Warning: Header may not contain more than a single header, new line detected in /home/philad/public_html/html_header_x.inc on line 208
Philadelphia Reflections

PHILADELPHIA REFLECTIONS
The musings of a Philadelphia Physician who has served the community for six decades

270 Topics

Terse Verse: Thomas C. Howes (9)
Poetry is a form of literature that uses imaginative and creative words in a compressed form to express idea.

Introduction: Health and Retirement Savings Accounts. As Is, Right Now.
New topic 2016-03-08 22:42:53 description

Terse Verse: Thomas C. Howes (3)
Poetry is a form of literature that uses imaginative and creative words in a compressed form to express idea

Right Angle Club: 2016
In progress.

Benjamin Franklin
A collection of Benjamin Franklin tidbits that relate Philadelphia's revolutionary prelate to his moving around the city, the colonies, and the world.

Click for more Topics

Philadelphia Reflections is a history of the area around Philadelphia, PA ... William Penn's Quaker Colonies
plus medicine, economics and politics ... 2594 articles in all

  • Try the search box to the left if you don't see what you're looking for.

Terse Verse: Green Aches

Green Aches

Grass land
Starts grand
Sow seeds
Hopes breed
But lawn
Turns tawn
Weeds win
Then grin

Seek aid
Pros paid
Grow pains
Pray rains
Work hard
Yet yard
Turf aint
So paint


Terse Verse: Ghost Bust

Ghost Bust

Spook tales
Bite nails
Strange noise
Shakes poise
Walk slow
Tip toe
Eyes stare
Night mare

Heasr creak
Knees weak
My voice
Yells twice
See Shroud
Cry loud
False clue
Boo who


The Subsidy Issue: Crossing the Line Between Private Sector and Public Sector

Rarely is the argument framed that private competition is harmful to public competition. It's not because private power seems too strong to be resisted, but alludes to the apparently limitless power of the public sector to print money. As we approach a limit to printing money, the competitive issue reappears. However, that's not why employer groups don't fit the ACA plan. Employer-based private plans can never match the Affordable Care subsidy rules for quite different reasons. They both would have inexpensive subscribers subsidize expensive ones, but do it in different ways. Employers have young employees subsidize older ones, while the ACA has rich ones subsidizing poor ones. While there must be many exceptions, in general young employees are not richer than older ones. As a matter of fact, young employees are even buying a different product. They buy protection against unexpected illness, while older employees buy health services when they are sick. In trying to reconcile these conflicts, the struggle to treat unequals as if they were equal leads some subscribers to find they are better off switching to Medicaid, while others conclude their health risks do not exceed the penalties for having no insurance at all. After all, a more generous health plan is not more generous if you never get sick. Some genius may figure a way to reconcile these issues, but they seem irreconcilable to me. Instead, I propose a different approach, entirely.

Some government planners want to fund a health program, others want to subsidize the poor. To a degree, it's useful to use the subsidy as a carrot to induce people to take the health plan, but one is not an inherent part of the other. Therefore, if the people who need health care were separated from the people who need a subsidy, there will be some who need both. Why not give subsidies to people who need them, regardless of their insurance? It will then be found there are people who need a subsidy but prefer a private plan, let's say a Health and Retirement Savings Account. The problems with the Equal Protection clause of the Constitution disappears. If it costs more to do it that way, one might well conclude the needed subsidies had been underestimated, and not for the first time. To soften the political damage, it might be a good idea to combine the poverty subsidy with retraining after the effects of globalization, but that's just a suggestion. Two subsidies are never the same, but merging poverty with globalization at least causes no collision with century-old earlier attempts to do the same thing.

In the case of the Affordable Care Act, a fear is the unanticipated migration of large numbers of subsidized clients would unexpectedly raise the premiums of those who remain in the private sector to pay them. It also raises the contrary possibility, that large numbers of fairly prosperous employed persons might switch to Medicaid coverage to get the higher subsidy. The resulting uproar might be more than a political body can withstand. The twin purposes of mentioning it here are to point to the example of ACA collision with more generously subsidized employer-based clients; and to warn against further hasty decisions to mix the public and private sectors within Health and Retirement Savings Accounts. The general reconciliation principle emerges that if government subsidies are resorted to, they should be unwrapped from the service delivery package, and funded independently. So long as the subsidy is distributed by the same criteria for everybody, it can pass muster. To emphasize: mixing the subsidy distribution with the service package always causes trouble, but globalization would cause less than health. Far worse are the ill effects of mixing public programs with private charity, incidentally removing competition from the public project.

Since Health Savings Accounts were begun independently of subsidies, they sometimes face the taunt they "do nothing for the poor man." The underlying purpose of enlisting the subsidy as a political enticement is thereby revealed. That's generally true enough, but it is particularly true for the Affordable Care Act. If equal subsidies were distributed by the same criteria, the subsidy issue would become independent of the health care one. It's too bad this wasn't examined as an independent issue from the beginning, since it definitely turns out to hamper the Affordable Care Act more than it helps it.

As a culture, we are unwilling to subsidize poverty, just because it is poverty. We are willing to subsidize poverty because of addiction, but we would prefer to subsidize it less than we subsidize poverty caused by other diseases, like blindness. But it doesn't stop with different diseases; we might prefer to subsidize one race, one region, or a whole host of other conflicting preferences. It seems a definitely superior approach to subsidize individual poverty -- as such -- than to get into an endless set of quarrels between the various reasons for health poverty, or the various source of its funding. Unfortunately, to enter that discussion might be to expand this examination of Health Savings Accounts beyond its natural limits. My present position is: if you want to extend the same health subsidy to the HSA as is extended to ACA, go ahead, but stop using the addition of a subsidy as a reason to prefer one to the other.

Perhaps, even more interestingly, poverty could be treated as economists are beginning to treat unemployment -- the net absence of affluence, comparable to unemployment as the net absence of employment. This would have the distinct advantage of regarding either employment or poverty as a huge temporary state of flux rather than a population subgroup. The numbers are not exactly comparable (4.6% in the case of net unemployment) but would remove the confounding effect of sickness causing poverty for varying lengths of time. And poverty creating illness. A small demonstration program in several states might clarify whether this approach could lead to some improved method of subsidy, or even the best method of management. That's about all I wish to say on this matter.


Escrow and/or Escrow-like

There are many times in a lifetime when new opportunities to spend rather than save, appear. You have a little cash and must decide what to do with it, for example. This choice presents itself with every paycheck. We suggest automatic paycheck deduction is the best way to handle it. Big specific temptations also come up. Your neighbor buys a new car, and you reflect whether it is your time for a bigger car, too. You are therefore tempted to make a big withdrawal from a retirement account to pay for it. Bad idea, don't do it. On the other hand, maybe you smashed up the old car and must have a way to get to work, so you do it. You want a way to resist big-ticket temptations, but you must not close that door entirely. We suggest an escrow account.

An "escrow" is a service often performed by a third party for a fee, to hold the two main parties to terms they independently agree on, and can only change if they both agree, or else a judge arees. Escrow can be a variant of insurance. Please bear with us, for a paragraph or two on this remote subject. Escrow variations in real estate are common, many assume escrow must be limited to real estate. But in an HSA there also arises a frequent need to identify illiquid funds, set aside for some future purpose; the term escrow also comes to mind. Illiquid funds usually command higher interest rates, the "yield curve" is in the daily newspapers, but both parties must agree to change it. Some people are naturally frugal, others are spendthrifts; funds are needed for emergencies, others are saved for later. All that creates a need for what we describe as an escrow account, as distinguished from "demand" accounts; others may call it something else. Since fees are often hidden, let's just say custody account instead of escrow.

Short term investments carry lower interest rates than long-term ones, because there is more risk of default the longer the risk continues. Banks survive on the difference (yield) between the rate for them to borrow and the rate to lend; the "spread" varies with the duration of the loan -- overnight, say, or thirty years. The critical issue is the duration of quarantine, but in general U.S. Treasury bills and bonds are found in demand accounts, while common stocks, lines of credit, and other permanent investments must be guaranteed in some way for the duration of investment, when their term is not already stated. It's a method of protecting the lender if he pays higher rates, but it's also useful to everybody if life situations change.

Therefore, whether you call it an escrow or not, investors should be given the option of setting certain HSA funds aside where, like Ulysses tied to the mast, they cannot touch the account until a certain time, by common consent, or with a court order. Their broker will respond with a higher investment return if he knows the investment can't be sold "out from under him". Getting back to Health and Retirement Savings Accounts, young people nowadays rarely get seriously ill; old folks often do. If a young investor knows he can ride out the bumps along the way, he is justified in hoping he can get 8% after-tax and after-inflation return. Otherwise, he might be lucky to net 1%. With really long-term investments, even a few tenths of a percent can make a major difference. Let's touch on a few examples.

Squeezing the Lemon Dry. Let's imagine he only spends 1.4% on investment expenses (at age 21); he thus gets back 6.6% on an 8% investment, net of inflation. If he spends 0.1% more on expenses, he will only net 6.5%, or $30,000 less at age 66. That's a lot of money for very little difference in effort, but he should have planned better. We are here suggesting passive investment in the entire stock market, using index funds, no tips, no stock-picking. In a pinch, the higher quality of "collateral" will command somewhat more favorable rates.

"Active investment" or "stockpicking by experts" may yield somewhat more for what are judged high quality assets, although it is hard to see why they should, net of hidden fees. The extra yield is often eaten up by extra fees. And then there is the theory of "black swans", general stock market dips of 30-60%, occurring every twenty or thirty years. The older he gets, the less likely an investor will be, to have time to recover from a "black swan", and the more he needs deflation protection with up to 40% Treasury bond content. But that protection costs his yield another couple percent in fifteen years. To have the funds to manage it, a young borrower needs to squeeze out another .1%-.2% of expenses from his managing firm. If he starts saving later in life, he may need to squeeze 2-3% from expenses, which is probably impossible. The bulk of his retirement will have to come from somewhere else. That's a pity, but what other proposal promises even a fraction as much, most of the time? Most investment managers who must constantly meet a payroll with endowment income feel pretty satisfied with 5% total return, employing the 60/40 method. The HSA investor has no payroll to meet, and often needs to do somewhat better to survive.

Just about the only way one can give it all to him fairly safely, is to use passive investing for a long escrowed time. Lower fees, buy-and-hold. But watch yourself, since managers are often replaced by new managers. We're definitely not saying,"buy and neglect".

In later sections of this book, we take up additional issues of, say, funneling money from Medicare to retirement. If science cures a few diseases; or transferring money from grandparents to grandchildren after research renders medical risk superfluous for retirements; or otherwise using extra funds for new purposes as chance and vigilance make it possible. But all of these windfalls require some sequestered fund to be protected against raids by pirates. Certain segments of the financial community will resist any or all of them. After all, most of the time your gain will be someone else's lost income.

But more fundamentally than that, banks in particular are also in the business of taking short-term deposits and making a profit on turning them into long-term assets at higher rates. If you persist in keeping idle money at short-term rates, they will take your money and use it in this way. Curiously, globalization tends to create more short-term loans on components of what was formerly one single long-term loan on an assembled unit. This tends to unbalance the normal ratio of long-term to short-term, in the direction of excessive short-term availability. For the person approaching retirement without any way to pay for it, there is little choice but to take more risk. That is to say, if your goal is to avoid risk, don't dawdle until there is nothing you can do but take risk. So, start saving young, start investing young, and learn your game. One old sage, maybe it was Ben Franklin, used to say, "The best thing which can happen to you, is to lose some money when you are young." Ben Franklin didn't like to lose money at any age. What he meant was, if you wait too long, you're likely to be stuck.


Fourth Section: A Single Lifetime System, Not a Single Payer System

...................................

THE GOAL OF A SINGLE LIFETIME SYSTEM, NOT A SINGLE PAYER SYSTEM


A most interesting website, thank you. I really hope to visit Philadelphia one day, and I shall definitely consult your website. I came across this website after doing a search on Johannes Kelp / Kelpius. I had just listened to a song written about him called, 'Sighisoara' at ukuleleroadtrips.com. Sighisoara is the place J Kelpius left for Philadelphia with 40 followers. Best Regards
Posted by: Pamela   |   Aug 20, 2015 11:04 AM
I'm overwhelmed. I'm thinking of a one-line poem by William Blake: "Enough or too much" " stragglers who live from 85 to 91." Sorry to be a burden, but soon to be 91 I can still go a couple of rounds without huffing and puffing. You remind me of Dr. Melvin Konner.... professor.... anthropologist..... physician.
Posted by: Martin   |   Sep 27, 2014 5:16 AM
I want to thank you for this wonderful resource. I find it fascinating. May I offer one correction? In the section "Rittenhouse Square Area" there is reference to the Van Rensselaer home at 18th and Walnut Streets and its having a brief fling as a club. I believe in 1942 to about 1974/5 the Penn Athletic Club was located in the mansion. The Penn AC was a good club, a good neighbor and a very good steward of the building - especially the interior. It's my understanding that very unfortunately later occupants gutted much of the very well-preserved original, or close to original, interiors. I suppose by today's standards the Van Rensselaer-Penn Athletic Club relationship could be described as a fairly long marriage. The City of Philadelphia played a large role in my life and that of my family, and your splendid website brings back many happy memories. For me and many others, however, there is also deep sadness concerning the decline of so much of the once great city and the loss of most of its once innumerable commercial institutions. Please keep-up your fine work. Your's is a first-class work.
Posted by: John D. Mealmaker   |   Aug 14, 2014 2:24 AM
Dr. Fisher, The name Philadelphia University was adopted in 1999, as you write, but the institution dates to 1884 and has been on School House Lane since the 1940s. It acquired the former properties of the Lankenau School and Ravenhill Academy, but it did not "merge" with either of them. I hope this helps when you update your site.
Posted by: David Breiner   |   Jun 11, 2014 10:05 PM
Hello Dr. Fisher, I was looking for an e-mail address and this is what I could find. I must tell you my Mother who you treated for years passed away last May. She was so ill with so many problems. I am sure you remember Peggy Marchesani. We often spoke of you and how much we missed you as our Dr. You also treated my daughter Michele who will be 40. I am living in the Doylestown area and have been seeing the Dr's there.. I just had my thyroid removed do to cancer. I have my fingers crossed they get the medicine right. I am not happy with my Endochronologist she refuses to give me Amour. I spoke with my Family Dr who said he will take care of it. I also discovered I have Hemachromatosisand two genetic components. I have a good Hematologist who is monitoring me closely. I must say you would find all of this challenging. Take care and I just wanted to convey this to you . You were way ahead of your time. Thank you, Joyce Gross
Posted by: Joyce Gross   |   Apr 4, 2014 2:06 AM
I come upon these articles from time to time and I always love them. Is the author still alive and available to talk with high school students? Larry Lawrence F. Filippone History Dept. The Lawrenceville School
Posted by: Lawrence Filippone   |   Mar 18, 2014 6:33 PM
Thank you for your articles, with a utilitarian interest, honestly, in your writing on the Wagner Free Institute of Science [partly at "...blog/1588.htm" - with being happy to post that url but the software here not allowing for the full address:)!] I am researching the Institute, partly for an upcoming (and non-paid) presentation and wanted to ask if I might use your article's reproduction for the Thomas Sully portrait of William Wagner, with full credit. Thanks very much for any assistance you can offer here. Josh Silver Philadelphia
Posted by: Josh Silver   |   Jun 2, 2013 1:39 PM
Thank you for your articles, with a utilitarian interest, honestly, in your writing on the Wagner Free Institute of Science [partly at "...blog/1588.htm" - with being happy to post that url but the software here not allowing for the full address:)!] I am researching the Institute, partly for an upcoming (and non-paid) presentation and wanted to ask if I might use your article's reproduction for the Thomas Sully portrait of William Wagner, with full credit. Thanks very much for any assistance you can offer here. Josh Silver Philadelphia
Posted by: Josh Silver   |   Jun 2, 2013 1:39 PM
George, Mary Laney passed away last November. I was one of her pall bearers. She had a bad last year. However, I am glad that you remembered her and her great work. I will post your report at St Christopher's and pass this along to her husband Earl. Best wishes Peter Hunt
Posted by: Peter Hunt   |   Mar 28, 2013 7:12 PM
Hello, my name is Martin. I came across [http://www.philadelphia-reflections.com/blog/1705.htm] and noticed a ton of great resources. I recently had the honor of becoming a part of a new non promotional project on AlcoholicCirrhosis.com. We decided to put together a brief guide about cirrhosis, and the dangers of drinking. We have received a lot of positive feedback and I wanted to suggest that we get listed on the above mentioned page under The National Institutes of Health. Let me know what you think and if you have any further requirements or suggestions.
Posted by: Martin   |   Jan 1, 2013 8:51 AM
I FIND THIS VERY INTERESTING, INDEED. I AM HOWEVER, SEARCHING FOR THE ANCESTOR WE HAVE BEEN TOLD WAS JOSEPH M. WILSON OF JORDAN TOWNSHIP IN WHITESIDE CO. IL USA. MY HUSBAND WAS ORPHANED AND WITH LITTLE CONTACT WITH HIS FATHERS SIDE OF THE FAMILY THE 9TH OF 10 SURVIVING CHILDREN SINCE ALL ARE DECEASED BUT, ONE). I HAVE HOPED TO FIND HIS CONNECTION AS TO THE STORIES RELATED BY SEVERAL OF HIS DECEASED RELATIVES THAT WE ARE CONNECTED TO THE WILSON MILL FAMILY HISTORY. OF JOSEPH AND FRANCES. MY HUSBAND WAS ALSO, FAMILY TO: GRANDFATHER RANSOM (ISABELLA)WILSON & HIS BROTHER WILLIAM; OF ELKHORN GROVE CARROLL CO. IL USA AND HIS SON JOSEPH WILSON(NANCY). I?WE( MY SONS AND NEPHEWS NEICES AND GRANDDAUGHTERS IN COLLEGE... WERE HOPING THAT NOW THAT I AM ON THE COMPUTER AND WITH YOUR HELP THRU THE GENELOGICAL SOCIETY TO YOUR ADDRESS WE MAY FIND THE FAMILY WE SEEK. MY LATE HUSBAND AND I DROVE PAST THE SITE OF THE FIELD WHERE JOSEPH AND FAANCES ARE BURIED , THE CEDARS ARE GONE AND IT IS NOW FIELD. I HAVE BEEN HOPING TO FIND THE LINK FOR OVER 30 FAMILY TO PAY TRIBUTE TO THOSE WHO HAVE GONE BEFORE AND PERSEVERED TO BRING US THE LIFE WHICH WE ENJOY AND SERVE, TODAY. I RECEIVED ONLY THIS WEEK BY A FLUKE AN EMAIL WITH PHOTOS FROM A 3RD COUSIN THAT FOUND MY EMAIL ON A COUSINS EMAIL ADDRESS AFTER INQUIRING AND INTRODUCING HIMSLEF: AND HE TOOK THE TIME TO SEND MANY PHOTOS AND HISTORY OF GRANDPARENTS AND FAMILY AS WE HAVE HAD NONE. WE STILL DON'T HAVE A PHOTO OF HIS MOTHER AND FATHER. WHAT I HAVE OF THE TREE, I AM ANXIOUS TO SHARE WITH FAMILY THAT IS SEEKING HISTORY, AS I STILL AM HOPEFUL TO FIND IT IN TIME FOR THE DEADLINE AUG. 30 TYPED AND DELIVERED TO MY MARTIN HOUSE MUSEUM WHERE I AM A MEMBER. MY HUSBAND WAS A MASTER MASON WHILE IN LODGE WITH THE COUPLE THAT DONATED THE HOUSE TO BE A MUSEUM. THANK YOU FOR YOUR TIME AND THE GRAT WORK YOU HAVE ALL DONE ON THIS HISTORY. WE WERE LIFE MEMBERS OF THE LUTHERAN CHURCH BUT , THERE IS NOT ONE IN OUR TOWN, SO I FOUND THE REFORMED CHURCH,OF WHICH, I AM VERY HAPPY TO BE A PART. THANK YOU .
Posted by: SUSAN WILSON   |   Aug 12, 2012 12:49 AM

Please Let Us Know What You Think


(HTML tags provide better formatting)

Because of robot spam we ask you to confirm your comment: we will send you an email containing a link to click. We apologize for this inconvenience but this ensures the quality of the comments. (Your email will not be displayed.)
Thank you.