In America, the closest thing to an oriental bazaar is the auto showroom, where a salesman will spend an hour evading the price question, knowing some customers will eventually buy a car rather than spend unlimited time shopping. Lack of price transparency favors the merchant, so prices are higher. It probably does follow that healthcare prices would be lower if prices were more widely advertised and therefore, more standard.
But healthcare also varies in quality and effectiveness, so prices need to be flexible enough to compensate. Even eminent practitioners, therefore, squirm at the idea of price transparency. Flexible pricing is in fact a useful thing, without it, prices do rise, but not as much as supposed, and not without some justification. The practitioner is tangled in a web of comparisons, with his colleagues, with clinics and institutional salaries, with memories of other prices for nearly the same thing, with all the other alternatives available to a customer who can walk around and shop. Under the circumstances, the patients generally want to have a fond relationship with a doctor they can trust to know what the market is saying, and trust him to make the best guess about what his own services are worth. Therefore, a physician is a fiduciary, expected to put the patient's interest ahead of his own. Insurance is not a fiduciary: Our modern third-party system systematically replaces trust with: standard prices, blind faith in low prices as always better than higher ones, and determination that medical quality had better always be top-notch, or else we will sue.
Competitive market solutions are never an even match, once someone takes away your clothes.
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Our system of third-party payment has firmly fixed its goal on a single price for the same service, no matter what its quality may be. By its very nature, a remote third-party payer cannot judge which person wasted the doctor's time, which doctor took extra care, which offices are shabby and which are unnecessarily plush. A surgeon leaves his showroom office empty most of the time he is in the operating room, while a dermatologist barely moves his feet for eight hours in the office; both of them are paid uniform rates. Any effort to modify the price in response to variables is only listened to if the outcome is to lower the price. The industry term for this process is "service benefits". A physical exam is a physical exam, a history is a history, a gastrectomy is a gastrectomy. Oh, yeah? If you believe that, said the Duke of Wellington, you will believe anything.
The best way to handle the situation is to pay, in part, by indemnity. In effect, indemnity makes the promise to pay $800 for a gastrectomy. If the surgeon thinks he is worth more than that, it must be agreed to by the patient in advance and paid out-of-pocket. Not paid in advance, agreed to in advance, with the implicit understanding it can be reduced by sincere dispute, after the fact, and without recourse before the fact. Back at the beginning of the system, this feature was bargained away. I cannot resist telling the story of my father-in-law's advice to me, doctor to doctor, at the time of my wedding. "Never let your wife keep your books," said he. "To you, the patient is a poor old devil down on his luck. To your wife, he just represents a steak dinner, if she can collect the bill." Our third-party payment system has succeeded in projecting the image of protecting the patient against voracious "providers of care", just the reverse of their natural postures, and something my father in law never dreamed of. It's very simple: basic payment by indemnity, extras by a negotiated patient supplement. Since consumer representatives are so intransigent about "give-backs", it might at well include a COLA on the basic, and otherwise put inflation into the patient supplement.
It's very simple: basic payment by indemnity, extras by negotiated patient supplement
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At this point, we should probably pause and notice that the imperfect DRG system for inpatients, has nevertheless proved to be an extremely effective rationing tool. It quite effectively put an end to relying on the bed patient to be unable to walk away. In a little research project of mine, the eighteenth-century patients were in the hospital bed for exactly the same reason they are today: they couldn't walk, or couldn't be allowed to walk. Competitive market solutions are never an even match, once someone takes away your clothes. If the DRG system could be improved by substituting a better coding system (SNODO recommended), it would answer every objection except one. That objection is the relentless instinct of Society organized as institutions to squeeze payments and quality, once the helpless patient is out of sight of visitors.
At present, DRG is mainly forcing patients out who was once enticed into the hospital by the previous payment system. Once that backlog is exhausted, the DRG pressure will start to hurt, since all rationing systems lead to shortages. Like the Volstead Act, this government mandate was successful in its original purpose, but the unintended consequences were worse. When DRG starts to hurt, a new coding system had better be ready. Because the resultant growth of hospital outpatient services has been so extreme, it will cause a bigger bubble to burst unless attention is given to service benefits inflating the cost of outpatient care. To repeat, the cure for medical cost inflation is not to apply rationing, it is to improve the payment methodology so that rationing is unnecessary. The current repetitious chorus denouncing fee for service is just a cry of desperation from people too unimaginative to devise any substitute more sophisticated than salaried rationing. The problem here is not fee for service, it is service benefits. And the problem lies, not with the provider, but with the carefree beneficiary -- carefree because he is insured. And furthermore the solution is not salaried practitioners bossed by salaried politicians, it is a hybrid of indemnity with basic pricing. Under Health Savings Accounts, we bring the public into power over its own affairs. The remaining problem is to let the individual control his own monster, by making waste and luxury his affair, not an affair of the public at large. A good beginning would be to forbid the use of collection agencies, forcing the institution to confront its irate customers.
SOME BRIEF EXAMPLES, EXPLAINING LIFETIME HSAs .
Obamacare does not include Medicare recipients. However, it is a familiar topic, and its data are fairly accurately available in a unified form. So future Obamacare costs are readily understood by subtraction of Medicare costs from lifetime totals, and future changes can be more readily integrated. The average lifetime medical costs are roughly $325,000, as calculated by Michigan Blue Cross, who devised a system for adjusting costs to the year 2000. The results have been verified by several Federal agencies, although the method includes diseases and treatment which we no longer see, and adjusts for inflation to a degree that is startling. Medicare data are more precise but have the same trouble adjusting for the changes of half a century. By this method, we get the approximation of $209,000 for Medicare. By subtraction, we get the data approximating what Obamacare would cover, slightly confounded by including the small costs of children. That is estimated by subtraction to be $116,000. The revenue to pay for these costs is assumed to come entirely from the working years of 25 to 65. In the examples which follow, the Health Savings Account data are the maximum annual allowable ($3350) multiplied by 40, representing the working years, so they represent the maximum contribution, adjusted for compound investment income at 6.5%, and paying for lifetime costs. The aggregate cash contribution is thus $134,000, which without being disturbed by withdrawals, at 6.5% would hypothetically grow to the astonishing figure of $3.2 million by age 93. A more conservative interest rate of 4% would reach nearly a million dollars. The conclusion immediately jumps out that there is plenty of money in the approach, with the main problem remaining, somehow to devise a way to get it out in adequate amounts when the average is adequate but an occasional outlier cost is extreme. In these examples, inflation in revenue is assumed to be equal to inflation in costs, an assumption which is admittedly arguable.
HSA and ACA BRONZE PLAN: A FIRST LOOK. Although a catastrophic high-deductible plan must be attached to a Health Savings Account, and the Affordable Care Act provides a catastrophic category, those plans are not available after age 30 except in hardship cases. Therefore, at the present writing, it is necessary to select the plan with the highest deductible and the lowest premium, which happens to be the Bronze plan. "Lifetime" coverage with this, the cheapest ACA plan, would amount to $170,000, or $38,000
more than the most expensive HSA allowed by law. That's about a 22% difference. And furthermore, the bronze plan does not allow for internal investment income accumulation, which could amount to five times the actual premium revenue if held untouched until the end of projected life expectancy.
A more conservative analysis would end at age 65 because that is where the Affordable Care Act presently ends. Stopping the investment calculation at age 65 would lead to the same $170,000 for the bronze plan, compared with an adjusted price of HSA of $132,000, less a 6.5% gain of $xxxx, or $xxxx. To be fair about it, the gain would have to be adjusted for inflation, which at 2% would amount to $xxxx, an xx% difference. Let's make a more dramatic assertion: The difference between the most expensive HSA and the cheapest Bronze plan would be $xxxx. In a minute we will discuss the reasoning applied to Medicare, but it will show that a deposit of $80,000 at the 65th birthday would pay for the entire average lifetime of twenty years as a Medicare recipient. In a manner of fast talking, you get a lifetime of Medicare coverage free, somehow buried within the HSA approach. That's an exaggeration, of course, but at a quick glance, it could look that way. We haven't accounted for Medicare payroll deductions or premiums. Or government subsidies. And we haven't depleted the fund for the medical expenses it was designed to pay.
HSA AND MEDICARE. Medicare Part A (the hospital component) is free, and the system while generous, is pretty ramshackle. Furthermore, it isn't free, since it collects a payroll tax from working people, and collects premiums from the beneficiaries. Almost no one understands government accounting, but it has the unique feature that its debts are often described as assets. That is, transfers from another department are assets, so money which is borrowed, from the Chinese, let's say, is placed in the general fund and transferred internally, so such debts are assets. And the annual report (available from CMS on the Internet) shows that 50% --half-- of the Medicare budget is such a transfer asset, otherwise known as a subsidy. Medicare is a popular program because a fifty percent discount is always popular; everybody likes a fifty-cent dollar.
Unfortunately, the elderly Medicare recipients perceived the Obamacare costs were underestimated and became suspicious Medicare would be raided to pay for it. Therefore, every elected representative regards Medicare as the "third rail of politics" -- just touch it, and you're dead.
THE OUT-OF-POCKET CAP FUND. The Affordable Care Act contains two innovative insurance ideas for which it should be given full credit: the electronic health insurance exchanges which unfortunately caused such havoc from poor implementation, nevertheless have great potential for reducing marketing costs with direct marketing, and should be given full credit. And secondly, the cap on out-of-pocket payments is really a form of reinsurance without the cost of creating a re-insurance middleman. It is this which is the present focus. Three of the "metal" plans have deductibles of about $6000, and two of the plans have $6000 caps on out-of-pocket cash expenses by the beneficiary. How these two features will be co-ordinated is not yet clear, and does not concern the present discussion.
The point which emerges is the original Health Savings Account was based on the concept of a high deductible, matched with enough money in the fund to pay it. Effectively, it provided first-dollar coverage without the cost-stimulating effect, and experience in the field showed it worked out that way. However, the forced match of HSA with one of the metal plans interfered to some unknown degree with the comfort of virtual first-dollar and the cost reduction of a psychological high deductible. The premium is higher, because an increased volume of small claims is covered, and may be exploited. And an increased pay-out means less cash is available for investment. The result could be either higher costs or lower ones. And therefore, the idea arises of a single-payment fund of initially $6000, deposited at age 25 (Since that might well be a hardship for many young people, an additional feature is required). But the power of compound interest is such that this reserve would eventually become seriously overfunded. If the hypothetical client deposited $6000 at age 25, he would have accumulated $80,000 from this source alone. That's enough so that if it were paid to Medicare on the 65th birthday, it would pay for Medicare for the rest of the individual's life. But since it would not be needed from age 50 to age 65, further compounding (at the arbitrary rate of 6.5%) to $320,000 or some such amount, at age 65. Therefore, the following uses can be envisioned: ( 1.) Lifetime health insurance without premiums after 65. (2.) Since Medicare premiums would not be required, the Medicare premiums would not be required and should be waived. Money which flows in from earlier payroll deductions could be diverted to paying off the Chinese Medicare debt. (3.) We have glossed over this matter, but everyone was born at someone else's expense and should pay off his debt for the first 25 years of his own life. (4.) If circumstances permit, the client should be able to transfer $6000 to other members of his family for the same funding as he got it. (5.) Surpluses might persist in exceptional circumstances, and the option to supplement his own retirement funds might be offered. Eventually, it seems inevitable that the premiums for "metal" plans would be reduced.
At the very least, one would hope that this dramatic example of the power of compound investment income would encourage wider use of the principle.
How Certain Numbers Were Derived
These are important numbers to know, but difficult for most people to understand what they mean. That will, of course, depend on how they are derived, a subject of much less interest to many people. Therefore, the more controversial numbers are discussed in this chapter, which the reader may skip if he chooses.
WHAT IS THE AVERAGE LIFETIME HEALTH CARE COST, PER PERSON, AT PRESENT RATES?
Most people in the past did not live as long as they do today, so the "average person" is a composite of older people who had illnesses as children which we seldom see today, plus some who may well live beyond recent expectations, but who live beyond the age of death of their parents. One surmises this tends to include among "average" some or many hypothetical people who had both more illnesses as children, and who will have more illnesses as retirees. This would lead to an average with more illness content than the future likely contains.
Prices in the calculation have been adjusted to 2000 prices, slightly less than in 2014. Furthermore, there has been a 2% inflation adjustment, which reflects that a dollar in 1913 is now worth a penny, so we expect the penny to be worth 0.0001 cents in 2114. It is hard for most people to wrap their heads around such calculations. There is a $ 25,000-lifetime difference between the sexes, but the highly hypothetical result is this statement: The Average Person Can Expect Lifetime Health Costs of $325,000. Since most assumptions lead to an overestimate of future real costs, this number is conservatively on the high side. Comparatively few people would think they can afford that much. That is, plenty of people are going to feel stretched to adjust their savings to that level of inflation. It's the best estimate anyone can make, but by itself alone it seems to justify organizing a government agency office to match average income with average expenses, and to make the ingredient data widely available to many others outside the government on the Internet, to maximize the recognition of serious errors, unexpected financial turmoil, the development of new treatments, and changes in disease patterns. Inevitably, these calculations will be applied to other nations for comparison, but that is a highly uncertain adventure.
HOW DO YOU CALCULATE CHILDREN'S HEALTH COSTS?
Like Archimedes announcing he could move the World if he had a long enough lever and a place to stand, accomplishing this little trick could arrive at impossible assumptions. Our basic assumption is that paying for your grandchildren is equivalent to having your parents pay for you, even though the dollar amounts are different. It's an intergenerational obligation, not a business contract, and you are just as entitled to share good luck as bad luck when the calculation is shaky at best. Since children's costs are relatively small, little damage is anticipated from taking present costs, adjusted for inflation, for both past and future.
Is it reasonable and/or politically possible to lump males and females together, when females include all the reproductive costs, and have a longer life expectancy? How do we apportion the pregnancy costs between mother and child, with or without including the father? What is fair to those who have no children? What costs do we include as truly medical? Sunglasses? Plastic Surgery? Toothpaste? Dentistry? The recent hubbub about bioflavonoids threatens to convert what was mainly regarded as a fad, into a respectable therapy for allergy. When allergists and immunologists agree it is a fad, you don't pay for it; if substantially all of them think it is medically sound, pay for it. The opinion of the FDA informs the profession, it does not substitute for that opinion. Quite aside from cost issues, all of these issues affect the statistical ground rules, and may not have been treated identically among investigators. Unverifiable 90-year projections must be thoroughly standardized to be useful, and that's one committee I shall be glad to avoid because I do not believe the improved accuracy is worth the dissention. When somebody discovers a cure for cancer or Alzheimers, rules may have to be revised, net of the cost of the treatment, and net of the increased longevity. Government accounting, private accounting, and non-profit accounting are three different schools of thought for three different goals; when a government borrows outside of its accounting environment to reimburse providers of care, misunderstandings of the "cost" consequences result, in the three definitions of medical costs. In short, only broad qualitative trends can be credible at the moment.
CRUCIAL FINAL QUESTION: FUNGIBILITY (Shifting money around)
Some of the foregoing examples are lurid, and perhaps a little dramatized for effect. But the effect of compound investment income is so impressive, that there really is a little question there is plenty of money to do just about everything which needs to be done in health financing. The problem, however, is how to get enough money to pay the right bills, at the right time. The temptation to steer the money into the wrong places has been present since Isaac and Esau, and while the pooling principle of insurance (and government) solves that problem, excessive use of that flexibility is what mainly got us into the present mess. The intrusion of government can be traced to the "pay as you go" system, which amounts to paying long-term debts with current cash flow. This money has been present right along, but political considerations created pressure to begin the government system, right away, and for everyone right away. The citizens are partly responsible since they have taught politicians they must respond to people taking off their shoes and pounding the table with them. So, yes it's true that compound interest gives an advantage to frugal people, and to some extent to people who are already prosperous. But egalitarianism doesn't justify refusing to do what is in the general interest of everyone. We are currently in a pickle because we took egalitarian short-cuts in 1965, and have preferred to borrow money for healthcare, ending up paying many times what we need to pay, rather than yield to mathematical principles discovered by Euclid, or perhaps it was Archimedes.
But while Health Savings Accounts, individually owned and selected, have more investment flexibility to take advantage of the necessarily higher returns of the private sector, and the flexibility to choose superior investment techniques as they are invented, and the flexibility to adjust to personal circumstances rather than universal absolutes,-- they lack the flexibility to pool resources between different persons and times. Perhaps this flexibility could be extended to whole families, since there are shared perplexities of pregnancy, age group, and divorce which must be addressed in a communal forum, and perhaps churches or clubs could fill that role. But in our system sooner or later you get mixed up with a lawyer, judge or investment advisor. And therefore must contend with moral hazard and disloyal agents. By this time, I hope we have learned the weaknesses of that new branch of government, the government agencies. As Adlai Stevenson quipped, "It used to be said, that a fool and his money are soon parted. But nowadays -- it could happen to anyone."
So I recognize that although some people in a Health Savings Account system will have barrels of money, while others will be desperately in need, the fact that on average there is plenty of money to fund everybody isn't quite good enough. Somewhere a pooling arrangement must be created, and the fact that the people running it will be overcompensated must be shrugged off as inevitable. But since the people who trust it will be fleeced, they might as well be the ones to create or select it.
A bank account earning interest will contain more money than a bank account earning no interest. How much the interest will be, depends on circumstances, but earning interest beats no-interest every time. In the case under discussion, the account is a Health Savings Account, and the alternatives for spending are healthy alternatives. Because the volume of money passing through the system is estimated to be huge ($325,000 per lifetime), the interest to be earned on 316 million Americans is staggeringly huge. In the following discussion, it is assumed the comparatively easy decision has been made to accept the money, but the highly contentious decision remains: how to spend it. The following choices immediately come to mind:
Pay off the health entitlement debts of the past.The U.S. Treasury reports our foreign debt to be $4.5 trillion, of which one trillion is owed to China, and one trillion to Japan. The Treasury does not issue data any more detailed than the national total, for the interesting stated reason that all Treasury bonds are general obligations. Some of this debt originated as Medicare subsidy, but it is not easy to learn more than that. In addition, it would only seem fair to devote some of a windfall for health to paying off its past obligations. For these two reasons, it would be possible to run an appreciable surplus without seeming to affect current balances.
Universal Entitlement. Obamacare was enacted on the proposition of universal entitlement to health insurance. Implicit in that claim was the idea that many Americans did not have and could not afford health insurance, and that insurance coverage represented some minimum level of healthcare entitlement, even if it had to be subsidized. Persons who did not have health insurance were regarded as jeopardized, even if they were in perfect health, and even if they did not regard health insurance as worth its cost. This uninsured risk within the population was covered by providers absorbing the cost, along with traditional health charities, and other levels of government. Somehow the idea was included that it was superior to have the federal government cover these costs, or perhaps it was superior to cover these costs with a graduated income tax. Although in the early stages there was some talk of reducing healthcare costs by federalizing them, it was eventually acknowledged, extra insurance coverage implied higher costs for everyone, except those who received government subsidies, derived from graduated income taxes, and identified as entitled by government regulation. It is a great curiosity of this campaign that employers were never pointed to as having a burden lifted when the existing system was still described as employer-based. As proposing to devote a huge windfall to the purpose tends to bring out, the cost of healthcare was being shifted from employer tax-deductions to individual taxation of the upper-bracket sort.
After three years of Obamacare, the two clear beneficiaries are health insurance companies and employers who donate the insurance to their employees. It is not clear either of these two groups was particularly suffering, so it is not obvious why a windfall should benefit them.
When I give talks about Health Savings Accounts, there often seems to be some person in the front row who doesn't seem to be listening. But he's usually the first to raise his hand with a question, which goes more or less like this: "Well, what does this do for poor people?" So here's my usual answer.
Poor people are all poor, but they are poor in different ways. For preliminary discussion, let's divide them into three classes.
On Their Way Up. Most Americans came here at the bottom and worked their way up. Poverty may once have been their condition, but it wasn't their ambition to stay there. Everyone, particularly the newcomers, can see that cheaper means more people can afford something they once couldn't afford. It's the job of Health Savings Accounts to make healthcare cheaper, but if you subsidize more than half of the population, and then set a threshold of 400% of poverty, you tend to hold people in place. You tend to make subsidies hard to surrender, which increases the number of subsidized people, and ultimately makes subsidies too expensive to continue. It may be well-intended, but it makes things worse. The Latin expression Primum non-nocere is the medical profession's motto, meaning "The least you can do for somebody, is not make their problem worse." On the other hand, by making healthcare cheaper, more people can afford it, so you've done a lot of good.
Like Tolstoy's Unhappy Families,
Poor people are Poor in Different Ways.
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Stuck at the Bottom. It's true a dismaying number of people are permanently unemployable. Not just unemployed, but unemployable. The Mayor of my little suburb tells me 8% of the school budget is devoted to "Special education", which mostly means mental defects of one kind or another. In spite of special education, a large proportion of mentally retarded kids will never be able to support themselves. And despite movies about Nobel prize winners with Lou Gehrig's disease, a lot of other people born with neurological conditions will never be self-supporting, either. My profession is working hard to reduce the number of permanently disabled, and quite often it is fiercely expensive to treat them, but we keep doing it. For the most part, these disabilities are easy to recognize, and with few exceptions, it is society's obligation to subsidize them indefinitely. But it is not the role of Health Savings Accounts to define, identify or treat these people. In fact, it would injure our performance to take on a non-financial role. Give us the money and we will expand it and then pass it along. We will even contribute toward its cost, but much prefer to have the government pay its own bills, and not disguise their taxes as part of our operating budget. Who made it government's duty? Our elected representatives in Congress did, and we try to follow their rules.
Temporary, Borderline, and Political. For a while, I acted as a referee on Disability Determination. Let me tell you, it's often pretty hard to tell who is malingering, from who is eligible among a host of different assistance agencies, and who has long since recovered from a disabling condition. It's therefore expensive to administer Disability Determination, and physically exhausting if you take it seriously. It isn't the proper job for a Health Savings Account, which would do it very poorly, dragging down the performance of what else we would really like to do perfectly. Which is to reduce the effective cost of healthcare, by adding an unexploited source of revenue in the financial field.
HSA Proposal for the Poor. The proposal, therefore, is we should start with what is least controversial in almost everybody's mind, which is catastrophic health insurance. This type of insurance comes closest to what everyone would agree we owe all our citizens. No money is expended on the basis of income or social circumstances, it is decided individually at the hospital door, usually by accident room physicians. Its volume of component services would be controlled by an improved DRG, and its retail price should be determined by outpatient costs determined in turn by the marketplace, or by a relative value scale when no comparable outpatient service exists. It may be advisable to reconstitute the PSRO (Professional Standards Review Organization).
It may be desirable to dispense this catastrophic insurance through an HSA, although it is not essential. If it is the only benefit provided, it still would be useful to provide an accordion mechanism for additional services for those who rise from poverty, who are reimbursed through special programs in a variety of ways, or who find ways to supplement the cost themselves. Ultimately, it should provide a vehicle for integration, temporarily or permanently, into the private sector.
Two themes run through the following modification of the Health Savings Account idea. The first is, we should seek ways to extend the period of time, during which compounding has a chance to work. The definition of forbidden perpetuity was created in the Seventeenth Century: one lifetime, plus 21 years. There is no reason why an American judge could not declare some other period of time to be a perpetuity, but this one has served for several centuries and therefore probably is at least as useful as any other. It seems to be an adequate compromise between fairness of inheritance, and Puritan encouragement of self-advancement through merit and industry. Longer than that would discourage the work ethic for descendants, and shorter than that would discourage the work ethic of elderly parents who might not live to be rewarded for late-life efforts. Perhaps other considerations were at work, but I personally feel no pressure to change the traditional definition. Therefore, the average longevity plus 21 years is here accepted as the limit of tax-exempt inheritance. It, therefore, sets a time limit we should accept when we are looking for the maximum return on a Health Savings Account; from birth to 105 years later, and a little longer if average longevity increases.
That's the first goal. The second is to create uniformity in the name of fairness and to use the uniformity to calculate the future. Obviously, people die at different ages, but the last year of life is the point beyond which everyone has less interest in accumulating money for himself, and the first year of life is the time when birth costs occur to everyone. So everyone gets his full life expectancy to calculate returns, and the average longevity is a surrogate for that. That leaves an extra 21 years, which we utilize, to include the grandparents in the family circle, permitting the idea that grandparents are funding grandchildren. Because American demographics reveal 2.1 children per mother, they result in one grandparent funding, one child. Thus, the stipulation that each person who dies must contribute one average grandchild's cost to the inheritance pool, in one way or another.
If you estimate the average rate of compounding accurately, you should be able to calculate the maximum income achievable by Health Savings Accounts. Somewhat less accurately, it is possible to calculate and make mid-course adjustments to, future reductions of health care cost for individual persons. If the maximum is known and adjusted for failure to contribute to the fund, it should be possible to calculate the incentive for continuing to fund or to borrow to fun, in the face of some household disruption. A sense of security is created. More than anything else, an incentive to save is created in the young. Furthermore, each subscriber can calculate the very large consequences of seemingly minor middle-man costs, and therefore resist them.
Finally, a consequence of this design is to maximize the lifetime income of the designated escrow fund. Not only is the duration of compounding stretched to its maximum, but it is aimed at stretching from childhood to the time of maximum health expense, usually the last year of life, and thereby getting the most out of the investment. Exceptions will of course occur. By using national averages, the bookkeeping cost is reduced. By using Medicare cost data, accuracy is enhanced. And by switching the cost-shifting to the reinsurance level from the (at present) largely hospital level, subscribers should barely notice it is happening.
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.