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 American Medical Association
has several hundred thousand physician members, all of whom consider
themselves important members of their communities, hence important
members of the AMA. "The Association" maintains a large, experienced,
and frequently successful lobbying staff in Washington. It would be
wildly impractical to permit every individual member of the Association
to walk into the Washington office and give orders to the staff. Even
when individual doctors have a very good idea, and the staff members
thoroughly agree with it, it's never safe to assume the professional as
a whole agrees. And in fact, it is always possible to find some doctor
who violently disagrees, no matter what the topic.
So, a couple of centuries of experience led to a system of funneling physician opinion up to the line to the House of Delegates,
and passing it through that narrow neck of the funnel before it is
released to the Washington office as "policy". Sure, a couple of
knuckle-heads can sometimes block a good idea at the narrow neck of the
funnel, just as an occasional Leonidas can save civilization at this
Thermopylae, against a bad idea. Sometimes an idea slides all the way
through on the first try, and sometimes it is necessary to build up a
head of pressure behind it. The fundamental question before the House
of Delegates is not entirely whether a proposition is a good idea or a
bad one; an equally important question is whether it likely reflects
the prevailing viewpoint of the profession.
My first salvo in the campaign to win AMA approval for Medical
Savings Accounts was a letter to Jim Sammons, the Executive Vice
President. He wrote back promptly that he had read the Medical Savings
Account proposal three times, and still didn't understand it. Although
my opinion of him was never quite the same, he did me the favor of
demanding simplicity, to be more quotable. An IRA for Health. An IRA
plus a catastrophic policy. What's good about that? Cheaper. What makes
it cheaper? Compound interest. How does it help poor people? More
people can afford to buy something that's cheaper. Sammons said, ok, I
can live with that.
The letter to the EVP turned out to be a good idea because it
established my claim to ownership. A few months later I arrived in
Chicago with a crisp, brief zinger of an MSA proposal, only to find
that somebody from Louisiana was attending the same meeting with an
almost identical proposal, called CHIP. Mike Smith was president of the
Louisiana Medical Society, and not only had the same idea but
personally had a lot of Louisiana oil money which he freely spent on
professional packaging of his presentation. Mike and I suspiciously
circled each other like two wildcats for a few hours, but we had so
much in common that very shortly we were the best of friends, remaining
so for years until his unfortunate death. He introduced me to his
Southern friends, I introduced him to my Northern ones, and the idea
itself picked up some allies on its own merits. It had a fairly easy
time of it in the House of Delegates. However, it was referred to a
committee for polishing and deeper consideration. Six months later it
had disappointingly picked up quite a lot of unforeseen opposition,
probably after the hospital and insurance executives heard about it. It
took another six months to fight through a wall of specious argument,
but an endorsement of the Medical Savings Account did become a policy of the
AMA and the eager Washington staff was thus free to run with it.
It has remained AMA policy ever since, and the main technical
problem for its main sponsors became one of keeping the idea alive in a
House of Delegates with constantly shifting turnover. The AMA is like
the court system; it doesn't like to keep revisiting an issue that is
settled policy. Too many other members have proposals requesting
attention, so why should we go on reaffirming old matters? However, the
proposal was stalled in Congress, and for the momentum, we needed to keep
beating the drum with variations which somewhat stretched the patience
of the more senior members of the House of Delegates. To them, I
apologize, with gratitude for their tolerance.
But what was the matter with Congress? What was the matter with the
editorial page of the New York Times? I was always uneasy about a protracted debate because reducing the cost of medical care (from the
patient's point of view) was apt to translate into reduced income for
doctors. I was leading a procession of self-employed entrepreneurs into
a proposal to cut their own income for the benefit of the public; how
long could physician enthusiasm be maintained for that? I'm proud to
say the answer is at least twenty-five years.
Even in retrospect, I am a little surprised that even such
sophisticated students of medical economics could remain focused for so
long. They might have come to regard the sponsors of MSA as being on an
ego trip, or else nutty fanatics obsessed with a lost cause. Or they
might have joined the young newcomers in fearing that such determined
opposition at a national level might signify the opponents were somehow
right to oppose it. The arguments advanced by the opponents really
seemed to have very little merit, but perhaps in private, it might be
possible to sympathize with some embarrassing circumstances that
explained the vigor of the resistance without crediting its excuses.
Political debate after all, even in scientific organizations, quite
characteristically wraps venal motives in a cloak of logic and
altruism. I remained fearful for years that the House of Delegates
would shrug its shoulders and let the opponents have their way. That
they never, ever, did so was probably related to medical care being
physician home turf; where you get used to hearing a lot of dumb
arguments, but you don't have to credit them with any merit until merit
is displayed. You can tell doctors a lot of fairy tales about
architecture or investment banking perhaps, but if you talk medicine
with them, you better have your facts.
Whenever my colleagues would privately draw me aside and ask why in
the world a lot of people were so resistant to the MSA, I had to tell
them I was not entirely certain. However, it was notable that three
groups had important things to lose, and would probably fight to
preserve them. The Medical Savings Account threatened the
eighty-year-old pricing preferences between hospitals and insurance
companies. Secondly, it threatened the sixty-year-old preferential
healthcare pricing for members of organized labor. And finally, the
politicians who were so anguished about the uninsured population might
possibly be more interested in preserving the grievance than achieving
its solution.
I can never remember a private conversation of this sort that didn't
satisfy the doctor who asked the question. And I also never met a
representative of health insurance, hospital administration or
organized labor who would admit any truth to it.
Pennsylvania Hospital, Nation's First Hospital, 1751
Healthcare institutions may well have mission statements, but the main force visibly shaping hospital mission is third-party reimbursement. One must be sympathetic with institutions which really prefer their own mission to the pressures from third parties, particularly when the "second party" -- the patient -- also likes the original mission better. Teaching hospitals surely would prefer to concentrate on streamlining tertiary care, retirement villages on enriching the lives of elderly residents, etc. And they could probably make a better case for what they prefer than third-parties can. When one-size-fits-all health insurance is imposed on institutions which must survive by internal cost shifting therefore, insurance mandates invisibly prevail. It is not always strictly a matter of "Who pays the piper calls the tune", as it is "Who pays the most can run the place."
Considering these invisible forces of control at work, it seems highly desirable to search for situations in which the incentives of the third-party do not run parallel to the incentives of the provider community. In the case of government third-parties, the goals of the agency may not even be parallel to the will of Congress. The public clearly prefers to pay for private rooms and private duty nurses if it can afford to, but those are mainly relics of the past. Doctors used to work out of offices in their homes, but you seldom see that, now. There once were twenty hospitals in Philadelphia which were owned, paid for and operated by churches, but now at most, the church name is a relic on the front door surviving from a former era. If these changes were a response to public preference it would be another thing, but they are usually not even traceable to a written mandate which might be appealed. So it becomes all the harder to defy a mandate which grew out of the hospital's surmise as to what the third party would probably prefer. Perhaps some examples of social pressures at work would be useful.
It happens my own first office experience was in the home of an older doctor on vacation. The location of that family residence was a careful triangulation of convenience, expense, distance to the hospital, and the preferences of the patients. It was a grand experience to put aside the breakfast coffee, walk into the next room, and see the first patient of the day. Or to interrupt office hours for an emergency in the neighborhood for less than an hour and to have your excuses readily accepted by the waiting patients upon return. My colleagues had explained the financial advantages of sharing a roof and heating system with a tax-deductible business. But my accountant explained that the Internal Revenue Service didn't like offices in the house, and would surely audit any doctor silly if he persisted. So I spent fifty years in an office across the street from the hospital, commuting and seeing patients who had to commute to see me; the extra expenses of parking and the rest of that arrangement are easy to imagine. True, it was easier to visit the hospital patients, and nice to eat lunch with other doctors in the hospital cafeteria. But all of these decisions were not my own first choice. I never got a letter from the IRS or heard a murmur from them, but I always believed I was responding to their mandate. When an IRS agent finally wandered into my office as a patient, he admitted the IRS prejudice but said he believed it grew out of fear the business expenses reported would really be the expenses of a hobby, not a business.
A second relevant experience occurred when I was a resident physician. A staff physician at the hospital had a heart attack, and the Chief of Medicine asked me to take a few days off to tend to the problems in the stricken doctor's practice. His home and office were in the midst of a row-house district of town. When I arrived, the office was empty of patients, but the nurse was waiting with an umbrella. "Before we see the office patients, we must make rounds to see the bedridden patients at home." To my amazement, within a three-block radius of his office, there were nearly twenty patients in hospital beds at home. Some of them had oxygen tents, several of them had intravenous fluids dripping into their arms. The nurse told me that she drew blood for pickup by a laboratory and that with a little argument a portable x-ray machine could be brought to the home. At the foot of each bed was a hospital chart, all up-to-date with notes and reports. It might not be possible to run such a show in many other neighborhoods, but the city row house neighborhood was ideal. Or, not ideal perhaps, because there must have been many problems. But it was clear why Blue Cross had slow progress making sales to the people accustomed to this arrangement. And it even made clear why patients were content with open twenty-bed wards in a hospital, for at least ten years after Medicare would have gladly paid for a semi-private room. No private duty nurses, however, it might set an unwise example.
Two things are at work, here. Things happen to medical care which is undesirable, so someone needs to complain about them, and complainers must be provided with a place to appeal. The reverse is also true; good things which ought to happen, don't happen. So in addition to providing an appeals system, we somehow have to provide a wise and unbiased ombudsman to suggest what new initiatives ought to be undertaken. And the two functions, negative and positive, need to commune with each other. Parenthetically, since everybody gets involved in health care to some degree, adversary roles must be filled in this process, containing representatives of patients and also providers (both institutional and individual), as well as guardians of the purse. Since the process quickly becomes unwieldy, it needs to be associated with a special committee of Congress and needs to be able to summon both witnesses and experts. An annual convention in some pleasant spot might enhance the concept.
Institutions are another matter since quite often the personal opinions of the spokesman are constrained by the incentives of the institution. It must be made clear to them which opinion is desired.
Institutions choose their location for other considerations, chief among which is cheap land, but the location near public transportation is another factor. Whatever the thought process underlying it, nursing homes and retirement villages are almost always in the far suburbs. A related problem is a vexing difficulty for a center-city hospital to find a nearby nursing home for convalescents. These annoyances are protracted by the licensing rules in a round-about way. When a corporation is formed, typically a lawyer with a yellow pad asks two questions: "What are you going to name this organization?", and then, "What is its purpose?". Presumably, he then completes some forms and files the necessary applications. The stated purpose may well have other uses, but it defines the sort of license needed, and eventually either match or does not match the rules some third-party reimbursement agency has laid down for what sort of institution is eligible for reimbursement. After that, the system becomes much more rigid than it needs to be. As long as the institution remains defined as a hospital it will be paid by the third-party, and without that designation, it won't. Effectively, the state licensing board acquires the power to shut off the revenue of some institution which displeases it. But what displeases it (let's say, mice in the kitchen) usually bears a scant relationship to whether or not the institution is capable of performing additional tasks. It does not take long for these issues to get blurred and forgotten; the retirement village can't receive hospital reimbursement because it doesn't have a hospital license. A hospital license would permit it to do a lot of things it doesn't want to do. While the general idea is sound enough, the rigidity it imposes is excessive, particularly when you consider the penumbra of reluctance it provokes from employees. Obviously, the interpretations vary greatly between jurisdictions. It leads to hospitals which may perform heart transplantations but may not run a day-care center for the children of their employees.
There are many simple solutions to this simple problem, but because so much of it is buried in-laws, it would probably require a special court to be appointed to oversee it. How busy that court would be would depend on how vigorously competitors would resist it, which would probably vary with the region.
In any event, Society has a legitimate interest in preserving the quality of care, but it does not fulfill that duty by transferring it to reimbursement agencies. During wars, surgery is satisfactorily performed in tents, for an extreme example of how expendable much oversight can be. Another principle would be to ease impediments to overlaps of functions between institutions, particularly including the backward sharing of component services and records toward the lower-level institution. Since such sharing is often observed to occur without objection within vertically integrated institutions, there is every indication it is both desirable and feasible between competitors.
Going much farther back to the town meeting form of oversight, the most radical departure from present custom would be to encourage a shift of the center of care from inpatient hospitals toward retirement villages. The simplest definition of the center of care would be the location of primary physician offices, and the most important step would be to discourage mandatory links between referring physicians and particular acute care hospitals. Doctors left to themselves will locate where the patients are, and increasingly it is possible to see a shift of patients requiring chronic disease management and terminal care into the retirement village. The tendency of doctors and laboratories to cluster around hospitals impedes this natural shifting together. If doctors shift their offices and are allowed a choice, laboratories and x-rays will soon follow them. Before Medicare, the center of care was found near the high-rent districts of cities. In London it was Harley Street, in Philadelphia it was Spruce Street. As reimbursement changed, it shifted toward the hospital campus, where the parking problem is also solved. Nowadays, early discharge and reimbursement shifts have made it unattractive for a primary care physician to visit his patients in the hospital, so hospitalist and emergency room specialties are flourishing, with computerization feebly bridging interruptions to the continuity of care. The primary care physician would find the retirement village solves the parking problem; pharmacies and laboratory pick-up are often already in place, and non-surgical specialists would soon follow primary care physicians. Patient transportation, at present crippled by expensive municipal monopolies, would be greatly eased by such shifts of medical interaction. The ultimate shift of the center of care would be for the more mobile younger population of suburbs to shift allegiances toward the retirement village location, a change mostly affecting pediatricians. It would take some time, and it would always be a partial migration. However, the infirmaries of retirement villages offer convenience and comfort near home.
The most effective force maintaining standards for this level of care, have no doubt of it, is the ease with which friends within the community drop in for visits. They have time for it, especially to and from the dining room, and all of them keep a watchful eye on how they would likely be treated there themselves when their turn comes. In retirement communities, client consensus is a powerful force. What is lacking is a willing sharing of reimbursement with acute care hospitals. Therefore, the idea of brief hospitalization followed by longer recovery near home is now only realistically available to the affluent. But their choices show the way, as they always did before third-party insurance dominated the scene. For a while, little children may think it is funny to get their shots at the old folks home, but they will soon get over it.
Recently it was announced that Apple Corp., the largest corporation in the world, enjoys a 50% profit margin. By contrast, an American hospital seldom makes more than a 5% profit, and many lose money. Even at both extremes, individual products have differing ratios of individual prices to individual costs. Only in the aggregate do they produce a company-wide profit of 50% and 5%, respectively. It is on this aggregate profit and loss that the company is judged, its officers promoted, dividends declared for the stockholders, taxes get assessed, and the value of the company measured by the stock market.
A for-profit company is judged by its profitability, and while most hospitals are run as not-for-profit organizations, the accounting convention for nonprofits is to judge "profitability" by the annual increase (or decrease) in its net assets, essentially the same thing as profits and losses. It is not necessary to examine the little quirks introduced by such things as the ownership of fine art. While a not-for-profit corporation is judged by its profitability rather than its profits, that's also really the same thing. It has been said that fewer than a thousand people in America understand nonprofit accounting, and while it is an important subject, it is just not the one we are discussing.
It is also important for even a layman to understand that government accounting while resembling nonprofit accounting, differs in one important feature: departmental accounting regards money from the general taxpayer fund as an asset, not a liability. Therefore, what we would normally regard as a loss for a government department has two components: any reduction in its assets, and any money from general taxpayer funds. The sum of the two is the loss from operations, and in the case of Medicare, it is about $550 billion a year, plus the decline in assets (in the Medicare Reserve Fund) of another $19 billion. Thus, if Medicare were a business, it would be said it lost $569 billion a year, or about half of its expenditures. If a nonprofit hospital were considered with the same numbers, it would be said to have lost $19 billion, because it has no transfers from general tax revenues.
The only present point is that it is difficult to discuss hospital economics in anything but the same aggregate form which is natural to for-profit entities, so you must look to the increase or decrease in its assets instead of profit and loss. If that premise is accepted, it must also be accepted that internal cost-shifting is not merely a permissible but an essential feature of their accounting. There are no dividends to dispose of excess profits; excess profits must be transferred somewhere and justify the costs of something else. Sometimes, just sometimes, a large vaporous cloud called "indirect overhead" floats around justifying expenditures. And weakening price resistance to them, so it's doubly important to concentrate on indirect costs. Triple, because the accountant has very little idea of the relevance of the indirect cost to the main business of the organization, which in this case is medical care. As soon as you start calling it healthcare, its relevance is even more difficult to define.
A large vaporous cloud called "indirect overhead" floats around justifying expenditures. And weakening price resistance to them.
Although a few corporations existed in the Colonial Period, corporations were not considered important enough to be dealt with at the 1787 Constitutional Convention. As the Industrial Revolution proceeded, that indifference was no longer useful, but a special blockade was created by what emerged as the central organizing principle of the new Constitution. That principle of limited federal powers is most clearly stated in the Tenth Amendment, declaring that any power not specifically assigned to the Federal Government belongs to the states and the people themselves. As a practical matter, corporations are created by state legislatures, and the Union would not have been agreed to without that provision. In spite of the current opinions of Justice Ruth Bader Ginsburg, the enduring force of this provision is illustrated by the difficulties the European Union is having over that same issue -- of limited federal sovereignty. It continues to be true that, if the federal union will not agree to limited federal powers, there will be no union. To explain the point, this must continue to be true of any voluntary union of sovereign states which are unequal in size and strength. A peculiarly American twist to this situation is to give corporations a choice of fifty state corporation statutes, and somehow they gravitate to Delaware by choice. It can be argued that a wide choice of governance rules leads to a selection by merit, but the militarily smallest of states does consistently win the prize. Whether that is an oddity or has something to do with it, remains a puzzle.
It is disconcerting to consider that the Affordable Care Act may have upset a minute of healthcare regulations, originally finely balanced on the need to run a hospital with reasonable business latitude. After all, it is impossible to follow society's mission if a hospital cannot itself determine some indirect costs. Once a hospital reaches even moderate size of two hundred beds, almost any product of a hardware store, department store, or supermarket could plausibly be required to run it. Business supplies, school supplies, parking, and building maintenance are required, as are architects, lawyers, and electricians. Once you go down this list, you might constrain approval to buy supplies and equipment that sound as though they belong in a hospital, but one hospital reported its largest single expense was heating oil, closely followed by ice cream. Somehow, every item must be connected in some way to a service which can be charged for, which is an accountant's trick for establishing what is a legitimate expense. Sometimes this is pretty hard to do; a hospital needs a hammer, but how do you assign the cost of the hammer to some item which is legitimately charged for? It soon becomes evident that the assignment of indirect costs is always going to be a little questionable, but always absolutely essential. In the early days of hospital cost accounting, it was reasonable to aggregate the indirect costs of each department and assign them to the direct costs of that department.
From this evolves the concept of a cost-to-charge ratio. Reasonable uniformity in the ratio of charges to costs within departments, or between various departments, assures that cross-subsidy between insurance companies and patient classes is fairly uniform. Without that check, complaints between competitors would be immediate. Essentially, this sort of system depends on equal justice being applied, at least in a general sense. When equal justice is impossible, the accounting department can only rely on intuition and overall balance. Outside regulatory agencies can compare the cost/charge ratio in one hospital's operating room with that of some comparable institution. The first step in such comparisons is to compare the institution-wide ratio with its peer group. If that doesn't produce a reasonable result, the analysis can go down to individual departments to individual tests and procedures, until the source of a wide discrepancy can be isolated. At that point, questions can be asked, and a reasonable conclusion reached. But that was forty years ago. When charges are submitted for an electrocardiogram totaling several hundred dollars, and drugs at several times the retail price in a neighboring pharmacy, this sort of analysis is fruitless because it leads to ridiculous results. It is time to agree that a reasonable pattern of only direct costs can be typically and quickly laid out. On the whole, it can be judged that it is indirect costs which become very hard to follow by the usual step-down process. Therefore, it seems reasonable to pass over direct costs quickly, and go straight to the indirect costs, judging them on their separate merits. Apparently, It really does not matter what charge they have been assigned to; what matters is whether they are legitimate. Outliers can be dealt with individually. What is important is for community representatives to assess, is whether the bulk of general overhead costs can be justified for a community, whether the bulk of CEO salaries suits community expectations, or whether landscaping costs unsettle community opinion.
The main reason for having health insurance is to protect yourself from being fleeced.
Jonathan E. Rhoads, M.D.
This all sounds pretty dry and boring, so let's look at something more exciting. Let's notice that in Medicare's own analysis, the ratio of average charges to average audited costs, or the hundred commonest diagnostic groups, in every section of every region, is four hundred percent greater than the audited cost. In plainer language, the charge reported and billed is 400% greater than the cost, which would be eight times the profit margin of Apple, Inc. if it were paid. It's not paid, but the mystery continues as to why hospitals keep on billing for so much more than they know Medicare will pay. The comparatively small variation in this markup suggests there is a reason unrelated to unreimbursed care since the variation in bad debts is likely to be much greater between hospitals. But the sad consequence is that the poorest people in the country, those without health insurance, get billed -- and vigorously dunned -- for amounts they of all people cannot afford. Another viewpoint was offered by an elderly surgeon, after whom an entire hospital pavilion has been named, that "The main reason to have health insurance is to protect yourself against being fleeced."
Unfortunately, it is just this sort of needed commentary which is most questionable on a constitutional or political science level. It is not at all certain that consumer groups or third-party insurance groups have a right to be dictating salary levels, or whether an institution needs a new HVAC system. It is far from clear that a government of limited federal powers has any right at all to be dictating local hospital indirect expenditures. When Medicare was only one of several dominant payers in a hospital, they did acquire a sort of legitimacy when they insisted on equal treatment with other payers. Now that Federal Laws of uncertain shape, mandate universal coverage of uncertain form, it becomes legitimate to ask whether the format of filling in the coverage gaps can stretch the Constitution into assuming the total administrative control which the Constitution seems to prohibit. As these new regulations get actual implementation, more and more people will acquire "standing" by sustaining a provable personal injury. It remains to be seen, where that will lead.
Forty-some months after Obamacare passage, its initial computer program was a huge and public flop. Since Obamacare contains four hundred fifty other sections, the future seemed ominous for what follows. At its worst, it even seemed possible the whole nation might be without a way to pay its medical bills for an indefinite time. It was impossible to say how long it would take to fix things. Things looked dim, not just for Insurance Exchanges, but for any other hugely complicated proposal giving politics the highest priority over technology. It was muttered that the fault was the government procurement process, whatever those mysterious words mean.
Up until October 2013, it had been axiomatic that other requirements must be sacrificed to preserve the priorities of the Federal Government. Of a sudden, the possibility had to be faced that the computer age -- or worse still, the nerds and long-hairs -- might impose a revision in Big Government's notions of sovereignty. These electronic systems are expensive, in the multi-billion dollar range. It is simply not tolerable to keep throwing them out until you find one that works. So what's left to conjecture is the awful possibility that government must change. There may turn out to be multiple ways to address the situation, but at the moment there is only one. It's called privatization, and it's not something a liberal political party welcomes.
But let's not go on about that; it is what it is. To some of us in the policy world, the great pity was that the Electronic Health Insurance Exchange was one feature of the Affordable Care Act which seemed like a good idea. Its sudden collapse might well force the Administration to continue its dependence on the existing insurance industry, along with its antiquated approaches. It might endorse caution about changing anything which seems to be working, or making reforms which are even mildly difficult. For example, direct marketing.
Direct marketing implies sales of insurance directly from the insurance company to the customer, without a broker or other intermediary. The insurance industry has been burdened since the 19th Century with heavy marketing costs and middle-men, reflecting the difficulty of convincing consumers of the safety of paying premiums without immediate contact with what it actually buys. Putting marketing in the hands of employers may once have been a necessary feature, but "job lock" and reduced international competitiveness for employer sponsors, have now grown to be fairly serious problems. The resulting incentive is to prefer to hire well people who are cheaper employees, thus hampering national efforts to hire the handicapped and extend the age of retirement. Employer sponsorship still retains one advantage: control of a large block of customers positions the employer to muscle down healthcare prices in the community through board seats at the local hospitals, health insurers, or newsmedia. But employer involvement creates an unexpected feature, that of union domination of the employer's seat at the table. These are all delicate balances, and a switch to direct marketing must be slow and incremental. Doing it all by the first of October may have advantages for politicians with their eye on the first week in November, but political deadlines can, and sometimes have, brought the system to its knees. It is definitely not liberating to have a goal of mandatory universal coverage, right now, immediately. Nevertheless, direct marketing does force insurance products to be more uniform and price-sensitive. And voluntary, not mandated.
Electronic insurance exchanges also address the Constitutional awkwardness. Both healthcare and insurance directly respond to the Tenth Amendment, that everything not Constitutionally mandated to be federal, must be state-regulated. And it's a good thing that is so, from the point of view of the small and sparsely settled states, who do not have enough actuarial power to support more than one monopolistic health insurer. By original intent, no Constitutional amendment could pass, over small-state opposition. But cheer up, the Tenth Amendment also applies to every major corporation in the country, and nevertheless, the little state of Delaware has no trouble harboring hundreds of corporations. These corporations operate as "aliens" in their home states, and for the most part, exist in Delaware as a brass plaque on the wall of a lawyers' office tower. Their corporate stock is listed in New York, on the stock exchange. Their products are sent to all corners of the nation, by Amazon, located in Seattle. These dispersed arrangements sound tortured and complex, but nevertheless, they are driving down transactional costs to the despair of their competitors. If we depend on competition to discipline prices, we must make competition possible.
Finally, computers make it easy to break health insurance into a hundred pieces, and allow the individual subscriber to tailor the pieces as an itemized package, or ultimately, a personalized list. If someone forces me to have obstetrical insurance, I feel sure some distant insurer would sell it to me for a dollar a year, knowing that the claims from an elderly widower would still allow them to make a profit on my nonexistent obstetrical care. Or if I have had my appendix removed, the risk of paying for a second time is pretty small. It works the other way around, as well. If some hospital wishes to charge "Medicare plus seventy percent", let them do so. I'm interested in buying health insurance that pays "Medicare plus five percent", and whether the hospital agrees in advance to accept it as payment in full. To capsulize this point: buying health insurance interstate and at a great distance, forces the products to be uniform, clearly defined, and cheap. And while any political entity may subsidize whom they please, the subsidies will be forced into the open.
So those are the reasons the electronic insurance exchanges seemed to have the kernel of a good idea, ruined by being in too big a hurry to do something which takes time getting used to. Like making it mandatory, universal, non-voluntary, and inflexible. But worst of all, demanding that it work by the first of January, next year. We're not selling snake oil, here. We're planting an oak tree.
Furthermore, name the CEO of almost any successful computerized business. You probably do know his name, whether it is Andy Grove, or Bill Gates, or Steve Jobs, or Tom Watson. But the name of the person in charge of electronic Obamacare is unknown to almost anybody. That he is a billionaire seems unlikely, even in a field full of billionaires; just about all of them are in the top 1%. Now that the Electronic Insurance Exchanges are such a notorious flop, it is going to be harder to find an outstanding person willing to accept the job--at anything approaching the laughable top salary level considered appropriate in a political environment. George Washington refused to take a salary, but that was then. The current situation is much like the one described by Mark Twain, of the man who wouldn't mind being hanged for his mistakes, except for the honor of the thing.
Privatization puts people out of work, and has other political liabilities, particularly for a President who has made such a point of denouncing the top 1%. But privatization is one quick way to find a genius to run a company, promising to make him and his close associates into billionaires as a reward for success, threatening disgrace if he fails. Awarding the whole program to a corporation after demonstrated success, not before then, concentrates the rewards on the politician who makes the correct choice. If his company is too small to handle it all, he can merge with others if he pleases, and fight with them about unpleasant succession issues. Privatization is not guaranteed to be successful, but privatization has been shown to work, more often than not.
Establishing an eventual goal of direct marketing will also force the insurance product to conform to what is useful for direct marketing, but such pressures do not seem to be injurious, as will be discussed in subsequent chapters. But one thing is pretty sure: mandatory universal coverage would be the last step in implementation, not the first.
We are going without a metal gold standard, substituting 2% inflation targeting because we don't really know what else to do.
And we seem to be getting away with it, although most people don't trust it. And indeed we have the shock of discovering that the Phillips curve (inflation and joblessness balance each other) doesn't work because we just can't get inflation to rise. By the way, this includes Milton Friedman, who blamed it on the Federal Reserve, but that can't be right, either. Don't listen to experts -- no one knows why this is true. I have a solution which hasn't been tried: we could use index funds as a new gold standard. They would be a real currency backing, which would flexibly respond to inflation and deflation. Come back in a century, if you want to find out how that works.
We have too much paper money. That's another way of saying the banks have thirty times as much paper money as they have hard currency (safe) reserves to back it up. We started out with banks making it two to one, two centuries ago, and gradually raised the ratio. No one knows what the right ratio should be, so we push the envelope and watch. One day, it will be too much, but it will then be too late to do anything about it. Thirty to one seems to account for most of our prosperity, but we have several billion of the world's population still living in poverty, but with atom bombs to blackmail the rest of us. So we apparently are going to inflate the bubble until it breaks. Then we will know what the right ratio should have been. Along comes Stephan Moore of the Heritage Foundation, with either the greatest trial balloon in history or else the best idea. Who cares why interest rates are so stubbornly low, just take advantage while that is the case. He suggests we take advantage of stubbornly low rates to have the federal government issue long-term bonds until interest rates rise, possibly paying off our national debts with the profits. And also bankrupting almost everyone whose survival depended on continuing low rates, and will surely oppose the move. At least, the argument may surface the reason the Phillips Curve stopped working.
Along a different line, James Madison was scared to death poor people will outnumber rich people, so in a democracy, poor people will win. They will vote themselves free college, free medical care, free wealth they didn't earn. We will then be tempted to substitute dictators for leaders, sacrificing democracy permanently to have the joys of a dictatorship temporarily. We may try everything else first, but what we need is something which will work, not demagogues, and probably not college professors, either. God help us if we start electing newspaper columnists. Even Ben Franklin learned that much.
Just remember how long we have been tinkering with bankruptcy solutions. Instead of cutting your heart out if you don't repay your creditors, we improved things somewhat by putting defaulted debtors in prison. Morris the billionaire showed George Washington how to strip all personal wealth from the defaulted debtor in exchange for extinguishing their debts; it's called bankruptcy. The banks figure out how many defaults they will have in bulk, and add that charge to the interest rate they legitimately charge substandard risk debtors and illegitimately charge a lesser amount to non-risky debtors. Unfortunately, lots of people have figured out how to cheat on their bookkeeping, and with cell phones, soon tell their friends. Just have the government bail out bad debts, and then tax the rest of the population to pay for it. It's that last step which makes it socialism. In Philadelphia, someone a century ago thought it was a good idea to have a city/county consolidation, with sheriffs sales to pay the bills. Today, hundreds of millions of dollars are skimmed off this arrangement by corrupt politicians, and the current --allegedly non-corrupt-- Mayor is running for re-election on the promise he will absorb this revenue for worthy causes, like education. In most cities in this country, this corruption goes on, because it pays off. We have had this corruption for a century, and keep electing the same people to continue it. Yes, I know we have a drugs problem, but we voted for this scam and the taxicab medallion scam. We need a few more people to get mad, but they soon turn into elected crooks, if the rest of us let experts seem to run things. Our Constitution assumes half of the public are inherently honest and the other half are inherently bad apples, seeing its job is to maintain a balance between the two.
In short, the Supreme Court could easily fix this, by fixing enforcement and penalties. Let's see if they try. Congress could also fix this, but it would be opposed by others in Congress. The overall potential might be to lower consumer and retail interest rates, because bonds average 5% return over the long run, while equities average 10% for the same risk. If stocks and bonds returned an equal amount, as they should, there should be a doubling of effect. Bonds are mostly purchased by insurance companies, forced by state insurance commissioners to limit equity purchases to 10%. Presumably, insurance commissioners are holding down the cost to the state of municipal bonds, so the cost of this subsidy is not visible. But the net effect is to have the municipal taxpayer subsidize the defaulting debtor. The tax exemption of municipal bonds is yet another feature of this subsidy, in this case drawing the federal government into the process.
Simplifying somewhat, raising the permissible insurance commissioner's permissible level of insurance company's purchase rate from 10% to 11% would double the permissible stock purchases by insurance companies. Not enough to pay off the national debt to foreigners, perhaps, but demonstrating the opportunity just waiting for a presidential candidate to exploit in his campaign.
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.
