Healthcare Industry Now Top Employer in Most States
Some argued that Obamacare would reduce the costs of healthcare in the U.S., but that has not happened. The government has failed us in multiple ways, by tolerating rampant fraud, by mandating voluminous red tape, and by reducing competition.
(p. A18) For years, the United States labor market has been undergoing a structural transformation. As jobs in manufacturing have receded, slowly but steadily, the health care industry has more than replaced them.
. . .
The nation’s corps of nurses, oncologists, lab technicians, anesthesiologists and other health-related workers has been growing steadily, through recession after recession, going from 9 percent of the total workforce in 2000 to 13 percent today.
. . .
. . . 20 percent or so of health care employment . . . is administrative. . . .
David Cutler, a health care economist at Harvard University, cautions that while more people will be needed to deliver care in the future, the industry shouldn’t be seen as a jobs program. Costs have been rising for decades, placing a larger and larger burden on taxpayers and businesses — and to the extent possible, those resources should be redirected to other parts of the economy.
“Any person who’s employed in health care who we don’t need to be employed in health care, that’s a waste,” Dr. Cutler said. “That’s money in health care that costs people money when they’re sick, and that’s a person who could be doing a job somewhere else.”
For the full story see:
(Note: ellipses added.)
(Note: the online version of the story has the date July 3, 2025, and has the title “How Health Care Remade the U.S. Economy.”)
“Nothing Is Incontrovertible in Science”
Somewhere we should start a Hall of Fame for those who had the courage to take the ill will from the enforcers of the “new religion” of global warming. Among its honorees would be Michael Crichton, Freeman Dyson, and (see below) Ivar Giaever. Science is not a body of doctrine; science is a process of inquiry.
(p. B12) Ivar Giaever might not have won the Nobel Prize in Physics if a job recruiter at General Electric had known the difference between the educational grading systems of the United States and Norway.
It was 1956, and he was applying for a position at the General Electric Research Laboratory in Schenectady, N.Y. The interviewer looked at his grades, from the Norwegian Institute of Technology in Trondheim, where Dr. Giaever had studied mechanical engineering, and was impressed: The young applicant had scored 4.0 marks in math and physics. The recruiter congratulated him.
But what the recruiter didn’t know was that in Norway, the best grade was a 1.0, not a 4.0, the top grade in American schools. In fact, a 4.0 in Norway was barely passing — something like a D on American report cards. In reality, his academic record in Norway had been anything but impressive.
He did not want to be dishonest, Dr. Giaever (pronounced JAY-ver) would say in recounting the episode with some amusement over the years, but he also did not correct the interviewer. He got the job.
He proceeded to spend the next 32 years at the laboratory, along the way developing an experiment that provided proof of a central idea in quantum physics — that subatomic particles can behave like powerful waves.
. . .
Though Dr. Giaever later earned a doctorate in theoretical physics, in 1964, from Rensselaer Polytechnic Institute in Troy, N.Y., he had not yet completed that degree when he came up with the experiment that would earn him his share of the Nobel. Indeed, as he admitted in his Nobel lecture, he did not fully understand the ideas behind the experiment when he first started working on it. He was, after all, a mechanical engineer, steeped in how things work in classical physics, which deals with real-world objects. Quantum physics, on the other hand, predicts what happens in the weird subatomic world.
. . .
Dr. Giaever prided himself on his common-sense approach to science, but not all his ideas were welcomed by his peers. He became a prominent denier of climate change, referring to the science around it as a “new religion.” (“I would say that, basically, global warming is a nonproblem,” he said in a 2015 speech.) He based his opposition, in part, on his belief that it is impossible to track changes in the Earth’s temperature and that, even if it could be done, the temperature changes would be insignificant.
When the American Physical Society announced in 2011 that the evidence for climate change and global warming was incontrovertible, he resigned from the society in disgust, saying: “‘Incontrovertible’ is not a scientific word. Nothing is incontrovertible in science.”
For the full obituary, see:
(Note: ellipses added.)
(Note: the online version of the obituary was updated July 9, 2025, and has the title “Ivar Giaever, Nobel Winner in Quantum Physics, Dies at 96.”)
artdiamondblog.com Is 20 Years Old Today and Will Now Switch to Weekly Entries (on Mondays)
On October 16, 2024 I announced some changes in my artdiamondblog.com web log. For instance, I was going to focus more entries on my next book project: Less Costs, More Cures: Unbinding Medical Entrepreneurs, and I was to include some brief entries on my memories of important economists such as George Stigler and Gary Becker. I implemented both changes, though more of the former than the latter.
One other change that I have made, especially in the last few months, is to precede almost all entries with (sometimes detailed) introductory commentary.
I believe that these changes have improved the average quality of my entries, but may have narrowed the audience who will find them of interest. My blog entries in the last several months may be of increased interest to those who are willing to follow me into the weeds of healthcare policy, but may be of decreased interest to those who care more about the broader set of issues that I dealt with in my Openness to Creative Destruction book.
Personally, I have mixed feelings about the changes to my blog. On the one hand I feel some pride and satisfaction on the higher quality of entries, and have some hope that many of the entries will end up being useful early notes toward my bigger project. On the other hand, the changes have not reduced the overall time I invest in the blog, as I had hoped they would.
The bottom line is that I have been spending too much time on the blog, and too little time on my writing and research projects. Or as an economist might say, the opportunity cost of marginal time spent on the blog is too high. So I have decided to implement another change. Starting on July 15, 2025, I will commit to running a new entry on Monday of each week, but will not post on the other days of the week unless something big comes up.
I want to see how this change works–it may be permanent, or after the end of the summer, I may switch back to daily posts.
I make this change with some twinge of sadness and regret, since I take some pride in having run a daily post on almost all days from July 15, 2005 through July 15, 2025.
On July 15 of every year Aaron Brown sends me happy blog birthday greetings. (I continue to be grateful to Aaron for his thoughtful comments on blog entries, and for letting me know when an entry is missing or when something in an entry is amiss.)
This year on July 15 my blog will be 20 years old.
Perseverance is sometimes praiseworthy; pivoting is sometimes praiseworthy too. I hope I am right to pivot.
Father Spends 20 Years Researching to Cure His Children’s Type 1 Diabetes
The development of a new drug to cure Type 1 diabetes is big news, a triumph of medicine. The process of developing the medicine and bringing it to market interests me for several reasons. One is that Doug Melton spent 20 years of effort on it. His passion was due to having skin in the game: he has two children with the disease. Another is that it took so many years “of painstaking, repetitive, frustrating work.” I emphasize the common importance of trial-and-error in many major medical discoveries. Another is that the trial-and-error was to develop a “chemical cocktail to turn stem cells into islet cells.” Several major medical advances have required nimble and persistent trial-and-error to adjust drug cocktails, in terms of components and doses. Examples include HIV, Hodgkin’s lymphoma, and childhood leukemia.
A final reason I am interested in the case is that Melton selected the Vertex company to bring the drug to market. Vertex is an interesting case of a large firm struggling to keep the innovative culture of its startup roots. I read a book about its struggles called The Antidote. I intend to read an earlier book about its early years called The Billion Dollar Molecule.
(p. 17) A single infusion of a stem cell-based treatment may have cured 10 out of 12 people with the most severe form of type 1 diabetes. One year later, these 10 patients no longer need insulin. The other two patients need much lower doses.
The experimental treatment, called zimislecel and made by Vertex Pharmaceuticals of Boston, involves stem cells that scientists prodded to turn into pancreatic islet cells, which regulate blood glucose levels. The new islet cells were infused and reached the liver, where they took up residence.
The study was presented Friday evening [June 20, 2025] at the annual meeting of the American Diabetes Association and published online by The New England Journal of Medicine.
“It’s trailblazing work,” said Dr. Mark Anderson, professor and director of the diabetes center at the University of California in San Francisco. “Being free of insulin is life changing,” added Dr. Anderson, who was not involved in the study.
. . .
The treatment is the culmination of work that began more than 25 years ago when a Harvard researcher, Doug Melton, vowed to find a cure for type 1 diabetes. His 6-month-old baby boy developed the disease and, then, so did his adolescent daughter. His passion was to find a way to help them and other patients.
He began, he said, with an “unwavering belief that science can solve the most difficult problems.”
It took 20 years of painstaking, repetitive, frustrating work by Dr. Melton and a team of about 15 people to find the right chemical cocktail to turn stem cells into islet cells. He estimated that Harvard and others spent $50 million on the research.
Dr. Peter Butler, a professor of medicine at the University of California, Los Angeles and a consultant to Vertex, said he was awed by the achievement of the Harvard team.
“The fact that it worked at all is just freaking amazing to me,” he said. “I can guarantee there were a thousand negative experiments for every positive one.”
When Dr. Melton finally succeeded, he needed a company to take the discovery into the clinic. He joined Vertex, which took up the challenge.
For the full story see:
(Note: ellipsis, and bracketed date, added.)
(Note: the online version of the story was updated June 21, 2025, and has the title “People With Severe Diabetes Are Cured in Small Trial of New Drug.” The online version says that the article appeared on page 24 of the New York edition of the print version. But the article appeared on page 17 of my National edition.)
The NEJM academic article co-authored by Melton and mentioned above is:
The books that I mentioned about Vertex are:
Werth, Barry. The Antidote: Inside the World of New Pharma. New York: Simon & Schuster, 2014.
Werth, Barry. The Billion-Dollar Molecule: One Company’s Quest for the Perfect Drug. New York: Simon & Schuster, 1994.
Jarvik’s Father’s Heart Disease Drove Him to Persist in Developing First Permanent Artificial Heart
Robert Jarvik had skin in the game, had a sense of urgency, with his father suffering from severe heart disease. And he understood that the usual path toward an eventual breakthrough, is to keep “working it through so it can be better.”
(p. B10) Dr. Robert K. Jarvik, the principal designer of the first permanent artificial heart implanted in a human — a procedure that became a subject of great public fascination and fierce debate about medical ethics — died on Monday [May 26, 2025] at his home in Manhattan. He was 79.
. . .
In a 1989 interview with Syracuse University Magazine, Dr. Jarvik admitted that his belief that the Jarvik-7 was advanced enough to be used widely on a permanent basis was “probably the biggest mistake I have ever made.”
Still, he defended his work. Of the five recipients of the permanent Jarvik-7, he told the magazine, “These were people who I view as having had their lives prolonged,” adding that they survived nine months on average when some had been expected to live “no more than a week.”
“I don’t think that kind of thing makes a person in medicine want to stop,” he said. “It just makes you all the more interested in working it through so it can be better.”
. . .
From an early age, Robert was a tinkerer. As a teenager, he made his own hockey mask and began developing a surgical stapler. He attended Syracuse University from 1964 until 1968, intending to study architecture, but his interest turned to medicine after his father survived an aortic aneurysm, and he received a degree in zoology. Dr. Norman Jarvik died in 1976 after a second aneurysm.
“I knew that my father was going to die of heart disease, and I was trying to make a heart for him,” Robert Jarvik once said. “I was too late.”
. . .
According to a 2023 study of the artificial heart market, a descendant of the original Jarvik-7, now owned by another company, is called the SynCardia Total Artificial Heart. It is designed primarily for temporary use in patients who face imminent death while awaiting transplants. The study found that the device had been implanted in more than 1,700 patients worldwide.
For the full obituary, see:
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the obituary has the date May 29, 2025, and has the title “Robert Jarvik, 79, Dies; a Designer of the First Permanent Artificial Heart.”)
Latest “So-Called Reasoning Systems” Hallucinate MORE Than Earlier A.I. Systems
Since more sophisticated “reasoning” A.I. systems are increasingly inaccurate on the facts, it is unlikely that such systems will threaten any job where job performance depends on getting the facts right. Wouldn’t that include most jobs? The article quoted below suggests it would most clearly include jobs working with “court documents, medical information or sensitive business data.”
(p. B1) The newest and most powerful technologies — so-called reasoning systems from companies like OpenAI, Google and the Chinese start-up DeepSeek — are generating more errors, not fewer. As their math skills have notably improved, their handle on facts has gotten shakier. It is not entirely clear why.
Today’s A.I. bots are based on complex mathematical systems that learn their skills by analyzing enormous amounts of digital data. They do not — and cannot — decide what (p. B6) is true and what is false. Sometimes, they just make stuff up, a phenomenon some A.I. researchers call hallucinations. On one test, the hallucination rates of newer A.I. systems were as high as 79 percent.
. . .
The A.I. bots tied to search engines like Google and Bing sometimes generate search results that are laughably wrong. If you ask them for a good marathon on the West Coast, they might suggest a race in Philadelphia. If they tell you the number of households in Illinois, they might cite a source that does not include that information.
Those hallucinations may not be a big problem for many people, but it is a serious issue for anyone using the technology with court documents, medical information or sensitive business data.
“You spend a lot of time trying to figure out which responses are factual and which aren’t,” said Pratik Verma, co-founder and chief executive of Okahu, a company that helps businesses navigate the hallucination problem. “Not dealing with these errors properly basically eliminates the value of A.I. systems, which are supposed to automate tasks for you.”
. . .
For more than two years, companies like OpenAI and Google steadily improved their A.I. systems and reduced the frequency of these errors. But with the use of new reasoning systems, errors are rising. The latest OpenAI systems hallucinate at a higher rate than the company’s previous system, according to the company’s own tests.
The company found that o3 — its most powerful system — hallucinated 33 percent of the time when running its PersonQA benchmark test, which involves answering questions about public figures. That is more than twice the hallucination rate of OpenAI’s previous reasoning system, called o1. The new o4-mini hallucinated at an even higher rate: 48 percent.
When running another test called SimpleQA, which asks more general questions, the hallucination rates for o3 and o4-mini were 51 percent and 79 percent. The previous system, o1, hallucinated 44 percent of the time.
. . .
For years, companies like OpenAI relied on a simple concept: The more internet data they fed into their A.I. systems, the better those systems would perform. But they used up just about all the English text on the internet, which meant they needed a new way of improving their chatbots.
So these companies are leaning more heavily on a technique that scientists call reinforcement learning. With this process, a system can learn behavior through trial and error. It is working well in certain areas, like math and computer programming. But it is falling short in other areas.
For the full story see:
(Note: ellipses added.)
(Note: the online version of the story was updated May 6, 2025, and has the title “A.I. Is Getting More Powerful, but Its Hallucinations Are Getting Worse.”)
A.I. Only “Knows” What Has Been Published or Posted
A.I. “learns” by scouring language that has been published or posted. If outdated or never-true “facts” are posted on the web, A.I. may regurgitate them. It takes human eyes to check whether there really is a picnic table in a park.
(p. B1) Last week, I asked Google to help me plan my daughter’s birthday party by finding a park in Oakland, Calif., with picnic tables. The site generated a list of parks nearby, so I went to scout two of them out — only to find there were, in fact, no tables.
“I was just there,” I typed to Google. “I didn’t see wooden tables.”
Google acknowledged the mistake and produced another list, which again included one of the parks with no tables.
I repeated this experiment by asking Google to find an affordable carwash nearby. Google listed a service for $25, but when I arrived, a carwash cost $65.
I also asked Google to find a grocery store where I could buy an exotic pepper paste. Its list included a nearby Whole Foods, which didn’t carry the item.
For the full commentary see:
(Note: the online version of the commentary has the date May 29, 2024, and has the title “Google Introduced a New Way to Use Search. Proceed With Caution.”)
Increasing the Illumination “of Everyday Hardship”
History records much more on the lives of the rich, powerful, and articulate, than on the lives of ordinary citizens. But if we want to deeply understand what happened in the past, and how far we have come, we need to tease out evidence of the lives of ordinary citizens. Gabriel Zucktriegel makes the case that the ruins of Pompeii provide us some evidence. The volcano did not care if you were rich, powerful, articulate or ordinary–it buried everyone who did not escape in time. And more importantly, it buried the artifacts and settings of everyone.
(p. C11) After lying inert beneath volcanic ash for nearly 17 centuries, the Roman city of Pompeii, near Naples, is today a site of continuous change. New discoveries emerge constantly, even as conservators struggle to protect what’s been found from damage by weather, looters and crowds. Articles and books about these findings have steadily appeared as excavations expand into parts of the town that remain buried.
In 2021 Gabriel Zuchtriegel, a German classicist then in his late 30s, was given the enormous task of directing this dynamic site.
. . .
“Pompeii is like a rip in the screen, through which we have the opportunity to take a peek behind the official version of history,” writes Mr. Zuchtriegel. He describes in vivid detail his 2021 discovery of a small room containing the remains of three beds and other quotidian objects. Perhaps it was the dwelling, as well as the workspace, of slaves. A newspaper described the discovery as “the rarity of the everyday,” and Mr. Zuchtriegel takes the phrase as a rallying cry. “The ‘rarity of the everyday’ could also be the title for my personal access to archaeology and Pompeii,” he writes.
“What we found here was different, precisely because it wasn’t a temple, grave or palace,” says Mr. Zuchtriegel, just some 50 square feet “of everyday hardship.” He recounts how he noticed a nail on the wall for hanging an oil lamp and, beneath it, a white painted rectangle designed to reflect the lamplight and increase illumination. Moved by this simple effort to lighten a dark existence, he ponders how the room’s occupants, who no doubt lacked paint and brushes, got that rectangle made. It’s one of many instances where he reimagines the lives of Rome’s downtrodden.
. . .
“The Buried City,” translated from the German by Jamie Bulloch, offers many such glimpses of common Pompeians, some of whom stand before us today in the form of plaster casts made from cavities in the ash where their bodies decayed. Mr. Zuchtriegel is deeply moved by these casts, the phantoms of those who were trying to hide or flee when a searingly hot blast of dust and ash swept in. As he contemplates them, he tells us, “the academic in me switches off.”
For the full review see:
James Romm. “An Ordinary Day in Pompeii.” The Wall Street Journal (Sunday, June 28, 2025): C11.
(Note: ellipses added.)
(Note: the online version of the review has the date June 27, 2025, and has the title “‘The Buried City’: Pompeii on Display.”)
The book under review is:
Zuchtriegel, Gabriel. The Buried City: Unearthing the Real Pompeii. Translated by Jamie Bulloch. Chicago: University of Chicago Press, 2025.
The Democratic Deep State Looked the Other Way as Fraudsters Stole 10 BILLION Healthcare Dollars
When DOGE fired federal workers we saw televised scenes where the fired workers expressed outrage at how taxpayers would be hurt by the loss of devoted civil servants. So where were the devoted civil servants in 2023? Were they doing their jobs to be alert to the Medicare, and personal identity, fraud that cost the public about 10 billion (that is “billion” with a “b”) dollars?
When Elon Musk’s DOGE uncovered myriad examples of major fraud, I saw Democrats on television complain that of course they were against fraud too, but it should be pursued more slowly and systematically, following traditional procedures. The Democrats were running the federal government in 2023. What procedure were the Democrats using, fast or slow, to protect taxpayers from the fraudulent loss of 10 billion (that is “billion” with a “b”) dollars?
Our jerry-rigged government-run-and-regulated health care system is rife with middlemen. In a true free-market healthcare system, patients would directly pay for healthcare, without middlemen. Patients would have the information, and the incentive to act on the information, to detect, report, and pursue fraudsters. Some fraud would exist under any system, but my hypothesis is that much less of it would exist under a free-market system.
(If you are concerned that patients would not have enough funds to pay for healthcare themselves, we could adopt the much better insurance system once proposed by Susan Feigenbaum, combined with deregulation that would reduce healthcare costs–like no longer mandating Phase 3 clinical trials.)
And my secondary hypothesis is that if we have to have a jerry-rigged government-run-and-regulated system, the Republicans, a party full of former bourgeois entrepreneurs and business managers, will usually do a marginally better job of detecting and pursuing fraud.
I wonder if these hypotheses have ever been researched by any of those noble economists studying the field of Public Choice?
(p. A18) When hundreds of thousands of people enrolled in Medicare were billed for expensive medical equipment they never asked for in 2023, it was part of a $10.6 billion fraud, among the largest such schemes in the program’s history, federal prosecutors said this week.
. . .
Those involved in the fraud bought dozens of companies that were accredited to submit claims to Medicare and the program’s supplemental insurers, prosecutors say.
Then, using personal information stolen from more than a million Americans, the defendants filed billions of dollars in claims for equipment that had not been ordered by people enrolled in Medicare and was not delivered to them, according to the indictment.
Of the $10.6 billion that was fraudulently billed, the indictment says, the defendants collected more than $900 million, most of it coming from private “Medigap” insurers and the rest from the Medicare program itself.
Even if the patients themselves did not pay for the phantom supplies, which included urinary catheters, braces and other durable medical equipment, such schemes can affect Medicare recipients by causing premium costs to rise.
. . .
In 2019, the Justice Department uncovered a scheme that it said had defrauded the program of more than $1 billion with phony claims for back and knee braces. In April 2023, prosecutors charged 18 defendants in a nearly $500 million scheme that involved false billing for Covid-19 tests that were never administered.
For the full story see:
(Note: ellipses added.)
(Note: the online version of the story has the date June 27, 2025, and has the title “U.S. Charges 11 in Russia-Based Scheme to Bilk Medicare of $10.6 Billion.”)
The better healthcare insurance system proposed by Susan Feigenbaum was proposed in:
Feigenbaum, Susan. “Body Shop’ Economics: What’s Good for Our Cars May Be Good for Our Health.” Regulation 15, no. 4 (Fall 1992): 25-31.
A.I. Hastens Search for Antibiotic Peptides in Extinct Species
In an earlier entry I commented on the use of A.I. to seek antibodies by George Church’s startup Lila. Now it appears that César de la Fuente is employing a similar approach. In both cases A.I. is being used to more efficiently do repetitive well-structured tasks. This is not the highest creative level of human intelligence, but it can free time for humans to exercise the highest level of human intelligence.
(p. A3) Buried in the DNA of the long extinct woolly mammoth is a compound that scientists hope will one day yield a lifesaving antibiotic.
In experiments, mammuthusin, as the compound is called, has eradicated superbugs—bacteria that are resistant to today’s antibiotics and cause infections that are hard to treat—says César de la Fuente, the bioengineer who helped discover the molecule.
. . .
To help combat superbugs, doctors say we need new antibiotics with novel chemical structures or mechanisms of action. But only a handful of such drugs has entered the market over the past several decades.
De la Fuente is banking on artificial intelligence to help end this dry spell. He and his collaborators have built deep-learning algorithms to comb through enormous genetic databases to find peptides, or protein fragments, that have antibacterial properties. They have used this method to analyze animal venoms, the human microbiome and archaea, an underexplored group of microorganisms. They have also mined the genetic codes from fossils of long-extinct animals and humans, including Neanderthals and Denisovans. “This deep-learning model has opened a window into the past,” de la Fuente says.
. . .
When the algorithms identify a new peptide with antibiotic potential, de la Fuente and his team use robots to manufacture the compound in their lab and then test it in mice infected with bacteria. So far, a few hundred peptides made in de la Fuente’s lab have safely and effectively cured sick mice.
One of them was mammuthusin, identified in the genetic code of Mammuthus primigenius, a species of mammoth that last roamed the Earth about 4,000 years ago. The researchers discovered the peptide after mining a National Center for Biotechnology Information database of DNA sequencing data obtained from the fossils of extinct animals. In experiments, mammuthusin was as potent as polymyxin B, an antibiotic often used as a last resort for serious infections, according to a paper published in the journal Nature in June [2024]. The mammoth peptide effectively eradicated a type of bacterium that the World Health Organization has designated a critical pathogen because of its resistance to many common antibiotics.
For the full story, see:
(Note: ellipses, and bracketed year, added.)
(Note: the online version of the story has the date May 24, 2025, and has the title “A Search for New Antibiotics in Ancient DNA.” In the original of both the online and print versions, Mammuthus primigenius appeared in italics.)
The academic article published in Nature Biomedical Engineering in June 2024, and mentioned above, is: