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
... William Penn's Quaker Colonies
plus medicine, economics and politics ... nearly 4,000 articles in all
Philadelphia Reflections now has a companion tour book! Buy it on Amazon
Philadelphia Revelations
Try the search box to the left if you don't see what you're looking for on this page.
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 Philadelphia Museum of Art recently had a special exhibition of paintings by Edouard Manet, with a heavy dose of Claude Monet plus a few others. A moment's reflection demonstrates the enormous undertaking it must be to assemble a hundred valuable paintings from 60 different museums and owners, arrange for permissions, negotiate insurance and shipping costs, debate the best display, lighting and arrangement, instruct the guides, print the brochures, hype the announcement hype, and probably a thousand other details of making this all come out right. Although a lot cheaper to assemble this show and move it around to various cities, than it would be to have thousands of Americans travel to Europe to see the paintings there, nevertheless it looks expensive. Half a dozen major foundations donated money for this effort, and the ticket price is not insignificant. When you are all done, however, you have seen a display that no one could possibly see privately, all in one afternoon, with an elegant lunch on the premises in air-conditioned splendor, accompanied by a small orchestral group in the background. The show is resident for three months, less two weeks for setup and travel, so four cities can collaborate on four traveling exhibits each year. Somewhere, there must be a very large staff devoting full time to keeping these exhibits in constant movement; probably several cycles are going at once. This is big business, and filling that big museum every day for three months implies that many of the visitors are from outside Philadelphia. After you go, at least you can tell Manet from Monet, you've had a taste of the huge Museum that makes you want to come back some day, and you have seen Philadelphia's best view, right where Rocky ran up the steps.
Our guide was well trained and entertaining, and knew all about horizons, prompting some deep, deep thought about horizons. The Dutch school of painters usually put the horizon down near the bottom of the painting, showing off the billowing grey clouds so characteristic of the European coast near the North Sea. By contrast, the French impressionists went down to the sunny Mediterranean coast, where the bright sunlight forces you to look down at the ground. So the horizon of painting, the line where the sky meets the ground, is low in northern paintings, but high in scenes of the Riviera, representing in both cases the typical viewer?s image of the scene. No doubt, some painters deliberately reversed the normal location of the horizon, in order to create the unconscious effect on the viewer that something was somehow wrong.
This little lesson has practical utility for those of us who take amateur snapshots. The rule for photographers is to throw the horizon into either the top third or the bottom third of the viewfinder. Avoid putting the dumb horizon right in the center of the photo. Since most cameras nowadays have an automatic exposure meter, if you get it wrong the meter will concentrate on the sky, underexpose the subject below the sky, and give you a puzzling black silhouette instead of a picture of your girlfriend.
Returning to the reality of the Art Museum, it sits on top of a little mountain --Fairer Mount-- that William Penn once considered as a place to put his home. It was later the site of a reservoir, with the famous pumping station and water works down the hill on the edge of the Schuylkill. Now, this Parthenon is an easy place to reach and to park, while the world's art is placed before you. The Russian Tsar in his Hermitage, and the Archduke in his Viennese palace never had it as easy as this.
Creative destruction seemed a violent driver for the past two centuries, injuring a lot of harmless occupations and provoking their resistance to progress. The Industrial Revolution was bad enough, arousing Engels and Marx. But the computer revolution works faster, putting the pedal to the floorboard in a lot of ways, changing almost every life in some way, only faster. We could be approaching a violent second Luddite reaction if we don't keep our heads.
The legitimate complaint about the electronics revolution is that it is going in the right direction, but exceeding a reasonable speed limit. Elegant novelties that function smoothly deceive us into expecting perfection too soon, developing a habit of depending on innovations which are still a little shaky. But the banking industry, which presently bemoans securitized mortgages, swaps, and other products of the computer age, could not possibly have coped with the vast expansion of bank transactions without computer assistance. Computerized fraud is a problem, but street crime has markedly declined in response to ubiquitous cell phones in the pocket of every innocent bystander. The press is vexed by Internet competitors and bloggers by the million, but democracy is the better for it. Sometimes a simple solution will solve a problem created by computers, but to a major degree, only computers can get us out of the fix we are in.
For example, it seems plausible that the flaw in securitized mortgages lies in the inevitable loss of diligence by banks who originate mortgages with full knowledge that they will immediately be sold. Requiring an originating bank to retain 10% of the mortgage permanently would also force it to maintain an accurate tracking system for the other 90%, providing analysts a way to assess the performance of the originator, and regulators a way to control the volume. Maybe a simple rule like that would suffice, but if not the solution would probably consist of a massive computer programming effort to maintain records in excruciating detail.
Madam LaFarge
It's probably true that five years ago hardly any bank president could have offered a simple coherent explanation of what a derivative is, and it is certainly true that's the case for 99% of the population today. But that is the worst possible reason to destroy derivatives, which offer a breath-taking advantage in scale and diversification, and ultimately in risk abatement. Bundling thousands of mortgages leads to a much more precise estimation of the risk of the bundle than a banker could make of a single mortgage. If you know the risk with precision, the assessment of risk will be more accurate and almost certainly cheaper. There will be, there must be dislocations of prices as one system morphs into another. Temporary halts and moratoriums are justified, but demagoguery and Luddite riots are pitiful harmful responses. Politicians up for election are a menace in any crisis, where they come in various guises. There's giggling while the heads roll. There's also Charles de Gaulle, purring that he wanted to go to Heaven, he just was in no particular hurry to get there.
Charles de Gaulle
But let's be careful of our slogans, here. It certainly is preposterous to say that anything which is poorly understood must be a villain. It's also unwise to be drawn into a swamp. The banking industry faces dissolution if they can't keep up with electronic advances in their industry, so it is inevitable that speeding up wrong approaches will only make some parts of the credit crunch worse. Most of the cost-effectiveness of computers in the past have grown out of revising and replacing old methods, not from speeding up dumb ones. For example, if you want to know why health insurance is so expensive and cumbersome, you need only ask why it is so profitable. Once the huge investment in computerizing a system has been made, replacing it with a better system gets to be nearly impossible.
Ultimately, our present dilemma is this: we don't yet know how bad the problem is. It seems a reasonable possibility that this crunch happened just in time. Bad, it is true, but not yet catastrophic. If 3% or even as much as 10% of mortgages are foreclosed, the present system can absorb the loss, learn its lessons, and move on. A loss of a hundred billion dollars would probably lead to business more or less as usual. A loss of four hundred billion would however probably imply a serious recession, but when you start talking trillions, you are talking disaster. Most of the immediate uncertainty arises from ARM, the adjustable rate mortgages, and the degree of leverage in the debts of financial intermediaries. It's quite uncertain how many people took out mortgages they will not be able to afford at higher future rates of interest, or how many people took advantage of low rates for five years knowing they were planning to sell and move on during that interval, anyway. With regard to business loans, a mild drop in the economy will make it hard for businesses to cover highly leveraged loans. A huge drop will make it impossible for many businesses to survive, and they won't. A trillion-dollar aggregate loss would certainly provoke some welcome bipartisanship in Congress, but it might trigger a collapse of the Chinese economy or other unthinkable contingencies. Forcing more transparency into the present murk is the most urgent need, and that might well imply a concerted crash electronic analysis effort, with the way opened by some enabling legislation. Speeding up is only a good thing if you are headed in the right direction.
Let's compress the basic idea to simple end-of-life funding, to show how much can be made of the two basics. And then using the accordion model, expand the basic ideas to five, in order to cover the health expenses of an entire average lifetime. And eventually, expand the patient contributions to match. If the parents or grandparents of a newborn child deposit $2000 in a Health Savings Account at the time of the child's birth, using 7% return as the projected lifetime average investment return for life in an index fund of the entire American stock market, and do not disturb the account for a life expectancy of 80 years, there should be $512,000 in the account at the baby's death. That is the extreme limit of optimism, generating far more income than is likely to be needed. Beyond this limit, overcoming initial obstacles of a zero-interest environment, the uncertainties of inflation and war, resistance by competitive insurance and political alternatives, and other risks and alternatives -- make the whole project unlikely to succeed. That sort of defines the general limits of the idea's initial feasibility as extending from a low investment of about $10 to an upper limit of $2000; more is possible, but this is enough. It uses two ideas (the Health Savings Account and the Last-Year of Life Escrow) to show that there is surely enough money generated to cover the cost of eliminating the last year of life cost of Medicare. With that sum in escrow, a calculation should also be possible to estimate how much Medicare premiums might be reduced for the owner of that escrow, acting as the ultimate goal of everyone involved. There are of course some people who would want a solid gold casket for their own funeral, so there probably must be some "service benefit" features to the program, but in general, it is envisioned as an indemnity, leaving the issue of price control undefined for the present. Taken all together, a package can be assembled within the rule of reason to show how much a lump-sum advance payment would reduce Medicare premiums as an incentive for the average person to enter into it. Naturally, if you wait to enter into the agreement late you will need to deposit more money, but that figure is easily derived from looking at the average net value of four or five index funds at the time you finally make up your mind to take a chance on the idea. No doubt, beginning contributions at the age of twenty is more realistic than having a grandparent donate at birth, but it becomes too complicated to establish detailed premiums right now. If you wait until you are twenty, you will need to deposit approximately $8000 to catch up; or only deposit $2000 and be satisfied with a final balance of $128,000. The longer you wait, the harder it gets, and no doubt the proponents of "pay as you go" will object to it. But that's exactly why individual options are preferable. You can start with one program and switch to the other, but it becomes more expensive if you wait. Those who recognized a bargain earlier are rewarded for their risk.
Now, $512,000 is probably more money than is necessary in the idealized, no-problem example. So, let's see what it would take to fund the projected lifetime healthcare costs in their entirety, no illnesses, no stock market crashes, no fees or taxes. The amount projected is surely enough to cover that and leaves some room for illnesses and administrative overhead, but it's getting closer to the bone. At the very least, you would have to subtract the premiums for a $5000-deductible catastrophic health insurance policy, guaranteed renewable, of course. That's needed to pay the retrospective cost of having been born, well-baby visits and all that, so it must have a premium somewhat higher than the quoted one. And there probably ought to be a surcharge for re-insurance, in case the deductible is invaded more than once. Remember, the assumption made is that you will remain in perfect health, which is definitely not the average experience. So, it probably must be conceded that you will also carry routine healthcare insurance for maintenance during your working years, or else pay for your working-life healthcare out of pocket. Out-of-pocket may actually be better, in order to support an active marketplace to set prices, because providers must always be suspected of exploiting a heavily insured environment. On the other hand, let's not be completely naive about the inner workings of life insurance. A lot of its profits are derived from subscribers who drop their policies and never file a claim. Let's go over this, once more:
Liberalization of the Health Savings Account.To start with, let's begin voluntarily, and let the success of the first-responders encourage the timid. There are surely several thousand new parents (or more likely, grandparents) each year who know a good deal when they see it and could afford to pre-fund health insurance for their newborn children for the rest of their lives. (Class warriors will snort to hear this, but it is a basic fact of risk-taking that well-to-do people are about the only ones who can afford to take the untried risks of trying something new.) Starting at birth adds a couple of doublings, and reduces the lifetime net cost remarkably; middle-class people have to hang back because a loss means more to them. Portrayed as an estate tax deduction, it would seem an attractive generation-skipping way to transfer income to the next generation and to grandchildren who would be thereby relieved of the obligation to support the middle generation. Ask your lawyer to explain it to you, it's a good deal.
Do not put a limit on contributions to a Health Savings Account for the children; what's the point of limiting contributions when withdrawals are going to be limited to actual health expenditures? Surplus funding would only be lost and is therefore self-policing. (Eventually, any surpluses in the account should flow into a reinsurance fund for those who exhaust their deductible more than once.) Your accountant can explain that one to you. After the first year, non-participating members of the child's age cohort can catch up by contributing, not the same amount, but the average amount to which the fund has grown in the meantime.
The contributions themselves should be invested in index funds for the whole U.S. stock market, so if stocks have gone down the latecomers have a chance at a bargain, if the index has risen, it shows what a good idea it has proven to be. Essentially, it is an investment in U.S. common stock, which in all but occasional years can easily prove itself. As explained later, the fund will have to maintain a certain investment in U.S. Treasury bonds in order to pay claims, but the extent of this will depend on what the benefits include.
From this basic investment must be subtracted the cost of a catastrophic health insurance policy for the child, with a deductible not less than $5000, net of inflation, to be purchased with the dividends of the fund (premiums for the catastrophic policy are waived until the dividend income will cover them). Essentially, this insurance policy is the source of advance funding for the last year of life escrow. By shifting catastrophic premiums to later years, it is also retrospective funding for the first year of life.
Last Year-of Life Escrow. The issue of trusting anyone, even our own government, with appreciable amounts of money for eighty years is solved in the following way:
The funding has been described; it is placed in an index fund and remains there until the beneficiary dies, theoretically eighty years later. The investment performance is therefore widely available on a daily basis. Meanwhile, the average annual cost of the last year of life is available from Medicare. Meanwhile, the average life expectancy of the age cohort is available from the life insurance industry; the average yearly investment return is published by the index mutual fund industry. A year after the death of the beneficiary, the fund transfers the average cost of the last year of life to Medicare and publishes the investment results and theoretical results of alternatives to the cohort. What to do with any surpluses remaining in the fund need not be fully described at this point, but it is envisioned that surpluses remaining after the death benefit is paid to Medicare will go toward the first year of life, followed by other years if additional surpluses appear. On the other hand, reducing the cost of Medicare for the last year of life would enable a reduction of the premium costs for other years, so perhaps it would be better to pay off the existing debts of Medicare.
The immediate purpose of the steps described is to reduce the cost of Medicare. If it does not cover the complete cost of the last year of life, it at least reduces it significantly at little administrative cost. Since lifetime medical costs ordinarily reach a peak during the last year, there is a potential for virtuous cyclic increases to include more of Medicare costs than the last year alone, but this is not promised. If it reduces Medicare costs significantly, donors of the fund enjoy lower Medicare premiums than otherwise. Numerous alternative proposals are available, as described in later sections, and it is not useful to start unnecessary quarrels about such contingencies at this stage of the debate.
Commentary This proposal combines features of first-year and last-year insurance, resting on a framework of Health Savings Accounts, with the funding incentive of generation-skipping tax avoidance to provide seed capital. With adjustments based on revenue experience, it can be designed to remove about two-thirds of lifetime medical costs from future federal budgets, but it intends to leave undisturbed the comparatively routine health costs of the working population. Although it addresses the majority of costs, at present it affects only two years of the average lifetime and does so by indirect reimbursement.
Problems Needing Attention. Seventy years of health insurance have demonstrated that any provider system will readjust to any generous source of funds by attempting to make it even more generous. It is a theory of mandatory universal coverage that eliminating other funding sources will result in the elimination of cost-shifting, but unfortunately, it will not. State and federal governments compete to shift costs to any easy revenue source, and both the suppliers and the management of healthcare institutions will unceasingly seek to increase their share of the revenue from a compliant source of it. In retrospect, it is extraordinary that we ever thought otherwise. Therefore, this proposal seeks to provide easy income to the health system, but it will surely fail if it relaxes its vigilance. Therefore, the absolute minimum requirement is to lodge investigative power at both the federal and state levels, to be certain that only market-based prices (or relative values) are paid, and that indirect mark-ups are reasonable. It seems advisable to retain a small portion of healthcare costs with the consumer so that rebates and surcharges coming from the main fund will serve to remind the public of its need for vigilance.
Secondly, if cost controls do become efficient, incursions into the quality of care must soon be looked for. Professional self-regulation is one defense, consumer vigilance is another. Both approaches suffer when they are undermined by careerism, of which the plaintiff bar is an outstanding example. The whole matter needs re-examination, and probably would be improved by establishing greater direct tension between these three groups with the greatest conflicts of professional interest. At the moment, they all need more term limits if rotation within professional silos is not feasible. The Constitutional Convention of 1787 would be a good model for working out the proper balances between interested parties; they should be given six months to work it out, but not a day longer.
Of the stocks now listed as members of the Dow Jones Industrial Average -- the largest and most successful corporations on the New York Stock Exchange-- only one of them made the list in 1900. That was General Electric, and although GE is still a successful business, it' s definitely not the wizard it used to be. Every investor, indeed anyone with a pension fund, should recognize that corporations have a natural life expectancy of about seventy-five years. No matter how successful a company is, when it reaches seventy years of age, three scores and ten, it is time for portfolio rebalances to consider replacing it with something younger. This curious life cycle of institutions usually regarded as immortal is unexplained, but it may match the life cycle of the man who initially formed the company or the decline of the founding family; or perhaps the original business plan becomes obsolete, unable to keep up with changing times. One alternative principle needs to be explored further, however: it always costs more to repair and reconstruct, than to start all over from scratch. A nation which prospered within a constantly expanding frontier may someday need to revisit this basic idea underlying "creative destruction". Automobile insurance companies, for example, often startle their claimants with the news that it is cheaper to "total" a dented car than to repair it. Building a new car involves engineering to compete for low-priced quality, but repairing an almost-new car after an accident will always involve tailoring a hand-made restoration. In the meantime, the whole healthcare insurance industry of America needs to be more reconciled to the possibility that it would just be cheaper to start all over with basic premises. And state regulation might be one of them.
Along these lines, there is an old joke in Philadelphia about the father who advised his teen-aged daughter, "If necessary, you may sell your body. But never, never sell your Pennsylvania Railroad stock."
Joseph Schumpeter
Consequently, it is not a sign of disloyalty or thirsting for vengeance to observe that what we now call health insurance companies were created in the 1920s, and therefore unsurprising if we saw them decline or go out of business relatively soon. Joseph Schumpeter seemed to proceed from the same observation, regarding it as one of the democracies' strengths that major corporations regularly undergo "creative destruction". Whether a good thing or a bad thing, it seemingly is a fact of life. Therefore, nostalgia for the good old names an investor recognizes from his childhood doesn't necessarily make the best investment strategy. But face it. Buying "cats and dogs" isn't so smart, either, so it's usually better for most folks to stick with companies that have some seasoning. The conflict between brand names and entropy is thus a continuous process of adding and subtracting. And because it is easier to have something automatic doing unpleasant things, this one probably needs an external threat to move the needle.
Re: The Medical Marketplace: Incentives vs. Controls
I was flattered by your recent request, thrilled with the prospect of a Cato book on the subject, and yet dismayed to discover a hostile undertone to the AMA in the outline. Perhaps I can do something to head off an unfortunate confusion in the minds of the authors as to who are their friends and who are their enemies.
Let me identify myself. I Am a member of the House of Delegates of the AMA, Chairman of the Philadelphia Delegation, and a candidate for election to the AMA Council on Medical Service. I doubt very much if anyone else at the AMA currently has more influence over the thought processes of the present-day AMA about the particular subject material of the forthcoming book. At the same time, I am a loyal subscriber, contributor, member or whatnot of the Cato Institute; I read its publications eagerly, attend its meetings when I can, and endorse its philosophy as completely as anyone could without losing his self-respect.
Furthermore, I labor under the impression that the concept of the IRA for Health was suggested by John McClaughry in anticipation of a dinner for the White House staff, was fleshed out into its present form by me after that dinner speech which Bill Niskanen attended. Quite possibly others thought of it independently or even earlier, it doesn't really matter. It is more important to understand that the AMA has embraced the concept as an official policy has spent a lot of money on actuarial work, and is trying its best to get the idea promoted in Congress. The Cato and the AMA would make a great team to put the idea over the goal line. At the same time, I know how touchy the AMA is about criticism, and I hope you can do something to prevent a collision between what ought to be two firm allies.
I am referring in particular to what I fear is behind the reference to the AMA as a quasi-monopoly, attributing to it the creation of cost-plus reimbursement. If I understand this allusion correctly, the authors are unaware of the considerable effort and expenditure of the AMA to get rid of hospital cost-reimbursement in 1983, and its violent efforts to server physician reimbursement from the hospitals' cost-plus system in the 1965 construction of the two forms of Medicare. The voluminous reports of the Health Policy Agenda, and the Cost Containment Commission both of them AMA sponsored and funded document the strenuous efforts of the AMA to substitute market mechanisms for the insurance-driven non-market reimbursement environment of the health industry. It is perfectly true that each action in this evolution of AMA policy has been opposed a debated by individual delegates with either non-market ideologies or self-serving motives. Please notice, however, that these free agents within a system of free speech and adversary debate did not win the important votes on the subject, and their views are not AMA policy.
The foregoing paragraphs were written from the viewpoint of trying to get Congress to adopt a policy which is congenial to the mainstream views of both the Cato and the AMA; let me turn to some ideas about developing a better historical analysis of some of these issues, which my position perhaps helps me suggest.
In the first place, I think it would help us understand the best limits of free trade within the medical industry to go back to the 19th Century when the AMA created the system of medical licensure, and successfully piloted it through the various legislatures. Please remember that as recently as 1900 the AMA only constituted 7% of American physicians, and was then a small group of lonesome idealists, trying thought processes went along the lines of what improved the medical profession improved the health of the citizenry, and vice versa. Notice, however, the difference between what they meant by being Good for General Motors. The AMA wanted to limit the license to those most qualified to have it, and the Flexner Report of 1914 extended the idea to medical schools. I think it would be very interesting to trace the effect of these actions on physicians income, at the same time that some sort of effort was made to quantify the improved health of the country which might be attributable to the monopoly thereby created. I have the impression that the economic benefits of the effort lagged the health benefits considerably, and in fact, I have the impression that the generation who created the license/ monopoly (citizens as well as doctors) did not live to extract ay great personal benefit from it. Perhaps some scholarly analysis could shake my conviction, but I have the impression that the creators of the system knew very well that it wouldn't do them much good they rightly thought their efforts were for posterity. Perhaps Peter Ferrara is entitled to reply that the creators of Social Security had their main effect on posterity, too, but I don't believe they saw it that way at the time, while the doctors did.
So maybe license was an idealistic idea gone wrong, but I doubt if it is fair to characterize it as a conspiracy to raise prices, no matter what Adam Smith said. But even that theory might be defended as being in the public interest look at what has happened to education as we impoverish the teachers.
The second interesting part of the medical marketplace story is a legal one, and I hope the authors have the legal background to explore the implementation of Milton Friedman's ideas about the medial monopoly by the Justice Department antitrust division, and possibly also the Federal Trade Commission, but mostly the Justice Department. I have the impression that those young idealists over at Justice have carried plausible manipulation of language to level of abstraction which is going to be unintendedly destructive of some other treasured societal values; and that the incumbents of the legislative branch are not going to have the wit to move quickly enough to keep related systems out of trouble. It troubles me that the AMA is examining this matter purely as a problem of legal reasoning, rather than asking whether the legal arguments can reasonably be followed to their limit without first building bomb shelters for the bystanders.
I think what I mean is that it seems a useful thing for doctors to reprimand a colleague who charges too much or urge their colleagues to reduce fees for poor the antitrust statutes were really not designed to prevent it. And it seems a good thing to urge that medical prices bear some relation to costs, in order to minimize distortions of the provision of care. ANd it seems a good thing to allow enough slack in the system to permit cost-shifts which provide care to the poor which they otherwise might not get. Temporarily, perhaps, and only until a better solution is found. But what I am saying is that the Justice Department appears to me to be attempting something which only Congress should be allowed to address in the Constitution, well, the hell with the constitution or the laws of the Medes and the Persians, or whatever other items of worship the lawyers may produce. It seems to me that the issue is not that the courts are writing legislation, but that the legal profession as a whole cannot restrain itself from that activity. I certainly hope the Cato will not endorse any short-cuts around achieving public permission to enhance the public interest.
Well, this letter has turned out longer than I intended it to be, and I hope my main feeling, which is one of enthusiasm for the book, has not been smothered. I would be happy to meet with the authors or comment on the manuscript, in the spirit of trying to avoid those minor errors of fact, upon which their debating antagonists are so likely to focus.
Sincerely Yours,
George Ross Fisher, M.D.
GRF/gj
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.
