Above the Fold

Medicare Advantage Has Saved Medicare


The Program has also Helped Millions of Low-Income Retirees with Better Retirement Benefits and Needed Support Services

Medicare Advantage (MA) has saved Medicare. Half of those in Medicare are in MA and their care costs less on average. This means the Medicare Trust Fund is protected against future deterioration because MA’s cost increases continuously run below the average increase in Medicare Trust Fund revenue each year.

The capitation paid to MA plans for each member is based each year on the actual average cost of fee-for-service Medicare in every county. Payments to the plans are now running about 11% below that average cost.

The plans bid capitation levels that are below the average cost of fee-for-service Medicare every year because the plans deliver much better care. The functional truth that most policy people do not know or understand is that better care costs less money, when you design the system and the processes to achieve that result.

Fee-for-service Medicare is expensive and too often is poorly delivered. The fee-based payment model pays more for bad and failed care because when the caregivers are paid only by the piece, they have more pieces to deliver when care fails. They deliver and bill for even more pieces when the health of a member deteriorates. When inferior care creates complications and mishaps more pieces of care are needed for that patient.

Diabetic Blindness Reduced By 60% With Blood Sugar Control

MA plans bid capitation levels every year based on the financial opportunity created by that bad care in FFS. The plans know that diabetic blindness can be reduced by 60% or more if the patients have their blood sugar controlled. The plans set their capitation levels knowing that the average cost of care in every county includes the high level of blindness that happens when FFS providers do not help their patients achieve their blood sugar control goals and thus incur extra expenses for those patients.

The Medicare Advantage program has blood sugar control as a key focus point. That is important and relevant, because the plans can collect the capitation money that was created by no blood sugar controls, and then can and do reduce blindness significantly by achieving that goal. They spend significantly less money on those patients.

The MA payment program is set up to have the plans create financial surpluses from better care and then to have the plans use those surpluses to improve the benefits of their members. The plans create those surpluses and use them to pay for additional benefits–so the Medicare Advantage members have vision benefits, dental benefits, hearing benefits, and various social support benefits that do not exist in the traditional Medicare benefit package.

Those expanded benefits do not increase the cost of Medicare because they are created by the capitation cash flow that runs about 11%–17% below the actual average cost for fee-for-service Medicare in each county. That is a far better use of the Medicare dollar and it is not an additional expense for the program.

The plans identify which patients have congestive heart failure or asthma and then they work with those patients to significantly reduce their crisis levels and improve care for those patients. The MA members with those conditions have much better lives and they have less physical pain, stress, anxiety and damage because they avoid those crises. The better care results in 40% fewer days in the hospital for both of those conditions. Plans save money by having significantly better care for those patients.

Amputation Five-Year Mortality Rate is Over 40%

A major expense for the Medicare program is amputations. We have some of the highest amputation rates in the world for our lower income patients.

MA plans know that 90% of amputations are caused by foot ulcers. You can reduce foot ulcers by more than 60% just by having dry feet and clean socks. So the plans save billions of dollars that create surpluses in their capitation cash flow and they significantly improve the life expectancy of those patients just by providing those services consistently and intentionally to their diabetic members.

The five-year mortality rate for the people who have amputations ranges from 40%–80%. In their attacks on the program MA’s critics never mention those amputation numbers and those important and real death rates .

Special Needs Plans Now Serve Over 6 Million People

MA Special Needs Plans (SNP) just had their enrollment grow to 6.5 million members in January of this year. SNP enrollees are eligible for both Medicare coverage and Medicaid coverage. They have some of the highest health care needs in the country and too often have some of the lowest levels of resources to deal with basic aspects of their lives and their care.

The critics also don’t mention that the SNPs do life changing and extremely beneficial work for the lowest-income and highest-need people in the Medicare program.

Millions of people enrolled in SMP plans have been badly impacted by various social determinants of health issues, as well as by care delivery failures for their entire lives. SNPs are often the first organized care related support that millions of those patients have had for their personal care.

People With Weak Retirement Plans Need the Additional Benefits

Those who look at the Medicare program need to understand and appreciate the fact that the expanded benefit package from the plans is often extremely important and directly relevant to the daily lives of millions of people. They are retired but have few assets and low levels of financial support for their retirement years.

We are no longer at the point where retirees in America can rely on a pension plan and basic retirement benefits after they retire. Fewer than half of retirees today have a pension payment or a deferred compensation plan of any kind. Most retirees have a low cash reserves to use to purchase needed services and benefits in their retirement years.

There is a solid set of reasons why almost 90% of our lowest income Medicare beneficiaries are now enrolled in MA plans. There are also obvious reasons why those numbers include more than 70% of African-Americans and more than 80% of Hispanics. Additionally, MA has language competency requirements for Hispanic enrollees that do not exist for fee-for-service Medicare.

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“What’s Up With The Alitos?”


The 1st Presidential debate is just around the corner. What should be Jake and Dana’s 1st CNN question. Here’s a suggestion:

What’s up with the Alito’s these days?

Justice Sam weighed in with tipping the American scale (by virtue of his decisions) toward “godliness,” while a seemingly unhinged flag-flying Martha-Ann invited the world inside their marriage, declaring “He never controls me.” Good to know.

Making it clear that her visceral reaction to a neighbor’s PRIDE flag was faith-based, she revealed a short-fuse and a long memory. As she said, “I want a Sacred Heart of Jesus flag because I have to look across the lagoon at the pride flag for the next month. I said (to Sam), ‘When you are free of this nonsense, I’m putting it up.’”

Harvard sociologist, Robert Putnam, and his co-author, Notre-Dame political scientist David Campbell, made it clear in 2010 that something was up with gender, religion and politics in their publication, “American Grace: How Religion Divides and Unites Us.” In two sweeping surveys reported in the book, they revealed a change in attitudes that began to gain steam in 1970. To their surprise, “By 2006, majorities of every religious tradition except Mormons had come to favor women clergy. Nearly three-quarters of Americans said that women have too little influence in religion, a view that is widely shared across virtually all religious traditions and by both men and women.”

A recent AEI survey this year that catalogued religious affiliation of Boomers (1946-1964), Gen X (1965-1980), Millennials (1981-1996), and Gen Z (1997-2012) showed that women (in much greater numbers than men) apparently have had just about enough when it comes to religious subjugation. Only 14% of the baby boomer women were self-described religious “nones,” while 34% of Millennials and a whooping 39% of Gen Z’s were turning their backs on male-led religions.

The problem, experts say, tracks back to the concept of “complementarianism”, a belief that the Bible supports strictly different roles for men and women, and that “wives should submit to their husbands.”

Subjugation of women historically has taken many forms. The most recent has been the elimination of health care access with the Dobbs decision and reversal of Roe v. Wade. But placing a lid on women’s autonomy has a rich history in America. Take for example divorce.  It was outlawed in most states south of the Mason-Dixon line until the mid-19th century. As legal historian Lawrence Friedman explained, “Essentially husband and wife were one flesh; but the man was the owner of that flesh.”

In 1847, Wisconsin newspaperman and editor of the Racine Argus, Marshall Mason Strong, warned in an editorial that the “domestic sphere” was under attack with men being “degraded, the wife unsexed, and children uncared for.” Strong lamented the loss of women’s “finer sensibilities” with “every trait of loveliness blotted out.”

Two centuries later, the majority of women are having none of it, delivering political defeat after political defeat to religious conservatives after the Dobbs decision. That decision was the culmination of a carefully planned and executed conservative takeover of the Supreme Court with Justice Alito in the lead. His intent, according to Yale legal scholar Neil S. Siegel, was to protect “Americans who hold traditionalist conservative beliefs about speech, religion, guns, crime, race, gender, sexuality and the family. These Americans were previously majorities in the real or imagined past, but they increasingly find themselves in the minority.”

What do the Alito’s fear most? They fear that traditionalists like themselves will be “branded as bigots.” Justice Alito said as much in his dissent in Obergefell v. Hodges (same sex marriage). He wrote with some sense of drama “Those who cling to old beliefs will be able to whisper their thoughts in the recesses of their homes. If they repeat those views in public, they will risk being labeled as bigots and treated as such by governments, employers, and schools.”

His campaign to “protect majorities-turned-minorities” was also on full view five months before the 2016 Presidential election in his dissent after the Court declined to hear the case of a Washington State pharmacist who refused to fill prescribed contraceptives on religious grounds. Stormans, Inc. v. Wiesman, left standing according to Alito, was “likely to make a pharmacist unemployable if he or she objects on religious grounds to dispensing certain prescription medications…If this is a sign of how religious liberty claims will be treated in the years ahead, those who value religious freedom have cause for great concern.”

AEI has little encouragement to offer the Alito’s.

The survey’s conclusion is rather stark: “None of this is good news for America’s places of worship. Many of these young women are gone for good. Studies consistently show that people who leave religion rarely come back, even if they hold on to some of their formative beliefs and practices. The decline in religious participation and membership has provoked a good deal of concern and consternation, but these latest trends represent a four-alarm warning.

And therein lies the problem. The recent actions of the Alito’s simply dig the hole deeper, as they await a reckoning with demographic fate. For the Alito’s, “the moment has revealed the man (and the woman).”

Mike Magee MD is a Medical Historian and a regular THCB contributor. He is the author of CODE BLUE: Inside America’s Medical-Industrial Complex. (Grove/2020)

Innovators: Avoid Health Care


NVIDIA founder and CEO Jensen Huang has become quite the media darling lately, due to NVIDIA’s skyrocketing market value the past two years ($3.3 trillion now, thank you very much. A year ago it first hit $1 trillion). His company is now the world’s third largest company by market capitalization. Last week he gave the commencement speech at Caltech, and offered those graduates some interesting insights.

Which, of course, I’ll try to apply to healthcare.

Mr. Jensen founded NVIDIA in 1993, and took the company public in 1999, but for much of its existence it struggled to find its niche. Mr. Huang figured NVIDIA needed to go to a market where there were no customers yet – “because where there are no customers, there are no competitors.” He likes to call this “zero billion dollar markets” (a phrase I gather he did not invent).

About a decade ago the company bet on deep learning and A.I. “No one knew how far deep learning could scale, and if we didn’t build it, we’d never know,” Mr. Huang told the graduates. “Our logic is: If we don’t build it, they can’t come.”

NVIDIA did build it, and, boy, they did come.

He believes we all should try to do things that haven’t been done before, things that “are insanely hard to do,” because if you succeed you can make a real contribution to the world.  Going into zero billion dollar markets allows a company to be a “market maker, not a market-taker.” He’s not interested in market share; he’s interested in developing new markets.

Accordingly, he told the Caltech graduates:

I hope you believe in something. Something unconventional, something unexplored. But let it be informed, and let it be reasoned, and dedicate yourself to making that happen. You may find your GPU. You may find your CUDA. You may find your generative AI. You may find your NVIDIA.

And in that group, some may very well.

He didn’t promise it would be easy, citing his company’s own experience, and stressing the need for resilience. “One setback after another, we shook it off and skated to the next opportunity. Each time, we gain skills and strengthen our character,” Mr. Huang said. “No setback that comes our way doesn’t look like an opportunity these days… The world can be unfair and deal you with tough cards. Swiftly shake it off. There’s another opportunity out there — or create one.”

He was quite pleased with the Taylor Swift reference; the crowd seemed somewhat less impressed.

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Josh Reischer, Health Note

Health Note takes the patient history from the patient and includes it in the EMR. It’s another piece of the puzzle in trying to fix the patient/physician encounter. Health note also does the basic information for intake that companies like Phreesia does but it also gets the patient to answer questions about their health so that the physician has more time in the encounter to focus on what to do about it. But they also add their history into Epic in a very specific and complex way. CEO Josh Reischer showed me a detailed demo about what the patient and provider experience is. Quite the advance on asking and typing as happens in 95% of visits today!–Matthew Holt

Adding a Sustainability Lens to Health Innovation Pilots


Following a year of growing conversation about the links between the climate and our health, a new proposed rule from the CMS Innovation Center (CMMI) links value-based payment innovation and sustainability for the first time, creating important precedent for an emerging connection in the health care sector and for system strategy.

In mid-May, CMMI proposed its first innovation model with a sustainability component, Transforming Episode-Based Accountability, or TEAM. The TEAM model is a successor to episode-based alternative payment models and notable in that it’s a mandatory payment model overall, though the sustainability component is voluntary. As proposed, acute care organizations selected to participate will have the option to opt into emissions reporting, opening the door to receive feedback and technical assistance. This is the first visible link between value-based payment and sustainability from CMMI, a test of a concept that–like all initiatives coming from CMMI–could give way to scale.

This follows on a year in which emissions reporting and the intersection of climate and health generally (which includes thinking about the health implications of factors like heat, air, and water, or simply put climate as a social determinant of health) has become more prominent. The Joint Commission began offering its Sustainable Health Care certification, a voluntary program. The Securities and Exchange Commission (SEC) passed a ruling requiring disclosure of carbon emissions and associated risks. This SEC ruling requires Scope 1 and Scope 2 emissions reporting from all publicly traded companies, which will include many of the largest health systems. And these rules follow on the heels of new reporting requirements for organizations operating in California, requiring emissions reporting for organizations larger than $1B on not only Scope 1 and Scope 2 but also Scope 3 emissions and climate-risk disclosure for organizations operating in excess of $500 million. Most hospitals and systems fall within these financial parameters. The reporting rules follow Task Force for Climate-related Financial Disclosures (TCFD) standards, which a number of organizations use today.

These proposals and programs are in their infancy. The SEC and California rulings will no doubt be contested and the CMMI proposal is voluntary in nature. However, there is a clear trend toward speaking about climate initiatives in terms of their health impacts and grappling with the health industry’s role in mitigating emissions overall. The CMMI proposed rule is important because it puts the sustainability discussion in the context of health care delivery and payment innovation broadly at CMS.

This matters because sustainability initiatives require similar core success factors to delivery reform and benefit from alignment. In fact, some of the breakthrough thinking happening in the sustainability space builds on the skill sets and experience gained in the value-based payment over the last decades, including:

  • Financial modeling: Sustainability investments challenge existing financial models because of the long timelines for return on investment–a lot like population health models that incent preventative care over long timeframes.
  • Workforce development: In both sustainability and climate adaptation (i.e. encouraging more resilient health systems), new skillsets are needed. In value-based payment, building competencies in care management and data analysis has been a central focus over the last decade. Both these skill sets (identifying and working closely with patients with significant health risks and using data to inform the work) and the practice of re-equipping the current workforce create important precedents.
  • Data strategy: While ESG reporting is largely focused on risk and financial in nature, we expect to see new sets of best practices around data collection, monitoring, and measurement–tapping into existing data sources as the field evolves. As sustainability reporting broadens out of the financial context into strategy, there is a lot of room to take advantage of the improved data functionalities of health systems for impact.

Finally, and perhaps most critically, a natural evolution of these pilot initiatives is to think not only about reducing emissions, but to reduce the impacts of environmental factors (like heat and poor air and water quality) on population health and specifically on patients with existing complex needs. When viewed in this longer-term context, as a social determinant of health, it underscores the importance of linking new payment and delivery models to this conversation. While this new proposal from CMMI is a small step in this direction, it’s an important one that we hope will seed greater participation and conversation in the health innovation space.

Marie Copoulos is the Managing Principal of Horta Health, LLC and a subject matter expert in health delivery and payment reform in Medicare and Medicaid models. Monica Nakielski is an ESG & Sustainability Advisor at Hameda LLC and a subject matter expert in sustainability and ESG efforts.

“Truth, Justice and The American Way” – Chris Reeve on Donald Trump.


As we approach the 20th anniversary of the death of Christopher Reeve, I’m drawn back to the evening of September 25, 2002, and a private conversation in a back room off the ballroom of the Marriott Marquis Hotel. As we awaited the ceremonial beginnings of the Christopher Reeve Paralysis Foundation Benefit Gala that evening, he said, “What I didn’t expect was that in this country, home of ‘Truth, Justice and the American way,’ hope would be determined by politics.”

That sentiment was, no doubt, fresh in his mind, having just appeared in his book, “Nothing Is Impossible: Reflections On A New Life” (Random House), a week earlier. And it was top of mind last month while (with millions of other Americans) I awaited a verdict in the New York trial of Donald Trump.

A month earlier, Smithsonian Magazine had run a feature on the first issue of the Superman comic book. The original copy of the 1938 “Action Comics No. 1” had just sold for $6 million at auction. A large part of that value tracked back to Chris Reeves himself – the enduring image and voice of Superman – a genuine American hero.

The famous slogan, “Truth, Justice, and the American Way”, however did not appear in that first publication. It surfaced later, in the early 1940’s comic books, written by Jerry Siegel and Joe Shuster, “to cheer on American military efforts in World War II.” Its use waxed and waned over the next three decades until 1978. That’s when the Richard Donner film “Superman: The Movie” was released starring Christopher Reeve. As the Superman Homepage News acknowledges, it was thanks to Reeve’s performance that “the ‘Truth, Justice and The American Way’ motto was really cemented in popular culture for generations to come.”

In a controversial move, at the DC FanDome on October 21, 2021, DC Publisher Jim Lee announced that Superman’s motto “Truth, Justice and the American Way” would be “evolving.” “The American Way” would now be replaced by “a Better Tomorrow.” A press statement elaborated that the move was made “to better reflect the storylines that we are telling across DC and to honor Superman’s incredible legacy of over 80 years of building a better world.” Rolling Stone was given a slightly different spin by DC Comics which said, “Superman has long been a symbol of hope who inspires people from around the world, and it is that optimism and hope that powers him forward.”

Whether commercial, philosophical or political in motivation, now two years later, as Trump self declares his own “Superman-status” its worth contrasting two very different versions of “the American way.” As NewYork Magazine reported in 2012, “Among the many laughably unrealistic images in the Donald Trump NFT collection, one stood out: the illustration of the former president in the classic Superman pose, ripping open his dress shirt to reveal a superhero costume underneath. Trump used this image, which was animated to show lasers shooting out of his eyes, to tease a ‘major announcement’ on December 15, which turned out to be a collection of 45,000 digital trading cards. ‘America needs a superhero!’ Trump proclaimed.”

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Oh. Never Mind


You may have read the coverage of last week’s tar-and-feathering of Dr. Anthony Fauci in a hearing of the House Select Subcommittee on the Coronavirus Pandemic. You know, the one where Majorie Taylor Greene refused to call him “Dr.”, told him: “You belong in prison,” and accused him – I kid you not – of killing beagles. Yeah, that one.

Amidst all that drama, there were a few genuinely concerning findings. For example, some of Dr. Fauci’s aides appeared to sometimes use personal email accounts to avoid potential FOIA requests. It also turns out that Dr. Fauci and others did take the lab leak theory seriously, despite many public denunciations of that as a conspiracy theory. And, most breathtaking of all, Dr. Fauci admitted that the 6 feet distancing rule “sort of just appeared,” perhaps from the CDC and evidently not backed by any actual evidence.

I’m not intending to pick on Dr. Fauci, who I think has been a dedicated public servant and possibly a hero. But it does appear that we sort of fumbled our way through the pandemic, and that truth was often one of its victims.

In The New York Times,  Zeynep Tufekci minces no words:

I wish I could say these were all just examples of the science evolving in real time, but they actually demonstrate obstinacy, arrogance and cowardice. Instead of circling the wagons, these officials should have been responsibly and transparently informing the public to the best of their knowledge and abilities.

As she goes on to say: “If the government misled people about how Covid is transmitted, why would Americans believe what it says about vaccines or bird flu or H.I.V.? How should people distinguish between wild conspiracy theories and actual conspiracies?”

Indeed, we may now be facing a bird flu outbreak, and our COVID lessons, or lack thereof, could be crucial. There have already been three known cases that have crossed over from cows to humans, but, like the early days of COVID, we’re not actively testing or tracking cases (although we are doing some wastewater tracking). “No animal or public health expert thinks that we are doing enough surveillance,” Keith Poulsen, DVM, PhD, director of the Wisconsin Veterinary Diagnostic Laboratory at the University of Wisconsin-Madison, said in an email to Jennifer Abbasi of JAMA.

Echoing Professor Tufekci’s concerns about mistrust, Michael Osterholm, the director of the Center for Infectious Disease Research and Policy at the University of Minnesota, told Katherine Wu of The Atlantic his concerns about a potential bird flu outbreak: “without a doubt, I think we’re less prepared.” He specifically cited vaccine reluctance as an example.

Sara Gorman, Scott C. Ratzan, and Kenneth H. Rabin wondered, in StatNews, if the government has learned anything from COVID communications failures: in regards to a potential bird flu outbreak,  “…we think that the federal government is once again failing to follow best practices when it comes to communicating transparently about an uncertain, potentially high-risk situation.” They suggest full disclosure: “This means our federal agencies must communicate what they don’t know as clearly as what they do know.”

But that runs contrary to what Professor Tufekci says was her big takeaway from our COVID response: “High-level officials were afraid to tell the truth — or just to admit that they didn’t have all the answers — lest they spook the public.”

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Welldoc–Anand Iyer & Marina Dorotheo demo the latest!

Welldoc is a consumer facing tool that has been around a long, long time in the diabetes management space. It was the first company to be certified by the FDA as Software as a Medical Device, and it has moved into wide range of diseases as the consumer front-end for many organizations. Welldoc itself is hiding behind the scenes in most of these relationships but it has grown steadily and not had to raise money since 2016. A few weeks back I grabbed Anand Iyer, Chief Analytics Officer and & Marina Dorotheo, Chief Marketing Officer who also runs strategy. We had a long chat about the state of the market, the company and they showed me an extensive demo (9.40-32.00). If you haven’t caught up with this sector lately, this is well worth a detailed look.

Cost Containment Through Health Improvement


The U.S. is in the midst of an ongoing—and still expanding—health care cost crisis. Even among people with health insurance, medical debt has become a persistent problem. Top executives at nearly 90% of large employers believe the cost of providing health benefits to employees will become unsustainable in the next 5-10 years. And the nonpartisan Congressional Budget Office (CBO) is warning that expanding federal debt—driven largely by health expenditures and compounding interest payments—indicates that a major fiscal crisis is looming.

On this last point, it is true that reputable people have been predicting fiscal collapse for many years. In 1988, Benjamin Friedman wrote that we’re facing a Day of Reckoning. Pointing to the rising federal debt, he said: “we are living well by running up our debt and selling off our assets. America has thrown itself a party and billed the tab to the future.”

Peter G. Peterson wrote a book in 1993 called Facing Up: How to Rescue the Economy from Crushing Debt and Restore the American Dream. In it, he said that “runaway medical costs are the single most important reason that federal spending and federal deficits have now become ‘uncontrollable.’”

Not everyone agreed that deficits and debt were problematic. In 2003, as Republicans were pursuing further income tax cuts, Vice President Dick Cheney declared: “Reagan proved that deficits don’t matter.”

David Stockman was Ronald Reagan’s first budget director and one of the chief architects of the Reagan Revolution—a plan to cut taxes and reduce the size and scope of government. He wrote in The Triumph of Politics that the Reagan Revolution failed because the administration had not been able to control spending, leading to massive increases in the federal debt.

In 2013, Stockman wrote a book called The Great Deformation: The Corruption of Capitalism in America. He said that during the Great Recession, the Federal Reserve Bank had carried out “the greatest money-printing spree in world history.” Between 2004 and 2012, 70 percent of rising U.S. debt was absorbed by central banks. He said that “the world’s central banks have morphed into a global chain of monetary roach motels. The bonds went in, but they never came out.” He concluded that it was easy money, which the Federal Reserve System had supplied for decades, that was responsible for “deficits without tears.” “American politicians…had essentially died and gone to fiscal heaven.” They were able to spend money “without the inconvenience of taxing.” Both Democrats and Republicans have taken advantage of this changed reality.

In 2020, Stephanie Kelton wrote a book called The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy. In it, she called for a paradigm shift: since the U.S. has the ability to print its own money, we should recognize that federal spending is not financed by tax revenue or borrowed funds. Whenever the need is pressing enough (e.g., warfare), we can and do supply whatever money is needed. The real deficit, she said, is not the fiscal deficit, but societal needs that are going unmet. Regarding health care, “our failure to provide proper insurance and care for every American is not because the government cannot ‘afford’ to cover the cost.” It’s just that we are operating under the wrong budget paradigm.

Importantly, though, Kelton wasn’t saying that there is a free lunch. She wrote, “It is possible for the government to spend too much. Deficits can be too big. But evidence of overspending is inflation, and most of the time deficits are too small, not too big.” This dovetails with David Stockman’s concerns about unsound money. And it mirrors the concerns of the CBO, which has said that a fiscal crisis would involve higher rates of inflation and an erosion of confidence in the U.S. dollar.

Containing Health Care Costs

If the CBO is to be believed, deficits and debt do matter. And although there have been “Cassandras” saying the sky is about to fall for many decades now, there may come a point in time when the need for cost containment becomes immediate and vital. (Some would argue that we’re already there.) Health care is a primary driver of fiscal deficits and, in an emergency, it would become a primary target for budget savings.

In this context, cuts to Medicare and Medicaid become a central focus.

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Who Needs Humans, Anyway?


Imagine my excitement when I saw the headline: “Robot doctors at world’s first AI hospital can treat 3,000 a day.” Finally, I thought – now we’re getting somewhere. I must admit that my enthusiasm was somewhat tempered to find that the patients were virtual. But, still.

The article was in Interesting Engineering, and it largely covered the source story in Global Times, which interviewed the research team leader Yang Liu, a professor at China’s Tsinghua University, where he is executive dean of Institute for AI Industry Research (AIR) and associate dean of the Department of Computer Science and Technology. The professor and his team just published a paper detailing their efforts.  

The paper describes what they did: “we introduce a simulacrum of hospital called Agent Hospital that simulates the entire process of treating illness. All patients, nurses, and doctors are autonomous agents powered by large language models (LLMs).” They modestly note: “To the best of our knowledge, this is the first simulacrum of hospital, which comprehensively reflects the entire medical process with excellent scalability, making it a valuable platform for the study of medical LLMs/agents.”

In essence, “Resident Agents” randomly contract a disease, seek care at the Agent Hospital, where they are triaged and treated by Medical Professional Agents, who include 14 doctors and 4 nurses (that’s how you can tell this is only a simulacrum; in the real world, you’d be lucky to have 4 doctors and 14 nurses). The goal “is to enable a doctor agent to learn how to treat illness within the simulacrum.”

The Agent Hospital has been compared to the AI town developed at Stanford last year, which had 25 virtual residents living and socializing with each other. “We’ve demonstrated the ability to create general computational agents that can behave like humans in an open setting,” said Joon Sung Park, one of the creators. The Tsinghua researchers have created a “hospital town.”

Gosh, a healthcare system with no humans involved. It can’t be any worse than the human one. Then, again, let me know when the researchers include AI insurance company agents in the simulacrum; I want to see what bickering ensues.

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