tinyyellowflowers-blog:

I have been thinking a lot about what a cancer diagnosis used to mean. How in the ‘80s and ‘90s, when someone was diagnosed, my parents would gently prepare me for their death. That chemo and radiation and surgery just bought time, and over the age of fifty people would sometimes just. Skip it. For cost reasons, and for quality of life reasons. My grandmother was diagnosed in her early seventies and went directly into hospice for just under a year — palliative care only. And often, after diagnosis people and their families would go away — they’d cash out retirement or sell the house and go live on a beach for six months. Or they’d pay a charlatan all their savings to buy hope. People would get diagnosed, get very sick, leave, and then we’d hear that they died.

And then, at some point, the people who left started coming back.

It was the children first. The March of Dimes and Saint Jude set up programs and my town would do spaghetti fundraisers and raffles and meal trains to support the family and send the child and one parent to a hospital in the city — and the children came home. Their hair grew back. They went back to school. We were all trained to think of them as the angelic lost and they were turning into asshole teens right in front of our eyes. What a miracle, what a gift, how lucky we are that the odds for several children are in our favor!

Adults started leaving for a specific program to treat their specific cancer at a specific hospital or a specific research group. They’d stay in that city for 6-12 months and then they’d come home. We fully expected that they were still dying — or they’d gotten one of the good cancers. What a gift this year is for them, we’d think. How lucky they are to be strong enough to ski and swim and run. And then they didn’t stop — two decades later they haven’t stopped. Not all of them, but most of them.

We bought those extra hours and months and years. We paid for time with our taxes. Scientists found ways for treatment to be less terrible, less poisonous, and a thousand times more effective.

And now, when a friend was diagnosed, the five year survival odds were 95%. My friend is alive, nearly five years later. Those kids who miraculously survived are alive. The adults who beat the odds are still alive. I grew up in a place small enough that you can see the losses. And now, the hospital in my tiny hometown can effectively treat many cancers. Most people don’t have to go away for treatment. They said we could never cure cancer, as it were, but we can cure a lot of cancers. We can diagnose a lot of cancers early enough to treat them with minor interventions. We can prevent a lot of cancers.

We could keep doing that. We could continue to fund research into other heartbreaks — into Long Covid and MCAS and psych meds with fewer side effects and dementia treatments. We could buy months and years, alleviate the suffering of our neighbors. That is what funding health research buys: time and ease.

Anyway, I’m preaching to the choir here. But it is a quiet miracle what’s happened in my lifetime.

Three GLP-1 drugs are approved for weight loss in the United States:

• Semaglutide (Ozempic®, Wegovy®, Rybelsus®)

• Tirzepatide (Mounjaro®, Zepbound®)

• Liraglutide (Victoza®, Saxenda®)

…but liraglutide is noticeably worse than the others, and most people prefer either semaglutide or tirzepatide. These cost about $1000/month and are rarely covered by insurance, putting them out of reach for most Americans.

…if you buy them from the pharma companies, like a chump. For the past three years, there’s been a shortage of these drugs. FDA regulations say that during a shortage, it’s semi-legal for compounding pharmacies to provide medications without getting the patent-holders’ permission. In practice, that means they get cheap peptides from China, do some minimal safety testing in house, and sell them online.

So for the past three years, telehealth startups working with compounding pharmacies have sold these drugs for about $200/month. Over two million Americans have made use of this loophole to get weight loss drugs for cheap. But there was always a looming question - what happens when the shortage ends? Many people have to stay on GLP-1 drugs permanently, or else they risk regaining their lost weight. But many can’t afford $1000/month. What happens to them?

Now we’ll find out. At the end of last year, the FDA declared the shortage over. The compounding pharmacies appealed the decision, but the FDA recently confirmed its decision is final. As of March 19 (for tirzepatide) and April 22 (for semaglutide), compounding pharmacies can no longer sell cheap GLP-1 drugs.

Let’s take a second to think of the real victims here: telehealth company stockholders.

Some compounding pharmacies are already telling their customers to look elsewhere, but not everyone is going gently into the good night. I’m seeing telehealth companies float absolutely amazing medicolegal theories, like:

• Compounding pharmacies are allowed to provide patients with a drug if they can’t tolerate the commercially available doses and need a special compounding dose. Perhaps our patients who were previously on semaglutide 0.5 mg now need, uh, semaglutide 0.51 mg. In fact, they need exactly 0.51 mg or they’ll die! Since the pharma companies don’t make 0.51 mg doses, it has to be compounded and we can still sell it.

• Compounding pharmacies are allowed to provide patients with special mixes of drugs if they need to take two drugs at the exact same time. Perhaps our patients who were previously on semaglutide 0.5 mg now need, uh, a mix of semaglutide and random vitamins. They need to have the random vitamins mixed in or they’ll die. Since the pharma companies don’t make semaglutide mixed with the exact random vitamins we do, it has to be compounded and we can still sell it.

• Compounding pharmacies are allowed to provide patients with drugs formulated for unusual routes of administration. All of our patients just developed severe needle phobia, sorry, so they need semaglutide gummies. Since the pharma companies don’t make semaglutide gummies, it has to be compounded and we can still sell it (thanks to Recursive Adaptation for their article on this strategy).

I am not a lawyer but this is all stupid. What are the companies thinking?

They might be hoping they can offload the stupid parts to doctors. Everyone else in healthcare is supposed to do what doctors tell them, especially if the doctors use the magic words “medically necessary”. So pharmacies and telehealth startups (big companies, easy to regulate) can tell doctors (random individuals, hard to regulate) “wink wink hint hint, maybe your patient might need exactly 0.51 mg of semaglutide, nod nod wink wink”. The doctor can write a prescription for exactly 0.51 mg semaglutide, add a note saying the unusual dose is ‘medically necessary’, and then everyone else can provide it with a “clean” “conscience”. If the pharma company sues the pharmacy or telehealth startup, they’ll say “we were only connecting patients to doctors and following their orders!” If the pharma company sues the doctors, the pharma company will probably win, but maybe telehealth companies can find risk-tolerant doctors faster than the pharma company can sue them.

The pharma company can probably still sue telehealth startups and pharmacies over the exact number of nods and winks that they do. But maybe they won’t want to take the PR hit if those pharmacies limit themselves to continuing to serve existing patients. Or maybe there are too many pharmacies to go after all of them. Or maybe DOGE will fire everyone at the FDA and the problem will solve itself. I don’t know - I don’t really expect any of this to work, but from a shareholder value perspective it beats lying down and dying.

But the compounders aren’t the only ones boxing clever. Novo Nordisk and Eli Lilly, the pharma companies behind semaglutide and tirzepatide respectively, have opened consumer-facing businesses about halfway between a traditional doctor’s appointment and the telehealth/compounder model that’s getting banned. So for example, Lilly Direct offers to “find you a doctor” (I think this means you do telehealth with an Eli Lilly stooge who always gives you the meds you want) and “get medications delivered directly to you”. The price depends on dose, but an average dose would be about $500 - so about halfway between the cheap compounding price and the usual insurance price. Not bad.

Pharma companies don’t like dose-based pricing (that is, charging twice as much for a 10 mg dose as a 5 mg dose). Part of their objection is ethical - some people have unusual genes that make them need higher doses, and it seems unfair to charge these people twice as much for genetic bad luck. But there’s also an economic objection - they want to charge the maximum amount the customer can bear, but if they charge a subset of people with genetic bad luck twice as much as they can bear, those people won’t buy their drug. So usually they sell all doses at a similar price, opening an arbitrage opportunity: if they sell both 5 mg and 10 mg for $500/month, and you need 5 mg, then buy the 10 mg dose, take half of it at a time, stretch out your monthlong supply for two months, and get an effective cost of $250/month. But here Eli Lilly is doing something devious I’ve never seen before. They’re selling their medication in single-dose vials, deliberately without preservatives, so that you need to take the whole dose immediately as soon as you open the vial - the arbitrage won’t work! So although this looks on paper like a $300 price increase ($200 to $500), the increase will be even higher for people who were previously exploiting the dose arbitrage.

The mood on the GLP-1 user subreddits is grim but defiant.

Some people are stocking up. GLP-1 drugs keep pretty well in a fridge for at least a year. If you sign up for four GLP-1 telehealth compounding companies simultaneously and order three months from each, then you can get twelve months of medication. Maybe in twelve months the FDA will change their mind, or the pharmacies’ insane legal strategies will pay off, or Trump will invade Denmark over Greenland and seize the Novo Nordisk patents as spoils of war, or someone will finally figure out a diet that works.

Others are turning amateur chemist. You can order GLP-1 peptides from China for cheap. Once you have the peptide, all you have to do is put it in the right amount of bacteriostatic water. In theory this is no harder than any other mix-powder-with-water task. But this time if you do anything wrong, or are insufficiently clean, you can give yourself a horrible infection, or inactivate the drug, or accidentally take 100x too much of the drug and end up with negative weight and float up into the sky and be lost forever. ACX cannot in good conscience recommend this cheap, common, and awesome solution.

But overall, I think the past two years have been a fun experiment in semi-free-market medicine. I don’t mean the patent violations - it’s no surprise that you can sell drugs cheap if you violate the patent - I mean everything else. For the past three years, ~2 million people have taken complex peptides provided direct-to-consumer by a less-regulated supply chain, with barely a fig leaf of medical oversight, and it went great. There were no more side effects than any other medication. People who wanted to lose weight lost weight. And patients had a more convenient time than if they’d had to wait for the official supply chain to meet demand, get a real doctor, spend thousands of dollars on doctors’ visits, apply for insurance coverage, and go to a pharmacy every few weeks to pick up their next prescription. Now pharma companies have noticed and are working on patent-compliant versions of the same idea. Hopefully there will be more creative business models like this one in the future.

Last month, Elon Musk complained that the Social Security Administration’s database contains millions of Social Security numbers for people who seem implausibly old but who are not marked as dead in the official files.

“Maybe Twilight is real,” he quipped, “and there are a lot of vampires collecting Social Security.”

This is the kind of thing that often happens when a person stumbles into an unfamiliar dataset. For example, I once tried to compute a “new homes per new people” ratio on FRED and noticed that there were consistently weird jumps in the ratio every January. I thought this might have something to do with the seasonality of home building, but when I looked into it, I learned that the Current Population Survey does a revision every January that creates a discontinuity in the population figures.

Literally, this chart says there was a mass death event in January of 2024. But we all know that this didn’t happen. By the same token, the US population did not increase by 2.8 million people in January of 2023. Instead, the population level estimate was revised upward by 2.8 million, and that is recorded in the database in a way that is annoyingly unhelpful.

By the same token, it’s true that the United States of America does not maintain a comprehensive federal death registry. As I have frequently complained, national data about the number of murders committed in the United States is incredibly laggy. The numbers on drug overdoses aren’t quite as delayed, but the most recent release (from late February) told us how many overdoses we had back in September.

In the United States, the tracking of births and deaths of livestock is much more timely and comprehensive than the tracking of births and deaths of humans, because livestock data is recorded by the Department of Agriculture, while collecting data on humans is a disaggregated state and county function. As a result, the CDC has one effort to figure out how many people are dying of drug overdose, while the FBI has another to figure out how many people have been murdered, and the Social Security Administration has a third to figure out how many people are ineligible for benefits due to death.

I find this to be a genuine government efficiency problem, and I think it would be great to create a centralized federal vital statistics database that could share relevant information with other agencies. This would reduce duplicative efforts, give decision-makers access to more up-to-date information, improve benefits administration, and constitute a genuine public good.

I was prepared to leave it at that, but Donald Trump repeated Musk’s claims in the State of the Union Address, again suggesting that money is being paid out to super-centenarians on a scale that is relevant to long-term fiscal policy.

This isn’t true, Trump is not proposing any solutions to the actual problem, and I don’t understand what move he’s trying to set up with this claim.

Subscribe now

Super-centenarians and Social Security

The best source of accurate information on the number of active Social Security numbers held by implausibly old people is the SSA Inspector General Report, “Numberholders Age 100 or Older Who Did Not Have Death Information on the Numident.” (The Numident is the name of the file where they list every SSN that has ever been issued.)

The IG report expresses quite a bit of frustration with the Social Security Administration.

They note that, as of 2020, the Numident contained 18.9 million SSNs issued to people born in 1920 or earlier who are marked as alive, even though the Census Bureau says only about 86,000 people over the age of 100 reside in the United States.

Of these SSNs, 1.7 million are issued to people who have more than one SSN and who have already been marked as dead with the other number. In hundreds of thousands of other cases, the death information is available to the Social Security Administration through the payment files or Medicare records, and the Numident simply hasn’t been updated. Beyond that, fully 13.3 million people listed as alive on the Numident are older than the oldest known living person. The IG believes, strongly, that the Social Security Administration should try harder to update the Numident — that they should mark as dead those 13.3 million presumptively dead people and the 1.7 million duplicates.

In most cases, precisely because these people are old, there are no electronic records of their death, which means deaths are hard to identify. But the reports says that in addition to Social Security benefits, the SSA has electronic access to all information about “SSI payments, Medicare benefits, Black Lung benefits, or Railroad Retirement Board benefits since the 1970s.” The IG’s view is that if you are over 100 years old and have not been collecting federal benefits of any kind, you should be marked as dead in the Numident.

The SSA has been slowly improving this document over the years, but keeps rejecting advice to conduct a large-scale purge of the people who are most clearly dead.

They claim that they lack statutory authority to do this. There also isn’t a very strong incentive to do it, because the IG’s whole point is that you can tell these people are dead precisely because they aren’t drawing any federal benefits. In fact, the IG’s report says that in “Tax Years 2016 through 2020, employers and individuals reported approximately $8.5 billion in wages, tips, and self-employment income using 139,211 SSNs assigned to individuals age 100 or older.” In other words, the main fraudulent use of undead SSNs is not to cheat the government out of money; it’s undocumented immigrants paying into the system.

This is the kind of situation in which an alternate universe DOGE could actually be extremely useful.

There is a known problem of inaccuracies in the Numident that the Social Security Administration is dragging its feet about correcting, because the problem doesn’t have any real downside for Social Security — it’s a problem for other agencies, primarily those charged with enforcing immigration laws. Without impetus from the top to change things, bureaucracies tend to move at the pace of their most lead-footed member, so high-level executive attention to these kind of long-simmering problems could be constructive. Across the whole government, there are lots of inspector general and GAO reports with various program integrity recommendations that are not being acted on with sufficient alacrity.

But the actual DOGE is, as far as we can tell, not doing any of this. Instead, they’re conducting arbitrary layoffs that will make it harder to fix anything. And in the specific case of Social Security, they are lying about the upshot of the undead SSN problem to make it seem like huge sums of money are going out the door when they’re just not.

Very little money is improperly paid to dead people

If you want to learn about improper Social Security payments, you should check out another Inspector General report titled “Preventing, Detecting, and Recovering Improper Payments.”

According to the IG, the SSA does, in fact, make billions of dollars in improper overpayments every year. They also make a smaller number of improper underpayments. (In the chart below, OASDI is Old-Age, Survivors, and Disability Insurance — the main Social Security program — and SSI is supplemental income for the disabled.)

Obviously, you’re going to sound like an asshole if you stand up in front of the voters and say, “Hey, what’s the big deal? It’s only $10 billion a year in overpayments!”

But the government paid out around $1.5 trillion in Social Security benefits in 2024, and the IG estimates an improper payment rate of about 0.84 percent. That’s not bad for government work! And it’s worth noting that improper payments are made in both directions, and to an extent, there are tradeoffs between Type 1 and Type 2 errors. If your sole focus is colonizing Mars, you may be obsessively focused on reducing overpayments to zero with no concern about improperly underpaying benefits owed to the elderly, the disabled, widows, or orphans. But normal people can see why the people running this agency may be wary of making mistakes in the wrong direction.

At any rate, the IG report seems to indicate that benefits improperly paid to people who are dead account for less than ten percent of erroneous payments.

The main source of overpayment is people whose checks are supposed to be adjusted downward not reporting their own situations accurately. Some of this has to do with weaknesses in SSAs automatic benefit calculation systems, an area where some smart engineers could probably help. Some of this the IG says the SSA could remedy if they had direct access to IRS income data, which would Congress would need to pass new legislation for. And some of it has to do with the complicated calculations around the Government Pension Offset and Windfall Elimination Provision rules. Congress largely eliminated those rules in an unwise bipartisan bill that passed in December, so there will be much less need to try to do the calculations correctly. Note that this law, the Social Security Fairness Act, costs nearly ten times as much as could be saved by eliminating all improper overpayments.

Which just goes to show that while better program administration is always desirable, the real reason Social Security spending is so high is the actual laws on the books.

The government should track people better

Long story short:

• It’s not true that the government could save significant amounts of money by eliminating improper Social Security overpayments.

• It is doubly untrue that Social Security overpayments are largely a matter of money going to people who are actually dead.

• Eliminating the undead SSNs that Musk and Trump are complaining about might actually leave Social Security with less money, because many of them are being used to illegally pay into the system!

Beyond the fact that the administration is full of extremely dishonest people who like to lie about things, I genuinely don’t understand what they’re trying to accomplish by misleading people about this.

Social Security benefits are either going to get cut or they’re not. If they get cut, people will notice. If they don’t get cut, no money will be saved and the bond market will notice. If Trump were running for office, the point of the lying would be to put the incumbent president on the defensive about why he’s not fixing this. But he is the incumbent president, and he’s not going to be able to fix the problem because the problem is fake.

All that said, I do think this whole saga is a case study in why the government both needs better administrative data and should make better use of the data that it does have.

Social Security numbers are sort of odd. They’re the closest thing that we have to a national identification system, but when Social Security was created, only 56 percent of the workforce was covered by the system. The program wasn’t designed to function as a comprehensive national identification. It expanded over time, but it still doesn’t actually cover everyone. And it also doesn’t have the features you would expect a national identification system to have. For example, when a baby is born in a hospital, they’re issued a birth certificate. But the birth certificate does not come with a Social Security Number attached. Instead, parents use the birth certificate to apply for an SSN, which is then issued separately. Similarly, the SSA needs to piece together information about who is and is not dead based on data from state governments, banks, Medicare, and other stakeholders in the system.

Subscribe now

It would be better, I think, to put privacy worries aside and actually create a canonical federal database of who is alive and who is dead and where they live.

This would solve a variety of problems. It would be easier to get people signed up for benefits they’re eligible for (and easier to cut people off when they’re ineligible). The FBI and CDC could publish timely statistics on topics of interest, like homicide and overdoses. It would be harder for people to work illegally. It would be easier to obtain accurate information about income and poverty, rather than relying on surveys. We could even have (shudder) a national photo ID card system instead of separate state driver’s license systems. And, of course, if we had a national system like that, we could require photo ID to vote without concerns about excluding anyone.

But this mires us in a timeless (though to me bizarre) debate in the United States, where we let privacy concerns stop us, even though in practice, we end up hacking together a bunch of substitute ID systems, like driver’s licenses and Social Security cards. I think people often don’t even know why they’re opposed to this kind of thing. Federalism has some real virtues in terms of decentralizing decision-making, but vital statistics tracking seems like an odd thing to decentralize. It’s just a legacy of historical happenstance that creates small-bore problems and lets dishonest people lie about Social Security fraud.

Share

It was only a few years ago that Republicans accused Democrats of wanting to defund the police. But on Tuesday afternoon, House Republicans seemed to do just that in D.C. – and much more.

The House approved a federal spending bill that could force D.C.’s local officials to cut more than $1 billion out of the city’s current $21.2 billion budget, a move that city leaders warn would prompt a hiring freeze, result in likely government layoffs, and potentially “decimate” services for residents and visitors – including police and schools. 

After the vote, D.C. Mayor Muriel Bowser said the spending bill – which still requires Senate approval – was "senseless, reckless and would have devastating consequences for our nation’s capital," while D.C. Del. Eleanor Holmes Norton lambasted it as “fiscal sabotage.” Other critics said the cuts were an unwise and unnecessary imposition by House Republicans on the city’s local budget and needs, and one that will produce no federal savings but plenty of local harm.

The potential damage comes by way of Congress’s long standing inability to pass annual federal budgets on time. The bill passed on Tuesday on party lines is known as a continuing resolution, which keeps funding for federal agencies at the same level as the previous fiscal year. 

In years past, D.C. was allowed to spend according to the annual balanced budgets that Bowser and the D.C. Council formulate and pass. (Those budgets are funded by locally raised revenue.) But in the text of the bill that was unveiled over the weekend, Republicans opted instead to treat D.C. the same as a federal agency, freezing funds and thus forcing the city to revert to its fiscal year 2024 budget – even as the city has been operating under its larger fiscal year 2025 budget since last October. 

The move caused a sudden panic on Monday, as D.C.’s elected leaders scrambled to explain to Republicans what the change would mean for the city’s existing budget – and the services and workers it pays for. “The impact is on public safety, on public education, on the cleanliness of our city, on housing, on dealing with homelessness,” said Council Chairman Phil Mendelson.

According to Bowser’s office, reverting to the last year’s budget levels would force D.C. to cut 16% out of what it is currently spending. Per initial estimates from the council, D.C.’s public and charter schools would have to quickly trim some $350 million from their budgets, while the Metropolitan Police Department would have to cut $67 million. D.C. Fire & EMS would need to slash $42 million in spending, while the Department of Human Services – which handles homelessness and other social services – would be on the hook for $28 million in cuts.

D.C.’s ability to modernize schools and recreation centers could also be impacted, with city officials estimating that they’d have to slash some $600 million from the capital budget. It could also imperil D.C.’s contribution to  funding  Metro. Even D.C. Water would be impacted, saying in a statement that cutting $51 million from its budget “would require slashing critical investments in infrastructure and maintenance and the people who are necessary to provide safe, reliable drinking water and sewer services to the nation’s most iconic landmarks and critical facilities including: the White House, the United States Capitol, the Supreme Court, the Pentagon, two international airports, and 177 sovereign embassies.”

City officials said they would be forced to impose an immediate hiring freeze, followed by likely layoffs across the government. “When you have a budget that is 85% personnel, and that personnel is focused on residents and delivering services, almost by definition to make the math work… you have to go to where your spending is, which is on people who deliver services,” said City Administrator Kevin Donahue. 

The potential cuts and layoffs would impact issues that Republicans have long said they support, including police and charter schools. And they would also work against goals that Bowser says she shares with President Donald Trump. 

“I can’t imagine why anybody would want to have less public safety resources on the street. I can’t imagine why anybody would want us to take money away from our schools,” said Bowser at a press conference on Monday afternoon. “If the Congress goes through with this, it will go against a priority that President Trump and I share: To make D.C. the most beautiful city in the world.”

The move by congressional Republicans also left local officials scratching their heads: Was this a simple drafting error, or a purposeful attempt to inflict harm on left-leaning D.C.? Republicans have often taken aim at D.C., whether in limiting what the city can do with its money or going as far as to propose doing away with the city’s elected government. But there were also hints this week that Republican leaders were unaware of the actual extent of the impacts of their proposal.

“We’re not taking anything that affects the day to day operation of municipal services,” said Rep. Tom Cole (R-Oklahoma), who chairs the House Appropriations Committee. He added that D.C. would at most see “minor reductions” in spending, a point local officials vigorously contest. (Cole’s office did not respond to questions seeking clarification.) 

“I would say it’s an ‘Oopsie!’ if no one was pointing out the real implications,” said At-Large Councilmember Christina Henderson to The 51st. “We have been saying, ‘If this is a mistake, cool.’ But if this is intentional, how crazy is it to cripple the public safety functions in the nation’s capital? This is a very easy fix. They are creating a crisis that didn’t need to be there and could be easily fixed with two sentences. Why double down on something that will cost the nation’s capital more than a billion dollars for nothing more than a mistake?”

An attempt by Norton to amend the spending bill to clarify that D.C. could continue spending its 2025 budget failed on Monday afternoon.

“D.C. residents pay an awful lot of taxes, more per capita than any other state. Many serve in the military, they are American citizens. It is rotten how they are treated, and this bill is something that piles on,” said Rep. Jim McGovern (D-Massachusetts). “D.C. passed a balanced budget, but now Republicans are blowing up their budget with no warning. It’s shameful and regrettable.”

What happens next, though, remains unclear. The spending bill heads to the Senate, which has to act by Friday – or risk a federal government shutdown. Some Democratic senators have expressed reservations with blocking the bill for that reason, but Henderson says that for D.C.’s sake, they should.

“I don’t ever want to encourage a government shutdown,” she said. “If the feds were to shut down and it gives the Congress time to stop and think about what they are doing to D.C., then OK.”

In the wake of the vote, Ward 5 Councilmember Zachary Parker urged residents to call senators to ask them to address the funding issue in the bill.

Should the Senate pass the spending bill, though, D.C. officials will have to start quickly cutting spending – and potentially delay their formulation of the 2026 budget, a process that’s expected to start next month.