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.
.MEETING OF THE SHAKSPERE SOCIETY OF PHILADELPHIA AT THE FRANKLIN INN CLUB, OCTOBER 10, 2001
The Shakspere Society began its new season, happy to meet again at the Franklin Inn Club, with Dean Wagner in the chair, and the following members in attendance: Binnion, Bornemann, Cramer, DiStefano, Dunn, Fallon, Friedman, Green, Griffin, Hopkinson, Lehmann, Madeira, O'Malley, Peck, Pickering, Simmons, Wagner, Wheeler. Vice Dean Fallon's son Rob Fallon, an environmentalist from Oregon, was present as his father's guest, heartily welcomed by all. Dean Wagner began with some unhappy news about our members: Harry Langhorne died in Virginia last May; Jodie Dobson's son Mark died in early September. The members of the Society extend their heartfelt sympathy and condolences to a member of Harry Langhorne's family and to our dear friend Jodie Dobson. Roland Frye has suffered from bad health but is recovering and is expected back among us shortly, we were very happy to hear. Jim Warden, after several years in London, is now back in Philadelphia, and we hope to see him at dinner with us in the near future. Jim Massey, who is living in London, has resigned his membership in the Society.
Your scribe was asked by the dean to say a word about his playgoing travels this summer. I was the grateful recipient of a grant from the Haverford School parents so that my wife Leila and I could spend two weeks in London and Stratford, and then five days in Niagara on the Lake, Ontario, seeing plays. All in the name of duty, my friends. We saw Macbeth and King Lear at the new Globe in London, and in Stratford King John, Twelfth Night, and Hamlet. The Globe provides a remarkably intimate ambiance for playgoing relative to the size of the audience in attendance, standing around the platform and sitting in the two tiers of balconies. One is very conscious of the other theatergoers'distracting to some but to mean intensification of the emotional impact of seeing these plays. The Lear was largely traditional in concept, aside from some marginal gimmickry in staging. The acting was crisp, energetic, forceful, especially the work of the women. But the language was rushed, I thought: the focus was on action, blocking, pacing, not on eloquent poetry. That was even more true of the Macbeth, which was funny and lively in the treatment of the witches (party hats, kazoos, grotesque dances, comic voices), and always clever in staging. Lady M was chilling, arresting, powerful. But where was the anguish of Macbeth and his queen? Where was the moral crisis each one faced, the religious judgment Macbeth felt with such agony in the play's late scenes? Where was the actor who would treasure the most wonderful language ever written in English for the stage? In Stratford, a lively, extravagant pageant for King John, which your scribe wrote about at excruciating length for his dissertation and never expected to see on stage in this life; a uniformly spectacular Twelfth Night, captivating in every scene, every speech, every word of dialogue'although the Viola might have been more varied, artful and nuanced in her speeches of love; and an impressive but rather cold Hamlet, spectacular rather than moving. The staging of Hamlet was wonderfully suited to the play's psychological world: a huge and bare stage, lighting either cold and glaring or deeply obscured; characters often physically separated from each other by huge sterile spaces so that speeches seemed launched into emptiness, unheard or unheeded by others. The ghost, for once, was not silly or flat or embarrassing. But Hamlet, though articulate and intense, speaking every word with crisp conviction, seemed irritable, angry, gloomy, depressed' but never a man facing ultimate questions about the meaning of life and the nature of familial or erotic love.
As to the Shaw, no Shakspere, but eight shows, all wonderfully well staged and acted. One was a stinker, Edwin Drood, but the others great fun, and the production of Pirandello's Six Characters a revelation about the psychological power of a play I had seen as only of Philosophical interest.
Bill Madeira reported that a summer Twelfth Night was beautiful in staging'" like a Watteau"' and enlivened by fine acting, especially the work of Paxton Whitehead as Malvolio. The PA Shakspere Festival put on a wonderful Romeo this summer; Bob Fallon thought the Juliet especially fine. A recent Princeton Romeo production at McCarter was criticized in comparison. Winter's Tale in Williamstown featured a remarkable performance by Kate Burton. (Your scribe has just seen MissBurton as an arresting Hedda Gabler on Broadway' but in his opinion, our friend Grace Gonglewski offered a more nuanced and complete portrait two seasons ago at the Arden). A portrait of an Elizabethan man has appeared in Ontario which purports to show the Bard at 39. It evidently dates from the early 1600's, but whether the subject is Shakspere is debatable.
Vice Dean Fallon introduced our reading and discussion of Antony and Cleopatra. The play is a sequel, historically, to Julius Caesar, though written perhaps eight years later, after the other major tragedies of the Bard. The action covers about ten years, from 40 till 30 BC (BCE to politically correct readers). The second triumvirate has divided the empire. Antony rules all the Roman lands east of the capital. He has gone to Egypt and become entranced, mesmerized, drugged by Cleopatra. Antony is 42, the queen 29'old enough in the ancient world so that in the play she is haunted by the specter of age. Cleo is Shakspere's best portrait of a mature woman. She is a legend: even in Rome, she is the principal subject of gossip and worry. She keeps her hold on Antony by constantly keeping him off balance, surprised, defensive, puzzled, charmed by her changing moods. Cleo's magic is in her language, as rich and varied as the words the master gave to any of his creations. The Roman Enobarbus is a frequent commentator on Cleo's words and actions, how she keeps Antony from his Roman duty. Egyptian decadence is dramatized in early scenes: "sensuous, self-indulgent, trivial," in the vice dean's words. In scene two, Antony tries to recover his sense of Roman duty, reflecting on the death of his wife: "She's good, being gone"'and determines that he must "from this enchanting queen break off" and return to Rome. "These strong Egyptian fetters I must break/ Or lose myself in bondage," says Antony, reprogrammed for the moment as a dutiful Roman. In scene three, Cleo plays her usual part: "If you find him sad, / Say I am dancing; if in mirth, report/ That I am sudden sick." But Antony declares that duty calls him to Rome, though "my full heart/ Remains in use to you." Cleo accuses him of "excellent dissembling" in declaring love, that she is "all forgotten." Antony hotly declares that "I should take you for idleness itself." Rome rules in him'for the moment.
OUR NEXT MEETING IS WEDNESDAY, OCTOBER 24.
Respectfully submitted,
Robert G. Peck, Secretary for Minutes
Employer-based health insurance can be viewed as a lingering vestige of feudalism, or maybe Federalism. Employer-basing evokes images of the mansion on the hill, overlooking the factory and a little village of workers, allowing an eternal debt to the entrepreneur in the mansion who risked life and fortune to make the industry flourish. When a worker in the factory was injured, it really was the duty of the owner to see he was cared for. In fact, about 25% of major businesses are still controlled by the founding family, where notions of paternalism are taken more seriously. At least one mutual fund even specializes in family-owned and controlled businesses and can demonstrate that such attitudes really are an important asset. Unions, of course, sneer at such nonsense, while the owner-entrepreneur, in turn, reacts with fury at the implicit ingratitude. The Roebling family (of the Roebling Steel Company, builders of the Brooklyn Bridge, etc.) is famous for an epic performance with its company town, and there are a thousand such tales, starting with George Washington and his plantation. Although it is now difficult to see the slightest trace of feudal beginnings in the present administration of Blue Cross and other health insurance corporations, benign feudalism was in fact the foundation stone for employer-based health insurance.
And while most of them would deny it, it accounts for some of the vigor with which union leaders insinuate themselves into the board rooms of the present successor health insurance corporations, like schoolboys sitting on a vacant throne. It would go too far to describe the seventy-year struggle for national health care as entirely based on these primeval victories, but something does remain of that idea. In the 1920s, the big problem was to get people to buy health insurance. Civic-minded employers played such a leading early role in promoting this distinctively American solution it was often called an employer-based system. Dominating hospital boards of trustees, businessmen exerted peer pressure to spread the health insurance message. It became the right thing to do if you wanted to be regarded as the right sort, yourself. Even today, healthcare in many cities would suffer considerably if employers suddenly withdrew support.
In their civic role as hospital trustees, businessmen also recognized early that employer insurance mainly eased the cost load for the working population, and became less comfortable for outsiders, while insurer management increasingly recognized employer groups were the most profitable clients. Some of this was the inevitable tendency of all large customers to be more demanding of better treatment and to get it. This recognition became more apparent in scarcely two generations, as workers emerged as the healthiest, least expensive segment of our population. As a consequence, more assertive employer representatives professed uneasiness about employee premiums cross-subsidizing the rest of the population, even though it was always obvious that people with an income are the only ones available to help people without income. There was thus stubborn resistance to the idea that the main function of health insurance was to act as a transfer agent of health costs between age groups, unfortunately without a written contract to do so. There was then a period when the expedient was imagined that employed persons supporting their dependents, children and elderly parents, might cover the need more or less adequately. Eventually, government programs for the elderly and for the poor were recognized to be absolutely essential additions; by 1965, we had Medicare and Medicaid. Taxes were just a redistribution system on a larger scale, but Lyndon Johnson was in a hurry and those Great Society programs went unclarified as potential equivalents for the same goal: working people recycling funds for non-working ones. Unfortunately, 1965 was about the time the American post-war international trade balance turned negative, eventually forcing a recognition that the "pay as you go" financing systems designed for Medicare and Medicaid would be unsustainable until our trade balance turns positive again, which could be the same as saying "forever".
Current premiums (mostly from healthy people) are used to pay current costs (mostly generated by older, sicker people) on the assumption that new young subscribers will always outnumber sick older ones. Not a safe assumption.
Even large cost savings from nearly eliminating the common causes of healthcare delivery expense, like peptic ulcers, tuberculosis, polio, typhoid, malaria, heart attacks. strokes and rheumatic fever -- could not overcome the instability of balancing increasing non-worker costs on a steadily diminishing base of worker costs. "Pay as you go" requires quite a suspension of disbelief to be called anything but a Ponzi scheme. And the essence of a Ponzi scheme has been made widely familiar by the Bernie Madoff example of it. Current premiums (mostly from healthy people) are used to pay current costs (mostly generated by older, sicker people) on the assumption that new young subscribers will always outnumber sick older ones. The retirement of the baby boom bulge had been predictable for sixty years but was ignored. Even today, it is pronounced impossible to happen a second time. It became an informal banking system for healthy working-age people to store up savings for those later life eras of heavy health expenses when they would be unable to work. Unfortunately, it was implied without a written contract and thus was always a "best efforts" promise.
Even benevolent employers had to worry that our international competitiveness could not withstand the strain of it. Although most citizens, businessmen or not, probably did not understand why it was true, attempting to lower worker health costs through Managed Care HMOs proved to be a self-defeating disaster, combining worker antagonism with further upward-leveraging of employee premiums to support it; even so, it never addressed the underlying basis of the problem. Reform of hospital cost-shifting against employee groups was equally futile, as described in later paragraphs because such pushing on the balloon caused it to bulge out among the uninsured, who mostly transformed it into bad debts for the hospital. Unfortunately, cost-shifting which in 2008 generated a proposed solution as dumping the system's growing medical expenses on the backs of those with high premiums but low usage, became translated into a shift onto the backs of those who could not even afford their own costs. It violated the long-established tradition that those with the highest medical costs should pay the highest premiums, without proposing a way to make it politically acceptable. It must be evident that the solution supported here is a benevolent return to the concept of "Each ship on its own bottom," because of alarming signs of class warfare in the concept that one group must support another group against its will. The general concept here advanced as a more palatable substitute is individual lifetime insurance. A short-term concession would be to call for modified individual lifetime policies as a transition step. The success of even this proposal must frankly depend on the hope that interest rates will return to normal, and that cures for cancer and Alzheimer's disease are on some future scientist's horizon. No solution to this problem should be presented as free of problems, but it is equally unproductive to throw things against a wall, just to see what sticks.
To repeat an inconvenient truth: "service benefits" means cost is not a responsibility of the patient or his employer. It has been transferred to the hospital and the insurance company to "work it out", which they mainly do by raising prices or shifting them to outsiders.
Employer-basing is far from perfect, as are service benefits, but at least they only minimally distort the medical system. They do create the potential for the employer to invade employee privacy, and real awkwardness arises when the employee wants to change jobs, a situation often known as "Job Lock". Difficult as these features do make things, we are about to learn whether eliminating them by Obamacare will seem worth the disruption. First, transferring insurance to that of a new job needs rough uniformity between policies of different employers, and therefore hampers competition between insurance companies. A second seeming requirement is to recognize that a sick employee is an expensive employee, by creating pooling arrangements with "healthiness credits" and "sickness debits", unfamiliar concepts generated by "pre-existing conditions", which will not be changed by writing pre-existing condition clauses. Sweeping these perfectly sensible reservations aside without addressing their merits will not be helpful. It will be interesting to see how well Obamacare manages this difficult issue. Ultimately, most of the issue reduces itself to an extra charge (or discount) on the premium for the policy of the new employer. Since the Health Savings Account and catastrophic illness policies do not commonly include service benefits, they can be much more restricted to money issues with an indemnity resemblance. (Explanation: a service benefit is to pay all the costs of an appendectomy. An indemnity pays $5000 if you get appendicitis.) Therefore, indemnities also suit themselves better as a common denominator for quarrels between successive insurance carriers. To shrug off the Job-Lock issue by saying this problem has no solution is to say that employer basing has no place in health insurance, other than the present patchwork causing so much dissension. The public seems to be demanding some solution. Of the compromises available, the Health Savings Account imposes the least contortion because it requires a dollar settlement rather than an agreement to the open-ended limits of pain and suffering, weakness and disability. An employee with a disability needs to change jobs, but he is an expensive employee in the eyes of the new employer. His costliness occurred while his health was the responsibility of the first employer, but how is that to be transferred? Large employers will prefer a money solution, unnecessarily ending the employee's career. This problem cannot be solved unless health insurance is either permanent or freely transferrable; permanent is better because its costs are set in advance of the disability. Transferrable means costs are established after the fact by a referee who knows insurance will pay. To repeat an inconvenient truth: "service benefits" means cost is not a responsibility of the patient or his employer. It has been transferred to the hospital and the insurance company to "work it out", which they mainly do by raising prices or shifting them to outsiders.
Many problems will prove to be non-problems, while unanticipated problems are inevitable.
Even after conceding the advantages of permanent insurance, there remain problems. Increasing employment mobility collides with variable state regulation of insurance. That awkwardness is mandated by the McCarran Fergusson Act which is more or less guaranteed by the Tenth Amendment of the Constitution, challenged by the Roosevelt Court-Packing uproar, and tracing ancient origins to Thomas Jefferson and the anti-Federalists. Litigation could be protracted. Nevertheless, the idea of creating individually owned, lifetime health insurance is so attractive it is hard to say it is impossible and easier to say its traditional alternatives are worse. Health costs concentrate in the first and last years of life, while the several-thousand-dollar premiums would be largely unspent for long periods of time, gathering interest for many decades (in periods with normal interest rates) that might largely pay for the whole thing. Therefore, although it is attractive to design a program within existing laws, it is probably more feasible to examine the legal impediments and conduct a protracted campaign to modify them in many small ways. That is essentially why this proposal is offered as a Grand Strategy rather than a legislative package. When legal obstacles are proven to be intractable, it is then necessary to design workarounds. Many problems will prove to be non-problems, while unanticipated problems are inevitable.
Obamacare designers probably expected most of its problems to come from small business; they seem to have forgotten about ERISA, which presents some health insurance alternatives. Taking nearly a decade to design, ERISA is likely to withstand most attempts to change it.
Other Transition Problems To return to more mundane issues, it also generates vexing political problems to go from employer-basing to any government-dominated system, if you have allowed one segment to have a tax-deduction while denying it to another segment. At first, transferring the cost from employee to employer is a gift from one to the other. But in time, the employer adjusts, and the costs return to the employee as a reduction of wages; almost all economists agree this invisible readjustment occurs. But when one segment of the business has adjusted the pay-packet to pay for the fringes, while another segment has not, the unfairness surfaces abruptly when it does surface. That is the unfortunate situation with the coming program, and it accounts for much Tea Party rancor. Employers who have previously reached a tacit agreement that they won't offer health benefits, but will pay a little more in the pay-packet, will suddenly be confronted with a new cost which their bigger competitors have long since absorbed. In short, it is likely that small business will be much more hostile to the approaching Obamacare than big business, because they will genuinely be hurt more by it. Just what has been solved by delaying the implementation of large groups by a year is unclear; it does sound as if it had things backward. Perhaps a problem emerges from conflict with ERISA.
The mundane but ultimate downside of employer involvement is that top management of major companies seldom give healthcare a high enough priority on their time, thus allowing unions and human resources departments (their philosophical successors on the company payroll), to speak for the company in important forums, with the effect of appreciably softening price concerns. When top management was again drawn into a visible role by the Managed Care ("HMO") fiasco, the business-school approach did not distinguish itself, so government and academia have become less deferential, perhaps even hostile, to business. The final word on the role of employers in the transformation of an employer-based system by the Affordable Care Act has yet to emerge. Much will depend on how gracefully the transition is managed.
We propose the development of a lifetime health insurance product, for the main purpose of gathering investment income on the insurance premiums. It reduces the cost of health care by adding that new revenue source, which at the moment is simply lost. The longer compound interest is allowed to work, the more income will be produced, to the point where it can be imagined that this income source would more than cover the cost of health care. For the most part, it would really only cover a portion of the cost, but a very large one. If things are cheaper, more people can afford them, so the problems of the uninsured are eased. This system would take many years to make the transition to wide-spread coverage, so many features of the Affordable Care Act might be temporarily useful. Many people who resist Obamacare are unable to see an end to it. As a transition, Obamacare would become a success if some other program is a success, first.
First, the law requires two things to be purchased at once: an investment account, and catastrophic health insurance. Deposits into the Account are tax-exempt. Withdrawals are restricted to health costs, not including the premiums of the catastrophic insurance, but the internal investment income on the deposits compounds tax-free. The framers of the enabling act apparently did not anticipate that many or most children would, under Obamacare, already have mandatory coverage on their parent's policies up to age 26, under their parents' policies, so the overlap is a little ambiguous. Apparently, however, there is no limitation to single health policy, so dual policies appear to be allowed. As long as the law requires money to be withdrawn from an Account only for health expenses, many people during the transition will find they already have health insurance, but not enough money in the account to cover the required minimum deductible. Unless they can make a deposit and see it grow, they will never be able to start an account. So, especially for children, the required deductible should match the amount in the account, not the other way around. It scarcely matters which it is, except the child rarely has control over the parent's policy, so the law should be amended to allow an HSA to be created without catastrophic coverage, until such time as some flexible minimum deductible is reached, even if it is necessary to prevent all withdrawals until the minimum is reached.
Perhaps this issue could be addressed for children with a single-payment deposit. It seems a great pity to prevent lifetime accounts which could be made for a nominal single payment, simply because the parent has a low-deductible policy and cannot or will not change it. Alternatively, it is an equal pity to require a child to have two other health insurance policies, when the reality is the healthiness of such children seldom requires even one policy. Since lifetime health coverage is within reach for a single payment of less than a thousand dollars, it is much easier to envision subsidies for the poor of that amount. Lifetime average health expenditures in the range of $300,000 are largely made up of inflation costs which reduce a dollar to the value of a penny, over an ensuing century. There are few ways for the poor to escape inflation, but this would be one of them.
That gets us to age 26 when employer-based insurance makes an appearance. Or makes a disappearance, replaced by Obamacare; we must wait to see what happens. Present law permits a deposit of a maximum of $3300 in the accounts, until retirement at age 65, when Medicare takes over. That could result in a deposit of $128,700 at age 65, which with 7% compound income within the account would amount to $610,000 total in the account, but an unknown amount subtracted for exceeding the insurance deductible. Since additional deposits are not permitted to people receiving Medicare benefits, $610, 000 will have to last for the duration of life expectancy, calculated to be age 90 by then. Assuming the same 7% return on investment, that amount is short of the $3 million single payment deposit which would be required (at age 65) to pay for average health costs to the end of that life at 2014 prices. And probably not nearly what year 3004 prices might become.
To achieve that, 10% compounded income would be necessary, both to reach the end of life, and to augment those deposits of $3300 yearly to $4.5 million, the point where they and their investment income would meet the need. Although Ibbotson's curve encourages the hope that 10% return might persist for a century, there is little doubt that long periods of 1% income would bankrupt the system, resulting in only $156,000 gross before illness expenses at age 65, and unguessable effects on medical costs after that. Large numbers of people would not even be able to afford annual $3300 deposits into their Accounts. But there are two ways out of this trap.
In the first place, no one claimed that 99% of future medical costs must be met by this approach. The claim is only that large amounts would be "found money", not found at present; don't be greedy, since not a penny of this money is being utilized at present. And secondly, it would be manifestly unfair for Medicare to continue to collect payroll taxes from one age group, and Medicare premiums from another, if the plan is for this individual to bear his own costs. Accordingly, these payments could partly be waived, and partly deposited directly into the Accounts rather than into the U.S. Treasury. The Treasury itself would be amply compensated by putting an end to the present 50% subsidy of Medicare costs by the taxpayer, assisted of course by foreign loans, mostly Chinese. There is a political risk, of course, that opposition politicians would encourage the elderly to believe that Medicare is about to be taken away from them. Almost everyone enjoys getting a dollar for fifty cents and is suspicious of claims that, otherwise, they will get a penny for a dollar. It would thus seem better timing to begin at the other end of the age spectrum, building up a constituency for compound interest, the Ibbotson curves, and Health Savings Accounts, and meanwhile waiting for competitive proposals to flop. It would take six months of intensive publicity to convince people who don't want to believe it, that Medicare is 50% taxpayer subsidized. It would take another six months to iron out all the unsuspected technical flaws in the proposal.
And it would take time to create a bipartisan think-tank, to collect the necessary data and make the necessary calculations. Perhaps some philanthropists will offer to do it privately, saving us from the criticisms of agencies like the Federal Reserve, which are accused of being less "independent" than they claim to be. The first step would be to put it somewhere other than Washington DC since there is no need to be seen as close to those who threaten your independence. The divergence between costs and revenues must be monitored and adjusted to; sudden changes in direction must be responded to.
If we aim for lifetime (or "whole life") health insurance, using a Health Savings Account, provision must be made for the vast majority of people who do not buy it with a single premium at birth, as we use for a simple example. If we know the lifetime goal and the expected average rate of return, it is easy to project the average growth of accounts by any future year. A simple table of such projections becomes useful for displaying the "buy-in" costs for any age. Naturally, it incidentally underlines how costs increase for late-comers since essentially the same costs are distributed among fewer remaining years. Conversely, compound investing while you are young is very attractive. These are important selling points and are valuable lessons to learn. But no strong argument is improved by exaggeration. This is not a way to reduce the cost of medical care, it is a way to pay for some unnecessarily added costs inherent in choosing a "pay as you go" design. The use of compound income does indeed give the initial appearance of something for nothing but should be viewed as a more efficient insurance design.
If it does nothing else, lifetime health insurance clarifies where this money is coming from. Under Medicare, for example, a person contributes all his life but gets no income on that contribution. At some advanced age, he spends that money at prices which reflect the Federal Reserve's 2% inflation of the money, but he pays no taxes on the gain. Meanwhile, some younger person pays his bills at the inflated rate, and in due course inflates it again before he spends it. In the case given, the last of three generations are spending money which includes eighty years of inflation at 1-2% tax-free. However, he has an opportunity cost: the money could have been invested in index funds which Ibbotson has shown would have grown at 12% per year over the same time period, tax-exempt if he put it in a Health Savings Account. And it wasn't even mostly his own money at work. It really doesn't sound impossible for that amount of compound earning to pay for a great deal if not all of the lifetime cost of one person's healthcare, providing he does not pay excessive investment costs to do it. And since this conclusion is based on considerations which have almost nothing to do with the cost of medical care or increasing longevity, it is nevertheless impossible to make precise predictions. Any investment outside the insurance plan will result in a considerable revenue gain, probably a big gain, and possibly pay for all medical costs. Fundamentally, this money is generated by obtaining a higher return on the money, and not sharing much of it with financial agents, or other contestants for your wealth, like the health industry, or like the luxury goods industries. In that sense, it's just like any other wealth.
It also should not matter much whether the planning design aims for the account to terminate at death or when Medicare takes over. Naturally, the same lesson applies to the terminal end as to the buy-in date; the more you delay withdrawals, the more time there is for growth of the principal. With a growing tendency for costs to cluster around the last year of life, many "young old" retirees have only minimal medical expenses for ten or more years after retirement. Since invested money at 7% will double in ten years, there would be a considerable advantage for latecomers in transition. If the latecomer intends to terminate deposits at an attained age of 65, he will need about $40,000 to see him out. If he intends to terminate at death, he will need about $300,000, but the buy-in price at any age before 65 should be the same. As experience gathers, there probably will emerge some distinctions matching health status changes, but curiously the costs seem to decline after age 85. After the preliminary layering by age, the annual lump sum can be broken into installments more realistically matching the income and health practicalities of individuals. Each annual step of a table would represent the "buy-in" price at that age, which is also the average account size achieved by a lump-sum at birth by that age, without withdrawals. The point about "without withdrawals" should be seriously considered as a reason to substitute out-of-pocket payments for trivial expenses. With the passage of time, it can be made more precise by experience. But it should be kept in mind that a regular HSA only hopes to make as much income as possible, while a lifetime HSA seeks an average lifetime target. As experience accumulates, it may be found that required balances actually shrink with advancing age, as the individual lives past the time when expenses had been expected but not experienced. However, without experience, the best conservative assumption is that expenses steadily rise with age.
Since a Health Savings Account tries to serve several purposes, a particular account may not have enough deposit content to match the deductible, for example, because the cost of an individual's illness has little to do with his investment history. The manager of an account will create rules designed to protect his own position, and for example might have a minimum designed for investment purposes, which happens to be considerably short of what the high-deductible insurance company needs as a deductible for a particular age-group's sickness experience. For another example, a gift from a grandparent at birth may be adequate to cover lifetime expenses, but not at first. Only after it has multiplied several times will it be enough to meet the deductible. Some managers impose fees on the first $10,000 of deposits rather than reject the account, and it really only becomes an attractive investment a decade or more later. At present, accounts have an annual limit of $3300 for deposits, so it takes three years to reach a suitable size, and perhaps ten years if only a single deposit is made. Investors must learn to be highly resistant to brokerage fees, especially in new accounts. True, the regulations are likely to be highly changeable in the first few years, so investors much learn to pay fees from outside sources, in order to protect the tax advantage when it is most needed. Unfortunately, educating young investors about complex new regulations can be expensive for the investment advisor, so it is, unfortunately, true that the interests of broker and client are not well aligned in the early years.
The rules should be adjusted to recognize this problem, even though many people would find it unnecessary. A subscriber may have enough savings to make a single-payment deposit but is hampered by the $3300 rule. Finally, an account might once be large enough to be self-sustaining, but be reduced below that level by one or two depletions to pay deductibles. Generally speaking, the conventional HSA does not need to concern itself with such issues, which only become a serious problem if lifetime Health Savings plans are contemplated.
Consequently, the regulations should be modified in the following ways:
1. A family of tables is prepared, showing the deposit required to equal the total average future health cost for each yearly age cohort of life, from now until the average death expectancy, using various extrapolation assumptions. It is possible to reach the same goal with almost any investment assumption, or almost any time period, or almost any starting deposit, but only so long as the other variables are adjusted to conform to that specification. A family of tables would show several investment levels of compound interest reaching the same goal, let us say $40,000 at age 65, at ten percent; seven percent; and five percent. Obviously, a higher interest rate gets you to the goal sooner. Attention should be focused on achieving $40,000 at age 64.
Any subscriber should be allowed to buy into the lifetime Health Savings Account for a one-time deposit of $30,000 at age 48 assuming 5% return, at age 55 assuming 7%, or at age 57 assuming 10%, merely as a rough example. The subscriber may not have savings of that size, of course, and a separate calculation should be made for time payments, also reaching the same goal. If such tables are displayed on a computer terminal, it should not be difficult to make a selection, but "user friendliness" is often more difficult to achieve. As are later modifications, if life circumstances change. The relentless mathematics will soon demonstrate that the more money deposited, and the earlier it appears, the more attractive the investment becomes.
2. Salesmen for HSA should be required to carry their illustrations out to the goal of $40,000 at age 64, supplying achievement benchmarks along the way. So long as the account contains less than the buy-in amount for the subscriber's age, the manager of a fund should be allowed to wager a guaranteed band of investment results; let us use an example of 7% and 10%. If the funds make more than 10%, the manager keeps the excess. If the fund achieves less than 7%, the manager must make up the difference, either by reinsurance or by offering to be at risk for it. If fund results fall between 7 and 10%, the investor retains it all. This mandatory arrangement may (not must) terminate when the fund reaches a buy-in level, so long as it resumes if illness depletes the account.
The actual limits should be set after consultation with managers in active practice since the purpose is to create incentives to get the funds to self-sustaining levels without kickbacks to investment vehicles. The tension is between a subscriber who has investment choices to make, and a fund manager who must cover his expenses. In the long run, it is to everyone's advantage to maintain a steady view of the risks and rewards of income compounding, while serving the goal of paying as much as possible toward everyone's health care costs in a free-market system. It is best if the limits are realistic, and they should be chosen to drive all the participants toward the highest safe level of performance. Ultimately, the subscriber should recognize that an unsafely high level (with leverage, for example) will make paying his health bills more difficult, not easier.
3. The easiest definition of the top limit is the running cumulative average of the stock market, so total-market index fund results are ideal for the purpose. However, index funds differ in their results, so transparent competition should even be able to squeeze out somewhat better results than the 10% compounding which has characterized the past 90 years. Curiously results significantly worse than the market is not a sign of safety. Consequently, freedom to change managers should be as unhampered as possible, comparative results and costs widely available, and exit fees discouraged.
4. In general, single premium policies are rarely used. However, since starting an HSA at birth adds 26 years to the compounding, and while the amounts at first are so small they are somewhat unattractive to HSA managers, they could nevertheless become an important feature of their future. Throughout childhood, the paradox will be common that the necessary deposits in an account for lifetime coverage of health costs are nevertheless far too small for a deductible which is sensible for children with such low health expenses. Therefore, provision should be made for supplemental policies which cover this gap in childhood between the amount in the account and the amount of the deductible, which is often set with an eye to the parents' situation, not the child's. Intuitively, such insurance supplements ought to be quite cheap.
Insurance companies announce premiums in September or October, giving themselves a few months of constant premium prices while they sell policies with a January renewal date. That provides time for the hesitant buyer to look over the competition but is an unnecessary inefficiency for a lifetime insurance, where it is likely to disappear. During the introductory period, experimentation should be made with charging for the ten-year incidence of certain conditions like appendicitis or gallstones, and allowance made for previous removal of the organ in question. A much larger database would be required to make the same adjustments for annual renewals, and there would be considerably less tendency for the patient to game his own health history. The incidence may be the same, but the risk of shopping behavior is much reduced. The possibility of introducing an elective surgery rider exists.
But a transition can be gradual in more ways than just one, changing annual renewal into once per lifetime marketing. Actuaries calculate the average lifetime healthcare cost to be around $130,000 in the year 2000 dollars. Retirement and Medicare begin at the same time, but retirement is continuous rather than episodic. A comfortable retirement to average age 84 might cost four times as much as the healthcare which created it. We may thus be talking about an average lifetime cost of $650,000 in the year 2000 dollars. At 3%, inflation could increase to nominal average cost of $
Assuming we continue yearly premium adjustments, we should at least make yearly adjustments to the premiums for lifetime coverage. That promotes a yearly decision between the present one-year term insurance and a smoothed-out lifetime price, mostly based on considerations other than price. It probably starts with a variable price band for the company to set, within which the employee is allowed a choice to switch to permanent insurance, or not, with a small price variation depending on the calendar date of switch-over. Age and perhaps other variables would affect the changing price. But the main consideration would be transferability between employers, so several large employers would have to agree on the schedule of prices. If the employer declines to participate, he also declines to pay for it, so he must adjust his pay packet accordingly. It must already be obvious why the employer is inclined to follow industry standards, and why special anti-trust exemptions may be necessary. However, once an employee makes a switch, he is likely to remain with that company for a lifetime, so the incentives are mixed.
To assist that decision, a brief overview of the insurance company position is in order. On the one hand, marketing costs are small for an existing company. The negotiation is with a single personnel office rather than hundreds or even thousands of employees. The concept of permanent insurance is probably unfamiliar to most employees, and most of them would have questions. On the other hand, insurance administration is simpler and cheaper, and some innovative clauses could make it still cheaper to run. It would create a permanent customer for many years of coverage with fewer loopholes. And just look at the money involved.
A lifetime policy, once it gets started, aims to create an individual $2 million reserve at age 65, which is run down to zero in twenty years by payments until average longevity of 85. But half of the clients will live longer than that, so there is a strong probability of payouts from a trust fund for another 21 years. Whether the insurance company services these expenses itself or farms them out to a vendor, this is a very appreciable amount of business. Multiplying such numbers by 350 million Americans, the sums are in the trillions, approaching the total now invested in index funds. What's involved is the destruction of a medium-sized industry, in order to create a mammoth-sized one.
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.
