The musings of a physician who served the community for over six decades
367 Topics
Downtown A discussion about downtown area in Philadelphia and connections from today with its historical past.
West of Broad A collection of articles about the area west of Broad Street, Philadelphia, Pennsylvania.
Delaware (State of) Originally the "lower counties" of Pennsylvania, and thus one of three Quaker colonies founded by William Penn, Delaware has developed its own set of traditions and history.
Religious Philadelphia William Penn wanted a colony with religious freedom. A considerable number, if not the majority, of American religious denominations were founded in this city. The main misconception about religious Philadelphia is that it is Quaker-dominated. But the broader misconception is that it is not Quaker-dominated.
Particular Sights to See:Center City Taxi drivers tell tourists that Center City is a "shining city on a hill". During the Industrial Era, the city almost urbanized out to the county line, and then retreated. Right now, the urban center is surrounded by a semi-deserted ring of former factories.
Philadelphia's Middle Urban Ring Philadelphia grew rapidly for seventy years after the Civil War, then gradually lost population. Skyscrapers drain population upwards, suburbs beckon outwards. The result: a ring around center city, mixed prosperous and dilapidated. Future in doubt.
Historical Motor Excursion North of Philadelphia The narrow waist of New Jersey was the upper border of William Penn's vast land holdings, and the outer edge of Quaker influence. In 1776-77, Lord Howe made this strip the main highway of his attempt to subjugate the Colonies.
Land Tour Around Delaware Bay Start in Philadelphia, take two days to tour around Delaware Bay. Down the New Jersey side to Cape May, ferry over to Lewes, tour up to Dover and New Castle, visit Winterthur, Longwood Gardens, Brandywine Battlefield and art museum, then back to Philadelphia. Try it!
Tourist Trips Around Philadelphia and the Quaker Colonies The states of Pennsylvania, Delaware, and southern New Jersey all belonged to William Penn the Quaker. He was the largest private landholder in American history. Using explicit directions, comprehensive touring of the Quaker Colonies takes seven full days. Local residents would need a couple dozen one-day trips to get up to speed.
Touring Philadelphia's Western Regions Philadelpia County had two hundred farms in 1950, but is now thickly settled in all directions. Western regions along the Schuylkill are still spread out somewhat; with many historic estates.
Up the King's High Way New Jersey has a narrow waistline, with New York harbor at one end, and Delaware Bay on the other. Traffic and history travelled the Kings Highway along this path between New York and Philadelphia.
Arch Street: from Sixth to Second When the large meeting house at Fourth and Arch was built, many Quakers moved their houses to the area. At that time, "North of Market" implied the Quaker region of town.
Up Market Street to Sixth and Walnut Millions of eye patients have been asked to read the passage from Franklin's autobiography, "I walked up Market Street, etc." which is commonly printed on eye-test cards. Here's your chance to do it.
Sixth and Walnut over to Broad and Sansom In 1751, the Pennsylvania Hospital at 8th and Spruce was 'way out in the country. Now it is in the center of a city, but the area still remains dominated by medical institutions.
Montgomery and Bucks Counties The Philadelphia metropolitan region has five Pennsylvania counties, four New Jersey counties, one northern county in the state of Delaware. Here are the four Pennsylvania suburban ones.
Northern Overland Escape Path of the Philadelphia Tories 1 of 1 (16) Grievances provoking the American Revolutionary War left many Philadelphians unprovoked. Loyalists often fled to Canada, especially Kingston, Ontario. Decades later the flow of dissidents reversed, Canadian anti-royalists taking refuge south of the border.
City Hall to Chestnut Hill There are lots of ways to go from City Hall to Chestnut Hill, including the train from Suburban Station, or from 11th and Market. This tour imagines your driving your car out the Ben Franklin Parkway to Kelly Drive, and then up the Wissahickon.
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Philadelphia Revelations
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George R. Fisher, III, M.D.
Obituary
George R. Fisher, III, M.D.
Age: 97 of Philadelphia, formerly of Haddonfield
Dr. George Ross Fisher of Philadelphia died on March 9, 2023, surrounded by his loving family.
Born in 1925 in Erie, Pennsylvania, to two teachers, George and Margaret Fisher, he grew up in Pittsburgh, later attending The Lawrenceville School and Yale University (graduating early because of the war). He was very proud of the fact that he was the only person who ever graduated from Yale with a Bachelor of Science in English Literature. He attended Columbia University’s College of Physicians and Surgeons where he met the love of his life, fellow medical student, and future renowned Philadelphia radiologist Mary Stuart Blakely. While dating, they entertained themselves by dressing up in evening attire and crashing fancy Manhattan weddings. They married in 1950 and were each other’s true loves, mutual admirers, and life partners until Mary Stuart passed away in 2006. A Columbia faculty member wrote of him, “This young man’s personality is way off the beaten track, and cannot be evaluated by the customary methods.”
After training at the Pennsylvania Hospital in Philadelphia where he was Chief Resident in Medicine, and spending a year at the NIH, he opened a practice in Endocrinology on Spruce Street where he practiced for sixty years. He also consulted regularly for the employees of Strawbridge and Clothier as well as the Hospital for the Mentally Retarded at Stockley, Delaware. He was beloved by his patients, his guiding philosophy being the adage, “Listen to your patient – he’s telling you his diagnosis.” His patients also told him their stories which gave him an education in all things Philadelphia, the city he passionately loved and which he went on to chronicle in this online blog. Many of these blogs were adapted into a history-oriented tour book, Philadelphia Revelations: Twenty Tours of the Delaware Valley.
He was a true Renaissance Man, interested in everything and everyone, remembering everything he read or heard in complete detail, and endowed with a penetrating intellect which cut to the heart of whatever was being discussed, whether it be medicine, history, literature, economics, investments, politics, science or even lawn care for his home in Haddonfield, NJ where he and his wife raised their four children. He was an “early adopter.” Memories of his children from the 1960s include being taken to visit his colleagues working on the UNIVAC computer at Penn; the air-mail version of the London Economist on the dining room table; and his work on developing a proprietary medical office software using Fortran. His dedication to patients and to his profession extended to his many years representing Pennsylvania to the American Medical Association.
After retiring from his practice in 2003, he started his pioneering “just-in-time” Ross & Perry publishing company, which printed more than 300 new and reprint titles, ranging from Flight Manual for the SR-71 Blackbird Spy Plane (his best seller!) to Terse Verse, a collection of a hundred mostly humorous haikus. He authored four books. In 2013 at age 88, he ran as a Republican for New Jersey Assemblyman for the 6th district (he lost).
A gregarious extrovert, he loved meeting his fellow Philadelphians well into his nineties at the Shakespeare Society, the Global Interdependence Center, the College of Physicians, the Right Angle Club, the Union League, the Haddonfield 65 Club, and the Franklin Inn. He faithfully attended Quaker Meeting in Haddonfield NJ for over 60 years. Later in life he was fortunate to be joined in his life, travels, and adventures by his dear friend Dr. Janice Gordon.
He passed away peacefully, held in the Light and surrounded by his family as they sang to him and read aloud the love letters that he and his wife penned throughout their courtship. In addition to his children – George, Miriam, Margaret, and Stuart – he leaves his three children-in-law, eight grandchildren, three great-grandchildren, and his younger brother, John.
A memorial service, followed by a reception, will be held at the Friends Meeting in Haddonfield New Jersey on April 1 at one in the afternoon. Memorial contributions may be sent to Haddonfield Friends Meeting, 47 Friends Avenue, Haddonfield, NJ 08033.
When confronted with any complicated and contentious issue like medical malpractice, the instinct of Congress is to ask for an impartial survey of the available literature on the topic from GAO. The Government Accountability Office has produced several well-balanced analysis of the situation, readily available to the public on its website. These cautiously worded reports complain that much information on this topic was collected for other purposes. For example, interstate malpractice insurance companies commonly collect information about classes of injury and types of subscribers, but often do not subdivide the information by the state of origin. Therefore, it is sometimes not possible to be confident of what effect varying state policies or laws may have had. Some of this data deficiency is being corrected but has not had time to accumulate into useful patterns. And divulging some data, like each company's investment performance on its reserves, is resisted as proprietary. After forty years of heated accusations between the medical and legal professions, this is disappointing.
Insurance Lawyers
The chief example of this sad situation is judging managed Care's effect on patient-doctor relations. Since reports like the Harvard study of medical negligence in New York demonstrate that disputes which result in lawsuits are less than ten percent of comparable male occurrences, patient animosity may be as important a stimulus to suit as the severity of an injury or the degree of negligence. Until hard data is produced, the issue is open to adversary rhetoric. The uncomfortable thing about Managed Careis its tendency to transfer doctor selection to a remote third party. The consequence, at least to some degree, is throwing doctors and patients together who do not like each other very much. Carried to the extreme, it would then be plausible for the degree of negligence to have less to do with triggering later lawsuits than does personal friction between patient and doctor. If you like him, you forgive; if you dislike him, you sue.
During the most recent period when malpractice suits, awards, and premiums rose to a level probably causing some physicians to abandon the practice, managed care simultaneously rose to become a dominant factor. It is safe to say many patients and many physicians hated being in this arrangement because it was essentially imposed on them both by employer group purchasers. There is some hope that some malpractice insurers have maintained records of their experiences, categorized by the type of health insurance of the plaintiff. These databases might establish whether managed care is responsible for increasing the number and cost of suits; it might assist other policy decisions as well. Those who scoff at the cost of tort litigation do not adequately acknowledge these far-reaching implications of many aspects of the issue.
Creative destruction seemed a violent driver for the past two centuries, injuring a lot of harmless occupations and provoking their resistance to progress. The Industrial Revolution was bad enough, arousing Engels and Marx. But the computer revolution works faster, putting the pedal to the floorboard in a lot of ways, changing almost every life in some way, only faster. We could be approaching a violent second Luddite reaction if we don't keep our heads.
The legitimate complaint about the electronics revolution is that it is going in the right direction, but exceeding a reasonable speed limit. Elegant novelties that function smoothly deceive us into expecting perfection too soon, developing a habit of depending on innovations which are still a little shaky. But the banking industry, which presently bemoans securitized mortgages, swaps, and other products of the computer age, could not possibly have coped with the vast expansion of bank transactions without computer assistance. Computerized fraud is a problem, but street crime has markedly declined in response to ubiquitous cell phones in the pocket of every innocent bystander. The press is vexed by Internet competitors and bloggers by the million, but democracy is the better for it. Sometimes a simple solution will solve a problem created by computers, but to a major degree, only computers can get us out of the fix we are in.
For example, it seems plausible that the flaw in securitized mortgages lies in the inevitable loss of diligence by banks who originate mortgages with full knowledge that they will immediately be sold. Requiring an originating bank to retain 10% of the mortgage permanently would also force it to maintain an accurate tracking system for the other 90%, providing analysts a way to assess the performance of the originator, and regulators a way to control the volume. Maybe a simple rule like that would suffice, but if not the solution would probably consist of a massive computer programming effort to maintain records in excruciating detail.
Madam LaFarge
It's probably true that five years ago hardly any bank president could have offered a simple coherent explanation of what a derivative is, and it is certainly true that's the case for 99% of the population today. But that is the worst possible reason to destroy derivatives, which offer a breath-taking advantage in scale and diversification, and ultimately in risk abatement. Bundling thousands of mortgages leads to a much more precise estimation of the risk of the bundle than a banker could make of a single mortgage. If you know the risk with precision, the assessment of risk will be more accurate and almost certainly cheaper. There will be, there must be dislocations of prices as one system morphs into another. Temporary halts and moratoriums are justified, but demagoguery and Luddite riots are pitiful harmful responses. Politicians up for election are a menace in any crisis, where they come in various guises. There's giggling while the heads roll. There's also Charles de Gaulle, purring that he wanted to go to Heaven, he just was in no particular hurry to get there.
Charles de Gaulle
But let's be careful of our slogans, here. It certainly is preposterous to say that anything which is poorly understood must be a villain. It's also unwise to be drawn into a swamp. The banking industry faces dissolution if they can't keep up with electronic advances in their industry, so it is inevitable that speeding up wrong approaches will only make some parts of the credit crunch worse. Most of the cost-effectiveness of computers in the past have grown out of revising and replacing old methods, not from speeding up dumb ones. For example, if you want to know why health insurance is so expensive and cumbersome, you need only ask why it is so profitable. Once the huge investment in computerizing a system has been made, replacing it with a better system gets to be nearly impossible.
Ultimately, our present dilemma is this: we don't yet know how bad the problem is. It seems a reasonable possibility that this crunch happened just in time. Bad, it is true, but not yet catastrophic. If 3% or even as much as 10% of mortgages are foreclosed, the present system can absorb the loss, learn its lessons, and move on. A loss of a hundred billion dollars would probably lead to business more or less as usual. A loss of four hundred billion would however probably imply a serious recession, but when you start talking trillions, you are talking disaster. Most of the immediate uncertainty arises from ARM, the adjustable rate mortgages, and the degree of leverage in the debts of financial intermediaries. It's quite uncertain how many people took out mortgages they will not be able to afford at higher future rates of interest, or how many people took advantage of low rates for five years knowing they were planning to sell and move on during that interval, anyway. With regard to business loans, a mild drop in the economy will make it hard for businesses to cover highly leveraged loans. A huge drop will make it impossible for many businesses to survive, and they won't. A trillion-dollar aggregate loss would certainly provoke some welcome bipartisanship in Congress, but it might trigger a collapse of the Chinese economy or other unthinkable contingencies. Forcing more transparency into the present murk is the most urgent need, and that might well imply a concerted crash electronic analysis effort, with the way opened by some enabling legislation. Speeding up is only a good thing if you are headed in the right direction.
A friend of mine, treated as my contemporary but probably only sixty years old, was recently speaking of a club picnic he, unfortunately, wouldn't be able to attend. His mother was now living with him, and since she was 84, obviously neither of them could go to a picnic on a sailing vessel. The club committee, listening to this regret, chuckled that of course, we shouldn't expect him. My thoughts were somewhat different. Since I'm 94 myself, I was wondering if she was available for a date. And of course I am going to that picnic, why shouldn't I?
You can't scare me very much about the future scientific costs of medical care. But Insurance and administrative costs are something else of course. If the problem of foolish borrowing puts Medicare out of business, it's hard to see how that could be the fault of my profession, unless perhaps something or other undermines our traditional system of ethics.
Where the ethics thing comes in is in the obvious conclusion that we are spending a lot of money treating diseases we crusty old docs once wouldn't have thought were worth our time. We are fast approaching the point when substantially all the medical catastrophic costs are concentrated in the first year of life and the last year of life. Increased life expectancy is a matter of widening the interval between those two signposts. Medical care between those years consists of treating the disease successfully, preventing disease and managing complaints we once would have dismissed as 'that's nothing'. Even the cost of doing this kind of medical care should decline: patents should expire equipment should simplify treatment should become standardized or even routine. But we notice people won't leave us alone: our government has just spent $27 billion forcing office computers on doctors who don't see the need to be bothered with them. People persist in using our time to inject botulism toxin into wrinkles and to listen to complaints about
how lonesome they are. That is to say, the public is beginning to insist on substituting their own view of what they want, for what doctors have traditionally thought was worth treating. This is an expensive way to enjoy the freedom of choice and it is only a matter of time before bureaucrats figure out the least obtrusive way to curtail it. Only when forces come to equilibrium will it be feasible to extrapolate future health costs.
What should appall us is the cost of paying for a progressively protracted retirement of so many unemployed people and the absolute impossibility of paying for it by continuing on our present funding path. Maybe that's what all this obesity means. Maybe people are trying to store up enough fat when they are forty, so they can go without eating from age sixty to ninety.
There is a fair amount of seemingly unrelated detail until we reach the point of this article, where we conclude it really is possible to design and pay for lifetime health costs with the tools we already have, using individually owned lifetime policies. As a part of that, it really should be possible to substitute cost shifting between the youth and the old age of one person, rather than the present kind of cost shifting from one person or group to somebody else. People don't mind taking from one of their pockets and putting into a different one. But fierce possessiveness appears when you shift from my pocket to your pocket, and the health system is riddled with it. "Riddled with cost-shifting" seems to imply underhandedness. In fact, only the simplest businesses could survive without such flexibility. The problem with cost-shifting in medical care is there is so much it, even carried to the extreme of performing carefree, with blithe indifference about how to pay for it. Just review how accustomed we have become to cost shifting as the only possible thing to do.
From the outset, Blue plans announced their business model: patients in the private rooms supporting the care of indigent patients on the wards, up to then entirely supported by the charity. Plus a third, intermediate class of say ministers and school teachers, called semi-private, who were financed on a strict break-even basis. Summary: rich people supported poor people, and the semi-privates broke even. At first, there was just a handful of semiprivate, but after a decade or so, just about everybody was semiprivate, defined as two strangers in a room. Blue Cross had an enormous unintended effect on hospital architecture. When Medicare and Medicaid adopted the same philosophy, the semiprivate room became the standard. If the rooms were small (and cramped) the nurses didn't have to walk so far, but the main driver was the insurance reimbursement formula, which was based on square feet of floor space. A square foot of such space was used as a cost basis for non-patient space in the overhead formula. Eventually, hospital architects were receiving demands for bizarre room sizes, in order to affect the reimbursement formula. The tail was beginning to wag the dog.
t
During that era, charities were payers of last resort, unless creditors were stripped by bankruptcy. Furthermore, to provide a full range of services, some services lost money, subsidized by other departments which generated a profit. Any corporate executive could tell you what came next: the profit centers start to boss the losers around. In group practices, surgeons generally still subsidize primary care ("the feeders"); state Medicaid is roughly 50% subsidized by federal Medicare, and after hospitals are paid, underpayment by Medicaid is balanced by the hospital from other sources, once again mainly from Medicare until payment by diagnosis (DRG) came along. It is when one insurance competitor is forced by internal hospital cost-shifting to subsidize its rival, that most of the outcry is heard. Employer-basing leads to different subsidies between insurances, and by a two-step process, one competitive business subsidizes its fiercest competitor. Generally, a business does not care what things cost, so long as competitors must pay the same price. In the eyes of business, trouble comes from unequal cost-shifting. Its mere suspicion is almost as bad. Working-age people subsidize the generations too young or too old to work. That is obviously what must happen indirectly and unofficially, anyway. Cost-shifting is a normal business practice, an absolutely necessary one, but the cost shifting of hospital costs is almost beyond belief. Because now, no one can tell what anything costs, and because patients who are business employees will reflect the attitude that the absolute amount doesn't matter, only that competitors must pay the same. In short, cost rises meet little resistance.
What brings the matter to a crisis is payment by diagnosis, where it doesn't matter how long a patient stays or how many tests he has, the insurance payment to the hospital is the same. Added to a determination by Medicare to cut costs, the result is that the profit margin for inpatients is around 2%. From the payment designers' point of view, it's an excellent rationing system. But it isn't, because hospital architects are directed to shift their lavishness to service areas with greater profit margins, like emergency rooms and satellite outpatient clinics. The next time you see a building crane at your local hospital, just ask them what kind of building they are putting up. Having spent a fortune twisting hospitals into one kind of shape, the reimbursement system is twisting a new shape, and rather oblivious about it. At the same time, two-bedrooms are being converted to one-bedrooms to attract a carriage trade and justify a higher price. Maybe, just maybe, the bed capacity is somewhat smaller at the end of responding to a pitiful profit margin for inpatients. Changing demographics are also a factor. Trends toward unsustainable cross subsidies grow steadily larger because the contribution of working people is certain to get proportionately smaller. Extended longevity increases the proportion of young and old dependents, boosting the costs of working people by the fact that their shrinking proportion must ultimately pay for all of it. Ultimately, all hospital revenue originates with the working segment of the population. Parents pay for their children, and payroll deductions pay for the elderly grandparents. Working people are supporting it all. Let's not overstate: disappearing infectious diseases reduced the mortality and hospitalization of working people, too. The elimination of polio and tuberculosis was a dramatic godsend but made it harder to finance a general hospital, because of the shrinking client base of employed people. The way things are going, health costs should eventually concentrate in the first and last years of life, with hardly any serious illnesses for the people in the middle years of life who ultimately pay for every bit. Hospital cost-shifting can not indefinitely support its own system because working people will have so few medical expenses it becomes impossible to hide very much within them. If you want to know why payment by diagnosis was welcomed, just reread the last three paragraphs. Unfortunately, if payment is based on diagnosis, it doesn't matter how many x-rays you have, or whether all the door handles are polished brass. We badly need a new way to charge inpatients, and just about every system has been tried. Unfortunately, it took a long time to get rid of payment by the square foot, and it will take a long time to get rid of payment by two hundred very approximate diagnosis groups, or DRG. The very least that could be done is to substitute a better diagnosis code, like SNOMed, for the private ICDA, so that payments are seen to be driven by the right diagnosis, which might tell planners something useful.
How could we have created individual policies that failed to reward customer loyalty with guaranteed renewal?
Or monopoly status, to companies without guaranteed issue?
Lost Opportunity
Under the growing circumstances, it might be possible to persuade most people it was a mistake to pay current costs out of current revenues ("pay as you go"). That is, we should have created individual policies, individually owned, that included a contractual renewal right in return for customer loyalty. And while we were at it, a guaranteed issue in return for monopoly status. As it is, whole demographic groups have come to believe that others have a moral duty to subsidize their costs. But these others know that a moral right is not a contract right, and both sides know a severe economic depression is apt to sweep aside merely moral claims. Taken all together, it is probably possible to persuade most Americans that it would be best to replace one-year "term" health insurance system with a "whole life" system, chosen and owned by each individual. People would pay in their estimated costs when young, accumulate compound interest income in the meantime and thus pay less than their costs when they are elderly. The overall lifetime cost would be less, by roughly the amount of the investment income. A dozen or so television serials and books might well convince the nation. What would be hard for people to accept, however, are the huge costs and convulsive disruptions of changing existing systems during the transition from whatever we have today, to whatever this imagined system would lead to. Asked offhand, the average American would probably guess this transition would take thirty years. Most people greatly underestimate the power of compound interest, and greatly overestimate the difficulty of doing something new.
Medicare would pay terminal costs as before, but be reimbursed by the escrow fund.
Transfer Vehicle
It would be difficult, all right, but not that bad. In the first place, we have an unusual set of circumstances involving the finances of the end of life. Predicting the average stock market price eighty years from now is considerably more precise than estimating what it will be eighty days from now. Furthermore, health expenses tend to be small for children and get progressively larger until we find that absolutely everybody will die and have some medical expenses, often very large ones. The list of diseases is steadily shortening and the life expectancy is getting longer. We have already discussed how relatively easy it would be to anticipate the heavy costs of the last year of life from Medicare statistics and the timing of it from life insurance data. That's not likely to change because no matter what other costs might be lowered, everyone is going to die. While it is true that current interest rates are unusually low, even they could be estimated, since the point is not to pay terminal care costs to the penny but to reduce them by whatever income might be generated. Forward projections would be comparatively straight-forward, so it seems likely the proof of concept would emerge in a few years. The vigilance of the public about government stewardship of the escrow, and of inflation control, are less certain but reasonably secure. Just assuring transparency would make watchdogs of the public in its own behalf, particularly if the rules prevent the individual from pilfering the fund for himself. As a practical matter, Medicare would pay medical costs as before, and be reimbursed by the escrow fund during the transition period. By the time the transition is complete, many other problems will be solved, and attention can be focused on this one. By comparison, generating the funds is the easy part. Keeping the voters from giving themselves a raise will always be with us.
Malpractice costs are disproportionately concentrated in Obstetrics.
Who is doing the suing?
But what about the first years of life , whose expenses have already been spent? (The term is loosely applied to pregnancy and post-partial.) The proposal here is to do it in stages. First, get the terminal care fund established and defended, showing benefits in its first year or two, as proof of the concept. Then, start collecting a contribution to the terminal care fund for the moral debt each citizen has for his early childhood costs, and do it for twenty years. Since both first-year and last-year care costs are being paid twice, funding can soon switch from double-paying terminal care to double-paying first-year of life costs, and eventually phase out double-payment. In time, the whole system becomes fully funded but it seems likely the dumb-bell shape of lifetime medical costs would lead to a strong temptation to spend the money on non-medical costs for spurious reasons. Therefore, the retention of the present system for employee benefits would have the additional benefit of creating a watchdog for straight-forward accounting practices. Meanwhile, keep chipping away at these maternity and childhood costs. The first chip is to recognize that malpractice costs are disproportionately concentrated in this group, so the fund would greatly benefit from tort reform. Vaccine costs are also strongly influenced by liability costs. The reader may have wondered why this article has said so little about litigation costs. It is to concentrate the focus of tort reform on this revised purpose for saving the money.
The second redirection of attention would be to campaign to lower the age at which American women have their first child, greatly reducing neonatal problems, including infertility measures and congenital malformations. Absorbing the cost of having a baby ought to assist this effort, otherwise highly desirable on purely medical grounds. Unfortunately, our system of graduate education and career advancement will incentivize timing conflicts with biologic goals. Society will have to work these conflicts out in its own way, but at least we can adjust health insurance timing to be more in keeping with societal trends.
Finally, it should be said that the Health Savings Accounts are a vastly simpler way of paying for health care than using the service benefits approach, and the payment system greatly needs simplification. Using a high deductible has the potential to preserve market benchmarks for prices which are otherwise going to induce unworkable price controls, permanently. The system of "first dollar coverage" was accelerated by a wish to include as much as possible under the Henry Kaiser income tax evasion, and it will return if we neglect to correct that flaw. Experience with Health Savings Accounts has demonstrated as much as a 30% reduction in claims costs. Linking market-set outpatient costs to the same services when provided to inpatients should be an adequate price control for helpless sick people since an improved system of diagnosis-related groups should accomplish most of it. But the main advantage is to reduce these fund transfers to money without health attachments, to make unification and substitution more plausible. That is, to eliminate "service benefits" and not replace them with "diagnosis benefits" except for helpless bed patients. A return to dollar indemnity is greatly needed, although perhaps not totally.
To a considerable degree, service benefits are in conflict with indemnity benefits, in a manner resembling the conflict between debt and equity in the financial sphere. At some point, there must be a reconciliation between these two ways of paying for things, especially by keeping indemnity consistent with market prices. The best one can hope for is to shift the location of the interface between service benefits and indemnity, bringing the friction out into public view, and equalizing the power of the sponsors. Therefore, the best place to hold the debate is to treat diagnosis groups as inpatient service benefits, and outpatient costs as indemnity. With reasonable exceptions, of course. One of the main mistakes of the DRG system was to extend it to every inpatient. Inpatient psychiatry should be paid for as if it were an outpatient service, and chronic diseases such as Alzheimer's disease should also be excluded from DRG as well. Emergency room visits should be separated into two groups as well (admitted to hospital and discharged home), with reimbursement slanted to reduce the incentives for unnecessary use of the Emergency room, not the other way around as it is at present. The whole trick here is to see the double reimbursement situation as an opportunity for constantly rebalancing the two approaches, rather than allowing it to be pounced upon as a loophole.
We started by saying these issues should be chipped away, during the period when more important issues are being addressed head-on. But the list of small issues is a long one, providing ample opportunity for trade-offs in ambiguous opportunities. More than anything else, the endless capacity to develop new problems demonstrates the need for careful construction of an institution to serve as an informed and trustworthy umpire.
The Progressive Era lasted several decades, some say it still continues. Around 1910, the Progressive Era, reacting to the Gilded Age which preceded it, started doing painful things in the best interest of the individual, like the graduated income tax, the War to End Wars, and employer-based insurance.
Harry Truman
Regardless of originator or date, employer-based health insurance was imported as an idea from Germany in the nineteen-teens, getting started in the nineteen twenties, and becoming the prevailing standard by World War II. Although control later shifted from employers toward government during this period, Harry Truman was unable to move it further. It was only in 1965 that government control jumped forward, coming to a climax in the 1965 Medicare and Medicaid laws. Curiously, the employer-based format itself reached a peak in the Lyndon Johnson legislation. Since 1965, one president after another has struggled to convert the rest of health insurance to government-based but always retaining its same general employer-based form. Along the way, two people significantly modified the model: Abraham Flexner, promoting the research-oriented teaching hospital into custodian of the standard of care, replacing the physician guilds; and Henry J. Kaiser, retaining control of a wage cost by calling it a gift, with high corporate income taxes and exempted employee income taxes reducing its effective cost to the employer. In a curious way, high corporate income taxes increased the proportion of healthcare paid for by the Federal Government, by increasing the value of the deduction. Not everyone would agree with this description of the history, but I'm convinced of its essence.
Henry J. Kaiser
Whether the gift comes from business or from government, makes little difference, except to the two contestants. Henry Kaiser seems to have become enlightened that corporate taxation higher than individual rates actually results in important tax advantages for the employer's gift. It allows employers to shift most of the cost to the government while retaining ultimate control in employers' hands. For many decades the commercial insurance industry tried to break in, but the greatest recent threat to this collusion was accidental. All insurance is a system of cross-subsidies, but the Obama Administration superimposed a subsidy of the poor by the rich, onto an employer system of the young employees subsidizing the older ones. The mismatch between the two seemingly similar subsidies now threatens the coherence of the medical finance system. It also brings out the advantageous warping of the insurance idea by calling it a gift.
HSA
Furthermore, the gift is ultimately one of money, so how did service benefits get mixed into this? What does the diagnosis have to do with paying hospital bills, except as a mechanism for obscuring the price? The insurance premiums begin with money, and the insurance intermediary ultimately sends money to the provider of care. Money-in, money-out is what the insurance industry calls indemnity insurance. They were using indemnity for centuries before health insurance came along. Why change to a unique and expensive accounting system, if final prices remain unchanged? This device probably started as a way for an insurance intermediary to check the medical validity of a remote claim, but has gradually evolved into an elaborate cost-shifting device. The unfortunate result is to blind the doctors in charge of the true costs of their options. So doctors nowadays totally disregard the posted prices which emerge, when they devise their treatment strategies. The result is very bad, no matter what the original purpose was.
There may be something to the idea that adding diagnoses and services adds enough mystery to the process to keep away competition, but there are business incentives which seem more central. Now that health cost consumes almost 17% of the gross domestic product, corporate taxes are an important part of the federal budget, largely explaining why the President might not want to lower them, even driving international businesses to consider moving abroad, rather than lower corporate tax rates. However, if the tax reduction which results from the gift is considered, the net corporate taxes actually paid are not too different from prevailing international rates. If corporate income taxes were eliminated, at least the employer would have to pay for his own wage costs masquerading as gifts. They might even discontinue them since employers could get the same tax abatement by calling them what they are, wage costs. Following this scenario, the main benefit appears as the tax exemption in the workers' pay package, and the main victims are the competitors who do not receive the gift. If the government is willing to lose the revenue from the tax-paying half of the workforce, they could permit the Health and Retirement Savings Accounts to pay the premiums, essentially providing tax exemption to everyone. If unwilling to lose revenue, the government could start taxing the large employers, which they are now prevented from doing by the seemingly high rates. It's hard to know whom to blame, except this sort of Byzantine structure creates winners and losers, and is ultimately unhealthy.
Abraham Flexner
Two simple and comparatively painless steps -- equalization of tax preferences, and lowering of corporate income taxes -- might soften the objection to indemnity, so why continue the service benefits concept? For this answer, you must return to Abraham Flexner, who brought Bismarck's "der her Professor" system to America, stimulated much research, and ultimately made teaching hospitals vastly more expensive than community hospitals for routine medical care. And now it is necessary to understand the system of calling all activities which are unrelated to patient care "indirect overhead". Although research is largely funded by outside agencies like the NIH and drug companies, it is described as indirect overhead, and distributed among the patient care bills as additional indirect overhead. Unfortunately, a great deal of bloated administrative cost is classified as indirect overhead, as well. No modern corporation could exist without a certain amount of cross-subsidy, but the present amount of it in hospitals is unreasonable. Beyond a certain level, indirect overhead should be forced out of the hospital cross-subsidy system, funded independently, or at least forced into public view. In short, too much routine care is being reimbursed at a high tertiary care level in the teaching hospitals, and this may well stimulate excessive administrative costs as well, even though it may be hard to trace how it comes about. Their competitors in the community hospitals also probably get a little raise, indirectly, to help suppress their complaints. Wall Street was once lambasted for steak dinners and Superbowl tickets from vendors, but you don't hear much about the hospital administrator version.
To make a long story short, service benefits tend to equalize the cost differences between teaching hospitals and community hospitals, ultimately raising the cost of both, but particularly the cost of routine care in teaching hospitals. Historically, this surplus subsidized the research revolution, to which we owe a thirty-year lengthening of our life expectancy. So, go figure. But nevertheless, it now blinds physicians as much as the public to the true cost of their medical decisions until they are unable to respond effectively to rising prices, and don't try. A century of it is long enough to devise a better approach, so apparently, some pain is needed. But any way you go about lowering them, if you want to control costs, you must start and end with undiluted true costs, not accounting fictions.
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.
