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.
Benjamin Franklin for whom we are named, was after all a club man. In his London years every Thursday he attended the Club of Honest Whigs, and every Monday a coffeehouse called the George and Vulture. His conviviality is part of my theme, but especially his congeniality with women.
Scientist and statesman, of course. We nod to bifocals, lightning rod, storage batteries, daylight savings time, less smoky stoves, and a flexible urinary catheter (which he commissioned for his ailing brother from a Philadelphia silversmith). We bow to lending libraries, fire brigades, insurance associations, planned giving, philosophical society, and legislatures. Above all, he helped to design and invent the United States of America, and by example, to inspire the free and mobile society that inhabits our states.
But tonight I celebrate his relationships with and his treatment of women. Let me dispose at once of an image of him as young playboy or old lecher. He was always responsible in his relationships. He acknowledged and raised his illegitimate son William (who as royal governor of New Jersey, loyal to the Crown, split with his father). He helped to raise and educate Temple Franklin, the bastard son of his bastard son, who stayed loyal to him as grandfather.
Deborah Read
His 44-year common law marriage with Deborah Read (an abandoned wife of another man) was a tender and practical bond. She bore two children and managed his print house and bookkeeping. She was half-literate and afraid of the ocean, and so may be thought to have been spared the high politics and intellectual life of England and France. In his duties overseas, Franklin was absent fifteen of the last seventeen years of her life. When she wrote him about rumors of other women, he answered, ".while I have my senses, and God vouchsafe me his protection, I shall do nothing unworthy the character of an honest man, and one that loves his family." His best biographers find nothing to stain his promise to Deborah.
That is not to say that he lacked interesting friendships with other women. Four long and intense ones are worth special mention: one American, one English, and two French.
Claude-Anne Lopez
Katie Ray was the first of his romantic "but probably never consummated flirtations." When they met, he was 48, she 28. Over the course of their lives, they exchanged more than 40 letters. He "made a few playful advances that [she] gently deflated." Claude-Anne Lopez describes the kind of bond he established, first with Katie, as "somewhat risque, somewhat avuncular, taking a bold step forward and an ironic step backward, implying that he is tempted as a man but respectful as a friend." She uses a French term for this --amitie amoureuse-- a little beyond the platonic, but short of the grand passion."
Such a loving friendship he also had with Polly Stevenson. He was 51 when he met her; she, 18. Her intellectual quotient was high, like Katie, and he talked science with her. They exchanged 130 letters. She, as a widow, was at his deathbed 33 years later. Charles Wilson Peale came upon Franklin one day in London, and later sketched what he saw: sitting with a young lady on his knee. She is thought to be Polly. But we should not treat that as a tabloid photo. He was sincere in urging Polly to raise a family rather than pursue more learning. There is nothing as important "as being a good parent, a good child, a good husband, or wife."
In Paris, as Ambassador to France, 1776-85, Franklin found two more mistresses of mind and soul. Mme. Anne-Louise Brillon was a famous harpsichordist and a supporter of the American Revolution. When they met, she was 33 and married; he 71 and a widower. In an eight-year relationship, he sent her 29 letters; she to him, 103. She finally turned aside his inquiries about a more corporeal relationship. But she wrote with affection that he demonstrated "a droll roguishness which shows that the wisest of men allows his wisdom to be perpetually broken against the rocks of femininity."
Anne-Catherine Helvetius
Mme. Anne-Catherine Helvetius was a lively and beautiful widow near 60 when she met Franklin at age 73. He eventually went beyond the bounds of his usual dance between sincerity and self-deprecating playfulness. He ardently proposed marriage to her. She found this entreaty a bit wearying. But when in the winter of 1785 he finally departed France, she was there, visiting his home. So was Mme. Brillon; as well as Polly Stevenson and her three children; altogether a splendid "network of good will" with himself at the center.
Jefferson, his friend, and successor in Paris noted on his last day before sailing that the ladies were smothering him with embraces. He told Franklin that as well as the duties transferred to him, he wished to have those privileges as well.
But Franklin answered: "You are too young a man."
Sisters and brothers of the Franklin Inn'let us toast Benjamin Franklin: his constancy with his wife, his well-contained passion, his well-expressed wit, his amitie amoureuse. May his example of loving friendship enfold and inspire the members of our club named for him.
-- Theodore Friend
At the Annual Dinner of the Franklin Inn Club
Philadelphia, 18 January 2008
---
Based on:
Walter Isaacson, Benjamin Franklin: An American Life (New York, 2003)
Edmund S. Morgan, Benjamin Franklin (New Haven, 2002)
Claude-Anne Lopez, Mon Cher Papa: Franklin and the Ladies of Paris (2nd ed., New Haven, 1990; 1st ed., 1966)
At the beginning of 1979, the price of domestic heating oil began to soar. Because natural gas was controlled by the Federal Government, this price remained fixed. It was evident that anyone who could switch from oil heat to gas heat would benefit greatly by doing so.
My home is a large Victorian house with 11 rooms that was built about 90 years ago. The House is not particularly well insulated, although it is very well built. The heating system was an old coal boiler that had been converted to oil. The oil burner itself was only 3 to 4 years old. The cost of converting to gas was approximately $2,300 and the saving that would result from the use of the less expensive gas was such that the payback period would be 3 years. It made economic sense to me to invest in this capital expenditure when the payback period was such a relatively short one.
To begin with, I would like to analyze the existing oil burner system. Feed water enters the system by means of an automatic valve that is set at a specific pressure. Water enters the system until that pressure was obtained and would then shut off. If the water exceeded a certain higher pressure, a relief valve opened allowing the water to escape from the system. An aquastat controlled the boiler water temperature and a circulating pump moved the water to the radiator when the thermostat called for heat.
The domestic hot water was also heated by this oil fired coal boiler. This was done by means of a summer/winter hook up consisting of copper immersed in the boiler water and an 80 gallon insulated storage tank that would collect the heated water.
When I first considered installing a new gas-fired boiler, the plumber suggested that I take out the old system and replace it with a new one. However, I saw no reason to do this as it was in good working condition. I decided that I would design a new system to work in parallel with or instead of the first system.
There was plenty of room in the basement and, since a hot water system lends itself to the type of arrangement P had in mind, it was relatively easy and practical to design a tandem system that could be operated in conjunction with or instead of the original one. The new system is basically very similar to the old one except it is fired by gas instead of oil. However, there are some significant differences. One is in the domestic hot water is heated. This is done by means of an instantaneous hot water coil. No storage tank is necessary because the rate at which hot water is used is less than the rate at which it can be heated. You can use hot water all day and all night and still have a sufficient supply. That theory is based on just one use at a time. In my house, two people cannot take showers at the same time in two different bathrooms because one would not have enough water pressure.
Because of the nature of the domestic hot water heating system in the gas furnace, it was decided to use the hot water storage tank from the oil burner system as a tempering tank for the new furnace. Cold water would come in from the main at approximately 45.F and would stay in the tempering tank in the basement and warm up to the ambient air temperature. The end insulation was removed to facilitate this. The water would then feed into the gas burner for heating up to approximately 120.F
After I had made my design, I reviewed it with the plumber and he suggested some practical inputs that I as an engineer hadn't considered. For instance, in using an instantaneous hot water system, a restrictor has to be put in the line so that the flow of hot water through the coil is not so rapid that the water flows through faster than the furnace can heat the water.
With the two systems that can be used together or separately, I have actually created a supra-system that can be operated in different ways. The normal way and the way that it is operated most of the time (now that natural gas is a good deal cheaper than oil) is as a gas burner with the burner domestic hot water storage tank acting as the tempering tank. A second way is to operate as an oil burner, just as previously, with the domestic hot water heated by the oil burner and stored in the storage tank. Both Systems can be operated together and this is done occasionally for very practical reasons. If I go on a trip in the winter and lower the temperature to 50.F and, upon returning, wish to increase the temperature in the house as rapidly as possible, I will put both systems on and can bring the house up to a comfortable temperature in about 1-1/2 to 2 hours. With just one furnace, it would take close to 4 hours. A third method that can be used, although I think it is an impractical one, is that you could use one burner to heat the house and the other one to heat the domestic hot water.
There are also two other combination's. You could use the oil burner to heat the house and use both the gas burner and the oil burner to heat the house and use both the gas burner and the oil burner to heat the hot water. You could also use the gas burner to heat the house and use both oil and gas burner to heat the water. This is really not a practical hook up and the only time it would conceivably be used as if one of my daughters was having a big house party where there would be a lot of showers, baths and shampoos and the girls wanted a guaranteed unlimited supply of hot water for the occasion.
One mistake that I believe was made in assembling the new system was that a separate feed water valve connected to the new furnace. I believe this occurred because the new furnace came equipped with the feed valves and, instead of just trying it into the existing feed water valves, the plumber automatically used the valves that were supplied. The system works satisfactorily the valves that were supplied. The system works satisfactorily this way but this unnecessary complexity did cause trouble once last winter. One of the radiators on the third floor cracked during a severe cold spell. I noticed the water leaking from the radiator on the third floor and the first thing I did was to turn off the feed water system. I had forgotten, however, that there were two feed water systems going into the Supra-system and, initially, couldn't understand why the water kept flowing from the cracked radiator. This is an example of the system becoming too complex so that, in reality, it becomes very cumbersome to control. Since I was the one who designed the system and was intimately familiar with it, I should have been fully aware of the fact that there were two feed water valves going into the supra-system. However, with the excitement of the cracked radiator and the dripping water, I had forgotten about this until I investigated thoroughly why the water had not stopped flowing.
Two other slight problems occurred that could not have been anticipated. One was that with the use of the modern designed high capacity circulating pump, a resonant type hum occurs when the system is calling for heat. This doesn't seem to be very noticeable in any room except the master bedroom and it became easier to get used to the hum rather than replace this circulating pump with a lower capacity one. The Second problem that developed was that as soon as the temperature in the boiler dropped below a certain point, the circulatory would shut off to allow the water temperature in the boiler to water from getting too cool, thereby cooling off the instantaneous hot water coil. This intermittent use of the circulator pump caused one particular radiator on the first floor no to get very warm because the circulator itself was only operating for a short period of time the hot water seemed to have trouble in getting to this particular radiator.
A complex as my new heating system seems to be, I believe it is a practical system for several reasons. First, it cost less to put the new system in tandem with the existing system than it would have to tear out the old and replace it with the new system. Second, by having two systems I have great flexibility as far as what kind of fuel to use. If the price of natural gas goes higher than oil, in less than one minute I can switch from gas to oil. Third, if one of the units develops a problem, the other unit can be brought on the line very rapidly and the house will stay warm. Fourth, the house can be brought up to temperature in approximately one-half the normal time because of the double heating capacity that is now in existence. Fifth, great flexibility was obtained with the domestic hot water system.
If the price of natural gas approaches oil while coal stayed low so that the installation of a coal furnace would have a payback period of 3 years or less, I would not hesitate in adding a third furnace. This might seem completely idiotic but, if it will pay for itself within 3 years, it would make economic sense. Since I have the room in the basement to keep adding furnaces, why not? of course one of the disadvantages of creating a supra-system that has approximately four times the complexity of a simple system is the difficulty in controlling it. Witness the problem that I had during the emergency of the cracked radiator! When I eventually sell my house, the new owner might be completely baffled by this complex system. Of course, all the valves and switches are labeled but, even so, it can be difficult understanding which valve to turn at which time. If the owner is completely ignorant when it comes to mechanical and electrical devices, he could solve the problem by just setting the system once and, when he feels he wants to change he could call the plumber.
One of the requirements, when a homeowner switches to gas heat in New Jersey, is that the house has storm windows. Another is that the system be controlled by a clock type thermostat works very nicely on a small house or on a house that has over 20 large cast iron radiators does not work properly from a practical aspect. What happens is that, if you lower the thermostat 5 to 10 degrees for night operations, when the thermostat calls for the day temperature the next morning, the furnace comes on and has to work very hard to heat enough water to raise the temperature of the whole system. By the time the house does come up to the day temperature, the cast iron radiator is so hot that, even though the furnace shut off, the temperature continues to rise about five degrees. The reason is that the cast iron radiators hold the heat and, even though the furnace has turned off, the house temperature goes up making it very uncomfortable and also defeating the purpose of the day/night thermostatic setting.
I had suspected that this would be the case, although I was not sure. The practical solution to this problem was that after the Public Service of New Jersey inspector made his rounds and saw that I compiled it every way, I then took out the clock thermostat and sent it back to the dealer and exchanged it for a regular single setting thermostat.
Since both heating systems can be used together and since each one has various sensing controls, one of the statements made by J.G. Miller in his book, The Need for a General Theory of Living Systems,
would also apply to this heating system. Specifically, he said, "if there are multiple parallel deciders without a hierarchy that has subordinate and supra-ordinate deciders, there is not one system but multiple systems". In a sense, this is what I would have if I used the oil burner to heat the domestic hot water but then fed this domestic hot water into the gas burner instantaneous hot water coil to further heat it. Miller also talks about joint subsystems and he defines that as, "the case when a system is dependent for the process on a component it shares with another system". In my heating system, this would be the case with the 80-gallon storage tank. In one used as a storage tank for domestic hot water and yet, in another method of operation, it is used as a tempering tank for the instantaneous hot water coil in the gas unit. This same tank can also be used as part of a preheating system in conjunction with the instantaneous hot water coil.
Miller also talks about passive adaptation and, as an example, he talks about a heater controlled by a thermostat. Since I have two heaters controlled by two different thermostats, this is a very good example of passive adaptation and it can be used in such a way that if, for some reason or other unit to heat the domestic hot water, this could be achieved by setting the thermostat for the home heating at the desired temperature while the thermostat for the heater that was to heat the domestic hot water would be placed at a lower temperature to ensure that particular heater circulation would not come on to heat the house.
Another advantage of my supra-system is it provides a back up in the event that the house is empty and the primary heater fails to function. This can be achieved with my dual system by setting one thermostat at, let's say, 50.F and the other thermostat at 45.F. The way this would work is that normally the house would be heated, for instance, by the gas furnace and the temperature in the house would remain at 50.F. However, if something happened to the gas furnace and the unit did not come on, the oil furnace would automatically come on when the temperature dropped to 45.F, thereby providing insurance against many cracked pipes and radiators.
The way my two heating systems are interconnected, they can be operated either as an integrated system or as a segregated system, depending on the requirements at the time. According to Miller, " the more integrated a system is, the more one part is likely to influence or control another". Generally speaking, however, my system is operated as a segregated one except for unusual circumstances. The two systems are very compatible and, if both are working at the same time, they work together without any conflict.
Miller maintains, "The general direction of evolution is towards greater complexity". He made this statement in relation to living systems but I believe this statement is also true in mechanical systems. As we evolve our various mechanized units, whether they be automobiles, airplanes or heating systems, the direction is towards increased complexity rather than greater simplicity.
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.
Well, it's all called the Health Savings Account, Classical Version. John McClaughry and I invented it as the Medical Savings Account in 1981, and we both consider it to be on the short list of things we want to be remembered for. The central feature of these accounts is they pay your medical bills with a special debit card, and they get every tax deduction we could find, except one.
Proposal 79: The law says they must be linked to catastrophic health insurance but are forbidden to pay the premium. This omission should be repaired, by changing the law or regulation; with this change, they would become superior to the discriminatory employer-based tax abatement discussed below, because that could extend the income tax relief equally to everyone, regardless of employer.
Since almost everyone would agree, why not adopt it and get on to other business? The essence of the whole remaining debate is how to pay for comparatively low-cost care, especially for people with low incomes, neither impoverished nor affluent. Some people will have to be subsidized, and the rest are mostly able to save enough to pay their medical bills. We can ease things for borderline cases with tax deductions, and the rest is mostly a routine drawing of lines. The concept is discussed in greater detail in later sections of this book. Right now, all it immediately needs is a revision of those two regulations of the Affordable Care Act.
An HSA should be overfunded. Any surplus can be used as a retirement fund.
That's all there ought to be to this fuss, and we already have most of it enacted into law. Whether called the Health Savings Account or the Medical Savings Account, it is a combination of two things: catastrophic health insurance and tax-deductible savings account for smaller health costs, and it could just as easily be regarded as a Savings Account with re-insurance backup, as Catastrophic health insurance with an account for the deductible. In practical use, one part customarily pays for hospital inpatient care, the other largely pays the deductible and miscellaneous outpatient services. When you get right down to it, it seems amazing so many people resisted the idea of full coverage, with imaginary objections. Since this simple issue has a history of being twisted for partisan purposes, it illustrates how unwise it is to call opponents names, when a little persuasion might convert them to becoming friends of the concept. But if you read between the lines of the next section of this book, it should be no problem to surmise who has opposed this perfectly legal alternative.
Instead of confronting, let's out-bid them, with a Lifecycle Health Savings Account (L-HSA). The dreams of the future usually include legalizing a few radical advancements which become normal parts of the landscape in time. By adding passive investing and the power of compound interest, the HSA becomes a Lifecycle (multi-year) Health Savings Account, providing the balance can be legally carried forward for a lifetime or even longer. The out-bidding already takes the form of adding a new revenue source, not by reducing the benefits.
Proposal 80:At this point, it probably would be wise to add some legislation clarifying the ground rules since several professions would have to cooperate in allowing a new line of business for whole-life insurance.
In effect, it could become a do-it-yourself whole-life insurance company, which pays for health insurance instead of funerals. I'd love to see the whole-life insurance companies adopt the idea, which comes close to imitating their business model. There's no reason why stockbrokers and/or investment managers couldn't do much the same thing in competition--it all depends on what the enabling statutes happen to enable. Whole-life insurers could manage the money professionally and would create much-needed competition for old-style health insurance companies, now operating on the "use it or lose it" principle. The large amounts of money the savings account approach would generate, seemingly almost discredit the idea as exaggerated; we'll, therefore, let the reader do some of the math. Perhaps you do need to dangle astonishing incentives to get people away from the something-for-nothing term-insurance approach which is now threatening to shoot itself in the foot. The full transition is a fifty-year project, but long-term progress usually doesn't seem so long looking back on it, and it gives everybody a chance to claim some credit. Remember, it's only long-term lack of progress you really need to fear.
Let's not quibble. It might even be legally or financially possible to adopt one approach, year by year, or the other, spread over a life cycle; and hurry it all up by making it into a mandatory monopoly. But it is inconceivable for half of a whole unwilling country to tolerate a mandatory health system they widely resent. However, it seems possible to implement parts of both approaches voluntarily right now, without major disadvantages except extra cost. You can do that, or you can read the Lifecycle-HSA as just an alternative proposal to consider. The main dream offered here prefers to cut average lifetime health costs in half ($175,000) but might be expanded to full lifetime coverage of $350,000. Or reduced by individual vendors to some more affordable fraction, such as by a reduction of average costs by only a quarter ($85,000) or a tenth ($35,000). To do this requires some legislation, but $35,000 times 300 million population is scarcely trivial. Even Bill Gates isn't worth half of that.
Over-investment in Health Savings Accounts -- The Retirement Alternative. Because it's a new program, with financing uncertainties, we advise everyone with an HSA to consider overfunding it as a precaution. If you could use resulting surpluses for something else, it should reduce the hesitation to overfund. One alternative is to use Medicare exclusively after age 66 and transfer the surplus to your IRA retirement fund. That's legal and essentially cost-free. Consider all the foregoing to be a short introductory look at the theory of Health Savings Accounts; we next display an actual example, using actual numbers which just came across our desk from a large and local insurer. To keep it simple, we assume the client had no serious illnesses at all and paid for minor illnesses out of pocket. That will rarely be the actual case, but its use here is to illustrate the safety of over-investing in the product in order to fund a healthy retirement with the overflow. Although it will provoke extensive discussion later, we assume the deposits into the HSA will earn 6% compound interest.
Example One. Assume an average employee aged 21 receives $750 yearly from the employer and deposits $3300 into the HSA account, adding the personal supplement permitted of $2600 extra, until age 66. Deposits earn 6% compounded. After age 66, income tax is paid and the remainder rolled over into an IRA. Subsequent to retirement, the minimum retirement is paid annually, while the balance continues to earn 6% after tax.
Example Two. Assume an average employee aged 21 receives $750 yearly from the employer and deposits $3300 into the HSA account, adding the full supplement permitted of $2600 extra, until age 26 when he/she retires to get married. Deposits earn 6% compounded. After age 66, income tax is paid and the remainder rolled over into an IRA. Subsequent to retirement, the minimum retirement is paid annually, while the balance continues to earn 6% after tax.
Example Three. Assume an average employee aged 61 receives $750 yearly from the employer and deposits $3300 in the HSA account, adding the full supplement permitted of $2600 extra, until age 66. Deposits earn 6% compounded. After age 66, income tax is paid and the remainder rolled over into an IRA. Subsequent to retirement, the minimum retirement is paid annually, while the balance continues to earn 6% after tax.
You pay income taxes when you make the transfer to the IRA and on IRA withdrawals. Most of the investment return is tax-sheltered, however. Assuming 6% tax-free earnings and a 15% blended income tax rate, your investment of $132,000 would be worth $698,000 pre-tax, and $482,000 after income tax, at age 66. At that point, suppose you pay your HSA tax and re-invest the proceeds in an IRA. Assuming a life expectancy of 88 years at that point, you would leave $1,638,000 when you die, or $1,493,300 after income tax. That's assuming you actually spend nothing out of the account, but since it's a surplus, it also represents how much you could have spent without affecting the retirement. Be careful of this point, however, because the age at which you spend it will markedly affect the outcome. That's unlikely to be sure, but if you consume it all you have paid for all your lifetime healthcare, as best we can estimate it. The point of this calculation is not to make everyone rich, but to demonstrate the financial power of the approach. With a little management, it easily covers the actuarily projected lifetime cost of health care of $350,000 per person and leaves enough slack to be comfortable about it. In case anyone questions the ability of a poor person to save $3300 per year, lifetime savings would amount to $440, per dollar invested at the beginning. That's too attractive to brush aside on the grounds you might never be able to do it, even for brief periods. It's quite honest and legal, starting today, but an additional reason to show it here is to demonstrate how little anyone has to lose by investigating it today. In fact, over 12 million people have already started such arrangements. If the rudiments of the plan are that attractive, just imagine what a few legal clarifications could accomplish.
What's the secret? Instead of paying 10-15% to service your bills, you earn 5-6% interest by pre-paying them. The swing between those two is the difference between comfort and worry. There are other swings, but that's the main one.
Read on, to see how the passage of a few relatively harmless laws, might offer poor people a way to get a rich man's health care. Getting rich in this sense amounts to funding your medical bills in a radically new way, but it does not imply any change in the kind of care you receive. Otherwise, it certainly will cost somebody $350,000 per average lifetime, as calculated by Michigan Blue Cross, verified by Medicare.
But it doesn't imply that no one will be worse off. There are 1,500,000 employees of health insurance companies, but there are only 800,000 licensed physicians. Doesn't it seem excessive that for every doctor you see, there are two insurance employees handling the bills? It's probably conservative to guess that every doctor hires another insurance employee, and every pharmacy hires several. Every hospital probably hires a hundred, and every laboratory or x-ray laboratory hires more; it just seems to go on, and on. Five or six clerical insurance employees per doctor don't seem like a wild guess since a lot of doctors aren't actually practicing. Those who want to continue with this sort of thing can pay for it. Surely, the rest of us deserve some other choice.
Because this book is written during a confusing period where both Health Savings Accounts and Obamacare have been enacted, but the position of the Supreme Court has not been clarified, nor the regulations coordinated, -- what an individual should do is highly specialized to his age and situation. We cannot predict what upsets the November 2016 elections will bring, or what the result of their reconciliation will be.
Essentially, this particular health plan offers its groups the choice between an Obamacare with, and Obamacare without, a Health Savings Account. Into the HSA version, the employer effectively contributes $750 but gets a lower premium from raising the deductible. Never mind the economic argument that the cost ultimately comes from the paycheck; most people will say it feels like a gift. The compound interest in the future dictates that every young person should enroll in an HSA at the earliest possible moment, and supplement the employer contribution to the limit of his ability. A young lady, for example, should go to work immediately after graduation from school, even though she plans to drop out of employment when she gets married. An older employee, on the other hand, is far less expensive to the employer than he appears to be if the retirement benefits are considered. If a person reaches age 61 without provision for retirement, there is little to be done about it.
Commentary. The high deductible portion of Obamacare serves as the catastrophic link required by the HSA enabling act. The employee is annually allowed to contribute up to $2600 to the savings account additionally. (There's a family plan, with different contribution rates.) There's no way to know how long an employee will remain with the same employer, or whether a new employer would continue the same coverage; but at least an individual's HSA has been established, provided you go ahead and do it. If an employee starts this plan at age 21 and continues it to age 66, the outside potential is to transfer $159,550 to a regular IRA at age 66, assuming 6% interest, but no personal supplement, and only out-of-pocket health withdrawals. Never mind theoretical economists; it's a very good deal, and it almost feels free.
But don't get carried away; you can't spend the money twice. The example shows the financial benefit of being lucky with your health; it could also be said to reflect the cost of being unlucky or careless if your health is bad. Its success depends on young healthy people saving their money and generating extra income before they become older people getting sick and having to spend their savings. Meanwhile, scientific progress will exaggerate both the savings and the attained age before the spending begins. In the past century, that added thirty years of longevity, and hence thirty years of compound interest. If some scientific miracle should add more cost than longevity, a mid-course correction might have to be applied. Some future generation might have to answer the question, "Didn't you want to live an extra ten or twenty years?" I would have to say the medical profession has been pretty good with this juggling act in the past when we were in control of it; one of the ponderable dangers of upsetting the system is the danger of upsetting this balance in the future if control of the payment system falls into other hands.
The foregoing should suffice as a summary of this book's proposal. The next section describes some of the other serious problems with healthcare and how they got that way in the past century. Sometimes more funding will help these problems, sometimes it won't. The section following that will describe some of the nuts and bolts of Health Savings Accounts, and sketch in some more elaborate variations which might be possible. By far the most important new concept to be thoroughly absorbed is the approaching wrestling match between the health industry and its finance partner. Recall that we have estimated the Health Savings Accounts would earn 6% compound interest income during the long lifecycle between healthy youth and sickly elderly. Actually, that is likely to be an under-estimate.
Stock Market Issues.For the past century, the foremost student of the matter, Roger Ibottson, has shown the equity stock market has averaged about an 11-12.7% total return. Investors in index funds of the same stock have received about 5%. Three percent of this attrition is ascribed to inflation, leaving another three percent unaccounted for. Money managers use the residual 3% for expenses and to buy bonds as a safety measure. While the law of large numbers will ordinarily account for the ordinary jiggles of the stock market, there is some other cycle at work causing a severe crash every 25-30 years. It is thought wise to set aside 25-40% of the portfolio in bonds to ride out such "black swan" storms. This, in essence, is the central issue of the third section. The final section describes other variations of the Health Savings Account concept, particularly as it involves transitions from other funding mechanisms.
So it's simple to get started, although any obvious modifications like periodic payroll deductions, are between you and your vendor.
To repeat: you choose a high deductible health insurance plan which conforms to regulations. Since they vary in price and service, you are advised to shop around, probably starting with the Internet, or the personnel department of your employer, or your friends. At the moment, a number of features are fixed by the Affordable Care Act, so price and service are really the main issues.
Then, having identified a (high-deductible) insurer and an HSA vendor (perhaps a bank or investment adviser), you are free to switch later, but in the long run you are looking for more-or-less permanent relationships.
You now presumably have your health insurance policy, with a Christmas saving fund arrangement attached. Don't sign anything until you are satisfied with the answer to this question, "How much income can I expect and how much freedom do I have to invest in total market stock index funds, when and if I choose to?"
If you get evasive answers, you might silently plan to sign up, but plan to keep on looking for a better deal to switch to later. At first, it might not matter, but over time you need to find the best arrangement. A debit card attachment is nice. Big vendors are reassuring, but they tend to be inflexible. Bear in mind, there isn't much in it for your advisor unless you keep renewing for a long time, so if you persist, you will probably get an answer. If persistence doesn't work, the outlook for a favorable answer, however, is dim.
So you might suddenly improve the atmosphere if you offer plans to deposit the maximum allowable immediately because a lot of obstacles will likely be waived. Keep that up for as long as you can, at least until minimum balance requirements are fulfilled. If you can't manage it, then use the Christmas fund approaches of payroll deductions and income penalties for as long as you have to, but remember your counterparty really must somehow be paid, even though he always remains a counterparty. What about the retirement income features?
You probably don't have to worry about retirement for many years, although it is always wise to check occasionally to see how income compares with the competition. As things now stand, you needn't do anything until you become eligible for Medicare, except keep score between your arrangement and others, reacting appropriately to differences. As the time approaches, you will probably find you have lots of choices of retirement plans, so don't be in a rush to freeze that option.
Whether it is explicit or not, let's say you have done everything necessary for both a health insurance plan and, following that, a retirement plan. The retirement plan will have no money in it until you shift it there from the health insurance plan, replaced with Medicare. There are penalties for early withdrawals, but they can be made if you must. So to summarize, there's a little nuisance when you start, and another bit when Medicare looms. But essentially the Health Savings Account is on auto-pilot if you keep funding it, and events continue to demonstrate you are getting the maximum available return.
That completes the first section of this book. It all may be a little hard to understand, but it's easy to do. The last part of the book is devoted to what else you and Congress might think about, to build additional features on top of this foundation. Most of these extensions would greatly enhance the finances of you and the rest of the country, but all of them must be debated in minute detail before implementation. And all of them require major legislation to be smooth and workable. The Health and Retirement Savings Account as it stands might use a few easy amendments, but it already has most of its kinks worked out. It's already reached the point where the claim can be made it's a whole lot better than any other term insurance plan.
One by one, let's examine the potential multi-year improvements to be debated, so at least you understand where all this might take you.
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.
