Also: Hospice Fraud and US Shipbuilding

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Edited by Brady Africk and Lexi Baker

Happy Thursday! In today’s newsletter, we examine Ukraine’s battlefield edge, hospice care fraud, and the United States’ maritime crisis.

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1. Ukraine’s Drone Advantage ([link removed] )

05.28_Dalibor ([link removed] )

Topline: Ukraine’s armed forces numbered roughly 260,000 in 2022. Today, they total approximately one million, including some of the world’s most experienced soldiers. AEI’s Dalibor Rohac and former Ukrainian Minister of Defence Oleksii Reznikov highlight this remarkable reversal, arguing ([link removed] ) that Ukraine has reshaped 21st-century warfare.

The Key to Success: Despite a growing Russian military budget and a 500,000 increase in active-duty personnel, Russian advances have steadily slowed this year. Russia has been losing roughly 35,000 troops per month, outpacing its declining capacity for recruitment. Ukraine’s advantage lies in the composition of its force: engineers, coders, and entrepreneurs capable of producing cheaper, faster, and scalable battlefield innovations.

A Valuable Asset: Ukraine’s battlefield innovations can help the US. The Pentagon and Ukraine are moving to finalize a deal that would send drones made in Ukraine to American soil for testing. Similarly, Germany’s defense minister signed an agreement to codevelop innovative armaments with Ukrainian firms.

“Investing in Ukraine is an investment in European security. It buys time and helps prepare Europe, and the West more broadly, for all the wars to come. It turns out that Ukraine is not the West’s problem. It is, in fact, a solution.”

—Dalibor Rohac ([link removed] ) and Oleksii Reznikov

More on Ukraine
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2. Confronting Hospice Care Fraud ([link removed] )

05.28_Capretta ([link removed] )

Topline: The number of hospice providers has increased by 35 percent, from 4,840 in 2019 to 6,535 in 2023—a jump driven mostly by for-profit agencies. AEI’s James C. Capretta warns ([link removed] ) that several factors suggest this surge may reflect fraud rather than a normal response to changes in market conditions.

The Moratorium: In response to the uptick, the Centers for Medicare & Medicaid Services (CMS) announced ([link removed] ) on May 13 a nationwide, six-month moratorium on adding new hospice service providers to Medicare. For context, relative to total program outlays, just 2.6 percent of Medicare expenditures were for hospice-related services in 2024, up only marginally from 2.5 percent in 2010.

Vulnerable to Abuse: Barriers to entry are relatively low for hospice providers, making the market particularly vulnerable to abuse. Initial capital investment for a hospice agency is modest compared with building a new hospital or nursing home. Potential profit margins are high because providers receive fixed per diem payments regardless of individual patient costs.

“Although CMS’s focus on fraud in hospice care is warranted, stronger oversight by itself may not produce large program savings. In theory, more use of hospice care could lead to lower overall costs if the sponsoring agencies are competent and can help their patients avoid costly hospital or nursing home admissions. CMS’s investigations need to be subtle enough to weed out the bad actors without making it overly difficult for vulnerable patients to get the care they need in their own homes or in other low-cost community settings.”

—James C. Capretta ([link removed] )

More on Hospice
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3. Restoring US Sea Power ([link removed] )

05.28_Eaglen ([link removed] )

Topline: While the United States currently produces just five ships a year and has only 66 shipyards, China builds more than 1,700 ships a year in over 300 shipyards. AEI’s Mackenzie Eaglen and Benjamin Jensen caution ([link removed] ) that the United States’ shipbuilding crisis represents a market failure that could undermine the country amid growing naval competition with China.

Naval Shipbuilding: US shipyards contend with production delays, face limited capacity for repairs, and struggle to keep mariners. In the past 20 years, the US Navy has not increased its fleet size, despite nearly doubling its shipbuilding budget. Although commercial and naval shipbuilding are separate enterprises, the two are interconnected. Strengthening commercial shipbuilding could help the economy and address constraints facing naval yards.

Possible Solutions: The White House’s America’s Maritime Action Plan (MAP) and Congress’s Shipbuilding and Harbor Infrastructure for Prosperity and Security (SHIPS) for America Act of 2025 could help address these challenges. Together, the initiatives aim to bolster demand and increase competition.

“Efforts such as MAP and SHIPS can rebuild maritime power if they create a competitive marketplace that connects economic and sea power. State action is now required because the existing market does not generate enough U.S. maritime capacity for national strategy. That action should force competition, not shelter inefficiency.”

—Mackenzie Eaglen ([link removed] ) and Benjamin Jensen

More on the Maritime Crisis
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Dive into More Data

05.28_Lachman ([link removed] )

A World Bond-Market Crisis ([link removed] )

More on the Bond Market
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05.28_Akers ([link removed] )

Will College Closures Limit Access? ([link removed] )

More on College Closures
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Special thanks for Henry Long, Rosalie Blacklock, Hannah Bowen, and Drew Kirkpatrick.

Thanks for reading. We will be back with more data next Thursday!

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