The musings of a physician who served the community for over six decades
367 Topics
Downtown A discussion about downtown area in Philadelphia and connections from today with its historical past.
West of Broad A collection of articles about the area west of Broad Street, Philadelphia, Pennsylvania.
Delaware (State of) Originally the "lower counties" of Pennsylvania, and thus one of three Quaker colonies founded by William Penn, Delaware has developed its own set of traditions and history.
Religious Philadelphia William Penn wanted a colony with religious freedom. A considerable number, if not the majority, of American religious denominations were founded in this city. The main misconception about religious Philadelphia is that it is Quaker-dominated. But the broader misconception is that it is not Quaker-dominated.
Particular Sights to See:Center City Taxi drivers tell tourists that Center City is a "shining city on a hill". During the Industrial Era, the city almost urbanized out to the county line, and then retreated. Right now, the urban center is surrounded by a semi-deserted ring of former factories.
Philadelphia's Middle Urban Ring Philadelphia grew rapidly for seventy years after the Civil War, then gradually lost population. Skyscrapers drain population upwards, suburbs beckon outwards. The result: a ring around center city, mixed prosperous and dilapidated. Future in doubt.
Historical Motor Excursion North of Philadelphia The narrow waist of New Jersey was the upper border of William Penn's vast land holdings, and the outer edge of Quaker influence. In 1776-77, Lord Howe made this strip the main highway of his attempt to subjugate the Colonies.
Land Tour Around Delaware Bay Start in Philadelphia, take two days to tour around Delaware Bay. Down the New Jersey side to Cape May, ferry over to Lewes, tour up to Dover and New Castle, visit Winterthur, Longwood Gardens, Brandywine Battlefield and art museum, then back to Philadelphia. Try it!
Tourist Trips Around Philadelphia and the Quaker Colonies The states of Pennsylvania, Delaware, and southern New Jersey all belonged to William Penn the Quaker. He was the largest private landholder in American history. Using explicit directions, comprehensive touring of the Quaker Colonies takes seven full days. Local residents would need a couple dozen one-day trips to get up to speed.
Touring Philadelphia's Western Regions Philadelpia County had two hundred farms in 1950, but is now thickly settled in all directions. Western regions along the Schuylkill are still spread out somewhat; with many historic estates.
Up the King's High Way New Jersey has a narrow waistline, with New York harbor at one end, and Delaware Bay on the other. Traffic and history travelled the Kings Highway along this path between New York and Philadelphia.
Arch Street: from Sixth to Second When the large meeting house at Fourth and Arch was built, many Quakers moved their houses to the area. At that time, "North of Market" implied the Quaker region of town.
Up Market Street to Sixth and Walnut Millions of eye patients have been asked to read the passage from Franklin's autobiography, "I walked up Market Street, etc." which is commonly printed on eye-test cards. Here's your chance to do it.
Sixth and Walnut over to Broad and Sansom In 1751, the Pennsylvania Hospital at 8th and Spruce was 'way out in the country. Now it is in the center of a city, but the area still remains dominated by medical institutions.
Montgomery and Bucks Counties The Philadelphia metropolitan region has five Pennsylvania counties, four New Jersey counties, one northern county in the state of Delaware. Here are the four Pennsylvania suburban ones.
Northern Overland Escape Path of the Philadelphia Tories 1 of 1 (16) Grievances provoking the American Revolutionary War left many Philadelphians unprovoked. Loyalists often fled to Canada, especially Kingston, Ontario. Decades later the flow of dissidents reversed, Canadian anti-royalists taking refuge south of the border.
City Hall to Chestnut Hill There are lots of ways to go from City Hall to Chestnut Hill, including the train from Suburban Station, or from 11th and Market. This tour imagines your driving your car out the Ben Franklin Parkway to Kelly Drive, and then up the Wissahickon.
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Philadelphia Revelations
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George R. Fisher, III, M.D.
Obituary
George R. Fisher, III, M.D.
Age: 97 of Philadelphia, formerly of Haddonfield
Dr. George Ross Fisher of Philadelphia died on March 9, 2023, surrounded by his loving family.
Born in 1925 in Erie, Pennsylvania, to two teachers, George and Margaret Fisher, he grew up in Pittsburgh, later attending The Lawrenceville School and Yale University (graduating early because of the war). He was very proud of the fact that he was the only person who ever graduated from Yale with a Bachelor of Science in English Literature. He attended Columbia University’s College of Physicians and Surgeons where he met the love of his life, fellow medical student, and future renowned Philadelphia radiologist Mary Stuart Blakely. While dating, they entertained themselves by dressing up in evening attire and crashing fancy Manhattan weddings. They married in 1950 and were each other’s true loves, mutual admirers, and life partners until Mary Stuart passed away in 2006. A Columbia faculty member wrote of him, “This young man’s personality is way off the beaten track, and cannot be evaluated by the customary methods.”
After training at the Pennsylvania Hospital in Philadelphia where he was Chief Resident in Medicine, and spending a year at the NIH, he opened a practice in Endocrinology on Spruce Street where he practiced for sixty years. He also consulted regularly for the employees of Strawbridge and Clothier as well as the Hospital for the Mentally Retarded at Stockley, Delaware. He was beloved by his patients, his guiding philosophy being the adage, “Listen to your patient – he’s telling you his diagnosis.” His patients also told him their stories which gave him an education in all things Philadelphia, the city he passionately loved and which he went on to chronicle in this online blog. Many of these blogs were adapted into a history-oriented tour book, Philadelphia Revelations: Twenty Tours of the Delaware Valley.
He was a true Renaissance Man, interested in everything and everyone, remembering everything he read or heard in complete detail, and endowed with a penetrating intellect which cut to the heart of whatever was being discussed, whether it be medicine, history, literature, economics, investments, politics, science or even lawn care for his home in Haddonfield, NJ where he and his wife raised their four children. He was an “early adopter.” Memories of his children from the 1960s include being taken to visit his colleagues working on the UNIVAC computer at Penn; the air-mail version of the London Economist on the dining room table; and his work on developing a proprietary medical office software using Fortran. His dedication to patients and to his profession extended to his many years representing Pennsylvania to the American Medical Association.
After retiring from his practice in 2003, he started his pioneering “just-in-time” Ross & Perry publishing company, which printed more than 300 new and reprint titles, ranging from Flight Manual for the SR-71 Blackbird Spy Plane (his best seller!) to Terse Verse, a collection of a hundred mostly humorous haikus. He authored four books. In 2013 at age 88, he ran as a Republican for New Jersey Assemblyman for the 6th district (he lost).
A gregarious extrovert, he loved meeting his fellow Philadelphians well into his nineties at the Shakespeare Society, the Global Interdependence Center, the College of Physicians, the Right Angle Club, the Union League, the Haddonfield 65 Club, and the Franklin Inn. He faithfully attended Quaker Meeting in Haddonfield NJ for over 60 years. Later in life he was fortunate to be joined in his life, travels, and adventures by his dear friend Dr. Janice Gordon.
He passed away peacefully, held in the Light and surrounded by his family as they sang to him and read aloud the love letters that he and his wife penned throughout their courtship. In addition to his children – George, Miriam, Margaret, and Stuart – he leaves his three children-in-law, eight grandchildren, three great-grandchildren, and his younger brother, John.
A memorial service, followed by a reception, will be held at the Friends Meeting in Haddonfield New Jersey on April 1 at one in the afternoon. Memorial contributions may be sent to Haddonfield Friends Meeting, 47 Friends Avenue, Haddonfield, NJ 08033.
A friend of mine, treated as my contemporary but probably only sixty years old, was recently speaking of a club picnic he, unfortunately, wouldn't be able to attend. His mother was now living with him, and since she was 84, obviously neither of them could go to a picnic on a sailing vessel. The club committee, listening to this regret, chuckled that of course, we shouldn't expect him. My thoughts were somewhat different. Since I'm 94 myself, I was wondering if she was available for a date. And of course I am going to that picnic, why shouldn't I?
You can't scare me very much about the future scientific costs of medical care. But Insurance and administrative costs are something else of course. If the problem of foolish borrowing puts Medicare out of business, it's hard to see how that could be the fault of my profession, unless perhaps something or other undermines our traditional system of ethics.
Where the ethics thing comes in is in the obvious conclusion that we are spending a lot of money treating diseases we crusty old docs once wouldn't have thought were worth our time. We are fast approaching the point when substantially all the medical catastrophic costs are concentrated in the first year of life and the last year of life. Increased life expectancy is a matter of widening the interval between those two signposts. Medical care between those years consists of treating the disease successfully, preventing disease and managing complaints we once would have dismissed as 'that's nothing'. Even the cost of doing this kind of medical care should decline: patents should expire equipment should simplify treatment should become standardized or even routine. But we notice people won't leave us alone: our government has just spent $27 billion forcing office computers on doctors who don't see the need to be bothered with them. People persist in using our time to inject botulism toxin into wrinkles and to listen to complaints about
how lonesome they are. That is to say, the public is beginning to insist on substituting their own view of what they want, for what doctors have traditionally thought was worth treating. This is an expensive way to enjoy the freedom of choice and it is only a matter of time before bureaucrats figure out the least obtrusive way to curtail it. Only when forces come to equilibrium will it be feasible to extrapolate future health costs.
What should appall us is the cost of paying for a progressively protracted retirement of so many unemployed people and the absolute impossibility of paying for it by continuing on our present funding path. Maybe that's what all this obesity means. Maybe people are trying to store up enough fat when they are forty, so they can go without eating from age sixty to ninety.
The Attitude of Big Business. In order to preserve maximum flexibility as long as possible, many important features of the Affordable Care Act (Obamacare) remain unrevealed, and some are perhaps still unsettled. Furthermore, attitudes change with experience. At the formation of the Obamacare idea, the leaders of big business (at the time) were more concerned about foreign competitors than about employee attitudes. The traditional goal of a "level playing field" led them to favor an employer mandate to provide employee healthcare. It probably was presented to them that they could only have their desires by agreeing to a universal individual mandate for everybody. Although it was uncertain whether the employees would agree, universal was the price to be paid, and they paid it. Whether new leadership supports this compromise or not, it is generally assumed that big business feels obliged to support Pete Stark's universal mandate until it is tested. Only time will tell whether businesses will withdraw their support in the face of events, but fragile beginnings certainly do not assure permanent support. Since it was the withdrawal of this group's support which destroyed the Clinton plan in 1994, a significant issue hangs in the balance. Therefore, when conflicts were discovered with the ERISA laws under which big business works, the inclusion of big businesses in the framework of the Affordable Care Act was postponed for a year. How it will emerge next year or whether the ACA can survive for a year without major business inclusion, both remain to be seen.
The Rising Voice of the Uninsured. A financial recession usually increases the number of health uninsured, but at present unemployment is slowly falling. However, decades of scientific medical advances are not only extending longevity but reducing non-fatal illness among the young and uninsured. Although it is unclear whether youthful perceptions match the actual changes in their morbidity, young healthy people who rebel at paying health insurance premiums may actually increase in number substantially during the coming decade. Although overall inflation has been moderate, discomfort from competing costs of college debts and items such as gasoline have escalated. When the Affordable Care Act is fully implemented, youthful perception may make the first serious test of its usefulness. Those among them who actually get sick may get an opportunity to sample Medicaid and report their experiences to their friends. To some extent, this will be a race between efforts to improve Medicaid in order to forestall complaints, and the tendency of young people to try to get their way by pounding the table with their shoe. If successfully managed, it could promote some badly needed improvements in Medicaid. Handled poorly, however, it could bring the program down.
Cost of the Program. The fact must be squarely faced that insurance almost always increases costs. That is true of all casualty insurance, whether auto, homeowners, or maritime. Correctly applied, it can indeed redistribute costs, but insurance imposes extra administrative expenses, and it produces "moral hazard", so total costs are increased by insurance. Moral hazard is a term of art, signifying that nobody spends someone else's money as carefully as his own. Actuaries calculate the extra cost imposed by present American forms of health insurance to be at least 30% of the total service, and arguments can be made it will be so much more, that level historical costs cannot conceal the appreciably higher premium level. Longevity is improved by reducing the number of brushes with life-threatening illnesses in a lifetime; costs go up because prices go up.
Universal coverage now introduces its own uniquely unwelcome issue, that eliminating non-insurance market benchmarks for medical prices also eliminates the cost guidance they formerly provided. Crippled though it may have been, the partial cash market did set benchmarks, if not prices, which insurers then had to match -- and those benchmarks will possibly soon be seriously diminished. That development will be welcome to those who wish to receive higher prices, but cause dismay among those who have to pay for them. The result is predicted to lead to price controls, which will, in turn, provoke shortages, possibly demonstrations or worse. Matters may not follow that path, but it is hard to see why not. As to any reduced overhead like marketing costs, employer-basing has already reduced them to a small opportunity for streamlining. In the past, a resort to price controls has almost invariably led to shortages. Even in 2013, there have been shortages of cancer drugs, an almost unheard-of event in the past century.
To put it mildly, rationed healthcare is politically disadvantageous for those who attempt to enforce it. The most conservative projections now suggest that Obamacare will increase healthcare costs by 22%. Since the following proposals would by contrast almost surely reduce costs by a conservative 30%, it is not impertinent to suggest that no matter remains closed while a 50% overall cost swing remains credible. That would be particularly true when it concerns 17% of gross domestic product (GDP) during a recession. In fact, no one has even contemplated what it would mean to inject 5% of American GDP back into the world economy, especially by the mechanism of releasing a paralyzed medical system.
Patient Participation
Patient Participation in Claims Costs, Generally Speaking. For the insurance industry, this is an old story. Industry survival has depended on success in answering it effectively. In health insurance, the traditional approaches have mainly been 20% co-pay and about $500 annual deductible. The first means 20% of all benefits cost, the second means the first $500 of benefit costs in a year. These figures evolved out of countless negotiations between labor and management, or within legislatures, are now accepted as traditional, and are accepted by the public. These figures also represent how much each side thinks it can afford since they see themselves as ultimately paying the bill. Until recently, however, patient participation at such small levels has not reached a point where it significantly influences patient behavior, which is set by entirely different forces and is now the main long-term cause of healthcare cost inflation. As mentioned above, business negotiators seldom pay much heed to imposed costs, just so long as their major competitors must pay the same costs; in fact, that is one of the flaws in our corporate system. However, governments as third-party payers enjoy no such luxury, and most of the complaining about healthcare cost inflation has originated with governments. Consequently, businesses not infrequently drag governments to higher cost levels, and this must be recognized as a reality of entitlement programs. Furthermore, attempts at raising patient cash contributions have always had political rather than economic origins, usually loudly characterizing any cost constraints at all as crippling the intent of insurance, making false promises, and depriving the poor of humane treatment. If patient contribution ever reaches 50% of costs, the program will likely be called a failure (Insurance exchanges please take note.).
However, it would appear incentives cannot affect overall patient behavior very much until patient payments to reach a much higher point, and we may well see some experiments to test what that level may be. (As it is argued here, this dilemma need not be completely dispositive.) More recently, steadily rising healthcare costs have actually led to employer increases in co-pays and deductibles, and the Obama administration has been giving signs of yielding to the behavior modification argument. However, these approaches cannot be called a success until they seriously reduce long-term healthcare cost inflation, and that remains a doubtful outcome.
In fact, no desperately sick patient should ever be expected to pay much attention to costs. The restraint of partial cash payment should be reserved for lesser conditions, and even provider discipline should be reserved for what are provably individual provider decisions, whether at the institutional level or the professional one. There are certainly broad areas where no patient cost restraint whatever can be justified, and program design should recognize that premise. Nevertheless, much more could be done with patient participation in costs than is done at present.
Cost Restraint
Targets for Cost Restraint Requiring Two Distinctive Approaches. There are two factors in overall medical costs: the item price, and item volume. Above a certain level of sickness severity, only item prices can be legitimately constrained, not the volume of service. Before any of that happens, of course, all published prices should be audited and forced to conform to standard cost-to-price ratios, because cost-shifted indirect costs are so prevalent. For minor conditions and illnesses, volume control on the patient remains legitimate, particularly for conditions where patients are usually responsible for inciting them. Patient cost-sharing is, therefore, a legitimate out-patient approach. Officials given the right to set such boundaries will almost surely be assailed as having a conflict of interest, or untrained for the decisions; it is an unpleasant role, attractive only to unpleasant people.
The healthcare market segments itself into two quite different approaches and successful administration consists of accurately distinguishing the two. As soon as the patient enters a hospital, his control of cost creation is taken away along with his clothes. Therefore, payment by diagnosis is a sensible approach for inpatients and could be even more effective if the diagnosis codes were revised to include greater stratification by the additional use of laboratory and other billing sources as confirmatory evidence. An argument can be made that fee for service to a helpless patient operates without cost resistance. But having removed incentives for abuse, the laboratory data becomes even stronger evidence of underlying diagnostic distinctions. Since Obamacare has apparently not fully examined such distinctions, there remains hope it can be persuaded to see the codes need expansion. At present, DRG codes are very crude and rely heavily on errors on the high side canceling out errors on the low side. Furthermore, they are derived from (ICD), the International Classification of Disease, which identifies individual diseases only if they are common, responding to the needs of medical records librarians who complained that usage did not justify the effort of coding every case. This combination of short cuts and errors is too crude for the advanced use now planned for them and would benefit from substituting the coding system called SNOMED3. A case can be made for both lumping and splitting; perhaps two codes are required, a crude one derived by computer-lumping precise ones of the same average cost -- rather than by similar etiology. As matters now stand, teaching hospitals have no way to assert a need for greater reimbursement for greater case complexity, specialty hospitals are able to select inexpensive cases within expensive categories, and rural hospitals are left without satellite cash cows.
However, this is tinkering around the edges of volume measurement. Much greater savings are immediately possible from attention to prices, through billing for direct and indirect costs separately, recognizing indirect costs as the present main locus of cost-shifting. Some serious thought should be given to the growing shift of profitability to the outpatient area, with inpatient care transformed into a loss-leader. As that is increasingly true, it becomes wiser to shift attention to the prices of outpatient and emergency room services. Going all the way to Health Savings Accounts would be ideal because it enlists patient incentives to the side of prices restraint. HSA also comes inherently segmented, between outpatient and inpatient hospital. Beyond segmenting price and utilization controls, however, consideration should also be given to segmenting health insurance itself, to match natural cost segmentations. Prison inmates, persons mentally impaired, and illegal immigrants account for nearly 30 million persons, and require specific ministrations, not patchwork exceptions to what the rest of the population requires.
Forty-some months after Obamacare passage, its initial computer program was a huge and public flop. Since Obamacare contains four hundred fifty other sections, the future seemed ominous for what follows. At its worst, it even seemed possible the whole nation might be without a way to pay its medical bills for an indefinite time. It was impossible to say how long it would take to fix things. Things looked dim, not just for Insurance Exchanges, but for any other hugely complicated proposal giving politics the highest priority over technology. It was muttered that the fault was the government procurement process, whatever those mysterious words mean.
Up until October 2013, it had been axiomatic that other requirements must be sacrificed to preserve the priorities of the Federal Government. Of a sudden, the possibility had to be faced that the computer age -- or worse still, the nerds and long-hairs -- might impose a revision in Big Government's notions of sovereignty. These electronic systems are expensive, in the multi-billion dollar range. It is simply not tolerable to keep throwing them out until you find one that works. So what's left to conjecture is the awful possibility that government must change. There may turn out to be multiple ways to address the situation, but at the moment there is only one. It's called privatization, and it's not something a liberal political party welcomes.
But let's not go on about that; it is what it is. To some of us in the policy world, the great pity was that the Electronic Health Insurance Exchange was one feature of the Affordable Care Act which seemed like a good idea. Its sudden collapse might well force the Administration to continue its dependence on the existing insurance industry, along with its antiquated approaches. It might endorse caution about changing anything which seems to be working, or making reforms which are even mildly difficult. For example, direct marketing.
Direct marketing implies sales of insurance directly from the insurance company to the customer, without a broker or other intermediary. The insurance industry has been burdened since the 19th Century with heavy marketing costs and middle-men, reflecting the difficulty of convincing consumers of the safety of paying premiums without immediate contact with what it actually buys. Putting marketing in the hands of employers may once have been a necessary feature, but "job lock" and reduced international competitiveness for employer sponsors, have now grown to be fairly serious problems. The resulting incentive is to prefer to hire well people who are cheaper employees, thus hampering national efforts to hire the handicapped and extend the age of retirement. Employer sponsorship still retains one advantage: control of a large block of customers positions the employer to muscle down healthcare prices in the community through board seats at the local hospitals, health insurers, or newsmedia. But employer involvement creates an unexpected feature, that of union domination of the employer's seat at the table. These are all delicate balances, and a switch to direct marketing must be slow and incremental. Doing it all by the first of October may have advantages for politicians with their eye on the first week in November, but political deadlines can, and sometimes have, brought the system to its knees. It is definitely not liberating to have a goal of mandatory universal coverage, right now, immediately. Nevertheless, direct marketing does force insurance products to be more uniform and price-sensitive. And voluntary, not mandated.
Electronic insurance exchanges also address the Constitutional awkwardness. Both healthcare and insurance directly respond to the Tenth Amendment, that everything not Constitutionally mandated to be federal, must be state-regulated. And it's a good thing that is so, from the point of view of the small and sparsely settled states, who do not have enough actuarial power to support more than one monopolistic health insurer. By original intent, no Constitutional amendment could pass, over small-state opposition. But cheer up, the Tenth Amendment also applies to every major corporation in the country, and nevertheless, the little state of Delaware has no trouble harboring hundreds of corporations. These corporations operate as "aliens" in their home states, and for the most part, exist in Delaware as a brass plaque on the wall of a lawyers' office tower. Their corporate stock is listed in New York, on the stock exchange. Their products are sent to all corners of the nation, by Amazon, located in Seattle. These dispersed arrangements sound tortured and complex, but nevertheless, they are driving down transactional costs to the despair of their competitors. If we depend on competition to discipline prices, we must make competition possible.
Finally, computers make it easy to break health insurance into a hundred pieces, and allow the individual subscriber to tailor the pieces as an itemized package, or ultimately, a personalized list. If someone forces me to have obstetrical insurance, I feel sure some distant insurer would sell it to me for a dollar a year, knowing that the claims from an elderly widower would still allow them to make a profit on my nonexistent obstetrical care. Or if I have had my appendix removed, the risk of paying for a second time is pretty small. It works the other way around, as well. If some hospital wishes to charge "Medicare plus seventy percent", let them do so. I'm interested in buying health insurance that pays "Medicare plus five percent", and whether the hospital agrees in advance to accept it as payment in full. To capsulize this point: buying health insurance interstate and at a great distance, forces the products to be uniform, clearly defined, and cheap. And while any political entity may subsidize whom they please, the subsidies will be forced into the open.
So those are the reasons the electronic insurance exchanges seemed to have the kernel of a good idea, ruined by being in too big a hurry to do something which takes time getting used to. Like making it mandatory, universal, non-voluntary, and inflexible. But worst of all, demanding that it work by the first of January, next year. We're not selling snake oil, here. We're planting an oak tree.
Furthermore, name the CEO of almost any successful computerized business. You probably do know his name, whether it is Andy Grove, or Bill Gates, or Steve Jobs, or Tom Watson. But the name of the person in charge of electronic Obamacare is unknown to almost anybody. That he is a billionaire seems unlikely, even in a field full of billionaires; just about all of them are in the top 1%. Now that the Electronic Insurance Exchanges are such a notorious flop, it is going to be harder to find an outstanding person willing to accept the job--at anything approaching the laughable top salary level considered appropriate in a political environment. George Washington refused to take a salary, but that was then. The current situation is much like the one described by Mark Twain, of the man who wouldn't mind being hanged for his mistakes, except for the honor of the thing.
Privatization puts people out of work, and has other political liabilities, particularly for a President who has made such a point of denouncing the top 1%. But privatization is one quick way to find a genius to run a company, promising to make him and his close associates into billionaires as a reward for success, threatening disgrace if he fails. Awarding the whole program to a corporation after demonstrated success, not before then, concentrates the rewards on the politician who makes the correct choice. If his company is too small to handle it all, he can merge with others if he pleases, and fight with them about unpleasant succession issues. Privatization is not guaranteed to be successful, but privatization has been shown to work, more often than not.
Establishing an eventual goal of direct marketing will also force the insurance product to conform to what is useful for direct marketing, but such pressures do not seem to be injurious, as will be discussed in subsequent chapters. But one thing is pretty sure: mandatory universal coverage would be the last step in implementation, not the first.
Newsmedia speak of medical "prices", the government speaks of medical "cost" -- what's the difference? Well, for fifteen years in my practice, and before that for thousands of years, prices and costs were nearly the same thing, or at least bore some relation to each other. The person who did the work set the price, and the person who paid the bill agreed to the price.
But out on the West coast they told us Henry J. Kaiser during World War II had expanded the idea of the Mayo Clinic into a pre-paid health system of clinics and pre-agreed patients, paying a set annual fee for all the care you could use in a year. By 1970 I was sent by my local medical society to see what this was all about. I learned a lot, including the main thing which made it so cheap rested on two government tax exemptions, one for the employer and a second one for the employee. They recruited doctors with the promise of relieving them of the business nuisances of medicine, plus instant practice-builders of employee groups of patients. Doctors in the neighborhood didn't like Kaiser at all, particularly after the Maricopa decision of the U.S. Supreme court made it an antitrust violation for doctors to do the same thing. For lawyers reading this, it is a particular irritant that this decision was 4-3 (not a majority), based without a trial of the facts, solely on upholding a motion of summary judgment.
Turning from historical legalities to practical economics, turning that is, from one doctor both doing the work and setting the price, into a third party with no doctors setting the price, the third party (the insurance company) paid its own reimbursement price. So not only did the physicians eventually lose control of pricing their own work, but that price rapidly drifted away from the audited cost in a capricious manner, responding to forces entirely unrelated to medical care. The accountants protested this lack of relationship between cost and price, and it was a legal requirement for hospitals to report (but not make public) the ratio of prices to cost. While the ratio was always high, it was also extremely variable. In effect, a fact demonstrated when the "diagnosis-related" system fixed inpatient costs by groups rather than individually, the disparity was only used to compete for out-patients with outside market prices. However, instead of forcing hospital prices down, it enticed drug companies to force prices up, often to absurd levels. Some hospitals negotiated discounts and applied them as invisible mark-ups to the uninsured patients. Cheap mortgages stimulated hospital building, and the situation spiraled out of control, as it does in any inflation. Nobody ever cured an inflation, except with brute force and lots of pain.
In our system, the money supply is governed by the Federal Reserve issuing and/or buying bonds. In so doing, it is issuing unheard-of amounts of debt for which there is no market, forcing interest rates down. Although the Japanese allow their central bank to buy common stock, Congress is adamant that buying ownership of corporations amounts to Communism with a demonstrated history of universal failure. Congress will probably never permit government take-over of corporation ownership, but Mr. Obama simply spent money beyond Congressional limitation and dared Congress not to pay the bill (and thus to ruin our national credit). Congress is not compelled to make a rational choice between inflation and government control of the private sector, but you can be certain it has been discussed.
I never took a course in economics but it seems to me, a couple of million individual citizens building up half-million dollar portfolios of indexed common stock might provide an adequate balance for three trillion dollars of excess debt. That is, holders of Health Savings Accounts would hold voting control of corporations, without the organization to abuse that power, and that power could never pass into foreign hands because it is contingent on American-based health care. Plenty of other regulations, good and bad, would have to be added for the system to become stable and tamper-proof, but it's a suggestion for debate and study of a possible solution to an entirely unrelated subject. One for which there has been an international shortage of fresh suggestions.
The preceding chapter seems like enough to say about the existing Health Savings Account. It should suffice for anyone who is stranded without health coverage, since it is already existing law, tested many times, and ready to go in a pinch. The handful of technical amendments are only about what you would expect from any fairly new program, and with any luck, they will slide through and suffice. The public, however, would be entitled to be disappointed with such thin gruel after so much hubbub, although repealing Obamacare outright would certainly make things more exciting. There has been an insufficient time in a lame duck session to render it effectively booby-trapped, but the pre-existing Obamacare law and its regulations are voluminous. After passing legislative actions to repeal it dozens of times, I have to assume the low-hanging fruit has already been picked by Congress. I would hate to see a relaxation of forwarding progress at the present stage; the resulting chaos would be considerable.
The J-Shaped Cost Curve. From a high altitude viewpoint, the healthcare of an average lifetime costs about $350,000 in the year 2000 dollars. It divides easily into roughly three thirty-year compartments: childhood up to age 25, employment from 25 to 65, and retirement from age 65 to death at age 84. Childhood is necessarily a gift from someone else, retirement costs are a gift of at least 50% from the government, and the lifetime operation is almost entirely funded by the working age group from 25 to 65 if you consider the government as being funded by the employed segment's taxes. Last year's NIH research budget was $33 billion, the Medicare budget was $55 billion.
This is quite a natural consequence of the way money is earned and spent in our society, but I consider it hazardous. Remember, the working segment (age 25-65) is not terribly sick. For a non-sick third to be supporting the sick two-thirds, is asking for a grievance to be expressed, and for somebody to be tossed out during economic upheaval. Let's put it another way: the people earning money aren't sick. The people who are sick may seem to have some money, but if they lose it, look out. The curve of health spending is said to be J-shaped: a childbirth expense and neonatal costs, then gradually increasing expenses clustered toward the end of life. Later on, we will discuss the proposal for First and Last Years of Life Reinsurance, which seems to me to match the future much better than what we now have.
Self-Funding, Rather Than Bulk Funding of Subsets. Furthermore, a long period of saving precedes a reasonably short period of spending. So a person's early saving would pay for later healthcare claims cost if we judiciously match savings with insurance. That's the Health Savings Account function, to which is added using surplus funds for retirement, by overfunding the premiums and keeping the invested surplus for later use. Somebody in 1965 made the serious blunder of overlooking the extended longevity provided by better healthcare. The awkward fact is retirement and Medicare begin at the same age, and retirement by some reckonings can cost five times as much. Retirement costs are continuous, while sickness comes in episodes. Further, saving for your own future needs will create an incentive to save; paying for whole classes of strangers creates an incentive to spend other people's money. Because when you create such a system, the money belongs to someone else.
The newspapers report that health insurance averages 17% to pay its own costs, and the other 83% still goes to someone else. It isn't too hard to see where 30% of savings might come from.
To synthesize an example of a $5000 annual premium, 30% savings, for 40 years at 7% compound interest, would generate $13,600. At 6%, it would only generate $6800.
109 Volumes
Philadephia: America's Capital, 1774-1800 The Continental Congress met in Philadelphia from 1774 to 1788. Next, the new republic had its capital here from 1790 to 1800. Thoroughly Quaker Philadelphia was in the center of the founding twenty-five years when, and where, the enduring political institutions of America emerged.
Philadelphia: Decline and Fall (1900-2060) The world's richest industrial city in 1900, was defeated and dejected by 1950. Why? Digby Baltzell blamed it on the Quakers. Others blame the Erie Canal, and Andrew Jackson, or maybe Martin van Buren. Some say the city-county consolidation of 1858. Others blame the unions. We rather favor the decline of family business and the rise of the modern corporation in its place.
Originally the "lower counties" of Pennsylvania, and thus one of three Quaker colonies founded by William Penn, Delaware has developed its own set of traditions and history.
Start in Philadelphia, take two days to tour around Delaware Bay. Down the New Jersey side to Cape May, ferry over to Lewes, tour up to Dover and New Castle, visit Winterthur, Longwood Gardens, Brandywine Battlefield and art museum, then back to Philadelphia. Try it!
Millions of eye patients have been asked to read the passage from Franklin's autobiography, "I walked up Market Street, etc." which is commonly printed on eye-test cards. Here's your chance to do it.
In 1751, the Pennsylvania Hospital at 8th and Spruce was 'way out in the country. Now it is in the center of a city, but the area still remains dominated by medical institutions.
Grievances provoking the American Revolutionary War left many Philadelphians unprovoked. Loyalists often fled to Canada, especially Kingston, Ontario. Decades later the flow of dissidents reversed, Canadian anti-royalists taking refuge south of the border.
