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.
Philadelphia Reflections is a history of the area around Philadelphia, PA
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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.
The 1937 Supreme Court (Owen Roberts, for the majority) allowed Franklin Roosevelt's New Deal to place the federal government in charge of all American commerce, not merely interstate commerce as the "commerce" clause of the Constitution provides. Congress, however, soon exempted the insurance industry from that federal control by passing the McCarran Ferguson Act. States were thus put back in charge of insurance, and it's about the only commerce they are in charge of. Out of this peculiar political anomaly, grows the present uncomfortably deep penetration of the local insurance industry into state politics. And over time, the unanticipated deep penetration of state politics into insurance.
In return, state governments have conferred at least one favor on insurance lobbyists unwisely. If an insurance company fails, subscribers angrily find themselves stranded. The patchwork solution arises, of assigning the obligations of a failed company to its surviving competitors. With no immediately visible cost to the taxpayers, that seems to rescue the subscribers. But it removes any point to competition, eventually raises premium prices, and overall, broadcasts moral hazard. That is, it doesn't matter how badly they behave, their competitors will have to pay for their mistakes. Moral hazard is the most insidious form of political corruption because it is so seldom punished.
Politically inclined state insurance commissioners have other favors to extend. Malpractice companies work in an environment with a peculiarly long tail. (Translation: It's at least six years before the average case is finally settled and paid.) A brand new insurance company collects premiums for six years before paying out much for claims. True, with unrealistically low premiums they are destined to go bust in six years, but there's a free ride in the meantime, including an available punt in the stock market with unspent cash. Investment income during those six years is chancy, making survival a gamble after six years. Lately, the true finances can be obscured by "finite reinsurance", which guarantees to absorb heavy losses, but often neglects to announce how briefly it will do so. It's the job of the Insurance Commissioner to decide whether premiums are realistic, the job of the auditors to assure that the complexities are transparent, the job of the competitors to complain if premiums are too low, and the moral hazard for the Insurance Commissioner arises -- from knowing in the worst case it won't matter to the subscribers, the competitors will bear the cost. Since Insurance Commissioners are usually politically appointed young lawyers, competing insurance companies are actually in political competition, not economic competition. As we say in Pennsylvania, you must Pay To Play.
These seamy realities can unexpectedly exploit premium differentials between medical specialties. There are a lot of lawsuits against obstetricians, neurosurgeons, and orthopedists; consequently, the premiums for these specialties are quite high. Pediatricians and general practitioners have low premiums reflecting infrequent lawsuits. Now, it might be supposed a company seeking long-term profitability would prefer to ensure clients who don't get sued. But here and there you can be surprised to see a new company with great eagerness for high-risk clients, people who get sued a lot. This paradox rests on the quick accumulation of big-ticket premiums from a mere handful of clients. Competitors are prompted to suspect companies with that behavior are looking to accumulate as much premium revenue as possible during a six-year free ride, even lowering premiums somewhat to generate business. But if they misjudge the stock market during those six years, all the other competing companies will likely be forced to pay for the gamble.
Once in a while, the totally unexpected happens. For example, some years ago thirteen judges in one city went to jail for accepting bribes. The Republicans wouldn't appoint Democrat judges, and the Democrats wouldn't confirm Republican appointees to fill the vacancies. During this impasse, Congress happened to pass a law leap-frogging drug offender cases ahead of everything else on court dockets; the unanticipated consequence was an eight-year period without malpractice trials. It became a sort of judicial coiled spring. Insurance companies accumulated huge reserves, the politicians squeezed down the excessive premiums as "windfall profits", money was made and lost in the stock market, and when finally the judicial logjam was broken, the cases had to be paid. Guess what. There wasn't enough money to pay the claims, and premiums took a big jump. Doctors and lawyers bellowed at each other that it was the other profession's fault. In a sense, that wasn't fair either way, although come to think of it, most judges are lawyers. As are most legislators. And Insurance Commissioners. These particular lawyers may not have participated in the problem, but only they are in a position to fix it.
For the better part of twenty-five years, I was a member of several physician study groups assigned to find some solution to the malpractice crisis. During that time, all manner of solutions were suggested or even tried out, and it would be my observation that only one of them seemed to work. That exception was a restraint on "pain and suffering" awards. In the past, we had tried arbitration panels, blue ribbon courts, and a wide range of proposals from the defense bar, designed to help them win cases. Nothing seemed to help the situation, which was always the number one complaint from surgeons, until California imposed a $250,000 cap on damages for pain and suffering and both awards and damage suits dropped significantly. That's legal jargon for a top limit to the amount of an award for pain and suffering, imposed on top of 'economic' damages, which are the awards for medical treatments actually incurred by the plaintiff. In the course of these discussions, I learned that it was customary to make these awards for non-economic damages based on medical costs. "Seven times the medicals" would be a typical offer in a negotiated settlement.
The history of this curious approach seems to have been the appeal to the judge, that if only economic costs were considered, the patient still would not be made whole, because the award would not cover his legal costs, which were usually 25-50% of the total, on a contingency basis. That is, the lawyer offered to work free of charge if he lost, but got 25-50% of the award if he won. From other investigations, I had discovered how hotly the trial lawyers would defend the contingency system, passionately proclaiming it allowed a poor man to have his day in court, so I tried to avoid that argument. My focus was, and is, that seven times the medicals are a somewhat overgenerous response to legal costs of a quarter to a half of the medicals. And it would be my surmise that the drop in California lawsuits following a limitation to awards for pain and suffering, reflected the fact that suits had been attractive at the overgenerous seven times level, but became unattractive when they declined to a more reasonable level. Stimulated by such surmises, it took very little investigation to discover that almost all high-figure awards were fairly exclusively for pain and suffering, while only a negligible amount of awards are for economic damages. Nuisance suits are in a different category, based on the insurance company estimate that a flurry of motions can usually run the defense costs up to the point where it is cheaper to settle than to defend a meritorious case. But even nuisance cases serve the purpose of paying to investigate a case, where it can be judged that ten nuisance cases may uncover one which has enough emotional appeal to a jury, to take a chance on trying the case. Therefore, a negotiated settlement of this issue between the two professions might justify a cap on pain and suffering, plus investigative costs of contingency cases equal to the economic damages.
Malpractice
That's the solution that appeals to me, but it does not propose a way to accomplish it. To argue this compromise with representatives of the trial bar is a waste of time unless they are threatened with some other solution which seems worse to them. As long as physicians are protected by insurance, they will not fight hard enough for any solution to be able to win it. The surgeons will seek ways to pass the costs through the reimbursement mechanism to the public, and the non-surgeons are not sufficiently threatened to cooperate. Ultimately, the public will have to recognize they are bearing almost all the costs of this conflict between professions, and direct public officials to do something about it. Whatever jurisdiction seems most appropriate begins to lose traction, here. Yes, the Legislative Branch is probably somewhat more appropriate, but from the beginning of our Republic, the legislature has been dominated by lawyers. Representation by physicians has in fact dropped considerably since the 18th Century, reflecting the vast increase in scientific progress, leaving them little free time for public service of the sort useful in a battle like this.
John G. Roberts, Jr
The person who comes to my mind is the Chief Justice. It is not commonly recognized that the Chief Justice, both of the United States and of individual states, has administrative control of the court system. Since most jurisdictions do not have monitoring and reporting systems useful for malpractice reform, these should be established. There is no great amount of judicial literature useful to a balanced analysis of this problem. There are no public forums for debating the matter which is not heavily sympathetic to one viewpoint or another, at least in the public view of it. And there are no fifty-one persons better positioned to appointing such review bodies, debating forums, and proposal-making -- than these fifty state Supreme Court Chief Justices, led by the Chief Justice of the United States. These Chief Justices already have the power to implement the necessary changes, but they lack public support for doing so. So the Chief Justice is the one person who can act, if he first orchestrates some mandate to do so.
It happens that the Chief Justice is already the head of the Judicial Conference, which includes the presiding officers of both state and federal courts. This might be an appropriate place to discuss Tort Reform, or for some reason, it might be better to appoint a special Task Force. One suggested approach might be to examine the usefulness of transferring hallmark cases to a special Federal Court of Appeal for Malpractice, or transferring particularly egregious awards to such a court, or constitute it as a special court of appeals for hallmark cases. That is, it is uncertain whether such a specially skilled court should be regarded as a way to untangle contentious issues, or whether it should be constituted as a punishment for outlandish judicial behavior. In one case, the policing power would be in the certiorari process, in the other, it would be by mandate from the Judicial Conference.
This is just a suggestion for adopting an approach which does not seem to have been used much. It was prompted by watching one particular State Chief Justice transform the malpractice environment of his state in a matter of a few months; I'm not sure how he did it, or whether I would approve of what he did. And after a year or two, things went back to the way they used to be. But the Chief Justices seem to have a role in this matter that needs to be explored.
No history of American healthcare finance is complete without acknowledging the deep debt of gratitude we all owe to Big Business. Negotiating stormy waters, they created a workable insurance system and held it together for decades. Their legal premise was good health care for employees was essential for modern business. Society has now decided good health care is essential for life. This extension of the mandate has been awkwardly arranged. The main function of this chapter is to ease the transitions between employer-based health care and the other half of life, before and after forty years of employment. In the process, we would like to see Health Savings Accounts become a voluntary alternative for working people, both of them changing enough to co-exist. As a start, I can see no reason to prohibit anybody from having an HSA, with or without employer insurance as well. Nor can I see the slightest justification for unequal income tax treatment. Yes, health insurance companies must make some major changes, but after all, we're talking about changing health insurance.
History. Theodore Roosevelt had proposed a system of national health insurance, probably based on the example of Bismarck's German system, and Teddy nearly pulled it off. The American Medical Association considered the reform idea quite favorably until some physician leader (legend relates it was Morris Fishbein) had a change of heart and denounced it. Legend also has it that Fishbein was influenced by the bad treatment the Mensheviks received at the hands of the Bolsheviks in Russia. Fishbein was related to many Mensheviks, and this is said to have influenced his thinking, although its connection to Bismarck and the Flexner Report is a trifle hard to understand at this distance. Word of mouth history also blames this episode for the alienation of academic medicine (medical schools) from organized medicine (the AMA), dating from this issue. Somehow or other, this has to do with the Flexner Report of 1914, favoring the affiliation of medical schools to research universities. Much of this is gossip, and much of it is possibly quite wrong. It is related here to help the reader understand why many present political alignments exist, even if they do not explain why they persist. The fact that hardly anyone alive can recount precise details, does not diminish the intensity with which some present partisans hold their (possibly mistaken) beliefs.
Big Business was obviously drawn into a dispute of this magnitude, but in view of Teddy Roosevelt's past activities as a trust-buster, business leadership was unable to unite its constituents into taking one side or the other, openly. That division continues to this day, although it is fair to say the leadership of Big Business leaned in the direction of "reform" of the healthcare system, even while many heavy hitters in their ranks still remain violently opposed. Businessmen lean heavily on their lawyers for advice about non-business issues, and there can be no doubt it makes Big Business uneasy to read the plain language of the Constitution, especially the Tenth Amendment, and the McCarran Ferguson Act of 1945. The Constitution firmly proclaims the Federal Government is to have only a limited role in most areas, so medical care is therefore regulated by state governments. As a reminder, the states license hospitals, universities, medical schools and physicians, and the entire structure of organized medicine revolves around state control. As well as upon the Constitution, for which all this stands. The President of every county medical society in the nation takes his inaugural oath, with the wording of great similarity to those of George Washington, to uphold the Constitution. Not the Governor, or the State, but the Constitution. Medical Schools, nursing societies, hospital administrators and all similar officers are expected to take much the same oath, although many feel free to disregard it. When they do so, they meet the glares of many physicians and many lawyers. A corporation is only a creature of the state legislature, and all lawyers know what danger lies in flouting the courts.
With all this background of stern rules and bitter recollections, it must have taken skill and courage for Big Business to act as negotiator and peace-maker in constructing the collection of compromises and invisible unity, now called employer-based health insurance. The edifice was negotiated in the 1920s and rescued the health system from near-dissolution after the crash of 1929. Much of its strength lay in family-controlled corporations with close associations to local hospitals and other members of civil society. As family-held businesses gave way to stockholder-controlled corporations, American business became much less local and more national, with hired managers much more congenial with government bureaucrats and university presidents, than self-made entrepreneurs ever felt. The stage was set for "reform", and for several decades things seemed to work very well. Its legal high point was probably Franklin Roosevelt's court-packing confrontation, which Harry Truman tried but was unable to exploit. In 1965 Lyndon Johnson succeeded in some patchwork, successful for old folks, a failure for poor people. Hillary Clinton tried again and failed, with rumors circulating that Big Business had ruined her plan. Then Barack Obama tried the same plan; whether he succeeded or failed is yet to be made clear. In all these efforts, the issue was the same: take control of healthcare away from the States, and give it to the Federal Government. The decisive argument for business to avoid total war was also the same: if you ignore the Constitution for medical care, you may find you have opened the door for federal conquest -- of all corporate independence.
That's a capsule history of healthcare reform, confessing it must contain many omissions about closed-door arrangements. And leaving to last mention, Henry Kaiser's tax-avoidance scheme during World War II. In an effort to move steelworkers from the East Coast to build ships in his West Coast shipyards, Kaiser found wartime wage controls prevented him from paying workers to move. So he persuaded the War Production Board to look the other way from his healthcare scheme, devised as a non-taxable inducement. After the war ended, Congress continued to include employer-donated healthcare as a necessary business expense for the employer, while excluding it from the taxable income of the employee who got the "gift". Furthermore, the same tax exclusion was denied for the same expense unless it was donated by an employer. For seventy subsequent years, the tax abatements have repeatedly defied Congressional repeal, in spite of the denial of the same tax abatements for competitors. In this case, competitors are foreigners without voting rights, uninsured persons, and self-insured. The critical legal issue was health insurance had to be donated by the employer to qualify. Management would have everyone believe they are powerless to persuade unions to be reasonable. In the next section, we explore other motives and suggest a different solution.
There are now reported to be 15 million subscribers to Health Savings Accounts, growing at about a million new subscribers a year, with hardly any advertising. It' s really a very simple concept, consisting of two parts. The Savings Account is pretty much like any other savings account, and I understand one New York Bank has 700,000 accounts. You are allowed to make deposits up to $2350 a year, terminating when Medicare begins, at age 66. At that point, any balance in the account is turned into an IRA, and may be used for any purpose after paying income tax. When you make withdrawals for other purposes there is a penalty tax of 20%. They may be used for legitimate healthcare purposes, without taxation. The statutory basis for this is that deposits are tax-deductible, and withdrawals for health are tax-sheltered; the rest of the rules are regulation. Most accounts are linked to a debit card for medical purchases.
Two working parts:(1) Tax-exempt savings fund (2) Catastrophic (high deductible) health insurance.
HSA in Essence
In order to make deposits, the subscriber must link the account to a high-deductible health insurance policy. It is often difficult to obtain a public quote on price, which must mean the price is highly competitive and variable. Changes in the environment make for price changes which are almost not worth printing in a pamphlet. Many account managers insist on linking to a specific brokerage account, either subsidiaries, or linked by fee arrangements; such details are to be frowned upon. The new investor should be aware that most index funds of the entire domestic market return slightly less than 12%, but the manager of a fund subtracts overhead and passes on a variable amount to the customer. The amount of this return on investment is critical, and the ability to move accounts to a new manager if dissatisfied is an important feature but an optional one. It is also important for the catastrophic insurer to have made price arrangements with local hospitals which are competitive. A price of one and a quarter times the Medicare rate is on the high end.
Most investment manager are not fiduciaries, they are brokers. That is, they have no legal obligation to put the customer's interest ahead of their own. It is reported that most new subscribers are between the age of 30 and 45. That is, old enough to have some savings, young enough to gather meaningful income before being used. Actuaries report the average yearly cost is about 30% less than conventional health insurance, but price quotes are difficult to get on anything but an individual basis, and there may be some tacit underwriting.
There are many times in a lifetime when new opportunities to spend rather than save, appear. You have a little cash and must decide what to do with it, for example. This choice presents itself with every paycheck. We suggest an automatic paycheck deduction is the best way to handle it. Big specific temptations also come up. Your neighbor buys a new car, and you reflect whether it is your time for a bigger car, too. You are therefore tempted to make a big withdrawal from a retirement account to pay for it. Bad idea, don't do it. On the other hand, maybe you smashed up the old car and must have a way to get to work, so you do it. You want a way to resist big-ticket temptations, but you must not close that door entirely. We suggest an escrow account.
An "escrow" is a service often performed by a third party for a fee, to hold the two main parties to terms they independently agree on, and can only change if they both agree, or else a judge agrees. Escrow can be a variant of insurance. Please bear with us, for a paragraph or two on this remote subject. Escrow variations in real estate are common, many assume escrow must be limited to real estate. But in an HSA there also arises a frequent need to identify illiquid funds, set aside for some future purpose; the term escrow also comes to mind. Illiquid funds usually command higher interest rates, the "yield curve" is in the daily newspapers, but both parties must agree to change it. Some people are naturally frugal, others are spendthrifts; funds are needed for emergencies, others are saved for later. All that creates a need for what we describe as an escrow account, as distinguished from "demand" accounts; others may call it something else. Since fees are often hidden, let's just say custody account instead of escrow. But remember. Don't escrow yourself into unnecessary fees for a lifetime; do it only for the best interest rate. Words like "prime rate plus 1%" might be used.
Short term investments carry lower interest rates than long-term ones because there is more risk of default the longer the risk continues. Banks survive on the difference (yield) between the rate for them to borrow and the rate to lend; the "spread" varies with the duration of the loan -- overnight, say, or thirty years. The critical issue is the duration of quarantine, but in general U.S. Treasury bills and bonds are found in demand accounts, while common stocks, lines of credit, and other permanent investments must be guaranteed in some way for the duration of investment when their term is not already stated. It's a method of protecting the lender if he pays higher rates, but it's also useful to everybody if life situations change.
Therefore, whether you call it an escrow or not, investors should be given the option of setting certain HSA funds aside were, like Ulysses tied to the mast, they cannot touch the account until a certain time, by common consent, or with a court order. Their broker will respond with a higher investment return if he knows the investment can't be sold "out from under him". Getting back to Health and Retirement Savings Accounts, young people nowadays rarely get seriously ill; old folks often do. If a young investor knows he can ride out the bumps along the way, he is justified in hoping he can get 8% after-tax and after-inflation return. Otherwise, he might be lucky to get 1%. With really long-term investments, even a few tenths of a percent can make a major difference. Let's touch on a few examples.
Squeezing the Lemon Dry. Let's imagine he only spends 1.4% on investment expenses (at age 21); he thus gets back 6.6% on an 8% investment, net of inflation. If he spends 0.1% more on expenses, he will only net 6.5%, or $30,000 less at age 66. That's a lot of money for very little difference in effort, but he should have planned better. We are here suggesting passive investment in the entire stock market, using index funds, no tips, no stock-picking. In a pinch, the higher quality of "collateral" will command somewhat more favorable rates.
"Active investment" or "stock picking by experts" may yield somewhat more for what is judged high-quality assets, although it is hard to see why they should, net of hidden fees. The extra yield is often eaten up by extra fees. And then there is the theory of "black swans", general stock market dips of 30-60%, occurring every twenty or thirty years. The older he gets, the less likely an investor will be, to have time to recover from a "black swan", and the more he needs deflation protection with up to 40% Treasury bond content. But that protection costs his yield another couple percent in fifteen years. To have the funds to manage it, a young borrower needs to squeeze out another .1%-.2% of expenses from his managing firm. If he starts saving later in life, he may need to squeeze 2-3% from expenses, which is probably impossible. The bulk of his retirement will have to come from somewhere else. That's a pity, but what other proposal promises even a fraction as much, most of the time? Most investment managers who must constantly meet payroll with endowment income feel pretty satisfied with 5% total return, employing the 60/40 method. The HSA investor has no payroll to meet, and often needs to do somewhat better to survive.
Just about the only way, one can give it all to him fairly safely, is to use passive investing for a long escrowed time. Lower fees, buy-and-hold. But watch yourself, since managers are often replaced by new managers. We're definitely not saying,"buy and neglect".
In later sections of this book, we take up additional issues of, say, funneling money from Medicare to retirement. If science cures a few diseases; or transferring money from grandparents to grandchildren after research renders medical risk superfluous for retirements; or otherwise using extra funds for new purposes as chance and vigilance make it possible. But all of these windfalls require some sequestered fund to be protected against raids by pirates. Certain segments of the financial community will resist any or all of them. After all, most of the time your gain will be someone else's lost income.
But more fundamentally than that, banks, in particular, are also in the business of taking short-term deposits and making a profit on turning them into long-term assets at higher rates. If you persist in keeping idle money at short-term rates, they will take your money and use it in this way. Curiously, globalization tends to create more short-term loans on components of what was formerly one single long-term loan on an assembled unit. This tends to unbalance the normal ratio of long-term to short-term, in the direction of excessive short-term availability. For the person approaching retirement without any way to pay for it, there is little choice but to take more risk. That is to say, if your goal is to avoid risk, don't dawdle until there is nothing you can do but take a risk. So, start saving young, start investing young, and learn your game. One old sage, maybe it was Ben Franklin, used to say, "The best thing which can happen to you, is to lose some money when you are young." Ben Franklin didn't like to lose money at any age. What he meant was, if you wait too long, you're likely to be stuck.
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.
