Universal Coverage Mighht Be Nice, but an AI Tax Is Necessary

I was amused – oh, I should be polite and say “interested” -- to see a new study, led by researchers from Yale School of Public Medicine, about the benefits of a universal single payor health system. It concluded that we could save 100,000 lives annually and save some 1.04 trillion each year – some 20% of our health care spending. What’s not to like? I’m sure Bernie Sanders is already drafting the bill.

AI needs to give back, especially for health. Credit: Microsoft Designer

The savings come from five sources: using Medicare payment rates for all providers, using “international reference pricing” for pharmaceuticals, reducing administrative costs to Medicare’s levels, reducing fraudulent billing (“consistent with the experience of other single-payer transitions”), and reducing emergency room visits and hospitalizations due to improved access to primary care.  Good goals, all.

Credit: Pandey, et. al. 

Steffie Woolhandler and David Himmelstein, among others, have been making these or similar arguments for decades, and they are not without merit. It is shameful that we don’t have universal coverage. It is distressing how much money we spend on healthcare. It is embarrassing that we spend so much money on administration.  It is maddening that so many people don’t get the care they need, get the wrong care, or get their care in the wrong places/at the wrong times.

We could do better, we should do better, but, if anything, we’re doing worse: more people are losing coverage, more providers are going out of business, our rates of chronic (and some infectious diseases) are going up, and we’re dying sooner.

I want to quickly point out some of the problems with the proposed sources of savings, then discuss other courses of action that might lead to these or even better outcomes.

• Medicare payment rates: yes, a lot of money could be saved by using Medicare payment rates, but I doubt you would find many providers who would say they could survive. They make their money on private insurance rates, are lucky to break even on Medicare rates, and lose money on Medicaid. This one is not going to happen.
• International pharmaceutical reference pricing: first, I’m not sure such a thing exists. It is true that drug prices are typically lower in other countries. Both President Biden and President Trump seized upon this, with some signs of modest success. But, as with the Medicare pricing, it would be a shock to the pharmaceutical industry to have prices slashed across the board, wiping out trillions of dollars of value and, oh-by-the-way, eventually reducing investments on new and better prescriptions.
• Administrative costs: as a percentage of spending, Medicare’s administrative costs are lower than private insurance, but that is partly due to Medicare spending per capita being so much higher. Also, costs incurred by other agencies – e.g., Social Security or the IRS – are not always counted. But certainly the complexities of so many plan designs by so many health insurers while tracking the current eligibility of everyone is a cost that is much higher than it should be.
• Reducing fraudulent billing: I mean, really: do people really think that Medicare does a better job of reducing fraudulent billing than United Healthcare or Anthem, much less than other countries?
• More primary care: reducing emergency room visits and hospitalizations has been the goal of countless private health insurance efforts, such as disease management or chronic health programs, and the track record has generally been underwhelming. But the real problem is – where are we going to get all the primary care physicians to handle all the underserved people?  

So, much as I agree with the goals, count me a skeptic that single payor is going to magically make everything better.

Here’s where I inevitably turn to AI. An article by Alex Janin in The Wall Street Journal marveled at how “AI Is Helping Patients Solve Medical Mysteries.”  Ms. Janin writes: “AI can be especially adept at flagging potential rare and hard-to-diagnose diseases, which may otherwise go undetected for years because doctors don’t often see them.”

That’s the kind of use AI advocates have been promising for years, and it is exciting to see this use finally bearing some fruit. For the small percent of patients with these kinds of diseases, AI can literally be a lifesaver, but let’s remember that they are a small percent. When I read the article, I keep thinking about bigger problems I want AI focused on. E.g.,

·       Flagging fraudulent and/or duplicative billing;

·       Identifying both unnecessary tests and procedures and the providers who most commonly perform them;

·       Identifying providers who deliver sub-standard care.

Want a more efficient/effective healthcare system? Let’s start there. The savings potential may not be as gaudy as Yale’s $1.04t, but these would not require as massive an upheaval.

While I’m at it, I want to bring up another AI-related area of healthcare. The not-so-hidden but too-little discussed secret of U.S. healthcare is that we have a lot of third world outcomes, largely in lower socioeconomic households and disproportionately impacting people of color.

Sure, we can put in single payor, but will that solve the problem of rural Mississippi or south side Chicago? Too many people don’t have access to clean air, clean water, enough food, adequate shelter, or accessible/affordable healthcare. The great lesson of 20^th century U.S. healthcare was not the gains from new medicines or more hospitals/physicians, but in public health efforts like improved sanitation and more immunizations.

So where are our investments in 21^st century public health? Do we want to make marginal improvements in the health of the middle/upper income households, or dramatic improvements in lower income households?  I suspect I know what this Administration would say, and they’re wrong.

By every measure of income inequality or social mobility, we’re in a have/have not society, and there is every reason to believe AI will make that so, so much worse. It’s going to be NAFTA but much worse. But I always remember: NAFTA didn’t cause all those jobs to go abroad. Those jobs went because U.S. CEOs chose to send them abroad, in order to make them and their stockholders richer. Think they won’t do the same with AI?

That’s why I firmly, fiercely believe we need some sort of AI tax to help make the adjustment to the new AI world. The financial gains from AI need to be broadly distributed, and one of those distributions has to be for addressing our third world health outcomes. That could be through 21^st century public health investments, and/or through some sort of universal basic income (UBI).  

Universal coverage might be nice, but an AI tax for public health and universal basic income might be necessary.  

Home Is Where Your Parents Are

When the Affordable Care Act passed, I thought one of the odder provisions was allowing children to remain on their parents’ health insurance until they were 26. This is largely a healthy population, cheaper to cover than pretty much any other demographic. They could have gotten inexpensive coverage through the exchanges or, if qualifying, through expanded Medicaid, It made no sense to me that their parents should subsidize them, or that, even more, their parents’ employers should subsidize them.

Mom, dad - I'm coming home to live!  Credit: Microsoft Designer

It proved to be surprisingly both popular and effective, to the point young adults now “dread” turning 26 because they’ll have to figure out health insurance on their own.  So I guess I shouldn’t have been surprised to learn that young adults are also living with their parents at record levels.

The numbers vary, but tell the same story:

• A May report from the Federal Reserve says 49% of young adults under 30 lived with their parents, up from 43% in 2022 and 37% in 2017.
• Census Bureau statistics indicate that 33% of young adults aged 18-34 – some 25.2 million of them – lived with their parents, just slightly below the COVID high of 33.6%.
• The Urban Institute found 20% of Americans aged 25-34 lived with their parents, down from 2017’s peak of 22.8% but nearly double 2005’s 11.8%.  
• Data from the National Bureau of Economic Research, first published in 2022 and updated last month, indicate that more than a quarter of college graduates aged 23 to 27 lived with their parents, reaching the high it reached during COVID; by contrast, in 2001 it was 18%.
• A survey from storage solutions company Sparefoot found that 58% of young adults who had once lived independently moved back home at least once; 15% did it more than once.

As Sparefoot pronounced: “The boomerang generation is no longer an outlier. It is the norm.”

People offer lots of theories about this trend, but most commonly blame jobs and housing. Many young adults have a hard time finding a job they want, for which AI is often blamed, correctly or incorrectly. Housing costs have skyrocketed.

Still, most of these at-home young adults are, in fact, working. Hannah Jones, the senior economist at Realtor.com, who authored its report on the topic, says: “The employment rate for this demographic has remained relatively stable, but the share of adults living at home has still increased.”

Credit: Realtor.com

The report also points out that the wave started with the Great Recession of the late 2000’s:

Between 2007 and 2010, co-residence rates rose sharply, and when the economy recovered, the rates didn’t come back down. A full decade of falling unemployment and rising wages did not reverse the trend…The housing supply never rebuilt fast enough after the crisis to absorb the households that should have been forming, and the gap kept widening through every year of the expansion.

COVID then made everything worse, so that: “By 2025, the overall co-residence rate had nearly matched its pandemic peak, and the absolute count, 25.2 million adults, had surpassed it.”

The median price for a new home is around $400,000, while the average rent for a one bedroom apartment is $1,663, both of which can be daunting for young adults. That’s why Rebecca Picciotto and Nicholas G. Miller of The Wall Street Journal reported: “Living at home as a 20-something was once viewed as a failure to launch and even a source of embarrassment in a culture that places a premium on independence. That is no longer the case. Living at home is now often viewed as a sign of financial prudence, and for some, a long-term prospect.”

Odysseas Papadimitriou, the founder and CEO of Wallethub, agrees, saying that living with parents ““is actually a very smart financial decision for a young adult,” although he was clear to add: “This arrangement should leave you with more disposable income that you can save for a down payment on your first home. It should not be an excuse to spend more on things that won’t benefit you long term.”

Three fourths of the Sparefoot respondents felt that moving in with family “is a smart financial strategy, not a setback,” which the company believes marks “a clear cultural shift in how the path to independence is perceived.”

Ms. Picciotto and Mr. Miller note that, rather than hiding their situation, some stay-at-home young adults “now broadcast their lives as “stay-at-home daughters” or “stay-at-home sons” on social media,” including Tik-Tok videos.  

There is a general sense that it is tougher for young people financially now than in previous generations. Northwestern Mutual's 2026 Planning & Progress Study found 56% believed that achieving financing independence was harder today than for previous generations. A Pew Research Center survey found 80% said it was harder for young adults to cover basic expenses than it was for their parents. Compared to the 2021 survey, finding a job jumped the most in terms of getting harder, but at 64% is well below the difficulty of buying a home (87%), paying for college (82%), or saving for the future (80%).

Some think affordability doesn’t explain everything. Noam Scheiber reports in The New York Times:

Smartphones and video calls have meant that going off to college no longer requires cutting the cord with one’s mother or father, making re-entry less jarring to both parent and child. And huge social disruptions like the Great Recession and the pandemic left many young adults with no alternatives, lessening the stigma.

My generation communicated through snail mail and infrequent, expensive long distance calls, so there was a much greater sense of separation.

Perhaps it is no coincidence that fewer young people report having sex: one in four Gen Z adults have never had sex, and the number of young people who haven’t had sex in the last year doubled from 12% in 2010 to 24% in 2024. Not all of those sexless adults are living with their parents, but the living situation has to have had an impact.

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Lawrence Katz, a labor economist at Harvard, told Mr. Scheiber: “Is there some cultural change in the way people are parenting? You see kids today and the degree to which they’re interacting with parents, that’s completely different than the world of 50 years ago, 25 years ago.” I’d agree. I’m a baby boomer. We didn’t trust anyone over thirty, we rebelled against our schools, our government, our societal norms, and, of course, our parents. Moving back in with our parents was unthinkable. But young adults today are facing challenges that we certainly never did think of.

Mothers, Do Let Your Babies Grow Up to Be Mathematicians

Last week I was mulling writing about the awarding of this year’s Field Medals, which are often described as math’s equivalent of the Nobel Prize (no doubt to the dismay of both awarding organizations). Nah, I told myself; sure, I’m interested in math, but how many other people are? Most people barely even care about Nobel Prizes, and when they do it’s likely to be more about the Peace or Literature Prizes, not Physics or Chemistry. Math reminds most people of junior high algebra.

Don't let the tuxedo fool you. Jacob Tsimerman winning the Fields medal. Credit: Simmons Foundation

But then I saw the hook: one of the medalists – Jacob Tsimerman, of the University of Toronto – announced he was "pivoting toward AI safety” and would soon be going to work at OpenAI. People can’t get enough about AI, and with AI agents “going rogue” and creating all sorts of mischief, AI safety should be top of mind for everyone interested ion our (AI) future.

Professor Tsimerman won the award for “his contribution in the recasting of o-minimality as a fundamental method of arithmetic and complex algebraic geometry, and his role in the proof of many central conjectures including Griffiths' conjecture on the algebraicity of images of the period maps, and the Andre-Oort conjecture for Siegel modular varieties.” If you have the slightest idea what any of that means, you may be going to work for an AI company soon too. Note, though, nary a mention of AI in all that.

He did, though, co-author a paper last year about various scenarios where AI lead to most or all humans being killed, so o-minimality may have to wait. That paper ominously concluded: An AI-driven omnicide may involve an intent to kill a large number of people, or may be wholly unintentional. And, if an intent to kill exists, that intent may exist within a large group of individuals such as a military or corporation, or just a few people, or in an AI system itself.”

He told Janet Hurley of The Toronto Star: “The reason I wrote that paper with Andrew Critch is that, even though this has been going on for a long time, I felt there wasn’t a visceral story people could engage with in terms of, concretely, what are we afraid of here?”

Consider me afraid.

It turns out that Professor Tsimerman is not alone in leaving mathematical academia for AI. There has been what has been described as a “wave of top mathematicians "exiting" academia for industry.” If you are a graduate student in math, or, better yet, a math professor, you are, as Ben Affleck’s character told Matt Damon’s math genius character in Good Will Hunting, “sitting on a winning lottery ticket.” The AI companies want you, and are putting up big bucks to get you.

Just in the past week Julia Amann of The Wall Street Journal writes of The Million-Dollar Talent Wars for 20-Something Math Geniuses and Lila Shroff of The Atlantic says Something Weird Is Happening in Math, both describing the impact of AI on academic mathematics.

Wall Street firms having been going after math students since the 1980’s to serve as “quants,” designing ever more elaborate trading models, while Silicon Valley firms have been snapping up computer science students for the last three decades. Now the AI companies can’t get enough math geeks either, and they have money to burn.

Matt Stabile, founder of New York-based recruitment firm Stabile Search, told Ms. Amann: “But a million dollars is something people don’t even bat an eye at anymore…The delineation is pre-OpenAI and post-OpenAI, that’s when you saw competition really take off.”  Charlie Witmer, COO of quant firm Optiver, acknowledged to her the effect of AI firm’s interest in math geniuses: “Outstanding people are in more demand than they’ve ever been, and that does create competitive pressure on wages. As competition increases for outstanding people, prices naturally rise.”

Part of the reason mathematicians may be tempted to leave academia is that, well, AI may soon be better than they are at math. A few months ago, I wrote about how mathematics might be one area that AI hadn’t yet conquered. That didn’t age well. “In a few years, AI systems will be robustly superhuman at the act of doing mathematics,” Professor Tsimerman told Ben Cohen of The Wall Street Journal. “The social consequence of that, how we choose to react, what you feel about it—those are much harder questions.”

He admitted to Ms. Shroiff that there are pluses and minuses (pun intended) to AI’s improving math skills:

From one point of view, I think it will be extremely exciting. We might speed up the process of generating interesting mathematics by enormous factors of 10 or 100. If that happens, we might see the connection between pure math and applications (which typically takes many decades) really speed up and become a much tighter pipeline.

But from the perspective of research mathematicians, and especially young people who are pursuing a Ph.D. in mathematics, it’s a bit of a turbulent time. The skills that we’ve acquired and learned to propagate might become less relevant than they are now.

On the other hand, he thinks math expertise may help us understand what AI is up to:

Mathematics is historically the language by which you take intuitions and fuzzy notions of how things work and you make them precise. We’ve done this with information theory; we have done this with complexity theory. Just a little bit of understanding and precise definitions can provide a ton of mileage. Once we have that understanding, the hope is that we could do a better job of anticipating the behavior of new AI systems, adjusting for them, controlling them, and reacting to them. That’s where I think mathematicians fit in.

He told Kenneth Chang of The New York Times about AI: “It’s mostly an empirical and engineering kind of science. If we understood how these things work better, we might be able to steer them better, or understand them better, or control them better.”

We can hope so, anyway.

The AI industry first sucked up university AI researchers, then academic leaders in computer science, and now is going after the math departments. The trouble is, there aren’t enough of them. Even worse, we’re eating our seed corn. Who will train the next generation of mathematicians?  That’s fine if you assume AI is that next generation, but if you still want human creativity and brilliance, it’s daunting.

Work Requirements Target the Wrong People

One of the key “cost savings” in last years’ Big, Beautiful Bill were work requirements imposed on most working aged beneficiaries in SNAP and/or Medicaid, despite the fact that the few times such requirements had been tried showed they were costly to implement and operate and don’t do much to increase work participation, although they are effective at getting beneficiaries to lose benefits. Republicans who pushed these requirements were infuriated at the thought that some able-bodied people – stereotypically young men – were sitting around on their couches playing video games while benefiting from the programs, despite those programs’ complex administrative burdens and meagre benefits.

Who is really abusing our federal tax dollar?

A new GAO report reminds us that the people coasting off SNAP and Medicaid were not so much the beneficiaries but rather employers, especially large employers. And the names of the most likely employers won’t come as a big surprise.

The report -- Federal Social Safety Net Programs: Millions of Workers, Including Many Employed by Large Employers, Continue to Rely on Medicaid and SNAP – was requested by Senator Bernie Sanders, in his role as Ranking Member of the Senate Committee on Health, Education, Labor, and Pensions, and is a follow-up to a similar 2020 report. It focused on 11 states: Arkansas, Georgia, Indiana, Maine, Massachusetts, Nebraska, North Carolina, Oklahoma, Rhode Island, Tennessee, and Washington.

The top-lines are that working aged beneficiaries in both programs were, in fact, not only likely to already be working—mostly full-time -- but also at participation rates higher than working aged people not on the programs, and that companies like Amazon and Walmart were among the largest employers of these beneficiaries.

The key change in employment in these populations has been the explosion of gig workers in the app-based food delivery and ride sharing sectors. Workers at Amazon on these programs also tripled since the prior report. Walmart remains the employer with the largest number of these workers who receive Medicaid, but has slipped to second to ride sharing gig workers receiving SNAP. McDonalds and Dollar General round out the top five employers.  

Now, these are among the largest employers generally, but, gosh, doesn’t it gall you that have so many of their workers who still need SNAP and/or Medicaid?  It’s not like they’re not making money, it’s not that their CEOs and other executives aren’t raking in tens of millions of dollars, but they sure are reluctant to pay federal income taxes. The Wall Street Journal reported earlier this year that, as a result of The Big, Beautiful Bill, Amazon’s federal income taxes dropped from $9b to $1.2b in 2025, while profits soared 44.5% to $90b. Walmart looks like a sucker for paying $6b in 2025, an effective tax rate of about 23%.

An Amazon spokesperson defended its practices in a response to The Washington Post: “Amazon pay is among the best in the industry, regular full-time employees have access to health care from their first day … and 74% of our regular full-time employees are enrolled in an Amazon health insurance plan, well above the 65% private sector take-up rate for full-time workers.”

So, if all those employees have access to coverage from their first day and get among the best pay in the industry, why are any on SNAP or Medicaid?  And couldn’t you at least pay more than 1.3% on federal taxes?

Bernie, of course, was outraged:

American taxpayers should not be forced to subsidize the starvation wages of large corporations like Walmart and Amazon. These corporations are making record-breaking profits, paying their CEOs exorbitant compensation packages and spending billions of dollars on stock buybacks to enrich their wealthy shareholders. It is beyond unacceptable that these corporations, owned by some of the wealthiest people on the planet, are receiving corporate welfare from the federal government.

He pointed out that, in the 11 states, Walmart had 16,000 workers on Medicaid and 15.500 workers on SNAP, while Amazon had 11,000 workers on Medicaid and 12,000 workers on SNAP.  

And, oh-by-the-way, an analysis by the Oregon Capital Chronicle of the most listed employers ion applications for Medicaid found “that dozens of major national and multinational corporations that often pay relatively low hourly or median wages rely on the government’s health insurance program for low-income and disabled people to cover the costs of thousands of their Oregon employees’ healthcare.”  The top five employers were Walmart, Safeway/Albertsons, Amazon (and affiliates), Fred Meyer/Kroger, and McDonald’s. The articles noted that those five employers were also the top five listed employers on SNAP applications in a prior analysis.

New Jersey, for one, has had enough. It recently passed a law requiring employers to pay an annual fee per employee on Medicaid, if there are at least 50 such workers. The fee ranges from $345 to $725, based on how many employees the company has on Medicaid. The fees are expected to raise $145 million annually. The state estimates that Amazon, for example, has 5,600 workers, and 10,000 dependents, on the state’s Medicaid program, while Walmart has more than 10,000 workers and family members.

Credit: Washington Post

Similar bills have been introduced in California, Colorado, and Washington.

“Our feeling about this is that it’s time for corporations working in our communities to step up for our communities,” Alan Dubinsky, a spokesperson for the Service Employees International Union Local 49, said. “Stop gouging the state and provide healthcare for your workers. If Jeff Bezos can afford hundreds of billions of dollars to build data centers, he can afford to provide healthcare for the people that built this wealth for him through their labor.”

I was around when there was active debate about “employer mandates,” requiring employers to offer health insurance for workers. The complaint from employers was always, oh, it will cost jobs, and others speculated employers would just manipulate employees’ hours to avoid them qualifying. Maybe both of those are true, but whatever sympathy I might have had for employers is diminished by their recent tax breaks and soaring executive pay. Corporations have successfully fought to be considered “people,” but they seem to only want the advantages that come with that standing, not the obligations.

I’d rather we ensure that even a few people sitting on their couches have adequate food and health care than I would that corporate executives can afford more yachts and helicopters. So, Republicans, spare me your faux outrage and focus on fairness.

Status Quo Wins, Until It Doesn't

With all that’s going on – e.g., congrats to Spain for its World Cup victory, scary about the cyclosporiasis outbreak and the Canadian wildfire smoke, dismaying but entirely predictable that the Iran-U.S. war is flaring up again – you may have missed the news that Ukrainian President Zelensky fired defense minister Mykhailo Fedorov.

Better times for President Zelensky and (former) Defense Minister Fedorov. Credit: Radio Free Europe

Now, perhaps Mr. Zelensky was worried he was inadvertently creating a future political rival, or maybe there’s some kind of corruption scandal behind the scenes, but the most common take is that the old guard military establishment disliked the acclaim Mr. Fedorov had gotten and the power he was accumulating. After all, even during war – perhaps especially during war – protecting one’s own interests often comes first.

Mr. Fedorov, who is only 35, had been in the role for just six months, having previously served as a digital transformation minister. His push for increased use of drones, and innovations in how they were used, led to his appointment. By all accounts, Ukraine leads the world in drone warfare: offensive and defensive, learning to cope with mass attacks, jamming, fiber-optic controlled drones, and other tactics no military had attempted or had to defend against before.   

He even created an Amazon-like arms procurement system that soldiers on the front lines could use to get the right weapons they needed, bypassing normal procurement channels, which were slower, more centralized, and more expensive. That helped lead to an ecosystem of young Ukrainian entrepreneurs working on military start-ups. “This level of innovation, and the way it’s been integrated into Ukraine’s fight, wouldn’t be possible without these young people,” Per Holst, the deputy defense attaché at the Danish Embassy in Kyiv, told Constant Méheut of The New York Times.

Example of Ukraine's digital procurement system

"One of the faces of the modern and technological war, it's Mykhailo Fedorov. He totally changed the rules. He's not afraid to take some risk or responsibility," said Ihor Fedirko, who leads the Ukrainian Council of Defense Industry.

The final straw that seemingly led to Mr. Fedorov’s ouster was his blocking of the purchase of artillery shells, preferring that the money be spent on his preferred weapons. The commander of Ukraine’s military, Gen. Oleksandr Syrskyi, felt that the “old school” weapons were still needed for the old school battlelines.

Mr. Zelensky was caught in the middle. "I wanted unity very much," Zelensky told reporters. "The sides did not find it. And that is not only their problem, but mine as well. I do not absolve myself of responsibility. And I respect the sides, I know their strengths, I know their weaknesses, and I very much want them to strengthen Ukraine. But it is what it is."

It did not go smoothly. “The season of shooting oneself in the foot has opened,” Kostyantyn Batozsky, a political analyst, wrote on social media.  Mass protests broke out, expressing support for Mr. Fedorov and distain for General Syrskyi.  They demanded Mr. Fedorov be reinstated, and General Syrskyi be removed, by July 24 or they’d hold nightly rallies.

Some raised not-so-subtle charges of what was really at stake: “You can’t even imagine what streams of funding have been cut off,” Serhiy Sternenko, an adviser to the Defense Ministry wrote on social media. He subsequently quit as well.

Mr. Fedorov held his own press conference, saying: “Today, my task is to show what we’ve done, and to talk about the risks that lie ahead for all of us. I don’t want to later look my children in the eyes and realize that I didn’t speak up on what’s really going on.” He criticized General Syrskyi for being too focused on tactics and not enough on strategy.  

Paul Adams of BBC reports that many in the Ukrainian military are “outraged” by Mr. Fedorov’s dismissal. "It is a blatant slap in the face to all service members," said one soldier. Another cynically pointed out: "If you can't come to an agreement with the old fossils, they'll eat you alive," while military analyst and former intelligence officer Ivan Stupak made it clear who the old fossil was: "Fedorov is an iPhone 16, Syrskyi is a telephone from the 1980s.”

One soldier told The New York Times: “Right now, we are facing the enemy. We believed that there were no enemies behind our backs, in our rear. As it turns out, there are.”  Another noted: “Almost all conversations right now are about this.” This is not what you want on the front lines. 

President Zelensky is likely to survive this, as he did a corruption scandal last summer. He’s holding lots of meetings, including with both General Syrskyi and Mr. Federov, who promises: “There will definitely be changes.” “Decisions regarding the army will be worked out,” the president promised in a statement.

Meanwhile, General Syrskyi defends himself:

The strangest accusation I’ve heard is that I supposedly ‘don’t want to fight with drones,’ A person who ‘does not want to fight with drones’ does not create the world’s first separate branch of unmanned systems and does not appoint a commander to it, contrary to all traditions of the military hierarchy.

Fair points. I suspect that Mr. Fedorov did push harder than the military establishment was comfortable with, while that establishment did, in fact, adopt radically new tactics out of the sheer desperation of the situation. But, at some point, push came to shove.

I have to note that, with all the lessons Ukraine has learned/taught about the new era of war, the vaunted, hugely expensive U.S. military has seemed flummoxed by the same Iranian drones Ukraine has battled for four years. Despite all the new, tech-based military start-ups across the world, experts predict that the old guard military contractors will still rake in 80% of military spending by 2033.  

Credit: Boston Consulting Group

Lockheed Martin, for example, has taken lots of criticism for how expensive its Patriot missiles are, and for how long they take to produce, so they’re introducing a new, cheaper version: it only will cost $2 million per missile. I don’t think they’re reading the room, or the battlefield, correctly.

 It’s amazing the Ukraine has held on this long, and is now even taking the fight to Russia. But no one who has attempted innovation in a big corporation or in a big industry can be surprised at this drama. Change is hard. Status quo doesn’t give up easily.

The point isn’t that the future of war is drones, or even AI drones. The point is that the future of war – and, in an AI world, the future of every industry -- is constant, rapid innovation. We are not living in a time when the status quo can hold.

Value Is in the Eye of the Beholder

The most (unintentionally) amusing story I read this week was Tim Higgin’s Wall Street Journal article Alex Karp Is Saying What Every Angry CEO Is Thinking About AI. Dr. Karp (yes, he has a Ph.D.), co-founder and CEO of Palantir Technologies, is upset about how AI companies are using relationships with their business customers to harvest data and business insights from those customers. “Something has gone completely wrong,” he fumed.

AI is collecting our data; why aren't we being paid? Credit: Microsoft Designer

Now, this is Palantir, mind you; it may not have invented surveillance capitalism but it might have perfected it. It has become essential to government and large corporations across the world. Most of us are aware of how tech companies like Meta or Google give us “free” services that exist primarily to collect more data on us, which they then use to target ads to us, but Palantir’s data collection and analysis operate at a level we often don’t recognize.  But make no mistake; it is using our data, and not necessarily in our best interests.

Mr. Higgins quotes former White House AI czar David Sacks in support of Dr. Karp’s concerns:

Anthropic has launched Claude Science, Claude Security, Claude Legal, and of course Claude Code—each expanding into categories previously served by companies building on top of their models. The pattern is consistent: Watch where value is being created, then move in directly. Dominate the model layer, then use that position to capture the most lucrative verticals.

So it is delicious irony that Dr. Karp and others are finding themselves at the wrong end of the power inequality with their data.

I find myself thinking about healthcare when I think above this new wave of data collectors/ synthesizers. It seems pretty clear that the AI companies aren’t going anywhere, and are expected to reshape most industries, including healthcare. Lots has been written about AI’s use in healthcare, including by me. It is both inevitable and, in many cases, desirable. Now this issue of AI’s insatiable appetite for data makes me wonder if we’re looking at things wrong.

I’ve worked in healthcare for longer than I care to admit, and at no point did people not complain that healthcare in general, and health insurance in particular, was too expensive. And yet, costs have kept rising. We’re closing in on $6 trillion in U.S. healthcare expenditures. No matter what kind of health insurance you have – large employer, small employer, ACA Marketplace, Medicare Advantage, even Medicare Supplements for traditional Medicare – your premiums (and/or out-of-pocket costs) are likely going up at rates we haven’t seen in years.

Two well known facts about rising costs are, one, that it is not so much we’re using too many services as it is that Americans pay way higher prices for healthcare than in most countries, and, two, that a relatively small percentage of people account for the vast majority of healthcare spending. The latter has an insidious effect on health insurance premiums, as people with fewer expenses are less likely to have or keep health insurance, making premiums for the remaining people higher. Nobody wants to pay for the people who use a lot of health care, but they want other people to help pay if they end up being one of those people. It’s a conundrum.

Now, optimists hope that AI can do a better job of identifying all the wasted, unnecessary, or inappropriate care we use – estimated as much as one-third – and help make administration more efficient; current levels are estimated as 15-30% of spending. Good goals, both of them, and it is entirely plausible that AI can help with both. But it would still remain that sick people are the “problem” with our health care spending and health insurance premiums, and I want to propose a different way of looking at them.

Healthcare generates massive amounts of data, increasing all the time. Some estimates put it well in the exabyte level, which, trust me, is way more than any of us can comprehend. We generate data when we go to the doctor, when we get lab work, when we fill a prescription, when we go to the hospital, even when we use a wearable like a smartwatch. All those health insurance claims and all those healthcare bills generate data. And, yet, most of that data isn’t effectively used, which I sure hope AI does something about.

So we have a system in which the people who use more health services generate more data, and an AI industry that craves data. This seems like it should be a match made in heaven.

Why couldn’t we have a healthcare system in which AI companies pay people generating healthcare data for that data? I.e., instead of heavy users of healthcare being drivers of spending, they become a valuable resource? And, oh-by-the-way, why aren’t we being paid for our data?

Our data, healthcare data included, is being shared, bought and sold now. Sometimes it is deidentified (supposedly), sometimes not. Either way, we’re not the ones getting paid for it. That should change.

Now, realists will point that that “value” of our healthcare data is nowhere near the costs of our health care, so paying for the latter with the former is impractical. I’ll grant that is currently true, but I’ll also ask: why is that?

I’d argue that our health data is grossly undervalued, because the companies using it are used to getting it so cheaply, and that our health services are wildly overpriced. Reorienting the system so that the former funds the latter should bring them closer into equilibrium.

If data is, as has been said, the new oil, then I’ll point out that oil was also once very cheap, until enterprising people figured out that they could control the supply and thus raise the price virtually at will. We should be those people when it comes to our data, especially our healthcare data.

So I’ll be amused at Dr. Karp being faux outraged at other data companies profiting off of his company’s data, and I’ll hope that we have a fundamental rethinking about who generates value in our data world and how that value is realized. There can’t be a better place to do this than in healthcare.

Life Not As We Know It

Well, let’s see. Laat week much of the U.S. and parts of Europe were under a crippling heat dome. The U.S. celebrated its 250^th birthday. And there’s something called the World Cup going on, for those of you who care about such things. But, I mean, really, the news of the week? SpudCell.

It may not look like much, but SpudCell is close to synthetic life. Credit: Orion Venero, Adamala Lab

OK, maybe you missed that one. If you are not a fan of science, or of synthetic biology in particular, news about it might not have shown up in your feeds, or perhaps you thought it was another ploy by the Potato Association of America to get you to buy even more potatoes. SpudCell is something truly new: “the world’s first synthetic cell with a complete life cycle, built entirely from non-living chemical components.”

Take a minute to take that description in.

“SpudCell performs the behaviors often used to tell the living from the inert — it feeds, grows, replicates its genome, divides and undergoes selection — yet it is far simpler than any natural cell and was assembled, part by part, by hand,” the project researchers wrote in a statement.

It was designed and built by researchers at the University of Minnesota, announced last week along with a preprint of their paper. The team was led by Professor Kate Adamala, and the name is either due to its supposed resemblance to a potato or it’s a play on “Sputnik.”

“This is likely the most exciting project I've ever worked on,” said Professor Adamala. “We’ve replicated in chemistry what only used to be possible in biology: the complete set of behaviors of a cell. It proves that the most fundamental functions of life, like growth and replication, do not need a mysterious magical spark.”

Scientists have been working for decades on stripping away genetic material from living cells to try to find the minimum necessary for life, but Professor Adamala and her team went the other way, gradually building up genetic material until it started behaving in ways we’d expect cells to.

The impressive thing is that the team engineered everything SpudCell does. As The Economist put it: “Everything the resulting cells do, they do because of molecules that Dr Adamala’s team put there. That leaves no room for mysteries.” That’s not true when researchers start with living cells.

Drew Endy, a synthetic biologist at Stanford University, told Carl Zimmer of The New York Times, “It’s a cell that was built, not born. It’s constructed, but it does what cells do.”

SpudCell is very basic. The human genome has about 3 million kilobase pairs (kbp); SpudCell has 90. And, instead of a single chromosome, SpudCell’s genome is split across seven separate DNA plasmids, while allows researchers to program various cell functions independently.

Whether SpudCell qualifies it as “life” is murky. Professor Adamala cautioned: “Life is not binary. That’s why I’m hesitant to call this ‘alive.’ There’s no clear line, as much as we would love it to be.”

For example, SpudCell doesn’t make its own ribosomes, using ones from e coli bacteria instead, which means it can only replicate for 5-10 generations before things degrade. It also needs some help feeding, with nutrient-carrying liposomes having to be added regularly. But, still; not bad for 90 kbp.

Other scientists are pretty impressed. “Kate Adamala’s team designed and built a nonliving synthetic cell that is much closer to being ‘alive’ than anything else produced by the bottom-up synthetic cell field,” said John Glass, who leads synthetic cell research at the J. Craig Venter Institute. ”It is dazzling that she has put these things all together.”  

“This is a stunning scientific achievement,” says Roseanna Zia, a computational cell biologist at the University of Missouri.

Prof Tom Ellis, at Imperial College London, told The Guardian the work was probably the field’s “biggest breakthrough in recent times,” further explaining: “Making a synthetic cell helps us understand the exact minimum requirements for life and how life might have emerged from chemistry. It’s also useful as it provides a fully understood system for testing biological circuits and computer models of cellular life.”

Professor Adamala admits that in some ways SpudCell is “as dumb as it gets,” and likens it to the Wright brothers’ first airplane, noting that researchers who start with real cells are “like an engineer that’s given a full Dreamliner without all the plans.” Dr. Endy also used the Wright brothers analogy, telling Mr. Zimmer: “The Wright flyer flying for 12 seconds doesn’t get you a 737. This is just the beginning.”

Professor Adamala, along with Professor Endy and two other researchers, have founded Biotic, a public-benefit nonprofit research organization to further the research. They hope to create a shared technical infrastructure for synthetic cell engineering, with a mission “to responsibly enable and steward foundational advances in bioengineering.”

To help other scientists use SpudCells in their research, the Biotic site includes detailed protocols for building SpudCells. It notes: “While our motivation for this research is to make biology a general purpose technology, usable freely by all, we are currently operating in the sandbox environment.” 

Early days.

Professor Adamala says:

This work is just the beginning. We are showing it’s possible to engineer the basic functions of the cell. To fully realize the promise of this technology – to make it robust and practical – we need combined international effort. The role of Biotic is to focus engineering efforts and make them compatible with a shared chassis. SpudCell is that chassis, and with Biotic setting the protocols for collaboration, we are eager to start applying this technology to serious challenges.

“This work demands our attention, not for what has been produced but for where it leads,” Dr. David A. Relman, a microbiologist at Stanford University, told K.R. Callaway of NYT, adding: “It is creative, disruptive and provocative in revealing what might be possible in the not-so-distant future.”

“Creative, disruptive, and provocative” -- music to my ears.

The University of Minnesota announcement makes clear the hope for synthetic biology in general, and SpudCell in particular:

Cells built from scratch could perform molecular transformations industrial chemistry cannot. That could first transform molecular medicine, building precise therapeutic molecules including drugs incorporating amino acids evolution never used. We could see materials that are grown, rather than synthesized, and manufacturing approaches that operate at biological temperatures, not industrial ones. Underneath it is a truly engineerable platform, which SpudCell provides for the first time.

OK, maybe the researchers didn’t “create life,” but the Wright brothers crashed many times before they succeeded. I love this idea of building from the bottom, and I’m rooting for SpurCell to grow up.