purchasers in the U.S, inclusive of rebates. For drugs where no ASP is available, such as a new drug like Aduhelm, Medicare pays 103% of the wholesale acquisition cost (WAC) until ASP data are available. The WAC is equivalent to a list price and typically higher than ASP. Biogen has set the list price for Aduhelm at $56,000 for a year of treatment.
It is hard to know exactly how many Medicare beneficiaries will take Aduhelm, but even a conservative estimate would lead to a substantial increase in Medicare spending. In 2017, nearly 2 million Medicare beneficiaries used one or more of the currently-available Alzheimer’s treatments covered under Part D, based on our analysis of Medicare Part D claims data. If just one-quarter of these beneficiaries are prescribed Aduhelm, or 500,000 beneficiaries, and Medicare pays 103% of $56,000 in the near term, total spending for Aduhelm in one year alone would be nearly $29 billion, paid by Medicare and the patients who use this drug — an amount that far exceeds spending on any other drug covered under Medicare Part B or Part D, based on 2019 spending. To put this $29 billion amount in context, total Medicare spending for all Part B drugs was $37 billion in 2019.
If 1 million Medicare beneficiaries receive Aduhelm, which may even be on the low end of Biogen’s expectations, spending on Aduhelm alone would exceed $57 billion dollars in a single year – far surpassing spending on all other Part B-covered drugs combined. In fact, this amount is roughly the same that Medicare paid for all hospital outpatient services in 2019.
Alzheimer’s patients covered under Medicare Part B could also face high out-of-pocket costs for treatment with Aduhelm, both for the drug itself and for the cost of related medical services. For most Part B covered drugs and services, Medicare pays 80% of the cost and beneficiaries are responsible for the remaining 20%. This means beneficiaries would face about $11,500 in coinsurance for one year of Aduhelm treatment, which represents nearly 40% of the $29,650 in median annual income per Medicare beneficiary in 2019. Because Aduhelm is not a cure for Alzheimer’s disease, patients could incur these annual out-of-pocket costs over multiple years.
The majority of beneficiaries in traditional Medicare have supplemental insurance, such as Medigap, employer-sponsored retiree coverage, or Medicaid, that would cover some or all of the coinsurance. However, beneficiaries with Medigap or retiree health could see their premiums rise to account for higher plan liability associated with costs for Aduhelm. And close to 6 million Medicare beneficiaries, or 10% of all beneficiaries, are in traditional Medicare with no supplemental coverage, which means they are fully exposed to Medicare’s cost-sharing requirements and lack the financial protection of an out-of-pocket cap, unlike enrollees in Medicare Advantage plans.
The 24 million beneficiaries enrolled in Medicare Advantage plans are also responsible for cost sharing for Part B drugs, like Abuhelm, though they typically do not have supplemental insurance to help with these expenses. According to our estimates, in 2021, nearly 90% of Medicare Advantage enrollees are in plans that charge 20% coinsurance for Part B drugs provided in-network, the same as under traditional Medicare, though some plans impose coinsurance as high as 45% or 50% for Part B drugs administered by out-of-network providers. Medicare Advantage enrollees who use Aduhelm would be responsible for their share of costs until they reach the annual out-of-pocket maximum ($7,550 for in-network care and $11,300 for combined in-network and out-of-network care in 2021).
The billions of dollars in new Medicare Part B spending will likely lead to higher Part B premiums for all 56 million Part B enrollees in traditional Medicare and Medicare Advantage. Since Part B premiums are set to equal 25% of projected annual Part B expenditures, an increase in spending would lead to an increase in premiums. State and federal Medicaid spending will also rise, since Medicaid pays the Part B premium for about 12 million low-income Medicare beneficiaries with Medicaid, and covers coinsurance for 9 million of these beneficiaries who have both Medicare and full Medicaid coverage.
The introduction of a new high-priced drug could energize efforts in Congress to enact drug price legislation. Under H.R. 3, which passed the House of Representatives in the last Congress and was recently reintroduced, the HHS Secretary would have authority to negotiate prices for up to 250 drugs, drawing from the 125 drugs with the highest net spending in Medicare Part D and the 125 drugs with the highest net spending in the U.S. overall, which could include drugs covered under Part B, such as Aduhelm. Negotiated prices would be made available to enrollees in Part D plans and private insurance coverage, and to providers that administer physician-administered drugs. Other proposals under active consideration would limit annual price increases for Part B and Part D drugs and limit the financial incentives under Medicare’s existing Part B reimbursement system for physicians to administer higher-priced drugs. The Center for Medicare and Medicaid Innovation could also test models to modify Medicare payments for high-priced drugs.
At a time when federal and state policymakers are weighing several policy options to lower prescription drug prices, the approval of Aduhelm provides the latest high-profile example of the potential budgetary consequences of Medicare’s role as a price-taker in the pharmaceutical marketplace. Concerns about the impact on Medicare spending associated with Aduhelm are reminiscent of discussions that took place after the introduction of high-cost treatments for hepatitis C, though in that case, the new drugs cured the disease and were approved for a much smaller patient population. Aduhelm may represent hope for Alzheimer’s patients and their families who have waited years for new treatments to come along, but that hope is likely to come at a high cost to Medicare, beneficiaries, and taxpayers.
This work was supported in part by Arnold Ventures. Kaiser Family Foundation maintains full editorial control over all of its policy analysis, polling, and journalism activities.
Jo Freeman Reviews Elizabeth Warren’s New Book: Persist (“I have a plan for that”)
Jo Freeman Reviews:
U.S. Government Accountability Office: Science & Tech Spotlight: Renewable Ocean Energy
This spotlight explores renewable ocean energy technology. These technologies include:
- Wave energy converters, which generate power from surface waves
- Tidal energy converters, which generate power from the movement of tidal currents
- Ocean thermal energy converters, which generate power from thermal differences between warm surface seawater and cold deep seawater
Ocean energy could power offshore activities and isolated island and coastal communities. However, these technologies are generally costlier than other renewable energy technologies, so it may be some time before they can be fully deployed.
A system used for harnessing tidal energy.
Why This Matters
Renewable ocean energy has the potential to reduce global carbon emissions from fossil fuels by 500 million tons by 2050, and could also meet the energy needs of isolated communities, which may not have access to reliable electricity sources. However, the technologies can be costly and more research is needed to understand their potential effects on marine wildlife.
The Technology
What is it? Renewable ocean energy (or, simply, ocean energy), is energy derived from the ocean’s movement, or from its physical and chemical state. In the United States, ocean energy can be generated from waves, tides, and currents, as well as ocean temperature differences. The National Renewable Energy Laboratory estimates that if fully utilized, ocean energy resources in the U.S. could provide the equivalent of over half of the electricity that the country generated in 2019. U.S. government and industry stakeholders predict that ocean energy will likely be first used to provide power for energy and water needs of island and coastal communities and offshore activities. According to these stakeholders, using ocean energy for these activities and communities will help advance the technologies and contribute toward making ocean energy cost-competitive in some additional markets.
Security, Planning, and Response Failures: Senators Peters, Portman, Klobuchar, Blunt Release Bipartisan Report Investigating January 6th Capitol Attack
Report focuses on the security, planning, and response failures related to the violent and unprecedented attack on January 6th; photo by Tyler Merbler
Full text of the report and recommendations is available for download HERE
Today, U.S. Senators Gary Peters (D-MI) and Rob Portman (R-OH), Chairman and Ranking Member of the Homeland Security and Governmental Affairs Committee, and Amy Klobuchar (D-MN) and Roy Blunt (R-MO), Chairwoman and Ranking Member of the Committee on Rules and Administration, released a bipartisan report on the security, planning, and response failures related to the violent and unprecedented attack on January 6th.
The report also includes a series of recommendations for the Capitol Police Board, United States Capitol Police (USCP), federal intelligence agencies, the Department of Defense (DOD), and other Capital region law enforcement agencies.
“Thanks to the heroic actions of U.S. Capitol Police, D.C. Metropolitan Police, the National Guard and others – rioters on January 6th failed to achieve their goal of preventing the certification of a free and fair presidential election. The events of January 6th were horrific, and our bipartisan investigation identified many unacceptable, widespread breakdowns in security preparations and emergency response related to this attack,” said Senator Peters. “Our report offers critical recommendations to address these failures and strengthen security for the Capitol to prevent an attack of this nature from ever happening again.”
“On January 6th, brave law enforcement officers were left to defend not only those in the Capitol, but our democracy itself – and they performed heroically under unimaginable circumstances. At our first bipartisan hearing, I announced as Chair of the Rules Committee that our purpose was to find solutions and issue timely recommendations so it never happens again. This report lays out necessary reforms including passing a law to change Capitol Police Board procedures and improving intelligence sharing. I will work with my colleagues on both sides of the aisle to implement the recommendations in this report that are needed to protect the Capitol and, in turn, our nation,” said Senator Klobuchar.
“The January 6 attack on the Capitol was an attack on democracy itself. Today’s joint bipartisan congressional oversight report from the Homeland Security and Governmental Affairs Committee and the Rules Committee details the security and intelligence failures in the days leading up to the attack, the lack of preparedness at the Capitol, and the slow response as the attack unfolded,” said Senator Portman. “We make specific recommendations to address key failures in the Capitol Police Board structure and processes; ensure Capitol Police has the training and equipment necessary to complete its mission; update how the intelligence agencies assess and issue intelligence bulletins, particularly as it relates to social media; enhance communications between the chain of command at the Department of Defense; and ensure timely and effective cooperation and coordination amongst federal, state, and local law enforcement. We must address these failures and make the necessary reforms to ensure this never happens again.”
“Over the past five months, our committees have worked together in a bipartisan way to thoroughly investigate the intelligence and security failures prior to and on January 6, and to develop recommendations to address them,” said Senator Blunt. “These recommendations are based on an extensive fact-finding effort that included interviews with key decision makers, firsthand accounts from law enforcement personnel, and the review of thousands of documents. Our focus now should be on immediately implementing these recommendations. We owe it to the brave men and women who responded that day to do everything we can to prevent an attack like this from ever happening again, and in every instance ensure that the Capitol Police have the training and equipment that they need.”
On January 6th, 2021, the world witnessed a violent and unprecedented attack on the U.S. Capitol, the Vice President, Members of Congress, and the democratic process. Rioters, intent on obstructing the Joint Session of Congress, broke into the Capitol building, vandalized and stole property, and ransacked offices. They attacked members of law enforcement and threatened the safety and lives of our nation’s elected leaders. Tragically, seven individuals, including three law enforcement officers, ultimately lost their lives.
The Scout Report: Seacoast Science Center, British Science Week, World War II Alaska, American Hiking Society’s Hiking 101 Portal, Portland Women’s History Trail
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