Category: Entrepreneurship

It May Take a “Thorny Character” to Be “Willing to Challenge Entire Establishment Belief Systems”

The obituary quoted below misidentifies Richard Bernstein’s main contribution. Yes, it is noteworthy that he was probably the first diabetes sufferer to effectively and continually monitor his own blood glucose level. But his main contribution was that by careful self-monitoring and trial-and-error experimentation he discovered that his health improved when he cutback on both carbs and insulin.

The obituary writer quotes Gary Taubes, but either didn’t read his book or disagrees with it, because Taubes is clear about Bernstein’s main contribution.

I am halfway through Taubes’s book. It is long and sometimes deep in the weeds, but comes highly recommended by Marty Makary and Siddhartha Mukherjee, both of whom I highly respect. The book sadly highlights how mainstream medicine can be very slow to reform clinical practice to new knowledge.

(p. C6) Richard Bernstein was flipping through a medical trade journal in 1969 when he saw an advertisement for a device that could check blood-sugar levels in one minute with one drop of blood. It was marketed to hospitals, not consumers, but Bernstein wanted one for himself. He had been sick his entire life and was worried he was running out of time.

. . .

Since he wasn’t a doctor, the manufacturer wouldn’t even sell him a device. So, he bought one under the name of his wife, Dr. Anne Bernstein, a psychiatrist.

He experimented with different doses of insulin and the frequency of shots. He eased off carbohydrates. He checked his blood sugar constantly to see how it was reacting.

After experimenting for several years, he figured out that if he maintained a low-carb diet, he didn’t need as much insulin and could avoid many of the wild swings in his blood-sugar levels. By checking his blood sugar throughout the day, he learned how to maintain normal levels. It changed his life.

. . .

With his diabetes under control, he tried to spread the word and change the way the disease is treated. In the early years, he was dismissed by much of the medical establishment. His ideas went against accepted wisdom and he was, after all, not a doctor. In 1979, at the age of 45, he enrolled at the Albert Einstein College of Medicine, where he received his M.D.

“I never wanted to be a doctor,” he told the New York Times in 1988. “But I had to become one to gain credibility.”

Bernstein went into private practice in Mamaroneck, N.Y., where he treated diabetics and continued to advocate for his ideas—to his patients, in articles, YouTube videos, letters to the editor, and writing books, including “Dr. Bernstein’s Diabetes Solution.”

. . .

Gary Taubes, the author of “Rethinking Diabetes,” said that it was Bernstein’s work that eventually led to the Diabetes Control and Complications Trial, a landmark study that demonstrated that diabetics could blunt the destructive effects of the disease by keeping their blood-sugar levels nearer normal. Released in 1993, the results led to the kind of self-monitoring and frequent shots of insulin that remains part of the standard treatment plan for Type 1 diabetes today—part of what Bernstein had been pushing for years.

This was only partial vindication for Bernstein. The medical establishment never fully embraced Bernstein or the strict low-carb diet that he prescribed, which some considered unrealistic.

Taubes said that Bernstein was a bit of a “thorny character” who was easy for the establishment to dislike. He also noted that’s something that comes with the territory when you spend your career telling people they’re wrong and you’re right.

“But often it’s the people who are not easy to like,” Taubes said, “who are the ones who are willing to challenge entire establishment belief systems.”

For the full obituary see:

Chris Kornelis. “A Diabetic Who Pioneered Self-Monitoring for Blood Sugar.” The Wall Street Journal (Sat., May 10, 2025): C6.

(Note: the online version of the WSJ obituary has the date May 9, 2025, and has the title “Richard Bernstein, Who Pioneered Diabetics’ Self-Monitoring of Blood Sugar, Dies at 90.”)

Bernstein’s book mentioned above is:

Bernstein, Richard K., MD. Dr. Bernstein’s Diabetes Solution: The Complete Guide to Achieving Normal Blood Sugars. New York: Little, Brown Spark, 2011.

Taubes’s book mentioned above is:

Taubes, Gary. Rethinking Diabetes: What Science Reveals About Diet, Insulin, and Successful Treatments. New York: Knopf, 2024.

The Classical Liberal Economist’s Current Job: Minimize the Harm from Tariffs, Maximize the Benefits from Deregulation and Downsizing Government

I used to run into Richard Burkhauser at economics meetings occasionally and always enjoyed talking with him and hearing about his research. I believe Richard’s activity in the first Trump administration makes sense: if tariffs are going to be imposed, do them in a way that minimizes the damage to the economy. Although not mentioned in the article quoted below, I am sure Richard also did what he could to further the part of Trump’s agenda that was positive for he economy: reducing regulations so entrepreneurs can innovate and create jobs, and downsizing the government so taxpayers can keep more of their earnings.

(p. 1) Partway through a panel discussion at a recent economics conference in San Francisco, Jason Furman, a former adviser to President Barack Obama, turned to Kimberly Clausing, a former member of the Biden administration and the author of a book extolling the virtues of free trade.

“Everyone in this room agrees with your book,” Mr. Furman said. “No one outside of this room agrees with your book.”

The academics and policy wonks gathered in the hotel conference room laughed, but the comment captured something real: After decades of helping to shape policy on weighty matters like taxes and health insurance, economists find that their influence is at a low ebb.

. . .

(p. 6) Mr. Trump, in his first term, had few economists in top roles, and perhaps the most prominent exception — Peter Navarro, a Harvard-trained economist who was an adviser on trade policy — held skeptical views on trade, particularly with China, that put him far outside the economic mainstream. (In a 2016 survey of academic economists, not a single respondent said putting tariffs on China to encourage domestic production would be a good idea.)

Economists who held more mainstream views had limited influence. Richard Burkhauser, a Cornell University professor who served on Mr. Trump’s Council of Economic Advisers, said he and his colleagues quickly understood that there was little point in trying to talk Mr. Trump out of imposing tariffs.

“The most forlorn economists at the C.E.A. specialized in trade,” he said. If they had tried to fight tariffs, he said, “that would have been the last meeting we were at.”

Instead, Mr. Burkhauser said, economists focused on a different question: If the administration was going to impose tariffs, how could it do them in the least painful way possible?

For the full story see:

Ben Casselman. “Economists See Influence Wane in Policy Circles.” The New York Times, SundayBusiness Section (Sun., January 12, 2025): 1 & 6.

(Note: ellipsis added.)

(Note: the online version of the story has the date Jan. 10, 2024, and has the title “Economists Are in the Wilderness. Can They Find a Way Back to Influence?”)

Plenty in Science Still “Just Doesn’t Make Any Sense”

In my Openness book, I argue against those who see a future of inevitable stagnation. One argument for inevitable stagnation says that entrepreneurs build their innovations on science and we have run out of new knowledge to learn in science.

But whenever we keep our eyes open and observe more closely, or in new areas, we see what we cannot yet explain. The passages quoted below give another example. So we still have a lot to learn in science.

(Of course I also point out in the book that much entrepreneurial innovation is not tied to current advances in science–and is done by entrepreneurs who do not know, or who do not hold in high esteem, the current conclusions of mainstream scientists.)

(p. A14) On Dec. 24 [2024], NASA’s Parker Solar Probe swooped closer than it ever had before to the sun, just a few million miles above its blazing hot surface.

The team behind the mission waited nervously, trusting that the probe would survive the encounter. Then, a few minutes shy of midnight on Thursday [Dec. 2?, 2024], Parker phoned home.

. . .

. . ., there was some fear that the probe might not survive this time. Parker’s heat shield is designed so that the front of the vehicle can withstand facing the blistering heat of the sun’s outer atmosphere, which reaches millions of degrees, while the back, which contains the probe’s sensitive instruments, sits at a comfortable 85 degrees Fahrenheit.

“Literally one side is at a temperature that is unfathomable,” Joseph Westlake, the director of heliophysics at NASA, said. “And the back of it is a hot, sunny day.”

. . .

Parker’s data will . . . help scientists understand how the sun’s outer atmosphere, known as the corona, can be hundreds of times hotter than the solar surface below it.

“It’s like if you were standing next to a bonfire and you took a couple of steps back, and all of a sudden it got hotter,” Dr. Westlake said. “It just doesn’t make any sense.”

For the full story see:

Katrina Miller. “After Silence, Solar Probe Signals Earth of Survival.” The New York Times (Sat., December 28, 2024): A14.

(Note: ellipses, bracketed year, and bracketed date, added.)

(Note: the online version of the story was updated Dec. 30, 2024, and has the title “After Days of Silence, NASA’s Parker Solar Probe Phones Home.”)

My book mentioned in my initial comments is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.

Medical Entrepreneur Fired for Nimbly Pivoting to Get Job Done

Back in early 2021, the Moderna vaccine was not yet widely available. Protocols mandated who could get the scarce shots, prioritizing health care workers, senior citizens, and those with severe diseases. Each vial contained enough for 10 doses, but the doses had to be given with six hours, before the vaccine spoiled. On Dec. 29 Dr. Hasan Gokal, a Pakistani immigrant, worked at the county’s first vaccination event, set up for health care workers. Near the end of the scheduled event a health care worker showed up and a nurse punctured a new vial to give the worker the shot.

Now, what to do with the remaining nine doses? He got on the phone and drove around seeking and finding several senior citizens who wanted the vaccine. Exhausted with a half-hour until the vaccine expired, he gave the final dose to his wife, who had pulmonary sarcoidosis, which was indicated in the protocols as a qualification for the vaccine.

Dr. Gokal’s supervisor and the director of human resources then fired Dr. Gokal:

The officials maintained that he had violated protocol and should have returned the remaining doses to the office or thrown them away, the doctor recalled. He also said that one of the officials startled him by questioning the lack of “equity” among those he had vaccinated.

“Are you suggesting that there were too many Indian names in that group?” Dr. Gokal said he asked.

Exactly, he said he was told. (Barry 2021, p. A5)

A couple of weeks later, the county district attorney charged Dr. Gokal with theft of doses of the vaccine.

Dr. Gokal acted as a medical entrepreneur. His job was to save lives by administering the vaccine. He nimbly pivoted in a difficult situation. For that he was punished–fired and charged with a crime.

The growing promulgation and enforcement of protocols limit physicians from acting as mission-oriented entrepreneurs. They are limited in their use of judgement based on their own experiences, they are limited in innovating, and sometimes they are even limited in using all of a scarce vaccine. These limits may be part of the reason that so many physicians today experience frustration and burn-out.

[As of the time of the writing of the NYT article cited below, Dr. Gokal remained fired from his job, and still was in legal jeopardy.]

My source for the facts of Dr. Gokal’s case, is the NYT article:

Dan Barry. “Racing the Clock, a Doctor Gave Out the Vaccine.” The New York Times (Thurs., February 11, 2021 [sic]): A1 & A5.

(Note: the online version of the NYT article was updated June 23, 2023 [sic], and has the title “The Vaccine Had to Be Used. He Used It. He Was Fired.”)

Gig Work Enables Free Agent Entrepreneurship

In my Openness book, I distinguish between free agent entrepreneurs and innovative entrepreneurs. Free agent entrepreneurs are there own boss, doing what has been done before. Innovative entrepreneurs are their own boss, doing what is new. Of course the distinction is not sharp–a continuum.

Recent research, summarized in the WSJ, suggests that gig work can ease entry into free agent entrepreneurship. Gig work is flexible–the gig worker has time when they need it, to work on their entrepreneurial venture. Gig work also can generate capital and give experience in self-management.

A higher percent of gig workers become entrepreneurs than similar employed workers, and they do so, on average, at a slightly younger age.

Those who want to regulate gig work, and thereby make it less common, should remember how gig work benefits aspiring entrepreneus.

The WSJ article mentioned above is:

Lisa Ward. “Gig Workers Show More Enterprise, Study Finds.” The Wall Street Journal (Thurs., May 8, 2025): A11.

(Note: the online version of the WSJ article has the date May 5, 2025, and has the title “Want to Start a Business? Maybe Begin by Being a Gig Worker.”)

The academic working paper summarized in the WSJ article is:

Denes, Matthew R., Spyridon Lagaras, and Margarita Tsoutsoura. “Entrepreneurship and the Gig Economy: Evidence from U.S. Tax Returns.” In National Bureau of Economic Research Working Paper #33347, Jan. 2025.

My book mentioned in my initial comments is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.

If Switzerland Is “Capitalist to Its Core,” Where Are Its Breakthrough Innovations?

If Switzerland is the premier capitalist country in the world, as Ruchir Sharma argues in the puzzling passages quoted below, what breakthrough innovations has it nurtured in the last half century? I can think of none. (Swatch may have been successful, but was it a breakthrough?) If I am right, what is Switzerland missing?

(p. 5) Capitalist to its core, Switzerland imposes lighter taxes on individuals, consumers and corporations than the Scandinavian countries do. In 2018 its top income tax rate was the lowest in Western Europe at 36 percent, well below the Scandinavian average of 52 percent. Government spending amounts to a third of gross domestic product, compared with half in Scandinavia. And Switzerland is more open to trade, with a share of global exports around double that of any Scandinavian economy.

Streamlined government and open borders have helped make this landlocked, mountainous country an unlikely incubator of globally competitive companies. To build wealth, a country needs to make rich things, and an M.I.T. ranking of nations by the complexity of the products they export places Switzerland second behind Japan, well ahead of the Scandinavian countries, whose average rank is 15.

. . .

Die-hard admirers of Scandinavian socialism overlook the change of heart in countries such as Sweden, where heavy government spending led to the financial crises of the 1990s. Sweden responded by cutting the top income tax rate from nearly 90 percent to as low as 50 percent. Public spending fell from near 70 percent of G.D.P. to 50 percent. Growth revived, as the largest Scandinavian economy started to look more like Switzerland, streamlining government and leaving business more room to grow.

For the full commentary see:

Ruchir Sharma. “The Happy, Healthy Capitalists of Switzerland.” The New York Times, SundayReview Section (Sun., November 3, 2019 [sic]): 5.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Nov. 2, 2019 [sic], and has the same title as the print version.)

Innovative Project Entrepreneur Mike Wood Helped Children Leapfrog the Reading Skills Taught at School

In my Openness book I argue that the kind of entrepreneurs who matter most in changing the world are what I call “project entrepreneurs,” those who are on a mission to bring their project into the world. Mike Wood, discussed in the obituary quoted below was a project entrepreneur.

I sometimes wonder how much formal education would be desirable in a world, unlike our world, that lacked creeping credentialism. Samuel Smile’s biography of George Stephenson says that he had zero formal education, but early-on paid someone from his meagre wages in the mines, to teach him to read. After that, the inventor and innovative entrepreneur read prodigiously to became an exemplary autodidact.

Today, Stephenson could learn to read through phonics technology like the LeapFrog pads developed by Mike Wood.

[By the way, Mike Wood, like Danny Kahneman recently, committed suicide at Dignitis in Switzerland in anticipation of declining health, in Wood’s case Alzheimer’s. As a libertarian, I believe they had a right to do this, but were they right to exercise this right? Harvard psychology professor Daniel Gilbert cites (2006, pp. 166-168) research showing that people generally underestimate their resilience in the face of major health setbacks. They can often recalibrate to their new more limited capabilities, continuing to find challenges they find fulfilling to overcome. If so, then maybe Wood and Kahneman were wrong to exercise their right to end their lives. (More than most of my claims, I very readily admit this one could be wrong.)]

(p. A21) Mike Wood was a young father when his toddler’s struggles to read led him to develop one of a generation’s most fondly remembered toys.

Mr. Wood’s 3-year-old son, Mat, knew the alphabet but couldn’t pronounce the letter sounds. A lawyer in San Francisco, Mr. Wood had a new parent’s anxiety that if his child lagged as a reader, he would forever struggle in life.

So on his own time, Mr. Wood developed the prototype of an electronic toy that played sounds when children squeezed plastic letters. He based the idea on greeting cards that played a tune when opened.

Mr. Wood went on to found LeapFrog Enterprises, which in 1999 introduced the LeapPad, a child’s computer tablet that was a kind of talking book.

The LeapPad was a runaway hit, the best-selling toy of the 2000 holiday season, and LeapFrog became one of the fastest-growing toy companies in history.

. . .

Former colleagues recalled Mr. Wood as a demanding entrepreneur who was driven by a true belief that technology could help what he called “the LeapFrog generation” gain an educational leg up.

He had “famously fluffy hair,” Chris D’Angelo, LeapFrog’s former executive director of entertainment, wrote of Mr. Wood on The Bloom Report, a toy industry news site. “When stressed, he’d unconsciously rub his head — and the higher the hair, the higher the stakes. We (quietly) called them ‘high-hair days.’ It was funny, but also telling. He felt everything deeply — our work, our mission, our audience.”

. . .

A shift in reading pedagogy in the 1990s toward phonics — helping early readers make a connection between letters and sounds — drove interest in LeapFrog’s products among parents and teachers.

. . .

In 2023, his daughter-in-law, Emily Wood, posted a TikTok video of Mr. Wood teaching her daughter to use a forerunner of the LeapPad. The video received 391,000 likes and thousands of comments.

“I owe him my entire childhood,” one viewer wrote. “I spent hours on my LeapFrog with my ‘Scooby-Doo’ and ‘Shrek’ books.”

“I sell books now because of him,” another viewer wrote.

“I’m learning disabled and have a stutter,” wrote a third. “This man helped me learn to speak.”

“I’m 25 and I loved my LeapFrog,” a fourth commented. “Coming from an immigrant family, reading made me have so much imagination. I never stopped reading.”

For the full obituary, see:

Trip Gabriel. “Mike Wood, 72, Dies; Taught a Generation With LeapFrog Toys.” The New York Times (Monday, April 21, 2025): A21.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the obituary has the date April 19, 2025, and has the title “Mike Wood, Whose LeapFrog Toys Taught a Generation, Dies at 72.”)

My book mentioned in my initial comments is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.

Smiles’s biography of Stephenson is:

Smiles, Samuel. The Locomotive: George and Robert Stephenson. New and Revised ed, Lives of the Engineers. London: John Murray, Albemarle Street, 1879.

Daniel Gilbert’s book that I mention in my opening comments is:

Gilbert, Daniel. Stumbling on Happiness. New York: Alfred A. Knopf, 2006.

Fraudulently Doctored Images and “Suspect Data” in Many Leading Cancer Research Papers

Charles Piller in his Doctored paints a damning picture of doctored images and suspect data rampant in the leading scientific literature on Alzheimer’s disease. Not only were leading scientists guilty of fraud, but the key institutions of scientific research (journals, universities, and government grant-making agencies) failing their oversight duty, and when outsiders stepped in to provide oversight, delayed and minimized their responses. Practicing and turning a blind eye to fraud matters, since Alzheimer’s patients are depending on this research. And researchers who do not commit fraud suffer because they appear to have worse research records than those compiled by the fraudsters. So the honest get worse academic appointments and fewer grants.

After reading Doctored I was depressed, but I at least hoped that this pathology was limited to this one (albeit an important one) area of medical research. But in the article quoted below, evidence is presented that there is substantial similar doctored images and suspect data in the field of cancer research.

A side issue in the quoted article is worth highlighting. In the absence of credible oversight from the institutions tasked with oversight, oversight is being done by competent volunteers, with the aid of A.I. These volunteers do not receive compensation for their work, and in fact are probably pay a price for it, since they alienate powerful scientists and scientific institutions. But if science is a search for truth, and truth matters for cures, they are doing a service to us all, and especially to those who suffer from major diseases such as Alsheimer’s and cancer.

On the connection with the Doctored book, it is worth noting that the article quotes Dr. Matthew Schrag, who is the most important source in Doctored. The article also quoted Elisabeth Bik, who does not have an MD like Schrag but has a PhD in microbiology, and who is another important source in Doctored.

(p. A1) The stomach cancer study was shot through with suspicious data. Identical constellations of cells were said to depict separate experiments on wholly different biological lineages. Photos of tumor-stricken mice, used to show that a drug reduced cancer growth, had been featured in two previous papers describing other treatments.

Problems with the study were severe enough that its publisher, after finding that the paper violated ethics guidelines, formally withdrew it within a few months of its publication in 2021. The study was then wiped from the internet, leaving behind a barren web page that said nothing about the reasons for its removal.

As it turned out, the flawed study was part of a pattern. Since 2008, two of its authors — Dr. Sam S. Yoon, chief of a cancer surgery division at Columbia University’s medical center, and a more junior cancer biologist — have collaborated with a rotating cast of researchers on a combined 26 articles that a British scientific sleuth has publicly flagged for containing suspect data. A medical journal retracted one of them this month after inquiries from The New York Times.

Memorial Sloan Kettering Cancer Center, where Dr. Yoon worked when much of the research was done, is now investigating the studies. Columbia’s medical center declined to comment on specific allegations, saying only that it reviews “any concerns about scientific integrity brought to our attention.”

Dr. Yoon, who has said his research could lead to better cancer treatments, did not answer repeated questions. Attempts to speak to the other researcher, Changhwan Yoon, an associate research scientist at Columbia, were also unsuccessful.

The allegations were aired in recent months in online comments on a science forum and in a blog post by Sholto David, an independent molecular biologist. He has ferreted out problems in a raft of high-profile cancer research, including dozens of papers at a Harvard cancer center that were subsequently referred for retractions or corrections.

From his flat in Wales, Dr. David pores over published images of cells, tumors and mice in his spare (p. A17) time and then reports slip-ups, trying to close the gap between people’s regard for academic research and the sometimes shoddier realities of the profession.

. . .

Armed with A.I.-powered detection tools, scientists and bloggers have recently exposed a growing body of such questionable research, like the faulty papers at Harvard’s Dana-Farber Cancer Institute and studies by Stanford’s president that led to his resignation last year.

But those high-profile cases were merely the tip of the iceberg, experts said. A deeper pool of unreliable research has gone unaddressed for years, shielded in part by powerful scientific publishers driven to put out huge volumes of studies while avoiding the reputational damage of retracting them publicly.

The quiet removal of the 2021 stomach cancer study from Dr. Yoon’s lab, a copy of which was reviewed by The Times, illustrates how that system of scientific publishing has helped enable faulty research, experts said. In some cases, critical medical fields have remained seeded with erroneous studies.

“The journals do the bare minimum,” said Elisabeth Bik, a microbiologist and image expert who described Dr. Yoon’s papers as showing a worrisome pattern of copied or doctored data. “There’s no oversight.”

. . .

Dr. Yoon, a stomach cancer specialist and a proponent of robotic surgery, kept climbing the academic ranks, bringing his junior researcher along with him. In September 2021, around the time the study was published, he joined Columbia, which celebrated his prolific research output in a news release. His work was financed in part by half a million dollars in federal research money that year, adding to a career haul of nearly $5 million in federal funds.

. . .

The researchers’ suspicious publications stretch back 16 years. Over time, relatively minor image copies in papers by Dr. Yoon gave way to more serious discrepancies in studies he collaborated on with Changhwan Yoon, Dr. David said. The pair, who are not related, began publishing articles together around 2013.

But neither their employers nor their publishers seemed to start investigating their work until this past fall, when Dr. David published his initial findings on For Better Science, a blog, and notified Memorial Sloan Kettering, Columbia and the journals. Memorial Sloan Kettering said it began its investigation then.

. . .

A proliferation of medical journals, they said, has helped fuel demand for ever more research articles. But those same journals, many of them operated by multibillion-dollar publishing companies, often respond slowly or do nothing at all once one of those articles is shown to contain copied data. Journals retract papers at a fraction of the rate at which they publish ones with problems.

. . .

“There are examples in this set that raise pretty serious red flags for the possibility of misconduct,” said Dr. Matthew Schrag, a Vanderbilt University neurologist who commented as part of his outside work on research integrity.

. . .

Experts said the handling of the article was symptomatic of a tendency on the part of scientific publishers to obscure reports of lapses.

“This is typical, sweeping-things-under-the-rug kind of nonsense,” said Dr. Ivan Oransky, co-founder of Retraction Watch, which keeps a database of 47,000-plus retracted papers. “This is not good for the scientific record, to put it mildly.”

For the full story, see:

Benjamin Mueller. “Cancer Doctor Is in Spotlight Over Bad Data.” The New York Times. (Fri., February 16, 2024): A1 & A17.

(Note: ellipses added.)

(Note: the online version has the date Feb. 15, 2024 [sic], and has the title “A Columbia Surgeon’s Study Was Pulled. He Kept Publishing Flawed Data.”)

Piller’s book mentioned in my initial comments is:

Piller, Charles. Doctored: Fraud, Arrogance, and Tragedy in the Quest to Cure Alzheimer’s. New York: Atria/One Signal Publishers, 2025.

Rampant Fraud in ‘Skin’ Bandages Paid by Medicare

A “quirk” in the Medicare law allows ‘skin’ bandage firms to charge, and have Medicare pay them, exorbitant prices. Are such quirks accidents or intentional? Medicare rules are so voluminous and obscure that few have an incentive to look carefully at the details. But the firms selling ‘skin’ bandages had an incentive. Entrepreneurs within these firms saw an opportunity and seized it. But they are what William Baumol called “destructive entrepreneurs.” Their energy and talent works against the general good.

Since patients are not paying, they have little incentive to reveal the fraud. So the taxpayers are robbed. In a system where the patients are the payers they would have an incentive to reveal fraud, and to seek alternatives to over-priced medical therapies.

But what of the poor, you ask? Susan Feigenbaum proposed an insurance system where patients would receive lump sum payments for different ailments. Then poor patients could be payers, and have the incentives of payer.

(p. 1) Seniors across the country are wearing very expensive bandages.

Made of dried bits of placenta, the paper-thin patches cover stubborn wounds and can cost thousands of dollars per square inch.

Some research has found that such “skin substitutes” help certain wounds heal. But in the past few years, dozens of unstudied and costly products have flooded the market.

Bandage companies set ever-rising prices for new brands of the products, taking advantage of a loophole in Medicare rules, The New York Times found. Some doctors then buy the coverings at large discounts but charge Medicare the full sticker price, pocketing the difference.

Partly because of these financial incentives, many patients receive the bandages who do not need them. The result, experts said, is one of the largest examples of Medicare waste in history.

Private insurers rarely pay for skin substitutes, arguing that they are unproven and unnecessary. But Medicare, the government insurance program for seniors, routinely covers them. Spending on skin substitutes exceeded $10 billion in 2024, more than double the figure in 2023, according to an analysis of Medicare data done for The Times by Early Read, a firm that evaluates costs for large health companies.

Medicare now spends more on the bandages than on ambulance rides, anesthesia or CT scans, the analysis found.

. . .

(p. 19) . . . experts in health care costs said the spike had been driven . . . by sellers and doctors taking advantage of Medicare’s pricing rules. The government will reimburse any price that a company sets for brand-new skin substitutes, even if it is far above the market average. The higher the price, the larger the doctors’ cut.

And the bigger the bandage, the more they can charge. For one patient in Nevada, Medicare spent $14 million on skin substitutes over the course of a year, according to billing records reviewed by The Times. The wound of a patient in Washington State persisted after Medicare paid $6 million for the coverings. A man in Texas got $1.3 million of bandages despite having no wound at all. Health executives trying to ferret out suspicious spending identified these patients and shared their stories with The Times.

As the Trump administration — and particularly the new Department of Government Efficiency run by Elon Musk — aims to shrink the federal purse, profligate Medicare spending is a ripe target, experts said.

Companies have billed Medicare for hundreds of thousands of urinary catheters that doctors never ordered. Other schemes have peddled urine tests and knee braces. In 2023, a federal watchdog agency flagged skin substitute spending as wasteful for both taxpayers and Medicare enrollees, who ultimately pay the costs with higher premiums.

“It’s the patients, it’s the taxpayers — unfortunately everyone is footing a part of the bill for this outsized spend,” said Dana Rye, an executive with Duly Health and Care, a Chicago-based medical group where payments for skin substitutes have risen 1,400 percent since 2022.

. . .

Five years ago, the most expensive skin substitute cost $1,042 per square inch, while some were as cheap as $45. Today, the three most expensive products on the market each cost more than $21,000. (Samaritan Biologics, a company in Memphis that sells the three products, did not answer questions about why they cost so much.)

Companies can set such high prices because of a quirk in Medicare pricing rules, industry experts said. For the first six months of a new bandage product’s life, Medicare will set the reimbursement rate at whatever price a company chooses. After that, the agency adjusts the reimbursement to reflect the actual price paid by doctors after any discounts.

To circumvent the reimbursement drop, some companies simply roll out new products.

In April 2023, Medicare began reimbursing $6,497 for every square inch of a bandage called Zenith, sold by Legacy Medical Consultants, a company in Fort Worth, Texas. Six months later, Zenith’s reimbursement fell to $2,746.

That month, October 2023, Medicare began reimbursing $6,490 for a new Legacy product, a “dual layer” bandage called Impax.

Marketing materials for the two products use identical photographs and similar language. The company describes both products as providing “optimal wound covering and protection during the treatment of wounds.”

Since 2022, spending on Zenith and Impax has exceeded $2.6 billion, according to Early Read’s analysis.

. . .

A cottage industry of doctors and nurses make house calls to treat wounds. Some skin substitute companies pitch themselves to wound care doctors by offering a cut of the rising bandage prices.

Dr. Caroline Fife, a wound care doctor from Texas who often writes about industry excesses, shared on her blog last year an email she received from an undisclosed skin substitute company. The company boasted that other doctors had developed “a healthy revenue stream” from its bandages and that a patch smaller than a credit card “would generate a little over $20,000 for your practice.”

Some companies offer doctors a “bulk discount” of up to 45 percent, according to doctor interviews and contracts reviewed by The Times. But doctors then collect a Medicare reimbursement for the full price of the product.

For the full story, see:

Sarah Kliff and Katie Thomas. “‘Skin’ Bandages Cost Medicare, And Doctors Get a Cut of Billions.” The New York Times, First Section. (Sun., April 13, 2025): 1 & 19.

(Note: ellipses added.)

(Note: the online version was updated April 14, 2025, and has the title “Medicare Bleeds Billions on Pricey Bandages, and Doctors Get a Cut.”)

The article by William Baumol praised in my initial comments is:

Baumol, William J. “Entrepreneurship: Productive, Unproductive, and Destructive.” The Journal of Political Economy 98, no. 5, Part 1 (Oct. 1990): 893-921.

The article by Susan Feigenbaum praised in my initial comments is:

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.s Are Overly Complicated, Patched-Together Rube Goldberg Machines Full of Ad-Hoc Solutions”

A.I. can be a useful tool for searching and summarizing the current state of consensus knowledge. But I am highly dubious that it will ever be able to make the breakthrough leaps that some humans are sometimes able to make. And I am somewhat dubious that it will ever be able to make the resilient pivots that all of us must sometimes make in the face of new and unexpected challenges.

(p. B2) In a series of recent essays, [Melanie] Mitchell argued that a growing body of work shows that it seems possible models develop gigantic “bags of heuristics,” rather than create more efficient mental models of situations and then reasoning through the tasks at hand. (“Heuristic” is a fancy word for a problem-solving shortcut.)

When Keyon Vafa, an AI researcher at Harvard University, first heard the “bag of heuristics” theory, “I feel like it unlocked something for me,” he says. “This is exactly the thing that we’re trying to describe.”

Vafa’s own research was an effort to see what kind of mental map an AI builds when it’s trained on millions of turn-by-turn directions like what you would see on Google Maps. Vafa and his colleagues used as source material Manhattan’s dense network of streets and avenues.

The result did not look anything like a street map of Manhattan. Close inspection revealed the AI had inferred all kinds of impossible maneuvers—routes that leapt over Central Park, or traveled diagonally for many blocks. Yet the resulting model managed to give usable turn-by-turn directions between any two points in the borough with 99% accuracy.

Even though its topsy-turvy map would drive any motorist mad, the model had essentially learned separate rules for navigating in a multitude of situations, from every possible starting point, Vafa says.

The vast “brains” of AIs, paired with unprecedented processing power, allow them to learn how to solve problems in a messy way which would be impossible for a person.

. . .

. . ., today’s AIs are overly complicated, patched-together Rube Goldberg machines full of ad-hoc solutions for answering our prompts. Understanding that these systems are long lists of cobbled-together rules of thumb could go a long way to explaining why they struggle when they’re asked to do things even a little bit outside their training, says Vafa. When his team blocked just 1% of the virtual Manhattan’s roads, forcing the AI to navigate around detours, its performance plummeted.

This illustrates a big difference between today’s AIs and people, he adds. A person might not be able to recite turn-by-turn directions around New York City with 99% accuracy, but they’d be mentally flexible enough to avoid a bit of roadwork.

For the full commentary see:

Christopher Mims. “We Now Know How AI ‘Thinks.’ It Isn’t Thinking at All.” The Wall Street Journal (Saturday, April 26, 2025): B2.

(Note: ellipses added.)

(Note: the online version of the commentary has the date April 25, 2025, and has the title “We Now Know How AI ‘Thinks’—and It’s Barely Thinking at All.”)

A conference draft of the paper that Vafa co-authored on A.I.’s mental map of Manhattan is:

Vafa, Keyon, Justin Y. Chen, Ashesh Rambachan, Jon Kleinberg, and Sendhil Mullainathan. “Evaluating the World Model Implicit in a Generative Model.” In 38th Conference on Neural Information Processing Systems (NeurIPS). Vancouver, BC, Canada, Dec. 2024.

Health Freedom Is a Right AND Can Yield More and Faster Therapies

The headline of the article on the front page of the NYT says “No Evidence for Healing Powers,” and goes on to slam unsophisticated right-wingers as irresponsibly pushing ivermectin as a therapy for cancer. In the article the NYT publishes a ludicrous picture from a right-winger’s Facebook page where he has spread veterinary ivermectin cream on his tongue and says “tastes like dead cancer.”

But this is unfair and tendentious caricature. A friend recently sent me an Instagram post by a chiropractor suffering from glioblastoma who has taken ivermectin and mebendazole. He briefly sketches the hypothesized mechanisms for activity of the two drugs, consistent with research published in scientific papers.

Glioblastoma is a serious, often fatal, brain cancer. He had surgery, but knows that surgery often does not cure, so he threw a Hail Mary and took ivermectin and mebendazole. These drugs have long track-records for safety, having been tested and approved for other uses. Doctors can, and have, prescribed drugs for off-label uses for decades.

Decades ago minoxidil was approved as an blood pressure medicine. I asked my then-doctor to prescribe it for me for its rumored effects as a hair loss cure. He did, so I crushed the tablets and somehow applied them to my scalp, which proceeded to itch, but not grow hair. It was a low-risk, modest-chance-of-success experiment. I think I had a right to try it, and that no government or expert had a right to forbid it. (Eventually minoxidil was approved for hair loss and branded Rogaine–which still didn’t work for me.)

In a free country adults should have wide latitude to make decisions about what risks they take; to scuba dive, to drive NASCAR, to go into space, and yes to take ivermectin and mebendazole. And the ludicrous right-winger? Hey, maybe even he has rights.

The NYT headline says there is “no evidence” for ivermectin. Below I cite a survey article that identifies 24 articles published in scientific journals identifying mechanisms by which ivermectin may be effective against cancer. There’s plenty of evidence, just not from randomized double-blind clinical trials (RCTs). But as long-time readers of this blog may remember, I have posted many entries giving useful actionable evidence that takes forms other than RCTs.

“No evidence”? Maybe the NYT was seeking plausible deniability by running its article on April 1st.

Oh, and by the way, allowing health freedom might sometimes result in better and faster therapies. I am currently reading Rethinking Diabetes by Gary Taubes. He tells the story (pp. 346-356) of Richard K. Bernstein, an engineer with Type 1 diabetes who was suffering from various serious ailments from his diabetes, in spite of the doctors saying it was being well-controlled by insulin. In his 40s, he was only expected to live another 10 years. Well he bought a new device that was not supposed to be bought by patients. The medical profession thought patients could not handle the information. (His wife was an MD, so he ‘bought’ it by asking her to buy it for him.) The device allowed him to get frequent readings of his blood sugar, and thereby to better control it, ultimately through changes in diet. When he tried to share what he had learned, he had trouble finding anyone who would take him seriously, so in his 40s he enrolled in medical school, and started publishing papers and books describing his results.

Richard K. Bernstein died on April 15, 2025 at age 90.

[Below are some relevant quotations from a NYT companion piece to the front-page article. The companion piece provides only slightly less tendentious background information on ivermectin.]

(p. A21) . . . there is not evidence to support people taking ivermectin to treat cancer.

. . .

Scientists do not dispute that ivermectin is powerfully effective — against parasites. The drug was such a breakthrough in the fight against tropical parasitic diseases that two scientists who studied it won the Nobel Prize in 2015.

The Food and Drug Administration has approved ivermectin tablets to treat certain parasitic infections, and the agency has authorized ivermectin lotions to kill lice and creams to help with rosacea. Veterinarians also use the drug to prevent and treat parasitic diseases in animals.

. . .

Studies in human cells suggest that the drug may kill certain types of cancer cells in a way that triggers the immune system, said Dr. Peter P. Lee, chair of the department of immuno-oncology at Beckman Research Institute of City of Hope in Duarte, Calif. In mouse studies, Dr. Lee has seen that the drug, on its own, does not shrink breast tumors. But it’s possible that the drug may have benefits for breast cancer when used alongside existing cancer immunotherapy, he said. Researchers are studying a combination of ivermectin and an investigational cancer drug in people with breast cancer.

While some inaccurate social media posts claim that ivermectin can treat cancer because tumors themselves are parasitic, the promise of ivermectin for cancer has nothing to do with its anti-parasitic effect, Dr. Lee said. Rather, it seems that the drug may be able to modulate a signal involved with cancer growth.

But doctors still need larger, randomized clinical trials to better understand whether ivermectin could treat cancer. Just because a drug seems to work in animals doesn’t mean those results will translate into real-world outcomes, Dr. Johnson noted. There are “hundreds of medications that look to be promising in a preclinical setting” every year, he said, adding, “The vast majority of those will never be shown to be effective in humans.”

. . .

Doctors generally view ivermectin as safe at the doses prescribed to treat parasitic infections.

For the full story, see:

Dani Blum. “What Ivermectin Can and Can’t Do, and What the Dangers Are.” The New York Times (Tues., April 1, 2025): A21.

(Note: ellipses added.)

(Note: the online version has the date March 31, 2025, and has the title “What Ivermectin Can (and Can’t) Do.” In the first quoted sentence, the print version says “no evidence” and the online version says “not evidence.”)

The Blum article that I just quoted and cited, is a secondary companion article to a longer front-page article, also on ivermectin:

Richard Fausset. “No Evidence for Healing Powers, but ‘Tastes Like Dead Cancer’.” The New York Times (Tues., April 1, 2025): A1 & A21.

(Note: the online version has the date March 31, 2025, and has the title “Why the Right Still Embraces Ivermectin.”)

The paper cited below reviewed the published scientific literature as of 2020 on the mechanisms through which ivermectin could have anti-cancer effects, finding 24 articles documenting one or more mechanisms.

Tang, Mingyang, Xiaodong Hu, Yi Wang, Xin Yao, Wei Zhang, Chenying Yu, Fuying Cheng, Jiangyan Li, and Qiang Fang. “Ivermectin, a Potential Anticancer Drug Derived from an Antiparasitic Drug.” Pharmacological Research 163 (Jan. 2021): 105207.

Tang and co-authors are optimistic in their summary section quoted below. [In this quote IVM is “ivermectin” and MDR is “multidrug resistance”.]

. . ., the broad-spectrum antiparasitic drug IVM, which is widely used in the field of parasitic control, has many advantages that suggest that it is worth developing as a potential new anticancer drug. IVM selectively inhibits the proliferation of tumors at a dose that is not toxic to normal cells and can reverse the MDR of tumors. Importantly, IVM is an established drug used for the treatment of parasitic diseases such as river blindness and elephantiasis. It has been widely used in humans for many years, and its various pharmacological properties, including long- and short-term toxicological effects and drug metabolism characteristics are very clear. (Tang et al. Jan. 2021, pp. 7-8)

The paper cited below reviewed the published scientific literature as of 2019 on the effect of mebendazole on cancer, and found 26 in vitro studies showing anti-cancer biological effects, 14 in vivo studies showing anti-tumor effects, and six Phase 1 or Phase 2 clinical trials listed in ClinicalTrials.gov.

Guerini, Andrea Emanuele, Luca Triggiani, Marta Maddalo, Marco Lorenzo Bonù, Francesco Frassine, Anna Baiguini, Alessandro Alghisi, Davide Tomasini, Paolo Borghetti, Nadia Pasinetti, Roberto Bresciani, Stefano Maria Magrini, and Michela Buglione. “Mebendazole as a Candidate for Drug Repurposing in Oncology: An Extensive Review of Current Literature.” Cancers 11, no. 9 (Aug. 2019): article #1284.

Gary Taubes’s book, praised by Marty Makary and Siddhartha Mukherjee, and mentioned by me near the end of my commentary, is:

Taubes, Gary. Rethinking Diabetes: What Science Reveals About Diet, Insulin, and Successful Treatments. New York: Knopf, 2024.

[I thank Ivette Locay for sending me a link useful for my commentary.]