George R. Fisher, III, M.D.

Obituary

George R. Fisher, III, M.D.

Age: 97 of Philadelphia, formerly of Haddonfield Dr George Fisher III

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.

Laundered Money

Judge Edwin O. Lewis

Judge Edwin O. Lewis finally got his way, the Pennsylvania State Government acquired four blocks of Chestnut Street stretching to the East of Independence Hall, and the Federal Government acquired four blocks stretching to the North. Judge Lewis was determined that a real revival of historic Philadelphia required the clearance of a lot of lands. Those who heard him describe it will remember the emphasis, "It must be BIG if it is to serve its purpose."

The open land is rapidly filling in but for a time the movers and shaker of this town had to scratch a little to find something to put there. That's fundamentally why the historic district has a Mint, a Federal Reserve, a Court Houses, a Jail, and a big Federal Building to house various local offices of the landlord, the federal government. It's where you go to visit your congressman, or to renew your passport, or to argue with the Internal Revenue Service. If you have certain kinds of business, there's an office for the FBI and the U.S. Secret Service. The mission of the Secret Service is a little hard to explain with logic.

The Secret Service is a federal police organization, charged with protecting the President of the United States, and enforcing the laws against counterfeiting money. In unguarded moments, the Secret Service officers will tell you they only have one function: to guard three-dollar bills. The President only comes to town from time to time, but the mandate extends to the President's family, and to the extended family of official candidates for election to that office. So, there is usually always a certain amount of activity relating to running behind limousines with one hand on the fender, or poking around rooftops near the speaker's platform at Independence Hall, or talking apparently to a blank wall, using the microphones hidden in their ear canals. The rest of the time is taken up with counterfeiters, but even then the excitement is only occasional, depending on business.

A few years ago, the buzz around the office was that some very good, even exceptionally good, fake hundred dollar bills were in circulation in our neighborhood. The official stance of The Service is that all counterfeits are of very poor quality, easily detected and no threat to the conduct of trade. Unfortunately, some counterfeits are of very good quality, not easily detected, and when that happens, The Service is made to feel a strong sense of urgency by its employers. These particular hundred dollar fakes were of very good quality.

One evening, a call came in. Don't ask me who I am, don't ask me why I am calling. But I can tell you that a very large bag of hundred dollar wallpaper has just been tossed over the side of the Burlington Bristol Bridge, near the Southside on the Jersey end. Goodbye.

Very soon indeed, boats, divers, searchlights, ropes, and hooks discovered that it was true. A pillowcase stuffed with hundred dollar wallpaper of the highest quality was pulled out of the river. By the time the swag was located and spread out for inspection, it was clear that several million dollars were represented, but they were soaked through and through. Most of the jubilant crew were sent home at midnight, and two officers were detailed to count the money and turn it in by 7 AM. The strict rule about these things is that all of the money confiscated in a "raid" was to be counted to the last penny before it could be turned over to the day shift and the last officers could go home to bed. After an hour or so, it was clear that counting millions of dollars of soggy wet sticky paper was just not possible by the deadline. So, partly exhilarated by the successful treasure hunt, and partly exhausted by lack of sleep, the counters began to struggle with their problem. One of them had the idea: there was an all-night laundromat in Pennsauken. Why not put the bills in the automatic drier, so they could be more easily handled and counted? Away we go.

Burlington Bristol Bridge

At four in the morning, there aren't very many people in a public laundromat, but there was one. A little old lady was doing her wash in the first machine by the door. It was a long narrow place, and the two officers took their bag of soggy paper past the old lady, and down to the very last drying machine on the end. Stuffed the bills into the machine, slammed the door, and turned it on. Most people don't know what happens when you put counterfeit money in a drier, but what happens is they swell up and sort of explode with a terribly loud noise. The machine becomes unbalanced, and the vibration makes even more noise. The little old lady came to the back of the laundromat to see what was going on.

As soon as she got close, she could see hundred dollar bills plastered against the window, and that was all she stopped to see. She headed for the pay telephone near the front of the door. The secret Servicemen followed quickly with waving of hands and earnest explanations, but within minutes there were sirens and flashing lights on the roof of the Pennsauken Police car. Out came wallets and badges, everyone shouting at once, and then everything calmed down as the bewildered local cop was made to understand the huge social distance between a municipal night patrolman and Officers of the U.S. Secret Service. Now, he quickly became a participant in the great adventure and was delegated the job of finding something to do with armloads of (newly dried) counterfeit hundred dollar bills. He had an idea: the local supermarket was also open all night, and they carried plastic garbage bags for sale. Just the thing. But who was going to pay the supermarket for the bags? Immediately, everyone was thinking the same thing.

Fortunately for law and order, the one who first suggested the the obvious idea of passing one the counterfeits was the little old lady. At that, everyone came to his senses. Wouldn't do at all, quite unthinkable. The local cop was sent off for the bags, relying on his ability to persuade the supermarket clerk. And, yes, they did get the money all counted by 7 A.M.

Obamacare And Its Repair, Executive Summary

For a while, there was a great air of mystery about why President Obama was in such a hurry to get his healthcare bill through the Democrat-dominated House of Representatives, after passage by a Democrat-majority Senate. There were to be no amendments, and in front of television several thousand pages were dumped on the desks of Congressmen with no amendments permitted, under orders to call a vote within a day. Just read Jacob Hacker's book The Road to Nowhere about the Clinton Plan for Health of ten years earlier, and since Hacker was a campaign advisor for Obama, make a strong guess that Obama was following the same plan -- but encountered a sudden twist. Everybody in the House and Senate had been encouraged to submit his best ideas, so inevitably the House and Senate versions differed so much they had to go to a House-Senate conference committee, also dominated by Democrats. As related by Hacker, the plan was for the President to appear before the conference committee, pick the cherries out of both puddings, and emerge with his health bill. The rest would be discarded as useful camouflage.

Unfortunately, the Senate bill passed but Senator Kennedy died, and to general amazement, a Republican Senator (Scott Brown) was elected to take his seat in Massachusetts. Senator Byrd of West Virginia died soon thereafter, and the ability of the Senate to defeat a filibuster was destroyed while the health bill was half-way through the plan. Since an amended bill would have to be resubmitted to the Senate, it would never pass. So an identical copy of the Senate bill was hammered through the House of Representatives, avoiding the need for a conference committee, and thus avoiding certain defeat in the Senate. So the Obama bill is really the Senate version, containing much baggage which was originally intended to be dropped. And failing to contain some nuggets which would have come from the House bill, which might have made the final product make more sense. Soon afterwards, the House of Representatives suddenly elected sixty-some Tea Party stalwarts, making it absolutely certain that Obama was just going to have to live with the 450 sections of the Senate bill, because these hootin', hollering Congressmen quite naturally supposed that their districts had sent them to Congress to defeat Obamacare, anyway they could. Rather than accept the voters' mandate that Obamacare just wouldn't do, an effort was made to portray the new Republican Congressmen as mindless obstructionists. Which is exactly what they thought the voters wanted them to be. When the Supreme Court then put its foot on the federal government telling the states to take the uninsured into Medicaid, this lesson in what the Tenth Amendment says, was soon followed by the utter failure of the computer programs for the Electronic Insurance Exchanges, and nobody could see what their health plan looked like (or cost), to say nothing of being unable to buy it if they wanted to. Although Section 1251 of the Affordable Care Act assures that everyone could keep his old plan if he preferred it, millions of letters were sent to subscribers who couldn't buy one of the new plans for computer reasons, that their old plans were canceled, while the President confused everybody by repeating the mantra that they could keep their old plans.

Quite soon, employers of more than fifty employees were given a two-year delay in mandated switch-over, echoing the experience which had caused the Clinton Health Plan to be withdrawn a decade earlier, and arousing the suspicion that Big Business was again going to pull out. Individuals were given no such reprieve and naturally were upset about it. Just about every newly offered plan contained a far larger deductible than most people had ever seen and a higher premium than they had ever paid. What made it affordable was the government subsidy, which the computer mess made it difficult to measure. Very few had read the 450 sections of the new law of the Land, and if they had, would have been highly disconcerted. Much of it was never intended to be enacted, but it was impossible to know which sections they were, and so it was not reassuring to be told that the President intended not to implement such unidentified sections. With our troops retreating in Afghanistan and Iraq, and both Syria and Russia conducting acts of war in defiance of us. And the economy still in a slump after five years of "recovery". And the Federal Reserve buying dud bonds by the trillions of dollars worth. And the rest of our allies in worse financial shape than we were -- incompetence was a word on every tongue, to defend against it by the Democrats, to denounce it by every Republican.

So that's where it stands, six months before the next election. In the meantime, I have been working on two projects for real reform of the healthcare system. The first is to improve on the Health Savings Accounts, which John McClaughry and I devised in 1980. The proposal is that since anyone and everyone can start an account, it is universal by definition, portable between jobs, tax-deductible for everyone, and running about 30% cheaper than conventional insurance. I am proposing to expand the program by making Flexible Spending Accounts convertible to it and permitting it to pay the premiums for the deductible catastrophic insurance which is a condition for buying it. Doing so would extend the income tax deduction which you get if your employer buys insurance for you, to everyone. But all of that is without mentioning the astonishing amounts of money that would accumulate from investing the HSA in low-cost index funds of premium American stocks. Nothing is guaranteed, but the experience of the last century is that this approach would assure enough internal income to pay for the entire lifetime healthcare cost of most people who bought it young enough. If you are sixty-four years old, you may have missed most of your chance, but younger people could have quite a windfall. The transition from here to there is pretty technical, and I hope I have not over-simplified it.

The second theme I have pursued is to start listing the many simplifications and cost savings for American healthcare, which I have assembled in sixty years of practicing medicine. What I am suggesting is what real healthcare reform would look like, not just coverage extension. The Congressional Budget Office predicts that spending a trillion dollars will still leave us 30 million uninsured people under the Affordable Care Act. Instead of that, I propose we develop three specialized (and probably non-insurance) programs for 8 million people in jail, 8 million mentally impaired, and twelve million illegal immigrants. Forget about mandatory; if you want to help thirty million people, devise three specialized programs aimed at these three groups, and you have it. Meanwhile, a whole group of flaws was introduced into American health insurance during the last Depression of the 1930s, and they should be repaired. It is preposterous to use three insurance plans to pay for a medical service (80% primary, 20% secondary, plus Major Medical for outliers). First dollar coverage was designed to exploit the Henry Kaiser income tax deduction, which should have been repealed decades ago. Co-pay of 20% has no effect on utilization, and 50% co-pay would infuriate people; co-pay should be abolished. Service benefits mean you never know what your bill is, and never know how much it is going to be; costs escalate. Payment by diagnosis means it doesn't matter how long you stay in the hospital, or how many tests you have, the hospital gets paid the same; consequently, it is essentially a rationing device for inpatients, making hospitals charge emergency room and outpatient services astronomical amounts. And the whole thing has transformed the purpose of health insurance. Nowadays, the real reason to have health insurance is to keep the hospital from fleecing you. Which they have to do, to remain solvent. The list goes on and on, to the point where you have to concede that you can only do so much in a short time. You just have to hold back to keep from overturning the system.

Utilization Review

When medical care was entirely a private two-party arrangement, the patient and doctor negotiated what was to be done, and often the price; if the patient could not pay, some embarrassed workaround was figured into the equation, including a vague promise to pay the doctor when he could. A surprising number of patients did pay later, and because the doctor's bill contained very little overhead, even partially paying it off created an unspoken promise that the patient would now be welcomed back.

It was the appearance of insurance forms which created secretarial overhead, even though of course it also brought along some revenue. Skeptics may doubt the extent of this, but at my advanced age as a patient I now visit four doctors of different specialties. Collectively, they seem to have fourteen assistants and fourteen computers I can count. That remains the situation even if a patient delegates decision-making to members of the family, or a hospital wants to know what is being given away to charity patients, or a bewildered patient seeks a second opinion. It changed abruptly when third-party payment seemed to entitle a government or an insurance company to be reassured that claims were legitimate. This uneasy and often resented intrusion into a private matter began to cause friction even in the 1920s, soon after third-party reimbursement made an American appearance, and as physicians gradually recognized that "utilization review" generated more overhead cost than simple claims submission. At first, health insurance companies were restrained from brisk business-like behavior, by the realistic possibility that the patient might switch back to paying bills in cash. Somehow that possibility now seems so remote that when the owner of a Korean auto manufacturing company tried to pay his hospital bill with hundred-dollar bills, the hospital simply had no procedure for handling such an unexpected request.

As long as a secretary was sitting there filling out forms, she might as well answer the phone for appointments. In this way, appointment systems became routine, including hidden extra revenue loss generated by broken appointments. Insurance pre-payment is always complicated by the realities of emergency care, where considerable expense must sometimes be incurred before the third-party has a chance to review the facts; in this lies the origin of the term "reimbursement". The third-party acquired the ability de facto to delay or deny reimbursement, an action immediately regarded as high-handed, since expenditures had already been made in good faith and could not be recovered. The right to deny such claims was implicit, and at first it was used gingerly by insurance companies trying to establish themselves. Now that insurance is considered normal, any incurred costs must be handled in some way, so other subscribers are charged extra to keep the hospital solvent. The cost to the system is exactly the same this way, but no other way has been suggested to maintain the credibility of insurance oversight. When I once told the owner of a department store that I had 2% bad debts in 1955 (ten years before Medicare) he replied that my bad debts were less than his and my bookkeeping was far more elaborate. True, some hospitals could not survive without the insurance system, but if others in better locations examined their experience extensively, they might discover their accident rooms are net losers for the insurance. Third-parties slowly retreated, hospital prices crept upward and the system readjusted, but no one is entirely satisfied with this showmanship masquerading as a balance of terror. When you see a sick or injured person turned away from an emergency department for lack of insurance proof, you can be sure there is either not enough slack in the system, or not enough administrative imagination.

Senator Wallace Bennett

Early in the 1970s, Senator Wallace Bennett of Utah devised a solution to this problem, and persuaded the rest of Congress to endorse a nation-wide system of Professional Review Organizations (PSRO), run by the medical profession but paid for by Medicare. Although many physicians muttered about the "creation of new elites", and hospitals were particularly uneasy about the migration of power, the new system worked reasonably well. If the physicians in the local PSRO approved a service, it was paid for. If payment was denied by a local PSRO, an appeal to a state-wide body of physicians was provided. In that way, prevailing local standards were respected, while appeal to distant physician judges was also provided, to guard against local vendettas ganging up on someone they disliked. Inevitably, a few localities would elect an unsatisfactory PSRO, so a voluntary national organization was formed to educate, inform and defend the process, and better able to discipline it with peer pressure than might be supposed. The national organization was pleasingly benevolent, sometimes apologizing for its role as a necessary one to weed out constituent PSROs whose bad behavior might discredit the others and start up the usual chatter about professional self-government: The foxes were guarding the hen house, and must be replaced by wolves. The PSRO gradually adhered to an unspoken rule of rarely boasting of success; it saw its role as redirecting unsatisfactory behavior, not vanquishing wrong-doers. It soon became evident that successful PSROs were of two types, rural and urban. In localities where a single hospital served a county or more, physicians were of all types mixed together, and the need was to strengthen the emergence of the natural leaders, often by placing them on the PSRO board. In large cities, however, a sorting-out process had usually resulted in strong hospitals and weak ones; birds of a feather flew together. The weaker hospitals were soon identified and urged to elect stronger leadership; sometimes it was necessary to suggest that the institution might serve better as a nursing home. Throughout the process ran the threat of exposure; successful PSROs usually relied far more on peer pressure than the threat of withholding payment.

What ultimately defeated the PSRO was its success, not its failures. Many pre-existing elites were content to see a new governance structure fumble, but felt highly threatened by a successful one. Moreover, the AMA leadership seemed particularly concerned about the direction of "regulatory capture", and was not completely certain whether the PSRO was beginning to dominate the Washington bureaucracy, or the AMA House of Delegates, or a little of both. The PSRO fraternity was definitely a large national organization of doctors who knew and respected each other, and many of its leaders were in the AMA House. Matters finally came to a head in a famous vote opposing the PSRO, by 105 to 100. The opinion of organized medicine meant a great deal to Congress. When representatives of the PSRO next testified before the Senate Finance Committee, the Chairman of the Committee wryly announced the next speaker from the AMA was one who was "presumably here to explain to us the difference between 105 and 100." The PSRO law was soon amended, and insurance review took its place.

AMA House of Delegates

For the time being, utilization review in the future is apparently currently limited to Medicare, under the Medicare Accountable Care Act. With the foregoing bit of history to warn the Accountable Care Organizations about what they are getting into, a simple set of principles can be stated. Utilization review encounters two components of cost: the volume of care, and the price of the services. Doctors control the volume, hospital administrators control the prices. Determining the proper volume of services is a job for practicing physicians, alone and unhampered. To some extent, under the new law an incentive to keep it that way was created by sharing with the provider members a portion of any cost savings associated with the patient group. But the ability to change the sharing will probably be a a one-sided government decision unless the physicians fiercely insist that it remain negotiable. Agreeing that the physician voice should be dominant in the issue of service volume should not imply agreement to exclude their inspection of the prices of services. When physician income becomes linked to their choosing less expensive alternatives, physicians must not continue to be blinded to what the true cost of components truly is. While it remains conceded that hospitals and vendors must retain some flexibility in adjusting the ratio of charges to costs, any deviation from a standard bandwidth must be negotiated with the physicians affected. Past experience should be ample proof of the fairness of this demand.

The volume of most medical services at present is about right, but prices will keep rising when they bear little relation to the underlying direct costs. Furthermore, the Medicare (or similar) Cost Report of every hospital must annually report the ratio of cost to charges, probably by item rather than department. And this ratio must be monitored. Complexity is no argument against doing so; the Chargemaster system has never been resisted because of its complexity. It has been no secret for thirty years that a twenty-dollar aspirin tablet has a very high ratio of charges to its actual cost. Other items are provided at a loss, and the mixtures are highly variable between hospitals. Everyone concerned knows this situation is unsustainable, but everyone recognizes that total denial of reimbursement is entirely too destructive if no slack remains in the system. If it is successful an appeal mechanism will become necessary, because new treatments can be resisted by old treatments, but the optimum rate of change will vary by local situation.

Rather than overcomplicate matters, the goal should be total denial of reimbursement for denied services, because the public will demand it. It must however, be coupled with an adequate profit margin on approved services, to service the costs of retrospective review. Designation of the optimum ratio of cost to charges is a critical decision, much like the function entrusted to the Federal Reserve, of picking the best average interest rates for the national economy. If the agencies selected by Obamacare get this point very wrong, very often, the public must quickly be in a position to let everyone know of its displeasure.

The other source of circumvention is the hospital system of enforcing a physician hierarchy reporting to a physician chieftain, but insisting that the chieftain himself be financially beholden to the hospital administration. In that way, financial health of the institution sometimes dominates the health of the third parties, who then find a way to retaliate. if this issue is neglected a deadlock could affect the health of the patients. Since a three-way balance must be preserved, governance must be fairly shared three ways. Those who believe this is a minor issue because the third party obviously has final power, have a great deal to learn.

Co-Insurance (2)

New blog 2013-07-01 16:26:04 contents

It's a convenience for the insurance company perhaps since it reduces the insurance cost by 20% and is easily figured on the back of a salesman's envelope. Therefore it helps in the three-way negotiation between the employer, the insurance company, and the union. The union calculates how much income tax the employees save by how much income is split between the "fringe benefits" (non-taxable) and the "pay packet" (taxable), and the negotiations shift around these offsets, usually at the end of grueling collective bargaining.

It was once explained to me that Co-pay was very popular with negotiators for unions and management because it was easy to calculate the total cost of it for an entire self-insured corporation. If a proposed budget for the employees was known, and the budget for health benefits was agreed, the arithmetic was easy. If the company has a 20% co-pay, it can reduce the company's total insurance cost by 20%, and if it doesn't come out right, you can negotiate 18% or 22% or whatever. Late at night when these negotiations characteristically get serious, the cost of the offer and counter-offer can be quickly calculated. By contrast, if a deductible is proposed, you have to know how many people use the program, how often they would get sick per year, and even so the calculation is difficult, requiring actuaries or at least accountants. So, the explanation ran, everybody, likes co-pay, and everybody hates deductibles. The insurance people present especially like co-pay, because there will soon be a demand to add it to the package as second insurance, and the premiums for that are also easily quoted, up or down as the negotiations proceed. When it got to involve Medicare and Medicaid, the Congressmen were in essentially the same position of only wanting to know what bulk costs of the whole program would be. In short, co-pay is easy to "score". But the best that can be said for it is, it's just another short-term benefit for which long-term costs are increased because there are diminished incentives for the third-party to hold them back. Just kick the can down the road.

It has never seemed completely credible that anyone would base expensive decisions on considerations so trivial, but you never know. Having invented Medical Savings Accounts with John McClaughry in 1980, for me the mysterious resistance to high deductibles has never seemed adequately explained. Negotiators must easily see that two (or three) insurance policies will be more expensive to administer than just one. They must immediately acknowledge that being 100% insured will increase costs by making the beneficiary ignore the cost, and they are probably willing to accept (off the record) the American Actuary Association's estimate that costs are thereby increased 30%. That much alone would free up about 5% of the Gross Domestic Product since we are currently spending 18% of GDP on Health care. There has almost seemed no point to go on that wages could be increased by diverting this wasted money to the pay packet, to say nothing of the frustration many doctors feel at having no idea of the true cost of what they order, and hence little interest in making the number smaller. Obviously, if true costs are concealed, they go up. This blinding of the doctor to true costs is what makes cost-shifting easy to do without criticism. The absence of a pool of deductibles makes it impossible to generate compound interest, and that in turn makes it less practical to consider "portability" of health insurance from one employer to the next. It is at the very root of fictitious costs for medical care of all sorts, which somehow seem to the advantage of many participants in the health field. Eliminating co-pay would result in a small saving, and it probably would result in a big saving in healthcare costs. The aggregate national savings would be astonishing. Health Savings Accounts are slow to be adopted, not because they fail to save money, but because state laws have imposed mandatory insurance benefits for small-cost items, apparently passed for the main purpose of undermining deductibles.

Most people initially resist the idea of a high deductible on the ground that poor people can't afford it. When it is explained that what is intended is basically to give the poor the money to pay for it, most resistance disappears. A more correct description is that some method is constructed to give them the money, but in a way that allows them to spend money left over from healthcare, for something else they want to buy. The ability to buy something else is not the same as wasting it, and safeguards are only prudent. Retirement is the use most commonly considered. Because interest rates are being suppressed by the Federal Reserve, this proposal may be somewhat retarded for a year or two, until interest rates return to normal levels. Addition of an inflation-protection feature (like TIPS) might well enhance its attractiveness. Ultimately, the first step would be to eliminate Co-pays. Completely and permanently.

How to spend

------------------------------------------------------------------------------------------------------- Throughout this discussion of the design of Health Savings Accounts, lifetime version, we have attempted to follow the underlying design of what we already do. That is, parents usually pay for children, old folks usually pay out of savings. So, once the money is in the Account, we try to imagine how it is now usually disbursed for healthcare, and even occasionally what the sources of it are. Our general choice is to follow established patterns where we can. Nevertheless, we favor debit cards in place of insurance claims forms, for all outpatient claims which fail to trigger the re-insurance deductible. Paying 10% for someone to pay your bills for you, is just unacceptable.

Children almost always have their medical bills paid by their parents or their parents' insurance. Where to place the upper limit on childhood is a puzzle, but recent law has included children up to age 26 on their parents' health insurance. Since that seems to meet general approval, we adopt it, although it might be wise to allow emancipated children to opt out. Regulations on the use of parents' HSAs for their children are a little unclear, but we assume they would be easily changed if they conflict with reasonable practice. That parents-pay-for children system does complicate a smooth estimation of the future growth of the parent's Account, however, particularly in the event of a divorce of two parents with such accounts. It also interferes somewhat in the child's future right to claim compounded growth, so there is a brief temptation to give it to all three at once. However, the deposit was only one deposit.

In some ways, it is easier to have both parents contribute to the child's one-time initial deposit, in order to have longer for their compounding to continue, and to have the child's account begin with their contributions. This makes a $150 contribution at birth become $300, and you really can't keep responding to problems that way, without destroying the universal appeal of the plan. However, it is easier to imagine acceptance of double contribution with a later rebate of half of it, than to imagine a single contribution later cut in half. Perhaps it is easier to give people their choice of the two approaches, but it certainly muddles future projections. We opt for double contributions, with an optional rebate of the half at the child's 26th birthday, if the parents have had a falling out. With double contributions, there should always be a small surplus in the child's account, whereas sharing even minimal deficits is apt to cause more trouble in an already strained marriage. Double deposits as a default, single deposits as an option. Optional rebate at child's age 26.

Immediately we must expect an outcry about poor mothers who can't afford it. But every other proposal suggests a government subsidy for this purpose, and so do we. The ultimate savings to the government of putting up $150 per baby, would be enormous, but they would not be totally realized until the child was forty, and the government would be "loaning" the expenses in the meantime. An important reservation is the health expenses of the indigent are usually higher than average, obscured by the fact that many of them are not paid.

Grandparents. Children are repaying a debt to their parents, which parents frequently forgive; the parents initially pay it out of their own accounts. With the elderly, there are often no children or grandchildren; the elderly either have some savings, or they are indigent. Where there are descendants, they are not always willing to back the defaults of the elderly. If they bought out Medicare (with roughly $40,000, adjusted) after attaining age 65, they will, in summary, stop paying Medicare premiums, pay outpatient costs with a credit card, and their catastrophic insurance will pay the hospital an updated (we hope) version of the Diagnosis Related Groups (DRG) for inpatients. To adjust for contingencies the insurance might make a deposit in the patient's HSAccount for other medical costs (ambulances, for example), which the patient pays by credit card. Emergency care may well fall into this ambiguous category. The catastrophic insurance company is expected to have negotiated reasonable charges with the hospital, and to defend the patient against unreasonable ones. Rent-seeking in the outpatient area is more the patient's responsibility to detect, to object to, and to negotiate below a certain amount. Generally, the principle sought is to assume no responsibility for recognized overcharges, unless they have been agreed to in advance of the service.

Working people, age 26-65, and/or their employers. At present, much of the health care of working people are voluntarily paid for by employers. Therefore, it is their choice what to do about a diminishing cost, absorbed in this system by their employees. Since the source of most of this windfall is an investment in the stock of their companies, perhaps everyone will benefit. Time alone will answer that issue, and perhaps it is too early to be making decisions about it. So for the moment we abstain from the fairness issue and do not greatly object to a gradual adoption of the HSAccounts for Lifetime Health Insurance, which is inherent in making it voluntary. However, it is clear that the employees are often spending for what they formerly got free, and as a beginning might well be gratified to have a roll-over of their Flexible Spending Accounts into Lifetime Health Savings Accounts. That would require the passage of no law, and perhaps ought to be requested politely. A surrender of industry's stance against income tax equity on health expenses would be nice, even though the Editorial Page of the Wall Street Journal cautions restraint in this effort, even restraint of the Tea Party members of the Republican Congress. I'm afraid I disagree on this significant point, which seems to put me to the right of the Tea Party.

That would seem to leave working-age people paying for themselves, their children, maybe their parents, and the indigents. Before that, for many of them, it was once all free. With that description, it is natural to expect some grumbling. But the cost to them is only a fraction of the former cost to the nation, and they get a great deal more control over an important part of their lives. It must be obvious that the old way was too expensive to continue, and it won't continue long. If for no other reason, unions will demand that everyone else feel some pain. Working-age people will end up with a bill of thirty or forty dollars a month, an undisturbed medical system, and no more yearly health insurance premiums. The employer has the employee health insurance cost gradually lifted from his back, and know very well that he will be pressed to spend some part of it for employee costs. Let him pay some into the HSAccounts, particularly during the early transition stage, when there will be very little investment "cushion".

And finally, it must be pointed out the federal government has been supporting a lot of this cost for nearly fifty years, but their instinct is to hide it. Fifty percent of Medicare costs are paid for with general tax money, quite effectively concealed in the budget term "Transfers from the General Account". Borrowing from foreigners is largely traceable to this source, and no one can be sure what will happen to world finance if it stops. Because this fifty percent subsidy would have to be extended to every citizen if we adopted a Single Payer system, even extreme liberals hesitate to press that solution, or imaginary solution to our problems. For now, leave it alone, and see how things are progressing.

Premiums and payroll taxes* Catastrophic Insurance= Debit Cards* Revised DRG= Personal funds* Direct Marketing= Internal loans* Escrow funds* Federal Reserve monitoring and midcourse adjustment. Deliberate overfunding of HSA*

Philadelphia Reflections

The musings of a physician who served the community for over six decades

Obituary

George R. Fisher, III, M.D.

Laundered Money

Obamacare And Its Repair, Executive Summary

Utilization Review

Co-Insurance (2)

How to spend