The musings of a physician who served the community for over six decades
367 Topics
Downtown A discussion about downtown area in Philadelphia and connections from today with its historical past.
West of Broad A collection of articles about the area west of Broad Street, Philadelphia, Pennsylvania.
Delaware (State of) Originally the "lower counties" of Pennsylvania, and thus one of three Quaker colonies founded by William Penn, Delaware has developed its own set of traditions and history.
Religious Philadelphia William Penn wanted a colony with religious freedom. A considerable number, if not the majority, of American religious denominations were founded in this city. The main misconception about religious Philadelphia is that it is Quaker-dominated. But the broader misconception is that it is not Quaker-dominated.
Particular Sights to See:Center City Taxi drivers tell tourists that Center City is a "shining city on a hill". During the Industrial Era, the city almost urbanized out to the county line, and then retreated. Right now, the urban center is surrounded by a semi-deserted ring of former factories.
Philadelphia's Middle Urban Ring Philadelphia grew rapidly for seventy years after the Civil War, then gradually lost population. Skyscrapers drain population upwards, suburbs beckon outwards. The result: a ring around center city, mixed prosperous and dilapidated. Future in doubt.
Historical Motor Excursion North of Philadelphia The narrow waist of New Jersey was the upper border of William Penn's vast land holdings, and the outer edge of Quaker influence. In 1776-77, Lord Howe made this strip the main highway of his attempt to subjugate the Colonies.
Land Tour Around Delaware Bay Start in Philadelphia, take two days to tour around Delaware Bay. Down the New Jersey side to Cape May, ferry over to Lewes, tour up to Dover and New Castle, visit Winterthur, Longwood Gardens, Brandywine Battlefield and art museum, then back to Philadelphia. Try it!
Tourist Trips Around Philadelphia and the Quaker Colonies The states of Pennsylvania, Delaware, and southern New Jersey all belonged to William Penn the Quaker. He was the largest private landholder in American history. Using explicit directions, comprehensive touring of the Quaker Colonies takes seven full days. Local residents would need a couple dozen one-day trips to get up to speed.
Touring Philadelphia's Western Regions Philadelpia County had two hundred farms in 1950, but is now thickly settled in all directions. Western regions along the Schuylkill are still spread out somewhat; with many historic estates.
Up the King's High Way New Jersey has a narrow waistline, with New York harbor at one end, and Delaware Bay on the other. Traffic and history travelled the Kings Highway along this path between New York and Philadelphia.
Arch Street: from Sixth to Second When the large meeting house at Fourth and Arch was built, many Quakers moved their houses to the area. At that time, "North of Market" implied the Quaker region of town.
Up Market Street to Sixth and Walnut Millions of eye patients have been asked to read the passage from Franklin's autobiography, "I walked up Market Street, etc." which is commonly printed on eye-test cards. Here's your chance to do it.
Sixth and Walnut over to Broad and Sansom In 1751, the Pennsylvania Hospital at 8th and Spruce was 'way out in the country. Now it is in the center of a city, but the area still remains dominated by medical institutions.
Montgomery and Bucks Counties The Philadelphia metropolitan region has five Pennsylvania counties, four New Jersey counties, one northern county in the state of Delaware. Here are the four Pennsylvania suburban ones.
Northern Overland Escape Path of the Philadelphia Tories 1 of 1 (16) Grievances provoking the American Revolutionary War left many Philadelphians unprovoked. Loyalists often fled to Canada, especially Kingston, Ontario. Decades later the flow of dissidents reversed, Canadian anti-royalists taking refuge south of the border.
City Hall to Chestnut Hill There are lots of ways to go from City Hall to Chestnut Hill, including the train from Suburban Station, or from 11th and Market. This tour imagines your driving your car out the Ben Franklin Parkway to Kelly Drive, and then up the Wissahickon.
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Philadelphia Revelations
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George R. Fisher, III, M.D.
Obituary
George R. Fisher, III, M.D.
Age: 97 of Philadelphia, formerly of Haddonfield
Dr. George Ross Fisher of Philadelphia died on March 9, 2023, surrounded by his loving family.
Born in 1925 in Erie, Pennsylvania, to two teachers, George and Margaret Fisher, he grew up in Pittsburgh, later attending The Lawrenceville School and Yale University (graduating early because of the war). He was very proud of the fact that he was the only person who ever graduated from Yale with a Bachelor of Science in English Literature. He attended Columbia University’s College of Physicians and Surgeons where he met the love of his life, fellow medical student, and future renowned Philadelphia radiologist Mary Stuart Blakely. While dating, they entertained themselves by dressing up in evening attire and crashing fancy Manhattan weddings. They married in 1950 and were each other’s true loves, mutual admirers, and life partners until Mary Stuart passed away in 2006. A Columbia faculty member wrote of him, “This young man’s personality is way off the beaten track, and cannot be evaluated by the customary methods.”
After training at the Pennsylvania Hospital in Philadelphia where he was Chief Resident in Medicine, and spending a year at the NIH, he opened a practice in Endocrinology on Spruce Street where he practiced for sixty years. He also consulted regularly for the employees of Strawbridge and Clothier as well as the Hospital for the Mentally Retarded at Stockley, Delaware. He was beloved by his patients, his guiding philosophy being the adage, “Listen to your patient – he’s telling you his diagnosis.” His patients also told him their stories which gave him an education in all things Philadelphia, the city he passionately loved and which he went on to chronicle in this online blog. Many of these blogs were adapted into a history-oriented tour book, Philadelphia Revelations: Twenty Tours of the Delaware Valley.
He was a true Renaissance Man, interested in everything and everyone, remembering everything he read or heard in complete detail, and endowed with a penetrating intellect which cut to the heart of whatever was being discussed, whether it be medicine, history, literature, economics, investments, politics, science or even lawn care for his home in Haddonfield, NJ where he and his wife raised their four children. He was an “early adopter.” Memories of his children from the 1960s include being taken to visit his colleagues working on the UNIVAC computer at Penn; the air-mail version of the London Economist on the dining room table; and his work on developing a proprietary medical office software using Fortran. His dedication to patients and to his profession extended to his many years representing Pennsylvania to the American Medical Association.
After retiring from his practice in 2003, he started his pioneering “just-in-time” Ross & Perry publishing company, which printed more than 300 new and reprint titles, ranging from Flight Manual for the SR-71 Blackbird Spy Plane (his best seller!) to Terse Verse, a collection of a hundred mostly humorous haikus. He authored four books. In 2013 at age 88, he ran as a Republican for New Jersey Assemblyman for the 6th district (he lost).
A gregarious extrovert, he loved meeting his fellow Philadelphians well into his nineties at the Shakespeare Society, the Global Interdependence Center, the College of Physicians, the Right Angle Club, the Union League, the Haddonfield 65 Club, and the Franklin Inn. He faithfully attended Quaker Meeting in Haddonfield NJ for over 60 years. Later in life he was fortunate to be joined in his life, travels, and adventures by his dear friend Dr. Janice Gordon.
He passed away peacefully, held in the Light and surrounded by his family as they sang to him and read aloud the love letters that he and his wife penned throughout their courtship. In addition to his children – George, Miriam, Margaret, and Stuart – he leaves his three children-in-law, eight grandchildren, three great-grandchildren, and his younger brother, John.
A memorial service, followed by a reception, will be held at the Friends Meeting in Haddonfield New Jersey on April 1 at one in the afternoon. Memorial contributions may be sent to Haddonfield Friends Meeting, 47 Friends Avenue, Haddonfield, NJ 08033.
The Rittenhouse Square "area" has far outgrown the square itself, and the term when used by locals usually refers to the whole area of central Philadelphia West of Broad Street to the Schuylkill, bounded roughly by Chestnut Street on the North, and Pine Street on the South. Rittenhouse Square Park is in the center of this primarily residential area and is now mostly ringed by apartment buildings. Rittenhouse Park was once enclosed by a high cast-iron fence with sharp-pointed palings and gates that could be locked at night, just like so many London Squares. The fence disappeared around 1900. Around 1840 the first house was built on the square, and then a fifty-year building boom (reflecting the burgeoning prosperity of the city) filled the fashionable area out to the limits defined by the Schuylkill bridges at South Street and Walnut or Chestnut Streets. Because of the advent of central heating and inexpensive window glass manufacture, the low ceilings and small windows to the East of Broad Street (promoted by the need for fireplace heat, plus laws taxing both windows and white paint) were replaced by tall ceilings and big windows without mullions. These townhouses were big, often with twenty or more rooms, and the occasional narrow streets filled with small houses were for servants, however, gentrified they may have recently become. The center of fashion shifted over the years, and right now probably Delancey Street is the pinnacle, although it is patchy and arguable. After the 1929 crash (of the stock market), many fashionable Families had to abandon the unmaintainable big house and move into the little servant house in the neighboring alley in order to remain in the fashionable area. The Big houses with its big taxes then became several apartments or a storefront with apartments above. Or it just deteriorated and then was torn down, unless some economic up swelling happened to rescue it again. The fact is that the number of big houses in the area exceeds the number of wealthy people who want to live in them, and the fashionable area has thus had to contract, but it has not disappeared, either.
Spruce Street
Rather than swamp this blog with a tedious recital of the previous occupants of so many show houses, let it suffices to say that the families which once had the most Notable Houses around and near Rittenhouse Square were Roberts, Weightman, Frazier, Gibbs, Harrison, Stotesbury, Cassatt, Jayne, Harding, Janney, Gazzam, Scott, Dobbins, Bullitt, Baugh -- and, of course, many others too.
Within this district, churches abound at the Northwest corner. Clubs are strung along the Eastern border, between the residences and the financial district along Broad Street. And the Southern border is where the doctors used to be. I had an office once at 19th and the Square, but the main concentration of doctors was on Spruce Street. If you have seen Harley Street in London, you will recognize the pattern. Originally, the doctor had his office on the ground floor and lived upstairs. The zoning regulations in both London and Philadelphia permitted professional use of the first floor only if the professional lived in the house. So, when the advent of automobiles induced most doctors to live in the suburbs, the office continued on the first floor of these houses, and the doctor's nurse lived upstairs, to satisfy the requirement of the zoning law. But that was just a transient phase; the advent of health insurance during World War II induced a more hospital-centered medical practice, and Spruce Street soon lost its medical flavor as doctors concentrated their offices around hospitals and their ample parking lots.
Resselaer
As traffic heading for the South Street bridge or the Walnut-Chestnut-Market bridges defines the limits of the district, the Rittenhouse Area has more or less contracted to the four blocks of East-West streets which terminate at the river, creating a more quiet and peaceful cul-de-sac.
Some idea of the former grandeur of the area can be gained by looking at the former Van Rensselaer home at 18th and Walnut, which had a brief fling as a private club before it became a gift shop. Or the Wetherill Mansion further South on 18th Street which now houses the art alliance. Or the grey stone house a couple of doors to the West of it which was where Governor Earle lived and was the last single-family house on the square. One of the houses on DeLancey Street was featured in the movie "Trading Places" as Hollywood's idea of real opulence, and a great many other houses tell a famous story. The Rosenbach Museum is at Spruce Street, very well worth a visit, particularly on Bloomsday. And the Thaw House at 1710 Spruce tells a particularly lurid tale of the Gilded Age.
Let's review the logic. Mandatory health insurance was considered to be necessary because we wanted Universal health insurance. And we wanted universal insurance in order to extend health insurance to those who had pre-existing conditions. In a sense, we don't have a mandatory insurance problem, we have a pre-existing condition problem. Is there no other way to solve this?
Perhaps, and perhaps not; but let's take up this critical point at the end of the discussion. Right now, it is pretty clear that 10% is a pretty big price for someone else to pay your bills. Most of us would not pay so much to have someone buy our groceries, pay our utility bills, or put quarters into a parking meter for us. We very definitely would not pay such a fee to someone who proposed to do it with a system of three insurance policies (one for 80%, one for 20% copayment, and the third one for Major Medical policies for gaps in our policy coverage). Nor would we compensate a payment agent to pay for coverage which is riddled with cash demands for escalating deductibles and copayments, every time we go to the drugstore, to the accident room, to the doctor's office. Something surely is wrong when we surrender the convenience of third-party payment, pay heavily for this service anyway, and they are hounded and confused by a myriad of partial payment demands, or bewildered by undecipherable itemized bills with an astonishing total at the bottom -- but nevertheless marked "patient responsibility, zero". Something is very definitely wrong when hardly anyone can explain the payment system to us, and no one is willing to quote a price in advance of service. So, let's start by considering what would happen if we eliminated co-payments entirely, and confined deductibles to out-patient services.
In the past, it might have been theorized that prices would go up because patient participation puts a brake on prices. But now we would have to contend with the question, "How would you be able to tell the difference?" The patient in a hospital bed is incapable of haggling about prices, while the hospital is mostly reimbursed in an approximated lump sum, called the DRG (diagnosis-related group). Even those insurances which are reimbursed by items are subject to secret discount systems, which vary from 40% discounts for state Medicaid to overpayments of 30% of costs for private insurance, and up to 400% for payments by list price. This system led one very famous Philadelphia surgeon to growl, "The main purpose of having health insurance is to keep the hospital from fleecing you." The bad public relations of asking the public to endorse this summary would make the problems of changing the system seem minor. For public relations alone, the system must be made more transparent. Most hospital administrators would make the irrelevant response that, after it all shakes out, hospital inpatient care only generates about a 2% profit margin.
That may be true but fails to emphasize that emergency room services generate a 10-15% profit margin, and hospital out-patient and satellite clinics approach 30%. If you drive past a nearby hospital, you are very likely to see a construction crane in operation. But just take a guess in advance at what type of building is being built.
Since hospitals are obviously responding to prevailing profit margins, they would be wise to agree on negotiations with insurers based on audited profit margins, assigning the margin to individual departments to divide up after internal negotiation. For inpatients, a refined object of negotiation with insurers should be an agreement on the variation of reimbursement to be tolerated between insurers for substantially similar inpatients, essentially some variation of Diagnosis Related Groups. A later chapter discusses improvements needed for DRG determination. The central point is: no attempt should be made to bargain prices with a patient who is sick enough to require inpatient hospitalization.
For emergency room services , it is possible to imagine a sort of DRG, and if the patient subsequently requires hospitalization, that should be the ideal approach. However, most emergency patients are not admitted, and there are usually nearby competitors for them. Therefore, some sort of hybrid should be constructed, partly an Emergency DRG, but also modulated by comparison with neighborhood facilities.
For outpatients, competition should rule, and any insurance accommodation should reflect that fact. Ideally, small outpatient services should be cash transactions, but the trend lately is for increasingly expensive procedures to be performed in the outpatient area. The most suitable outpatient payment would be the option of using a Health Savings Account. Optional, because it is desirable to encourage those who are able to protect their HSAs for other uses, to be described in later chapters.
The ambulatory patient is fully capable of loud and insistent bargaining over prices, ultimately threatening to go elsewhere or just to refuse the pay the bill. In the last extremity of disagreement, the provider will be very glad to accept an HSA, so it serves as sort of a distorted re-insurance, and it is useful to have a central reporting mechanism to determine how the market is faring. Since everyone is now entitled to have an HSA, everyone should sign up for one. The uproar over the Electronic Exchanges has demonstrated that almost everyone is coming to the conclusion that high deductibles are desirable. The reasoning is not so self-apparent, but it is nevertheless also true, co/pay is something to be discouraged.
Starting with N-HSA We have just described the general outline of New Health Savings Accounts (N-HSA). Essentially, it consists of individual HSA funds for children, connected to Medicare by permitting the funds to sit in escrow from age 21 to age 66. However, the amount which can be accumulated during childhood is small, and the task it is asked to perform is large. Because children are so lacking in income, they can't be expected to accumulate much, even though their grandparents may have helped out. Consequently, that small amount multiplied by compounded income for 45 years, will probably only pay for one designated segment of the Medicare program, and it is unlikely it would be able to pay off much of Medicare's accumulated debt.
So, although it can be shown to be workable, it would look like a long run for a short slide, to an economically illiterate family. Meanwhile, its political enemies would likely describe it as meddling with Medicare, and its chances of achieving the necessary enablements would shrink. However, the grand discovery is, the Health Savings Account idea resembles how President John Adams once described his native Boston -- Every goose is a swan. Every problem we encounter, that is, seems to suggest an unexpected new improvement. Let's explain the three accompanying graphs.
Three Graphs. The top graph shows the situation, without either a bridge around or participation in, the Affordable Care Act. The HSA escrow comes to a halt for 45 years and then resumes with Medicare. There are two savings accounts, but each starts at zero and lasts two decades. One is an escrow account, unspendable until age 66.
The middle graph imagines the situation with a dormant escrow gathering interest during the 45 years. Notice the thickened blue escrow.
The bottom graph is a cutout enlargement of the transfer point for grandpa's gift, showing how easy it would be to adjust the escrow transfer from zero to $29,000. The difference between the extremes added to the escrow is the difference between solvency and riches. To imagine a small deposit spiraling out of control is probably a little fanciful, but for those who worry, here is a ready solution.
Adding Obamacare. If we achieve political consensus, and thereby add the subscribers from age 21 to 66 (the only age group which reliably produces real new wealth), the arithmetic suddenly transforms. The complete system from cradle to grave generates enormous surpluses. After studying this paradox for some time, I came to realize that what distinguished it from Lifetime Health Savings Accounts (L-HSA) was the two, eventually three breaks between programs, where the escrow fund could drop to zero, without some agreement to transfer it between insurance programs. If it drops to zero, the effect of compound interest rising at its far end is chopped off, and overall returns are much reduced. The whole idea unfortunately then becomes politically precarious and runs the risk of some small glitch somewhere unraveling it. To use our own descriptive terms, three Classical (C-HSA) funds are nice, but one Lifetime (L-HSA) is so far superior it raises grandiose questions of starting an inflationary spiral. But in a sense, the radical Right is correct. The changes to the Affordable Care Act must be drastic enough to generate public support for merging the radical plan of the left with a radical plan of the right, essentially making both of them unrecognizable. I'm no politician, but I can easily imagine the difficulties of that negotiation.
The Goose is a Swan. But I came to see that what makes it impractical is the same as what makes it so glamorous. The possibility of linking the healthcare fund to the stock market would likely be brushed aside by the explosions of a money machine -- the system as originally envisioned for L-HSA generates almost any amount of money you please. That's a pretty intolerable effect of inflation heedlessly disregarding any monetary standard, even a return of a gold standard.
But if the HSA is more or less denominated in index funds, it essentially has a monetary standard built in and could maintain it if someone held a meat ax in reserve. Some impregnable threat is needed to control the monster, and it is provided at the three linkage points, where the three existing insurance programs connect.
Three Meat Axes. The connection after the children's escrow fund is the most leveraged and therefore the most sensitive since we have already demonstrated how the difference between zero transfer between two funds, and the transfer of $27,000, is the difference between marginally paying Medicare bills, and having money to burn. If some totally reliable monetary angel could be discovered and put in charge of it, the discretion about inflationary consequences could be placed in one pair of hands.
But the history of inflation has been that even Kings, Popes and Emperors have succumbed to the temptations of such power. Remember, this fund is truly generating $350,000 of new wealth per person (in a nation of 300 million inhabitants) if it operates precisely as hoped, so it starts with some latitude. There are several Presidents of the nations of the world, who might fairly be suspected of raiding their own currency right at this moment, however. Wisdom suggests more caution is necessary. For example, Congress could permit a discretionary band within which the Executive branch could operate, perhaps in consultation with the Federal Reserve. That might permit Congress to create some very difficult hurdle for the process to jump, for widening the limits of the band, such as a Constitutional Amendment.
There's an End in Sight. And also remember, my colleagues in the research department are busy looking for a cure for cancer and Alzheimer's Disease, and I feel confident they will eventually have success. Just cure diabetes, schizophrenia, or birth defects, and our problem with Health Savings Accounts would transform into how to turn them off. In the meantime, we must modulate the ups and downs of medical costs which are steadily becoming less urgent. Take warning from the recent example of the price of tetracycline, which a year or two ago was 35 cents retail for fifty capsules, and suddenly jumped to $3.50 for a single capsule. And then with a new owner, jumped to thousands of dollars. If things like that continue to happen, we might be ready for another pet scheme of mine, the limitation of health insurance coverage to covering the first year of life, and the last year of life, by eliminating most of the disease in-between. Because of the helplessness of both these population groups, and the universality of the need for their coverage, in their case alone drastic interference with market mechanisms might appear justified, to those who are injured by them. The rest of us ought to have a say in something like that. But that's another book, for another time.
We're some way from seriously having that type of problem, so let's get back to details. For this purpose, paying patients arrange themselves into only three groups, children, working folks, and Medicare recipients. Thus there exist three breakpoints between these three programs for different ages, assuming Congress authorizes transfers between them, especially from grandparent generation to grandchildren, incidentally relieving the middle generation of a lot of cost-shifting. There is now so much (necessary) cost shifting, it is nearly impossible to sort out the cost numbers. So I won't try to do it, except in a sort of general way. Rationing is a sort of a lip-service concession to the wide-spread liberal endorsement of a single payer system, endorsing but without facing the resultant deficits in every direction. Instead, we encounter the worrisome potential for generating too much money, even though that is hard to believe without endorsing galloping inflation. There is little difference between external transfers -- between insurance plans, and internal transfers -- within one mega-institution -- except, in this case, one approach creates impossible deficits, and the other approach raises a real concern about inflation. A compromise might be devised, but it requires some sort of conciliatory response from both sides, for even a beginning.
Meanwhile, I don't scoff at the legal issues of who is responsible for those bills, if we destroy the family unit with exciting new social liberties. And I haven't forgotten the problem of corporate finance officers, who have run a confidence game for eighty years, making money for the stockholders by giving away health insurance to employees, as long as they can conceal what they are really doing. We've suggested in this book, we should offer the business a reduction of their corporate income tax to levels comparable to individual tax levels, in return for getting them out of the health insurance business. In a sense, it returns the favor of making a profit by giving away a service benefit, by -- generating revenue for the public sector in return for reduced taxes in the private sector. I'm entirely serious about offering major corporations a one percent cut in corporate taxes for each two percent reduction in fringe benefits tax exemption, down to the point where the top corporate income tax rate is equal to the average individual tax rate. That benchmark is selected because of the temptation otherwise created, to elect Subchapter C to S inter-conversions, exploiting such tax differences. The international corporate flight is another serious consideration. Meanwhile, it is always possible to equalize employee tax exemption by allowing HSAs to purchase catastrophic insurance through the HSA itself, if the law would permit it.
Inflation Protection. Q. Now, wait a minute. If we permit a money machine to be built, what is to prevent it from resembling the galloping inflation which ruined the Weimar Republic? And if we devise a way to keep the United States from going down that road, how do we prevent a hundred small foreign states (Zimbabwe, for instance) from doing it deliberately in order to use their sovereign status to acquire the index funds held by Health Savings Accounts?
A. You've almost answered your own question about Zimbabwe. Even without freely floating currencies, the markets are quick to detect changes in the value of the foreign currency. Zimbabwe can force its own people to accept pennies disguised as trillion-dollar bills, but everybody else avoids them, whereas bitcoins don't even have sovereign power. And as for our own domestic currency, I propose we enact a band of fluctuation in consultation with the Federal Reserve, within which the dollar can float, and beyond which the band may not be expanded without a Constitutional Amendment, again in consultation with the Federal Reserve. In two hundred years, the amendment process has only let one matter (Prohibition of alcohol) slip past, which had to be revoked after the experience with it. Almost every other indiscretion has proved to crumble in spite of the temptation to raid the cookie jar.
Watchdogs. Three breakpoints, one between each age group, with wildly different medical needs and financial viewpoints, need watchdogs. Since going to zero between any two of the three insurance programs could bring inflation to a halt, and since venality knows no political boundaries, I suggest each breakpoint be governed by a different political entity, composed of a board nominated by a different branch of government, and each ratified by a different process. It may or may not be necessary for them to share the same information agency, since think tanks are very popular right now, but may not continue to be. We will need another conference in a resort hotel to work out a paper but keep in mind that foreign powers will be anxious to infiltrate and subvert it. So maybe we need two conferences, one to review the other. After all, we are talking about 18% of the gross domestic product, and Benjamin Franklin isn't available anymore.
Placing a termination point for Health Savings Accounts was originally occasioned by recognizing the overlap created in 1965 by Medicare for everyone. At the time, it seemed pointless to be covered by Health Savings Accounts in addition to Medicare, and there was confusion with Health Spending Accounts with their "use it or lose it" features. Pouring remaining HSA surpluses into a regular IRA retirement fund, seems in retrospect the most effective way to create some incentive to save as much as you can in the Accounts. You couldn't lose it and might well need it. To a certain degree, the size of the resulting retirement package is determined by the frugality of the individual client during his whole medical lifetime long before, but also during, the time he is on Medicare.
He would, however not be in the position of needing to do that, if he had been born earlier. The subscriber to an HSA could continue to deposit extra tax-exempt money in the roll-over IRA for his retirement, giving the appearance of laundering it. Unfortunately, he would first have to drop out of the healthcare benefits, so he would lose the laundered tax exemption for health benefits on withdrawal. You would now have to view the extended tax exemption as repairing that unintended inequity. As Medicare began to be less generous, there were increasing gaps in coverage, and there may be many more in the future.
In what follows, we extend the retirement roll-over idea to several other medical entitlements without suggesting it be required as a universal rule. The time-honored old approach was to use an insurance surplus to reduce costs by recycling its surplus, but there are other things to consider. The first would be to imagine a theoretical sharp drop in the cost of Medicare, itself. Since 80% of Medicare is now spent on five or ten diseases, the possibility of a sudden cheap cure of one of those diseases is raised. The astonishing savings in the cost of strokes and heart attacks, created by taking a daily aspirin tablet -- shows what it might be possible to imagine as happening again. Not to promise, but to imagine.
On the other hand, it is also possible to imagine less desirable priorities getting into the competition for such a financial windfall. Confronted with the issue, the average person would likely suspect such a windfall might as likely pay for aircraft carriers as Medicare deficits. But another opinion would emerge and should be the default position. The Medicare program and its members had experienced the unexpected -- and expensive -- a consequence of more protracted retirement than they planned on (five times as expensive, by one estimate). A more just assignment of such windfall would be to pay for the extra-long retirement cost it had provoked. If other emergencies seemed more pressing at the time, they could always be given priority on the money, but by default, Medicare should first pay for its own consequences. In fact, nothing of the sort occurred.
In a sense, President Obama later created the same political problem for himself with the original budget for Obamacare. He did not need to make any speeches directing attention to the diversion of Medicare money to help pay for Obamacare costs, because plenty of Republican opponents were studying the budget. And plenty of Republicans remembered Richard Nixon's advice, "Watch what I do, don't listen to what I say." Having spoken to many groups of retirees about healthcare financing, I am acutely aware that retirees are watchful for any move to strip Medicare funds for Obamacare's benefit. It's about their highest priority.
And indeed their anxiety would be heightened by discovering Medicare is already 50% subsidized by general taxation, and then unsustainably maintained by borrowing money (selling US Treasury bonds) to foreign countries like China. And still more to the point, medical costs have been and will continue to migrate from working-age people to retirement age people in the future. Just about everyone who dies right now dies at Medicare expense. Even more than that, the effect of medical science has tended to eliminate terminal medical costs for people under 65, shifting them to people who get sick when they are over 65. It can be predicted a major cause of future Medicare cost increases, compared with the cost of living, lies in this shift of disease cost to the elderly. So it's a little hard to project whether Medicare costs will go up or go down, even if the cost of illness remains the same.
Recipients will change insurance compartments. Many attempts have been made to shift Medicare costs to the non-stick working population, such as through the payroll tax deduction and hospital internal cost-shifting, but the trend continues. A more sophisticated thing for the retirees to worry about, is the instability of a system which depends for its financing on that one-third of the population who are at work -- but who are themselves becoming progressively more healthy -- to support the medical finances of the other two thirds of the population, who are sick.
Taken in summary, there exists a great political opportunity for both political parties to put a stop to this "third rail of politics" talk. And to amend the Medicare Law immediately to provide that any declines in Medicare costs be immediately transferred to Social Security, for the purpose of paying for further increases in longevity. That provision should not cost much for some time to come. But the incentive it would give to the retirees to reduce their health expenditures might be considerable. Just as the comparable position Health Savings Accounts achieved, once Medicare coverage was attained.
But its real benefit might be tested on that fateful day in the future. The day you pick up the morning newspaper and discover someone has cured cancer.
Actuaries have one way of totaling up the average lifetime cost of healthcare, which comes to $350,000 per person, in the year 2000 dollars. Their method of the cost estimate is to ask insurance companies to tell them how much they spend at each yearly age. That potentially has three flaws, although perhaps some of the flaws cancel each other out.
The first comes from getting reports from insurance companies, which might well minimize the cost of insurance itself, sometimes estimated as high as 17%, sometimes as low as 2%, for Medicare. The Medicare figure is surely on the low side, with much of its cost attributed to other sources than CCS -- the cost of Treasury and Congressional involvement, for example, or military administration. But as a preliminary guess, let's say 2-17% is a possible statement about this source, or $7000-$59,500 per person, per lifetime.
The second is medical research, which is $33 billion a year, or $1000 per person-year, $84,000 per lifetime, or 4% extra, for the National Institutes of Health, alone. University and pharmaceutical expenditures overlap somewhat, but surely double the research cost to 8%. Research cost is part of the overall equation, as the companies loudly complain. Training professionals is similarly mixed-source, but certainly another 2%.
And finally, depending on how you figure it, there is an uncompensated subsidy of one subgroup by another. The cost of Obamacare is difficult to measure, but surely seems a major cost to the people who pay extra to support it. For the present, we treat the Affordable Care Act as tentatively revenue neutral, which is to say: adding nothing to the non-escrow portion of the Health Savings Account of the age group 26-65, and/or costing no more than inflation adds at 3%. Inflation lends a working supposition to the idea that total lifetime healthcare cost is somewhere around $500,000 in 2017 dollars, plus 2-17% for health insurance, 2% for training, and an unknown amount for ACA. Call it $600,000 a year, with research entirely funded by independent sources. Total revenue expended for health might easily reach a million dollars per lifetime per person by the end of the decade, by this method of calculating.
Bottom Line. Calculating the expenses-consumed we reach about the same conclusion, but both approaches are confounded by cost-shifting. Let's skip ahead to approximate where the new proposal places us. From childbirth to age 25 we estimate $18,000 cost, having shifted $10,000 of obstetrics from the mother to the child, and donating the remaining $10,000 from the grandparent. From age 26 to 65, starting at an HSA balance of zero, we break even by assuming a shifting balance between current expenses and subsidy from other generations; that is, the escrow account keeps growing while non-escrow also grows but falls behind by age 65. We thus project a net voluntary transfer (of $65,000 for a Medicare buy-out) leaving $ 135,000 for retirement. They would surrender $10-18,000 of childhood expenses when the same $10-18,000 is transferred from the working generation and then later re-transferred from retiree surpluses to one grandchild's HSA.
Up the time of death (average age 84) scarcely any new money has been added to the medical system, except for money previously uncomplainingly paid during working years from working-age people toward Medicare, plus Medicare premiums paid by seniors. These funds, which currently produce unmanageable deficits, would now be paid into the Health Savings Accounts for age 26-84 deficits from awkward timing. For the most part, the surplus should replace hardship, for deficits anticipated for age 66-84 in the form of $65,000 for a Medicare buyout at 66 and a $10-18,000 Childhood buy-in at age 84. Surplus or deficit may arise between the HSA and Medicare at age 65, or again between the HSA and Children's funds at 84. If any deficits appear during this interval, they could be paid by extending Trust Funds to age 104 regardless of whether the depositor is still alive, and only then must the remainder being written off as national debt. At that duration, compound interest grows quite surprisingly. During the early transition, these deficits might appear large, but many of them could later be written off easily against looming reductions in Medicare costs caused by a century of research discoveries, or stock market returns multiplied by compound interest.
This is America, built on several centuries of optimism, or risk-taking. No one needs to warn us of the possibility of miscalculation. We have sometimes, indeed, experienced miscalculation and over-optimism. But if all goes well, we could end a century of risk with bills paid, longevity further lengthened, and money in the bank from betting on the American economy. If things go badly in the stock market and laboratory, or if they go bad in wars and epidemics, our reserves will suffer and planning will work out wrong. Obviously, in a gloomy future, plans must be curtailed. We count on the stock markets to be our banker, but if they appear to be based on a miscalculation, we may once again blame it on the bankers. But let us hope we have the sense to modify our plans, particularly by adding the First and Last Years of Life reinsurance system and dipping into our reserves sooner than expected. That's for volatility. For real miscalculation, major modifications of the delivery system may be needed, but it's difficult to imagine wanting anything more than longevity.
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.
