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 visiting Frenchman Alexis de Tocqueville was struck most by the volunteerism he found everywhere in the young American nation; in his view, the first reaction of 19th Century Americans to a problem was to create a volunteer organization to fix it. Benjamin Franklin, who created dozens of such initiatives, was held up as its great exemplar. But de Tocqueville visited us at the beginning of the Industrial Revolution, and we are now well past that into the Information Revolution; volunteerism has noticeably declined. Not only have the great volunteer organizations like the Masons and the Red Cross suffered, but it is far more difficult to enlist the help of others to form a pick-up group to attack some issue or other. It is in that sense the general spirit of volunteerism has declined. The likely difficulty is not selfishness, but the helplessness of people to control their own time.
When volunteer groups to assemble, they are mostly composed of self-employed people like plumbers and dentists, free to be somewhere else during "normal business hours", which although shorter than they once were, seem extended by commuting time and by chores pushed aside during workplace confinement. To some extent longer commuting distances make it physically impossible to do personal chores in the vicinity of the workplace. But constrained personal time is also related to increased control behavior by management. A successful big business has to employ strategies to get employees with cell phones to stick strictly to business while the employer is paying for their time. Now that so many women are going out to work, the family unit needs to struggle to coordinate everyone's work time so there will be some remaining opportunity to conduct family life. When a working couple shares the home tasks and babysitting, the preempted time now extends to two working partners, and what is left is called "quality time". A probably temporary elaboration of this time competition is the need to chauffeur teenagers to their resume-enhancing activities. For the time being, you don't pick a college, the college picks you, and parents desperately labor to assist their children on a career path. Quite obviously, America needs to evolve better ways of trading work at home for more flexibility in the actual workplace, and we also need to build more first-rate colleges, but those issues are not the present topic. To summarize: It's awfully hard to assemble a group of volunteers simultaneously because employers have so successfully assembled their time. Failing to appreciate the tradeoffs inherent in commuting time is a secondary but still important factor, somehow related to the recent housing/schools mania.
Consequently, volunteer organizations increasingly tend to regard their chores as something you hire someone else to do if it proves impossible to dump them on someone who is retired or unemployed, or too timid to refuse. Even nominal volunteers are reluctant to step forward. This leads to recruitment lectures along the line that naturally you must sacrifice if you really truly believe in the goals of the dear old Whatsis Association, surely just a coercive speech pattern. That claptrap was never heard during the age of universal volunteers; volunteering was just one of those things everyone expected to do to get community activities accomplished. We're losing something important if we continue to endorse this attitude. Sometime during the first twenty-four hours in military service, for example, someone will surely advise the new recruit -- never volunteer.
For a penniless non-profit to adopt the solution of hiring staff when there is no revenue stream to pay them, is the first step toward the dissolution of the organization. Essentially, the non-volunteers are ordered to contribute money if they choose to be draft-evaders, and eventually, the officers and staff begin to look back at the organization members as cows to be milked. A class of people who are only making a living is substituted for those who understand and promote the goals, and it just goes downhill from there.
Instead, all volunteers really must each do some unpaid work, and the officers and directors must set an example of it. What an organization does next is crucial. Individual members, either anonymous or hoping to remain anonymous, must be approached with the suggestion they accept responsibility for a task. The wild-eyed response to this approach is quite familiar, like the lame excuse that there is no time. A counter response that I'm busier than you are, does not improve the conversation because it suggests the refuser is merely a selfish shirker. Instead, initial requests must take the following form: They should be for a simple, limited task without any obligations stretching to infinity. Almost everyone will be glad to bake a cake for a party, but almost no one will agree to be chairman of the cake-baking department unless the boundaries of that commitment are more reliably limited than they usually are.
In modern times, any major undefined volunteer responsibility is seen as potentially leading to an unthinkable conflict with gainful employment or else its ill-considered outgrowths like commuting. Since that's the basic problem, all-volunteer invitations must respect the true issue and devise workable ways to circumvent it. Role models certainly help if you have any.
When I had to confess my defeat (by 5%) at a local club in Philadelphia that I belong to, I had to tell the group why I had been running for the Assembly. Finally, one friend with a puzzled look asked, "I never heard of running for election to the Assembly. I always thought membership was inherited."
Another friend had to tell him that it wasn't that Assembly, with dancing and all, it was the political one in New Jersey.
Only in Philadelphia, could you imagine such a conversation.
Among the many things we don't know about the future, is the average longevity eighty years from now. The whole-life insurance industry prospered when they sold policies assuming American longevity of 47 years in the year 1900, and it turns out to be 83 today, still growing fast. If longevity should get shorter, as it recently has in Russia, life insurance would go out of business. Since we can't rely on projections, we have to rely on early observations and make mid-course corrections.
President Lyndon Johnson both underestimated how much Medicare would cost, and how politically successful it would be. He was in no position to multiply 50 million Americans times $11,600 per year per person, times 22 years per person. That simple sentence tells you all you need to know about current Medicare costs, but who knew? Nor could he know how fast longevity would grow, or how fast the cost would rise. But we can monitor the trend, extrapolate, and revise the extrapolation. Medicare was a medical success, which had to be paid for; and President Johnson's successors might have found that out a little sooner, and changed course. If we must find fault, failure to readjust early would be my candidate.
So, who is counting?
Quis custodiet custodies?
For reasons obvious or not, the nation would be well served to create a monitoring agency for the guidance of future Congresses in charge of the type of Health Savings Accounts we already do have, and maybe some related issues. When we start envisioning lifetime coverage, it becomes even more vital to have a permanent agency to sort out what is happening. This is particularly important when the Branches of the Federal Government are divided between the two parties. Informally, the subcommittees of the Appropriations Committees have assumed much of the burden of overseeing agencies. They are the only Congressional Committees to review every program every year. However, the Agencies have grown to be the largest bureaucracies in the government, and tend to become jealous of their independence, as the Appropriation Committees grow too burdened to bother with them. It begins to look as though we need more Congressmen if we want Congress to maintain closer control of the agencies. Each Congressman now represents a million constituents, and simply cannot do all we would like him to do. As much as anything, we need a core group who worry about issues in advance and have the prestige and access to make their views be heard. Rather than design a blueprint, let's review some issues that such a body might explore.
Proposal 8: Health Savings Account Age Limits Should be Extended, from the Cradle to the Grave. A few extra years might be a minor improvement in special cases. The real benefit would be to create a continuous account, which could grow over long periods of apparent inactivity.
Proposal 9: Instead of annual contribution limits, the limit for HSA should extend over several years, or even be a lifetime limit. When deposits must be skipped for health or occupational reasons, there should be an opportunity to catch up. Athletes and similar occupations tend to concentrate on earning power in a few years.
Since the HSA is increasingly accustomed to augmented retirement income, thought should be given to extending the idea to amounts of money which could encourage that use. Furthermore, there are special circumstances, like a partial Medicare buyout, in which a limit to deposits forces a choice between two desirable uses for the same money. If the individual has the money for more than one purpose, it seems wrong to force a choice. For example, it's considerably safer to over-deposit more than you believe you will need, planning to return the excess. As a practical matter, the usual danger is overoptimistic revenue projection. Someone who sells his business at age 63 might have enough cash, but still, encounter trouble with the $3300 per year limit because he once needed the income to run the business. It seems pointless to squeeze through such a narrow window, and much better if the window were at least enlarged to permit lump-sum deposits up to a $ 132,000-lifetime limit. With that sort of cushion, plus a stretch of reasonably good health at the right time of life, it would become considerably safer to take risks. At age 65, a lifetime of health costs is already in the past, but the curve of health expenses starts to bend upward at age 50, at a time when college expenses for children may be persisting, and the house isn't quite paid for. It seems a pity to cripple a good idea with pointless contribution limits that almost stretch far enough, but leave people fearful. If Congress develops a serious interest in lifetime insurance, the yearly contribution limit should be revisited. The optional side use for retirement should be examined in parallel, including its potential for being gamed.
Revisited by whom? Someone should be empowered to travel, and talk to people in the field. Maybe hold hearings, maybe just interview. A simplified goal is, therefore, to accumulate $80,000 in savings by the 65th birthday, intending to make a single-premium buy-out. That clarifies costs, but is it practical on a large scale? Remember that savings get a lot harder when earned income stops. With the current law, you would have to wake up and start maximum annual depositing of $3300 by your 50th birthday, to reach $80,000 by age 65, and you would need generous internal compounding to make it. But notice how easily $100-200 a year would also get you there, starting at age 25 (see below), even justifying somewhat less optimistic investment income returns until age 65.
Many more frugal people might skin by with looser rules; It even could rather easily be subsidized for poor people and hardship cases. If you are going to cover lifetime health costs instead of just Medicare, many more will need $80,000 to do so and have something left to share with the less fortunate. But to repeat once again, that still compares favorably with the $325,000 often cited as a lifetime cost. That's all we care to promise in public, but secretly we know it may not be enough. The plain fact is, if longevity or inflation get out of hand, someone must have the authority to raise the contribution limits and to do that, there should be some research by a trusted house actuary.
Proposal 10: Instead of the present annual limit of contributions to Health Savings Accounts of $3300 per year, Congress should permit a lifetime limit of $132,000, with annual deposit limits adjustable to bring accounts at their present age, up to what they would have been if $3300 annually had been deposited since age 25.
Proposal 11: Congress should reserve decisions to itself for changing the lifetime contribution level, and review final appeals from contract terms which seem to threaten imminent major adjustment to the general public lifestyle.
The Cost of Pre-funding Medicare. Rates of 10% compound income return would reduce the required contribution to $100 per year from age 25 to 65, but if the income were only 2% would require $700 contributed per year, and at 5% would require $300 per year. Remember, we are here only talking of funding Medicare, as a tangible national example,
It is this calculation, however rough, which has made me change my mind. It was my original supposition that multi-year premium investments would only apply up to age 65, and that would be followed by Medicare. In other words, HSA should only be implemented as a less expensive substitute for the Affordable Care Act. It seemed to me the average politician would be very reluctant to agitate retirees by proposing a plan to eliminate Medicare. They would feel threatened, the opposing party would then fan the flames of their fears, and the result would have a high likelihood of undermining the whole idea for any age group, for many years. Better, I thought, to take the safer route of avoiding Medicare, and confining the proposal to working people, where its economics are overwhelmingly favorable.
But when the calculations show how close this proposal under cautious revenue projections could come to failure, and when nothing else remotely close to it has been proposed by anyone, the opportunity runs the risk of passing us by. So, I have changed my mind. The moment of opportunity is too fleeting, and the consequences of missing it entirely are too close, to worry about the political disadvantage of doing the right thing. The transition to a pre-funded lifetime system will take a long time to get mature, and the political obstacle course preceding it is a daunting one. At least we should allow it as a demonstration option, where some fears will prove unwarranted, while others can be corrected.
So we make the guess of the average life expectancy where things will eventually flatten out, will then be about 91. (Be careful, most census figures are for life expectancy-at-birth.) But many people would have to be lucky in all details: a favorable investment climate for the right ten-year periods, plus a favorable health situation which avoids expensive illnesses just at the age when they begin to threaten. Some life-saving scientific advances would be a big help, too. Using a lower goal of $80,000 and an interest rate of 7% is considerably easier to conjure, but the barrier which might be reached first is the $3300 yearly contribution limit. Some unfortunate individuals might be forced to pay all medical expenses out of pocket in order to make the investment fund stretch, even before the average becomes affected. The individual who came up short might still remain considerably ahead of where he would be without an HSA, but we are using a precise match of revenue and expense, to simplify the examples.
Someone who sells his house or business at age 63 might have the cash, but still, have trouble because of the $3300 per year deposit limit. It seems pointless to squeeze through a narrow window, and much better if the window were enlarged to permit lump-sum deposits up to a $ 132,000-lifetime limit, adjusted for inflation and compound income returns. With that sort of cushion, plus a stretch of reasonably good health at the right time of life, it would become considerably safer to take the risks. At age 65, a lifetime of health costs is nearly in the past, but the curve of health expenses starts to curve up at age 50, at a time when college expenses for children may be persisting, and the house isn't quite paid for. It seems a pity to cripple a good idea with pointless contribution limits that almost stretch far enough, but leave people fearful. If Congress develops a serious interest in lifetime insurance, the yearly contribution limit should be revisited.
The simplified goal is, therefore, to accumulate $80,000 in savings by the 65th birthday, remembering that savings get a lot harder when earned income stops. With the current law, you would have to start maximum annual depositing of $3300 by your 50th birthday, to reach $80,000 by age 65, and you would still need generous internal compounding to make it. But notice how easily $100-200 a year would also get you there, starting at age 25 (see below) and less optimistic investment income returns until age 65. Many more frugal people might skin by with looser rules; poor people and hardship cases could more easily be subsidized. If you are going to cover lifetime health costs instead of just Medicare, many more will need $80,000 to do it and have something left to share with the less fortunate. But to repeat once again, that still compares very favorably with the full $325,000 which is often cited as a lifetime cost. We have already imposed an extra $80,000 internal savings requirement in order to include Medicare; here is the place it would be a hardship. That's about as far as concentrated thought will carry you. It leads to the conclusion that it might be better to modularize Medicare and let the public pick and choose what it wants to buy its way out of.
The Cost of Pre-funding Medicare. Rates of 10% compound income return would reduce the required contribution to $100 per year from age 25 to 65, but if the investment income were only 2% would require $700 contributed per year, and at 5% would require $300 per year. Remember, we are here only talking of funding Medicare, as a well-understood national example, Obviously, a higher return would provide affordability to many more people than lesser returns. When $100 competes for the investment income from 10%, it's much easier than $300 competing for 5% income. Let's take the issues separately, but don't take preliminary numbers too literally. They are primarily intended to alert the reader to the enormous power of compound interest, and the big difference made by relatively small changes in it. Let's go forward with some equally amazing investment discoveries which are more recent, and vindicated less by logic than empirical results.
A transition from term insurance to pre-payment of Medicare is greatly eased by forgiving the premiums and payroll deductions, which are roughly age-distributed, and can, therefore, be forgiven in a graduated manner for late-comers to the program. Most cost-redistribution of high-cost outlier cases should be handled through the catastrophic insurance, which is well suited for invisible and tax-free redistribution. Because of hospital cost-shifting, inpatients are temporarily overpriced but are quickly becoming underpriced as a result of hospitals gaming the DRG to shift costs to outpatients. This will in time affect the relative costs of Catastrophic and Health Savings Accounts and must be carefully monitored for mid-course adjustments. This changing horizon of cost shifting reinforces the need to create a special agency to keep track of it. And to report its findings to Congress, who can consider the broader political implications, once they know the facts.
Proposal 12: Congress should create and fund a permanent Health Savings Account Agency. It should have members representing subscribers and providers of these instruments, with the power to hold hearings and make recommendations about technical changes. It should meet jointly with the Senate Finance Committee and the Health Subcommittee of Ways and Means periodically. It should have extensive access to the appropriate Executive Branch department, to review current activity, detect changing trends, and recommend changes in regulations and laws related to the subject. On a temporary basis, it should oversee inter-cohort and outlier loans, leading to recommendations about the size and scope of inter-subscriber loan activity. At first, it might conduct the loan activity itself, with an eye toward eventually overseeing a commercial vendor.
Cost Sharing with Frugality.At present costs, statisticians estimate future healthcare costs of about $325,000 (in year 2000 dollars) for the average lifetime. We could discuss the weaknesses of that estimate, but even though it's breathtaking, it's the best guess available. Women experience about 10% higher lifetime health costs than men. Roughly speaking, how much the average individual somehow has to accumulate, eventually must equal what he spends by the time of death. The dying individual himself has little interest in what is left unpaid at his death, so Society must do it for him, in order to survive as a Society. At this point, we, unfortunately, must also work around one of the great advantages of having separate accounts.
On the one hand, individual accounts to create an incentive to spend wisely, but it is also true that pooled insurance accounts make cost-sharing easier, almost invisible, and tax-free. Cost sharing induces reckless spending of other people's money, however, while individual accounts induce frugality with your own money. Therefore, linking Health Savings Accounts with Catastrophic insurance provides a way to pool heavy outlier expenses, while the incentive for careful money management remains in the outpatient costs most commonly employed (together with a special bank debit card) to pay outpatient costs. Such expenses are much more suitable for bargain-hunting anyway because dreadfully sick people in a hospital are in no position to argue or resist.
But a cautionary reminder: linking individual accounts to frugality through outpatients, as well as linking heedless spending to insurance through inpatients -- induces hospital administration to game the system we have here imagined. There's no doubt a system can be gamed by shifting medical care to the outpatient area, but we must expect the DRG to be attacked, in order to reverse such incentives, which run in the hundreds of billions of dollars. A well-informed monitoring system simply must be created and funded, if we ever expect the decision to hospitalize patients to rest on whether the patient needs to lie down, instead of on what kind of payment system we happen to fancy. At the same time, the present DRG coding system must be considerably improved to withstand being subverted. These are not tasks which congressmen typically enjoy, but they must be done within the legislative branch if we expect it to function.
Standard Deviation within and between age cohorts.Furthermore, there is an important distinction between a mismatch of revenue to expenses caused by chance within one age group and a revenue mismatch between two age cohorts. To put it another way, somebody has to pay off these debts, and we must have a plan about who should pay them when revenue is not present in the account. Borrowing between subscribers within the same age cohort should pay modest interest rates to forestall gaming, but borrowing between different cohorts for things characteristic of their age level (pregnancy, for example) should pay no interest if at all feasible. Unfortunately, people sometimes abuse such opportunities, and interest must then be charged. Until the frequency of such things becomes better established, this function of loan banking policy should be part of the function of the oversight body, rather than the executive agency, which tends to want to retain the function. When its limits become clearer, it might be delegated to a bank, or even privatized, but the policy must be monitored by specialists who understand what is happening "on the ground". While it is unnecessary to predict the last dime to be spent on the last day of life, incentives should be understood by the managing organization, separating routine cash shortages from likely abusive ones. And looking at all such activity as potentially having been caused by payment design. Much of this sort of thing can be minimized by encouraging people to over-deposit in their accounts, possibly paying some medical bills with after-tax money in order to build the fund up. Such incentives must be contrived if they do not appear spontaneously. User groups can be very helpful in such situations. People over 65 (that is, those on Medicare) spend at least half of that $ 325,000-lifetime cash turnover, but just what should be counted as careless overspending, can be a matter of argument.
Proposal 13: Current law permits an individual to deposit $3300 per year in a Health Savings Account, starting at age 25, and ending when Medicare coverage begins. Probably that amount is more than many young people can afford, so it would help if the rules were relaxed to roll-over leftover entitlements to later years, spreading the entire $132,000 over the forty-year time period at the discretion of the subscriber.
Finally, an observation. The classical Health Savings Account will save a big chunk of money, but who gets it will depend heavily on the health of individual subscribers because it is term insurance, year to year. Two concepts loom over it: (1) The nation may want to distribute the good and bad luck more evenly, and (2) It would be much easier to cut down an over-funded project than to supplement an under-funded one. If we can think of some ways to improve the product, we should start with as generous a benefits package as we can easily devise. Therefore, the rest of this book is devoted to making the returns more generous, and the outcome more predictable, sooner.
Nobody told us to do it, but let no one suppose our scientific community was the only group who had the notion. Exceptionalism likely originates deep in our culture of conquering the wild frontier. There's also the Abe Flexner or Teddy Roosevelt progressivism theory, but sometime during the winning of World War II, we Americans strongly exaggerated the idea we could do anything and carried that idea to surprising levels. Somewhere in the course of building the atom bomb, landing a man on the moon, defeating the whole world at war, defeating the Great Depression, and winning a whole lot of Nobel Prizes, we gave ourselves the idea we really could conquer all of the diseases. All it seemed to require was to spend tons of money and to set our minds not to quit. It probably is well to remember that at the time of the Bretton Woods Conference in 1944, we had two-thirds of the gold in the world, locked up in Fort Knox. Foreign trade was paralyzed because nobody else had any money.
Since 1900, average longevity has expanded from 47 years to 83. At least thirty major diseases have disappeared, fifty percent of drugs now in use were unknown just seven years ago, and so on. In 1950 we had 500,000 licensed beds for a mental disorder, in 2010 only 40,000, although John Kennedy's impulsiveness probably overdid it a bit. Far from all those mental patients were transferred to jail, and far from all those jail inmates came from mental hospitals. There has been a remarkable acceleration of scientific discoveries, new drugs, new cures. And it would take more than money to do it. Why worry now about what medical care costs, when it is obvious if we cured all the diseases, even the poorest among us could easily afford to spend -- nothing at all on health care. Foreigners scoff at such childish belief, but then, they retire in their thirties and wonder why they don't accomplish anything. Nobody ever won a war without taking casualties. You aren't listening to Quakers, when you hear that last one; the feeling isn't universal, nor is it always valid.
If we cured all the diseases, even the poorest could afford to spend nothing at all on health care.
It does sound a little childish to go on like this, but there are signs it might actually be more or less the right path to take. We spent a billion dollars searching for cures in the genes of the entire human genome and found very little. So we questioned the research and repeated it, spending another billion dollars. The result was, unfortunately, the same; apparently, that was the wrong place to look. But a man who lives in Philadelphia found thirty-seven more genes outside the cell nucleus, in the mitochondria, and spent his career finding out what they did. That sounds like a better way to go. There are scientific reasons to hope that among other things, these genes are responsible for the major diseases which make their first appearance during middle age. Four or five diseases of this sort, like cancer, diabetes, or Alzheimer's Disease, account for most of the medical costs we spend so much time worrying about. Obviously, no one is going to live forever, so there will continue to be substantial medical costs. At the very least, if we had no diseases, we would have the problem of outliving our income. Onward! Only a couple more decades to spend money, and then there will be plenty left over.
To make it last, maybe someone has to cut costs. The hospitals are the single largest source of medical spending, so somebody's unspoken plan is to let them put on fat for the coming winter, and then suddenly cut them off at the knees. After all, hotels seem to be considerably cheaper, and retirement communities run infirmaries at a fraction of the cost. We instinctively know state licensing agencies are somehow protecting some monopolies, which will disappear if we pass a few laws, although the Maricopa decision shows the weakness in acting on that hunch. All in favor, signify by saying aye, and it's as good as done. As somebody once said, nobody ever won a war without taking casualties.
It has been noticed by others we tend to make systematic prediction errors. If you predict what you will accomplish in a year, I'm sorry to say you can't get that much done in a year. But if you predict what will occur in twenty years, you always underestimate the enormous changes to take place in two decades. If you experiment between short-term extrapolation failures for what can change in a year, on the one hand, and imagination failures for what will take place in twenty, at the other extreme, it appears that predictions for about six years come out closest to what does actually happen. I think I got that from The Economist.
Will medical costs be substantially lower in six years? Probably not, but they will probably be somewhat lower, just from extending the scientific advances we have already made, to more or less everybody within our borders. Beyond that, much will depend on the scientists. Whether major discoveries will emerge, or how often, is beyond present prediction. But in five or six jumps, we can expect present accommodations to health costs, to become quite obsolete. Read the proposals to deal with them, which appear in a later section, in that light.
Although the language of exceptionalism really isn't my native language, right now the general sense it conveys seems roughly correct. Although I'm not as reckless as some would be with research funding, I do believe the general sense of it is correct. With a little bit of luck, and considerable help from newly developed centers of foreign research, present trends do seem to be leading to a drop in both research costs and health delivery costs reasonably soon, let's say during the next generation. Improved transportation, telemedicine, and extended longevity seem to hold the promise of slimming most medical costs as we now know them. And it does seem to be reasonable to make most general hospitals into tertiary care centers, and then to shift the center of bread and butter medical care to the suburban and exurban retirement centers. Mostly, we need better transportation arrangements, to do so fairly soon.
What seems to be retaining the center of gravity in the present urban Medical Centers, seems to be: the location of research already present in those places, and the use of indigent populations for teaching purposes. When research (read: government funding) begins to dry up, it is my prediction the center of healthcare delivery will shift with the population centers, adjusted for their sickness content. My guidepost is the Hershey Medical Center, located on the most fertile farmland in the world, and only a few miles from where my ancestors lived for two hundred years. Each year I make a trip there, and every year there are more mini-mansions. A dear friend of mine advised Milton Hershey on how to build a medical school in the boonies, and frankly, all it takes is money. When present funding dries up, the center of Medicine will move to where the sickness is, unless the government gets in the road of it. As far as I can predict things, it seems to mean medical care will move to retirement centers (CCRC). Some people prefer high-rise apartment buildings, but building vertically is invariably more expensive than building horizontally. Very likely, the migration of both healthcare and retirement will be dominated by making financial resources stretch further. Research? Well, research is a young person's game, so let them plan to retire earlier and become administrators later.
My ability to predict politics is poor, so I notice politicians can sometimes direct funding into wasteful directions. We might annex Canada, Mexico, and Cuba, and thereby jumble up the American economy in unrecognizable, unpredictable ways. Or we might annex Canada, Iceland, Ireland, and England, for a different unpredictable future. Any of that would just be our Exceptionalism, carried out in another direction. But somebody else's exceptionalism might turn us all into a lump of molten ash, so this is a better choice. Using the same unconstrained reasoning, our leaders may decide the direction started by the careless Maricopa decision was ill-advised, and the people trained by the system Abraham Flexner set into motion are better qualified to run research systems than the people elected on the second Tuesday in November. Governing this, however, will be the nature of the reaction when the taxpayers discover a few awkward things, like who benefits most when an employer gives health insurance to his employees as a tax-deductible gift.
Overview. In earlier volumes, it was proposed to make healthcare more affordable by re-organizing its pieces. We're still on that theme, now emphasizing how to go about harvesting investment income from the quirks of modern healthcare. To be brief about it, health spending now crowds toward the end of life, with most heavy spending after age 65, but most earning power coming before 65. That bifurcating trend continues and our financing gets increasingly middle income-heavy. The initial reaction was to treat workers and retirees as two different classes of people, relying on one to tax the other, ignoring any restlessness about the cost of paying for someone else. Retirees now move to different communities, even different states, almost sorting into two different nations. Furthermore, the gap gets wider, with good health leading to longer retirements. Government is forced to be the paymaster for an expanding free lunch for strangers.
As if that were not enough, at the front end of life, children become entitled to tax their parents for health and education, for longer stretches of increasing alienation. Give things a little time, however, and it's possible to anticipate this additional third of the population feels entitled to tax the working third, deploying the enforcement powers of the government intermediary. Between them, the non-working two thirds will constitute a majority, so even politics may not forestall the problem. To earn more requires more education. To work more should entitle a peaceful retirement. Somewhere, we got on this wrong path for the right reasons.
The book before you is not a list of dooms and glooms. It is a proposal to protect a functioning society by regarding child, parent, and grandparent as different stages of the same person's life, all with a unifying interest in preserving the system. Specifically, we build upon the idea of a Health Savings Account, one account per person throughout one lifetime, as a financial way to illustrate a social point. If you spend too much too early, you won't have much left for later. This proposal is voluntary, you don't have to do it, but in some ways, that's another advantage. No matter what system is used, ultimate protection lies in the sympathy of more fortunate people. Sympathy will last longer if everyone appears to have done his level best--for himself, and with plenty of warning if it wasn't sufficient. Ultimately, there is no escaping the use of insurance for unexpected catastrophes, but that's the last resort. Only an insurance salesman would argue for unlimited insurance for everyone, all the time. And only someone who knows very little about insurance would believe insurance is a form of printing money. Voluntary isn't one-size fits all. Voluntary doesn't dump 340 million subscribers on an untested system, all at one time.
Either voluntary or mandatory, the consequences of our present dangerous path eventually fall on the individual, leaving nothing but the unlimited (?) sympathy of others for protection. The working generation must always subsidize the two dependent generations, but it's the individual at different ages instead of as anonymous classes of strangers. For a final twist, we propose to address this problem by adding the incentive of a second problem we didn't even have until a few years ago. It isn't a trick; everything looks in retrospect as if it could have been predicted.
The cost of a third-party system can be found in the difference between two costs, first-dollar cost, and high-deductible.
Three Surprises. Curiously, the new concept had to be tested before it could be fully understood by its originators. A bit of history may help explain how it came about. The basic concept of Health Savings Accounts was developed in 1981 by John McClaury and me, while John was Senior Policy Advisor in the Reagan White House. Derived from the IRA concept developed by Senator Bill Roth of Delaware, it started as a Christmas Savings Account to build up the deductible for a (high-deductible) Catastrophic health insurance. After testing, the realization dawned that the real deductible was the unpaid portion of the deductible in the account, eventually becoming zero -- because the (linked) insurance premium did not rise as the real deductible declined. Eventually, the HSA emerged with first-dollar coverage for the same price as high-deductible insurance. The modest saving of the deductible within your own hands, plus the relief of that burden upon the insurance company, essentially high-lighted the undue cost of first-dollar coverage.
A different way of enlarging that point emerged from the tendency of non-insurance HSA managers to use debit cards for medical payments, instead of claims forms. Although there must be more temptation to chisel in the absence of strict scrutiny, the debit-card system essentially depended on the client to howl if his own money was suspected of being mis-spent. When you spend a third party's money, there's far less concern than when spending your own. The relative absence of chiseling cost was defining the true cost and effectiveness of third-party policing. And since the cost was seemingly much greater to police than not to police, it exposed the second true cost of using the third parties at all.
That was one surprise, but a more gratifying development was an appreciable fall in medical costs in spite of minimal cost-reduction efforts. At first, this was attributed to the ("adverse") selection of unusually frugal clients, but in time the real incentive emerged: the provisions of the HSA act permitted any surplus at age 65 to be turned into an IRA. That is, an incentive had been created to save health money for retirement, substituting personal responsibility for insurance company vigilance. And the hidden cost of using a third-party system was approximated by the resulting difference between the two costs.
But a third zinger in the system took longer to emerge. What was mainly motivating subscribers to be stingy and vigilant was the provision in the enabling law that when the owner reached Medicare age, the Health Savings Account turned into an IRA, Bill Roth's Individual Retirement Account. The name itself suggested motivation. As improved health care spread among the elderly, they lived longer and longer. Gradually and grudgingly, it was recognized that extended longevity was an unfunded cost of Medicare. There was Social Security, of course, long left in the dust of thirty extra years of longevity. It might have satisfied Bismarck, but it was essentially negligible in the face of really extended longevity -- which eventually proved to be five times as expensive as the rest of health care. What's worse, its cost is even harder to approximate than the future cost of health care, because everyone has his own definition of a "decent" retirement. An underfunded retirement is a stronger incentive to watch your pennies than a specified one, because there is no one, not even the demonized one percent, who can be certain there will be enough left to last. Wasn't that enough incentive to get anybody's attention?
For the purposes of this book, the strength of that last incentive was its most important feature. Almost anybody could tell at a glance that the cost of Medicare was what stopped "single payer" in its tracks, what paralyzed Congress on healthcare, and what defied solutions from any direction. Medicare was the "third rail" of politics -- touch it and you are dead. But with a new retirement entitlement looming which almost made Medicare costs laughable, it was a new ball game. In the new environment, third-party reimbursement was itself standing in the road of lowering everybody's costs through rearranging the payment stream. Medicare became a symbol of what the problem was, not just a lobbying benefit. Increased retirement cost was, in short, a central cost of health care, and anyone who stood in the way of fixing it was misguided. Because it is closest to retirement, Medicare is in fact the first thing you must change, but you better do it very carefully. And by the way, you better do it pretty soon.
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This study of Health Savings (and Retirement) Accounts was begun thirty years ago, with intensity in the past five years. During most of that time, it was paying for health costs which were the central concern. Paying a big chunk of health costs would be an achievement, paying for it all would be an impossible dream. Therefore, paying for the whole healthcare system was the earlier goal of my proposals. If it fell short, well, it paid for a big part of it. Either way, we could afford to leave Medicare alone. But once Medicare came into focus as the main impediment to solving an even bigger problem for exactly the same age group, "saving" it becomes a relatively small issue. New revenue must be found, the quality of care must not be injured, and -- most of all -- public opinion must be re-directed. This is a specialist's game, but the public is now the real player.
Resource Assessment. Adding up all the other economies of Health (and Retirement) Savings Accounts, but now also including the retirement costs, the conclusion is left that HRSAs might pay for health costs, and some but not all retirement costs. Much of the shortfall comes from difficulty stating a "decent" retirement payment which would satisfy most people. That's enough for a Trappist monk is not enough for a movie star, and what will be called decent in 60 years is pretty hard to say. So the most we should promise is healthcare plus some retirement; supplement more generous retirement as you are able. Even promising that much is a stretch, but is certainly superior to healthcare plans without the discipline of individual ownership. Unfortunately, it forces the individual to some choices he must make for himself, versus allowing some big anonymous corporation to do it all for him at a hefty markup. Let's specify the two big dangers he must navigate:
Imperfect Agents Theoretically, the best result anyone could provide would be to give a newborn baby a couple of hundred dollars at birth, let a big corporation do the investing, and pay a million dollars worth of bills over the next ninety years on his behalf, at no charge. The long investing period would provide some astonishing returns, and it would be entirely carefree for the customer.
Unfortunately, experience over thousands of years has demonstrated agents will eventually extract much of the profit for themselves. Countless kings have been known to shave the edges of gold coins, even more, have been found to have employed inflation of the currency to pay their own bills. Investment managers are almost invariably well compensated, usually for mediocre returns. William Penn, the largest private landholder in history, was put in debtors prison by his wayward agent, as was Robert Morris, the financier of the American Revolution. Whole-life insurance companies are the closest approximation of an agent for a Health Savings Account who might propose to get paid a level premium for decades before paying out a benefit for a dead client. They seem to survive by promising a single defined fixed-dollar benefit and counting on inflation to work for them as it does for dictators, overseen by an insurance commissioner. Unfortunately, they have the moral hazard of falling back on other surviving firms to bail out bankruptcy, and the political hazard of trying to force premiums downward for the taxpayer without any reliable benchmark. Just how much they have been rescued by lengthened longevity is something only an actuary knows. Long ago, the situation was summarized by the question, "And where are the customers' yachts?"
Inexperienced Solo Management. If Warren Buffett had an HSA, he would have no problem managing it, and neither would a great many other savvy folks. The problem is to make the management so simple and standard that expenses can be kept low without injuring investment returns, for the average citizen. This consideration almost drives the conclusion the lifetime would be best divided into at least three component parts, with benchmarks and averages published regularly, since the medical and beneficiary problems divide into the same three (childhood, working age, and retirement) components. It begins to look as though a new profession of fee-for-service advisors needs to become educated and distribute themselves widely, perhaps in local bank branches. As will be described in later sections, the need is for the income stream to be kept in balance with the probable expenditures, adjusted for inflation or deflation. It is not to achieve the maximum possible revenue return, regardless of risk. That is to say, the purpose of the HRSA is not to make as much money as possible, but to be sure as much medical need as possible can be satisfied by the revenue available. Let's put it all in a nutshell: There's a big difference between designing a system to cover a public need inexpensively -- and designing a business model to make a profit. But that's not nearly as big a problem, as doing both at the same time.
After Assessing Obstacles Comes Strategy. Most HSAs make payments with a debit card suitable for passive investing (utilizing total market index funds) for inexperienced investors and for otherwise undesignated accounts. However, there's a technical problem: the earning period is not the first stage of life; it's the second, following nearly a third of life in childhood and educational dependency or debt. Health expenses in the childhood third of lifespan may be comparatively small, but the earning capacity is essentially zero. This unconquerable fact leads to splitting investment considerations into three stages, the first and last thirds subsidized by the middle one. The result is, two systems feeding off the middle third in opposite ways, requiring opposite approaches. Somehow, it must all come out in balance at the end. And remember, it starts with a deficit in the obstetrical delivery room unless we re-arrange something else.
If you spend too much too early, you won't have anything left for later.
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.
