George R. Fisher, III, M.D.

Obituary

George R. Fisher, III, M.D.

Age: 97 of Philadelphia, formerly of Haddonfield Dr George Fisher III

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.

Corporations: Property, but also Immortal Persons

Proprietor House

The Proprietorship of West Jersey is the oldest stockholder corporation in America. Devised by William Penn it has been doing business in Burlington, New Jersey since 1676. The Proprietorship of East Jersey may possibly have been created slightly earlier by William Penn, but recently dissolved itself, thus leaving a clear path for West Jersey to claim to be the oldest. For a hundred years before 1776, corporations were devised by the King through royal charters, and for a century after 1776, most state legislatures passed individual laws to create each corporation, one by one. Consequently, there were a great many variations in the powers and scope of older corporations, with a heavy emphasis on the purpose to which the business was limited. Eventually, so many corporations were created that a body of law called the Uniform Law of Corporations simplified the task of incorporation for the legislatures. The Proprietorships of East and West Jersey would now probably be described as real estate investment trusts (REIT), but the Uniform laws now tend to diminish the emphasis on corporate purpose. It is now common to have a corporation proclaim the ability "to do whatever it is legal to do."

Many voices have been raised in opposition to corporations, largely claiming unfairness for a large and established corporation to compete with newcomers, especially small newcomers striving for the same line of business. Because of its immortality, a stockholder corporation can achieve dominance no individual could hope for, while because of its multi-stockholder ownership, it can generally raise larger amounts of capital. Moreover, because of its size and durability, a corporation can become more efficient and offer the public lower prices and higher quality. As much as anything else, a corporation can generally hire more employees and pay them higher wages; as even the unions admit, corporations create jobs, jobs, jobs. No doubt, state legislatures are attracted by the tax revenue derived from major corporations, but the quickest way to stimulate the economy has repeatedly been found to grow out of lowering corporate taxes. Since there is scarcely any purpose of creating a for-profit corporation unless it eventually pays its stockholders some kind of dividend, all corporation taxes have the handicap of double-taxation for a fixed amount of business. The Republic of Ireland recently lowered its corporate tax rate severely and triggered so much new corporate activity that it inflated and destabilized its whole economy. The result was a dangerous economic crisis, but politicians privately and world-wide silently derived only one real conclusion: lower your corporate taxes if you are looking to stimulate jobs, jobs, jobs.

The corporate model of business thus looks pretty safe, in spite of envious criticism, and is what most people mean when they speak of capitalism. The Constitution had the intention of extracting Interstate Commerce for the Federal Government and leaving the regulation of every other business to state legislatures. The Roosevelt Supreme Court-Packing dispute of 1936 twisted the meaning of Interstate Commerce to mean almost all commerce, but Congress wasted no time specifically exempting the "Business of Insurance" from federal regulation and returning it to the state legislatures in the 1945 McCarran-Fergusson Act. Although the matter remains one of some dispute, it is roughly correct to say that all commerce is federally regulated, except insurance. The corporation is nevertheless usually a creation of some legislature, and legislators have wide latitude in regulating them. To illustrate, in the early days of a banking corporation, the Bank of Hartford was delayed in receiving incorporation by the strong legislative suggestion that a closed stockholder list would result in refusal to incorporate them, whereas opening up the list to new stockholders might result in rapid approval. The implication was strong: the legislators wanted some cheap or free stock as a condition of incorporation. The following year, 250 banks were incorporated, and the year after that, over 400 more. Making of incorporation applicants by politicians was sharpened to a fine point in Pennsylvania in the late 19th Century, when legislatures accorded monopoly status to public utility corporations, withholding it from competitors. It is now a textbook statement that the funding of substantially all municipal political machines is derived from voluntary contributions by utilities with politically granted monopolies, who are consequently indifferent to the retail prices of their products.

So there is still room for public concern and vigilance, and both the courts and the Constitution protect but restrain corporations. In the early 19th Century when public opinion was becoming firmer about incorporation, it was contended they should be treated as persons, possibly resembling real persons more closely by imposing a finite life span on their charters. Although corporation entities are still to some degree treated like individuals, the legal doctrine prevailed that they are in fact contracts between the state and the stockholders. The paradox is thus defended that although legislatures can create corporations, they cannot dissolve them! After all, a contract is an agreement between two parties, and it requires both parties to agree to dissolve the agreement. And then, the final uncertainty was removed by John Marshall. The U.S. Supreme Court in the Dartmouth College case applied Article I, section 10 of the Constitution. That section provides that state governments may not pass any law impairing the obligation of contracts. The Supreme Court decision written by Marshall made it clear that this provision of Constitution eliminated any distinctiveness between a contract involving a state and a contract involving two citizens. There had been a growing feeling that private property was not to be disturbed by state power, and this linkage to Article 1 affirmed that point and finally settled matters. Shares of company stock were property, protected from state legislatures as belonging to the owner and not to the state in any sense. All the while that this quality of the property was established, certain features of the corporation as a person endured. Most of the attention to this point arose after the Civil War when the mixture of concepts ( a slave was a person who was also private property) more or less applied to the institution of slavery as well. More recently, potential muddles have been created by limiting campaign contributions of corporations, thus impairing their right to free speech in the role of a person. It even appears to be true that some of the 1886 precedents were created by an error of a court reporter. The dominant precedent in operation here would appear to a layman as, "If it ain't broke, don't fix it." Additional centuries including a Civil War thus encrusted conditions and traditions onto the hybrid idea of a corporation which now allows it to stand on its own feet, more or less free at last.

The legal profession can certainly be congratulated for constructing two institutions which include the majority of working Americans -- the corporation and the civil service -- without the slightest mention of either one in the Constitution. Although everything seems to be reasonably comfortable, and no one is actively proposing substitutes, it is uncomfortable to hear so much dissension about the original intent of the Framers, when so much of American Law traces its history to events and institutions which the Framers never imagined. Constitutional Law, both within and without original intent, will soon be dwarfed in effect by non-constitutional accretions to it. Sooner or later, the advocates of some undefined cause could find it in their interest to challenge the Judicial system for what has been allowed to happen. Expediency has triumphed. We started with nothing but the common law (defined as law created by judicial decision), and we are slowly returning to that condition under a different name, misleadingly called statutes.

Evolving Employer Attitudes About Employee Privacy

{Health Insurance on the National Economy}

Health Insurance is Everyone's Business

Employer-based Health Insurance. From an employer's viewpoint, a sick employee is an expensive employee, but there are special employer twists to employee illness. The most effective comment a former employer can volunteer in a letter of recommendation is to say that over several years, the employee was "never late and never missed a day of work". It's hard to predict medical costs in advance, but the identification of someone as "accident prone" is the kiss of death for hiring or promotion, because the difference between a devastating injury and a trivial one, is about half an inch. Disabled persons are identified as being unable to do the job, and may include less visible issues, such as being so attached to local health providers they become unwilling to accept a transfer to another city. Some of this affects health insurance premiums, some may not. But the large employers are largely self-insured, so they have more access to individual health cost information, and can longitudinally assess whether their Human Resources departments are doing what is vaguely stated to be a "good job." Some of this is no more than shrewd selection of an agent for administrative services-only. Large self-insured employers almost always have lower health insurance costs, which in the aggregate is likely to mean healthier employees, the cream of the crop.

New or small businesses generally do not have a large enough employee group to justify basing next year's budget on last year's health cost experience. So "small group" insurance tends to reflect the overall higher costs of small-group employees in the whole geographic region, and "individual policies" are the most expensive of all, because they generally have a good idea what they need and want in an insurance policy -- and seek it out. Add to that factor the preferential enjoyment of tax exemption, and the system has gravitated into one which could not have been designed by experts to be so preferential to certain types of business models.

For the sake of economy of effort, let's first see what we can do about portability and privacy, indirectly, by getting rid of the tax preference. {bottom quote}

It appears that employers seldom drive their health information advantage to the extremes which would seem within their abilities. Generally, they look for a "Cadillac" plan for important officers and professionals, lower-paid employees generally receiving the "Chevrolet" plan, and that's about as far as it goes. Psychiatrists as a group are much more passionate about patient privacy than other doctors are. Certain employers in Madison Avenue businesses are thus more likely to be dealing with the bills and complaints of psychiatrists, that those who run farmers' co-ops in Nebraska. Probably that reflects some highly charged experiences with a few psychiatric patients, much more likely to give the lurid responses of a trial lawyer than of the tired and bored primary physician. Or of the dressing-room attendants in the fashion business, who are more or less constantly bumping into naked women in a big hurry to change into a new costume. Standards of modesty vary quite a lot across the country, and this probably parallels similar regional variations in the rest of patient privacy concerns. There seems to be a steady trend toward indifference about privacy, however. Even Bill Clinton waited until his last day in office to sign the HIPAA regulations, knowing how unpopular they would be.

Participants in sports where a great deal of betting goes on about game outcomes and career records have good reason to fear careless gossip about injuries, illicit drug use or even cataracts. Aging actresses fear their younger competition; almost everyone is uncomfortable about addictions and deviant behavior. The decline of primogeniture and the rise of antibiotics have even undermined the devastating consequences of suspicions about true paternity. Whether the resulting business models are going to lead to a decline in concern about patient privacy in any forum, could well be argued at length. What's more likely is that most people will tire of the subject.

Nevertheless, no one can dispute that employees in a favorable health insurance arrangement are quite reasonably reluctant to change employment to a situation which loses them a tax deduction on 30% of their salaries. The situation is called "Job lock". Portability is a real problem, while privacy is much less consequential, except to some very vocal groups. Even though it seems unrelated, the manifestly unfair design of this tax preference is one of the reasons American politics have become so restless about seemingly unrelated matters. The freedom to go somewhere else has become impaired. For the sake of economy of effort, let's first see what we can do about portability and privacy, indirectly, by getting rid of the tax preference.

Some Underlying Principles

Casualty insurance formerly contained a clause making it noncancellable and guaranteed renewable. Except for disability insurance, most insurance no longer has those contractual promises, but the better ones will still "stand by their product". Prices were too unstable to permit a continuation at the same price as a legally enforceable right. In 1945, the Henry Kaiser caper changed the whole nature of the relationship, at the end of which the employees walked away with no individual renewal right at all, but got really great benefits while they had them. That was not a good bargain. Without a right of renewal, there is no good way to make internal transfers from young healthy employees to aging sick ones. Apparently, labor and management felt it was more important to get something out of the situation than to come away empty-handed. Most of these negotiations were private, and there may have been unrevealed considerations.

No individual renewal right, but really great benefits while they lasted. {bottom quote}

Bad Bargain.

But the one sure outcome of this turmoil was a young employee had no assurance of health insurance if he changed jobs, and no sure way of transferring surplus benefits to his later years, even after remaining within the same employer group for decades. Older employees were plainly getting more value for their health benefit, but young ones could not be sure they would stay around long enough to enjoy it. In retrospect, this may have been a driving force in the enactment of Medicare in 1965. Employees experienced "job lock", which definitely meant they could not take stored-up benefits to a new employer, or into retirement. Furthermore, casualty health insurance was gradually changed by employers donating the policy to the purchaser, so ownership of the policy migrated into the employer's hands. The employer had to change insurance companies for the whole employee group, or not at all, so slavery begat more slavery. The negotiated group rates naturally reflected this change. The business plan of health insurance does not differ greatly from automobile insurance: Premiums are paid to an insurer at the beginning of the year; and at some time during that or subsequent years, the insurer uses the pooled money to pay the claims. In practice, there does exist one important difference between the two types of casualty insurance. Many auto insurance companies imply they hope to renew a policy if the premiums remain paid, but hardly any health insurance is "guaranteed renewable" in any sense. You can pay individual health insurance premiums for many years to the same insurer, but the insurer still reserves the right to drop you.

This largely unanticipated disadvantage grows out of the sponsorship of health insurance by employers since applicant employees are in no position to put strings on a gift. Its hidden unpleasantness was emphasized when millions of people were recently dropped from long-standing policies which did not conform to the Affordable Care Act's regulations. Original motives and understandings became unprovable after the passage of time. One could, however, easily imagine employers felt they might acquire new duties by law, and were reluctant to stand behind unmeasurable ones. One could imagine the insurers were uncomfortable with the risk an employee might move to a new state, and because of the Tenth Amendment to the Constitution, be facing insurers with no duty to continue coverage. This ACA dilemma came about in an environment with so little competition, neither the employers nor the health insurer felt compelled to wander into unforeseeable conjectures.

In this single subsequent event during the Obamacare confusion, a serious disadvantage of employer-based insurance discarded its tradition as harmless boiler-plate, revealing the enforceable facts of the matter. A health insurance company can unexpectedly walk away from an employer-based contract, even when it is needed most. The patient gets it as a gift and doesn't own it. This dispute over fairness and the original intent was surely involved in the government's decision to delay implementation of Obamacare for large employer groups.
By contrast, we must point out the Health Savings Account leaves unspent money with the individual as permanently as he can restrain himself from spending it. For this, he loses the ability to pool with others and must buy high-deductible insurance to provide the pooling feature for large costs. Interest gathered on his idle money remains his alone. By retaining ownership in the hands of the employee, HSA gains protections against much broader health-finance risks, than the Affordable Care Act's pre-existing condition-exclusion does, for its population segment.
In fact, this sweeping violation of a gentleman's agreement may make such arrangements unacceptable in the future. If the employer community finds it impossible to live with guaranteed renewability, they may feel forced to drop the fringe benefit. Not everyone wants to exchange the freedom of choice for freedom from the expense of it, but some do. Consequently, opening this can of worms could lead to the dissolution of the present system, which depends heavily on the tax-deductibility of the gift for employers. There is essentially no difference between an individual income tax, and a corporate income tax, except the corporate tax, is higher. The world's highest corporate tax necessarily creates the world's highest tax deductions for employers. Reduce their wage costs, and you will reduce their income tax. But reduce your own tax, and you reduce what it has been paying for. That's the bargain, and no stalling will change it.
We must, however, introduce an observation which applies to all defined-contribution plans. The advantage has switched from the older "new hire" rather markedly toward the younger "new hire", because of the addition of investment income for the younger one. This is an advantage for one, not a disadvantage for the other, but negotiators seldom recognize such arguments. The terms of the agreement should probably be adjusted for this new development, which is illustrated in the first section of this book. But since the change is due to the mathematics rather than the judgment of the donor, experts will have to see what they can do about it, before it becomes a punching bag, desired by no one, but forced on everyone.

Some rude things it would not hurt to know. {bottom quote}

Employer-based health insurance was once a well-intentioned gift, with a regrettable lack of guaranteed renewability. Until the First World War, most corporations were controlled by founding families, and more employees enjoyed lifetime job security. The switch to stockholder controlled to fewer benign gifts to lower-level employees. After a century of modification, the employee still is forced to bear the risk of losing his paid-for health insurance when he loses his job. The implicit good-faith guarantee of guaranteed renewability is however likely to vanish. Its implicit risk was transferred to the employee, but money to pay for it was not until the Health Savings Account came along. With that, surprising discoveries emerged. Thirty years had been added to longevity, now making compounded interest money a truly substantial issue. Furthermore, many diseases had disappeared, generating overall a protracted interval of smaller expenses during working life.

As long as the (term insurance) risk of losing the premium flow remained, it was not prudent to invest the money in higher-paying assets, so the insurance intermediary was in no position to maximize float. Curiously, the famous Warren Buffett became one of the richest men on earth by buying entire auto insurance companies to transform the one-year "premium float" into a virtually permanent source of cash flow. Substituting health insurance for auto policies, essentially the same strategy is proposed by this book, for employees to consider. Except for Jimmy Hoffa, few unions have considered such a role, and in view of colorful union history, perhaps employers resist it.

Is there enough money in this approach? Some of the limitations to be encountered in paying for healthcare are specific and final; longevity would be one of them. At present, the average longevity at birth is 83. It would take some dramatic research discovery to extend it much beyond 93, but it is reasonably safe to project it will slowly rise from 83 to 93 during the next century. The medical costs of achieving such a goal are almost impossible to know in advance, but attempts are regularly made, and the best available estimate is $350,000 on average per lifetime, using the year 2000 dollars. Women cost about 10% more than men, partly because of increased longevity, partly because of the statistical convention of attributing all obstetrical costs to the mother. There is a reason to believe all late-developing diseases originate in the dozen genes residual in the mitochondria of the mother's cells, so the conquest of diabetes, cancer, Alzheimer's disease, Parkinson's disease, and arteriosclerosis -- during the next century -- is a reasonable prediction. Furthermore, new cures while generally expensive at first, eventually become cheap. Mix it all together, and while the costs of the next century may at times be towering, it seems entirely conceivable healthcare costs will become comfortably sustainable, a century from now. If we can generate the means to get to that point, give some of the credit to Warren Buffett, and John Bogle.

John Bogle may not have invented the idea you can't beat the index, but he certainly evangelized the news that 80% of mutual funds managed by experts, somehow don't beat the index. Let's explain. When you finally get over the idea of getting rich by out-performing the stock market, the idea reverses itself. The whole stock market is a proxy for the economy, and so although some people do get rich faster than the stock market grows, hardly anybody gets richer in the stock market without using some form of leverage, a genuinely risky approach. Professor Roger Ibbotson of Yale has compiled extensive data for the previous century, and convincingly demonstrated how relentlessly the American equity stock market has grown quite linearly, depending on the asset class, but largely disregarding stock market crashes, and numerous wars, large or small. While small stocks have grown at a rate of 12.7%, blue-chip stocks have consistently grown at about 11%. With big cheap computers, we can see investors in stocks have received a return of 8%, paying a penalty for the small investor's inability to ride out really long-term volatility in any way but buy and hold. Perhaps, over time, we can find ways to narrow the overhead and return more than 8%. But for the time being one must be satisfied with 8% net, although 11% might become some ultimate goal. To go on, the 8% we get is made up of 3% inflation, so we better not count on more than 5% actual return. What will that achieve toward paying an average lifetime cost of $350,000?

The table plots how $400 will grow, starting at birth and ending at 83 and 93 years, with 5% compound interest. We've already described why 83, 93, and 5% were chosen, but why $400? It's a personal guess. It represents the amount I think would be achievable as a subsidy to "prime the pump". It might someday be a government subsidy for handicapped people who could never support themselves. And since it would be at birth, it would have to seem bearable to young parents. Many readers would react that $400 is too stingy, but politics is politics, and what people can afford is not the same as what they will vote to afford. In any event, we here are testing the math as a preliminary to announcing we can save a bundle of money by changing the system we are used to. Choose your own number, remembering we are attempting to reduce what is now reliably estimated as 18% of the Gross Domestic Product, and competing with a presidential proposal to give it to everyone. Further, the only thing you need to know about dynamic scoring is that making it free will assuredly escalate its eventual true cost.

Compound interest always surprises people with its power, and in this example, 5% just about makes the goal. There's not much room for error or contingencies. All of the known factors are conservatively estimated, and it passes the test. What isn't covered is the unknown factor, atom wars, a stock market collapse, an invasion from Mars. To be on the safe side, we had better not count on this approach to pay for all of the health care. Just a big chunk, like 25%, seems entirely feasible. In the immediately following section, we examine the first "technical" problem. The first year of life is effective as unaffordable as the last year of life, and newborns generally can't dip into savings.

It's Time for a Grand Summary

This book will appear in print around the time of the November 2016 presidential election, and therefore have little effect on its outcome. I expect the election to polarize both political parties still further on the Affordable Care Act, sucking all the oxygen out of the room, as the expression goes. It is likely to create a sort of lame-duck situation during November and December, no matter who wins. Therefore, I decided to present a book which superficially seems to have little to say about the Affordable Care Act, in order to grasp the microphone first, about health issues which got ignored by the Affordable Care uproar. Even when discussion seems to focus on the A.C.A., trade-offs are blithely apt to ignore "germane-ness". And thus get to issues which have been debated very little, and pass very quickly. This book primarily attempts to do two things to re-focus attention:

1. To draw attention to the Health Savings Account legislation as a fall-back from almost any deadlock. HSA is already enacted, tested, and distributed. If Congress reaches a deadlock, the HSA is existing law, and anybody in a jam can simply go down the street and buy one. It's simple and cheap to get started, is approximately as inexpensive as any other health insurance, and you can discard it whenever you like. (Naturally, I hope people will keep it.)

It does have a few flaws, which I hope Congress might correct. It unnecessarily limits buyers to people who are employed. That seems purposeless to me, while it prevents minor children from being enrolled, limits the deposit of funds to a fixed amount of their own money, and forces people out of the HSA at age 65. Forcing people to drop it as they acquire Medicare, impairs one of its most important virtues, the incentive to apply unspent money to retirement living, just at the time they are likely to retire. Some people will have other retirement sources and time-tables, and wish to defer use of some or all of them. Getting back to children, permitting deposits at birth would add at least twenty years to the compound interest period available preceding retirement, allowing the retirement fund to grow four times as large. Dropping the age and employment limits would not require more than a few sentences of an amendment, and provide maximum flexibility.

2. We also portray universal Health Savings (and Retirement) funds as potentially "a string holding together a necklace of pearls". To do that requires major legislation, going far beyond emergency stop-gaps for deadlocks. It's potentially a program for health, phased in over a century, and including the possibility of even including ACA. Since one Congress cannot bind a successor, it provides a road map through ten or more changes of political control in Washington, adding or subtracting individual programs which sometimes have little relation with each other. As a matter of fact, if an attachment is voluntary, you can have other parallel programs without attaching them, if you prefer.

By happenstance, reform could start with one "pearl" already in place. By the legislation's automatic transfer to an Individual Retirement Account at the onset of Medicare coverage, every subscriber in effect would immediately possess one of the essential ingredients of a lifetime health and retirement funding system. That even generates coherence, symbolizing prolonged longevity as a result of earlier health care. On the other hand, it implies the present configuration of Medicare is perpetual when it already has a number of features which should be changed. Therefore, it is essential to state at the outset that the string, the HRSA, intends to be kept as simple as possible so that amendment complexity is concentrated into the "pearls" themselves. After doing so, the HSA can remain versatile enough to suffice for newborns, mentally handicapped and billionaires, alike. It might provide healthcare for prisoners in custody as well as the marooned Medicare copayment supplements. Some things wouldn't work and can be dropped without upsetting the whole system. The expression is KISS -- which they tell me means keep it simple, stupid.

The basic structure is to divide health finance into two parts, one for everyday routine expenditures, and the other for bare-bones, cheap, insurance -- for people who are too sick in bed to be bothered with haggling over finances. If there is anything left over at age 65, it can be spent for retirement and serves as a life-long incentive to be frugal about health expenses. It's for everybody, not just some demographic group. If the government chooses to subsidize certain groups, then that becomes an independent topic, sharing a common framework, hanging separately from the necklace as it were. At the moment, it's one serious technical flaw is to imply total control over investment policy lies in the hands of any corporation which manages it, leading eventually to suboptimal investment performance for customers. Also, limiting management to visible fees rather than invisible profit-competition should allow plenty of room for shopping between managers.

Having established the basic framework and pointed out its present main -- but correctable -- flaws (management control of investment, and mandatory management participation in profits), we added two potential pearls to the necklace. One is the two parts (80/20) of Medicare with its finances unified, and the other is to provide health coverage for children up to the age of 25. These are both sensitive topics and may take the protracted debate to get the mechanics right. When these two programs have finally got their books balanced by deciding who pays for what, they are ready for voluntary acceptance into HSAs, and they remain eligible to be tossed out if unexpected problems surface, once we get over any notion of infallibility. Balancing the books may include subsidies, but the subsidies for poor or the handicapped must reasonably result in balanced books. It is intended to be an insurance design, not a subsidy originator. A design, not a budget; the government may subsidize as it pleases without changing the design. The government has a right, even a duty, to provide for those who cannot provide for themselves. But deficit financing is not wise: if you are going to subsidize, subsidize the pearls, not the string. This wouldn't eliminate politics, it merely shifts politics to a less dangerous level.

At that point, we now stop detailed planning and merely list seven more "pearls" which might be added on the same terms. They would be special programs for difficult situations, like prisoners in custody, physically or mentally handicapped to the point of not being self-sufficient, and aliens within our borders. We are told the aggregate of these three groups alone is thirty million people.

When it comes time to negotiate the Affordable Care Act, between twenty and forty million more are eligible to become self-financed "pearls" after the ACA finds a way to balance its books. It is not intended to subsidize other subsidies linked to programs. That's the government's job. Unfortunately, the government has tended to raise prices for people struggling to pay their bills by subsidizing other people who cannot. The consequence is even more people cannot afford their own care, threatening to sink the lifeboat for everybody. If we are to subsidize the health care of some part of the population, let the money come from defense, or agriculture, or infrastructure, not from the quality of healthcare of some other person.

To continue the list, additional pearls for the future are the accumulated debts of fifty years of deficits, and the tax deduction-supported gifts of health insurance from employers to employees. I'd like to see some resolution of the mess left behind by Maricopa Medical Society v. Arizona decision of the Supreme Court. As these problems get worked out to be self-sufficient, they become eligible to become "pearls" as long as it remains clear this proposal is not a cross-subsidy vehicle. At the moment, the ACA shows no signs of adding anything to the HRSAs except more deficits, making solutions more difficult to find. Just because we see no end to problems, shouldn't keep us from getting started. In particular, when the ACA is addressed, out goes the oxygen from the room, diverting attention from anything except expedients. That should not be necessary. All of these problems can be worked on simultaneously.

* * * *

It is now time to identify the financial maneuvers which promise partial success. It isn't true there is only one principle involved, but there is certainly one main one. Almost all of the magic of money creation in this proposal is provided by stretching out the time for income earning. A longer earning period takes advantage of the rock-solid principle of compound interest rising at the end of its investment period. To return to our oft-repeated formula, money earning 7% will double in 10 years, so 2,4, 8, 16 reaches 512x magnification in 90 years. From age 80 to 90 the money grows 128-fold., so an original investment of $100 grows from $25,600 to $51,200 between the ages of 80 and 90 or $2,560 per year for a $100 investment. That is, it's not growing at 7%; during those last 10 years, it's growing at 256%. And it's not magic, it's just math. Furthermore, it's not new. The ancient Greek Aristotle complained about the unfairness of it because he was seeing it as a debtor. So that suggests a related strategy: wherever possible, position citizens as creditors, not as debtors.

What's new about this whole thing is the extension of longevity. In Aristotle's day, it was considered remarkable to live to be forty years old. In our era, life expectancy at birth is moving from 80 toward 90. So today it's not a pipe dream, it's a realistic strategy. But stretching it out automatically comes with problems, too. There's a greater risk, fifty years of extra opportunity for someone to chisel it from you. History is replete with examples of kings who shaved gold coins, financiers who took more profit for themselves than for their investors, central banks who give you back a penny when you invested a dollar a century earlier. If you win a war, you might emerge better off; but if you lose a war you may be more like the seventy million people who died from wars in the past century, an experience which strongly favors having no wars, but otherwise doesn't seem to change things much. This risk/reward ratio strongly suggests we have neglected the necessary precautions required. So the proposals of earlier pages to balance the Medicare budget, etc., carry the risk that something or someone will come along and divert the money to other purposes. And without planning to forestall that, you have not got a workable plan.

That's the thinking underneath the dispersion of control to individual Health Savings Accounts, just as it is the reasoning behind resistance to consolidated systems of control, such as "single payer" systems as presently described by their proponents. They all just make it easier for your trusted agent to steal bigger amounts of money at one time. William Penn, the richest private landholder in recorded Western history, spent his days in debtor's prison because his steward falsely accused him of stealing the money from him. Robert Morris, the financial savior of our nation, likewise went to debtor's prison while the Governor of his state nearly sprained his hand signing over property deeds to himself. When the Federal Reserve was created in 1913, a dollar was a dollar; now it is a penny. Nobody needs to explain what "pay to play" means. So, although we need much more ingenuity in devising safeguards for savers, we need to grit our teeth and allow some people to fail to take their opportunities. Countless teenagers who might have had a comfortable retirement will instead have the opportunity to smash up their red convertible on the way home from college. We absolutely must not deprive them of this risk, out of sympathy for its consequences. There will be plenty of Huns, Goths and Vandals watching what Rome does with its advantages.

* * * *

Suffice it to say a billion dollars will turn anyone's head; Health Savings Accounts are already many times that size in aggregate. Although ownership is dispersed widely, it is only a matter of time before some stockholders organization is formed, ostensibly to protect the interests of HSA owners. There will be an eternal need to suggest tweaks in the law to adjust to new circumstances. There will be a need to monitor the performance of managers, and even to counter the power of regulators. Sneaky little laws will get thrown in the hopper, requiring alarms in the night. Someone who lost money will sue to recover it; someone will have to decide whether to settle or resist in court, ever mindful of precedents being set. Executives will demand extraordinary life-styles; someone will have to decide if their production warrants the rewards. Someone else will have to be fired for incompetence or venality, but he will find many friends to defend him. The methods of selection of the board of directors are vital issues, now and forever in the future. As much as anything, continuous publication of results ("sunlight") is vital to oversight. The directors of the oversight body should have a deep suspicion of the directors of the "pearls" and only limited pathways for promotion between the two. Every time, every single time a dereliction is discovered, the results should be published and morals are drawn. Mr. Giuliani made a name for himself by policing broken windows, and it's still a very sound principle.

There is a financial success, and then there is product quality, which is different. Organizations will undoubtedly be formed to monitor quality, and these will produce measurable monitoring results. An effort should be made to make a meaningful match between these two report cards, with comparable groups having access to each other's data. There should be observers from each discipline on the other's board, and possibly a few voting overlaps. Disparities between rankings in the two evaluations should be explored and evaluated, and at least one annual meeting should be composed of both kinds of boards, devoted to the interaction of cost and quality. This may prove particularly fruitful at moments when scientific advances cause major changes in underlying premises. On another level, dialog should be frequent between research groups like the NIH, to see if research parallels needs..

A particularly interesting comparison might result from contrasting the regions with their 20% copayment partner's performance. They should be very similar, but may not prove to be.

Electronic Medical Records

The electronic medical record had a great flurry of excitement about 1980, and I was one of its earliest proponents. I wrote my own program in the Basic language to produce bills and insurance claims forms, and to serve as the basis for adding diagnoses, lab work, and prescriptions. It took about a year of my spare time, worked very well in my office, and is available for anyone who wants it. It had two flaws, and it still has two flaws. After a fruitless effort to simplify physician input, I abandoned that particular effort as taking too much of my time.

That's still the case, thirty years later. Programmers have a habit of telling the boss something can't be done when it is merely inconvenient to do it, and doctors absolutely will not tolerate doing something some lesser-paid person can do for them. Some variant of the Google search engine might suffice for coping with physician input, particularly if combined with Dragonfly voice recognition. Eventually, someone will conquer this beast, but it turns out to be harder than it looks, and nerdy doctors have turned their attention from data entry to Big Data. Meanwhile, programmers have avoided the task of simplifying something which could be simplified, just because it requires acknowledging that somebody else's time is worth more than their own. The time for excitement about data entry has passed, while the problem remains incompletely solved. If you were going to win a Nobel prize, it wasn't going to be for data entry perfection.

The second physician obstacle is that computers generate far more information than anyone has time to read. The white blood count is vital when appendicitis is being considered, but it just bulks up the chart thirty years later. So what is needed is an automatic summarization system, with hooks back to the original data in the rare instance where retrieval is needed. Since medical care is constantly changing, the summarization algorithm must change with it. It's a big job, and somehow billions of dollars have been expended trying to do something else the doctor never asked for. The new danger is that some malpractice lawyer will discover a point vital to his case has been omitted from the summarization (but not the bulk record) without the doctor's knowledge, even though it seems no longer vital to the treatment of the patient in the future. For a long time, I merely smiled when people told me the EMR was more trouble than it was worth. But recently I have read of the astounding amounts of money (thirty billion dollars have been mentioned) which have been devoted to this mess, much of which is pretty cute but nobody asked for it. Apparently, the doctors who advised the program let the big-shot millennials who actually wrote the code do the real directing because it seemed worthwhile to spend billions to accomplish their personal goal of payment by diagnosis instead of by procedure. Maybe that's how you subdue a bucking broncho, but the doctors work around you until you seem to be winning. And then they quit.

If someone had the bad judgment to put me in charge of this circus, I would immediately limit the archiving to data which can be automatically generated, and rest content with reports of lab and x-ray reports from this source. And then I would advertise for someone to produce workable physician data entry, as well as generate periodic automatic summarization. Until these two features pass approval by seasoned physicians, we would just have to get along with paper records. This is essentially what I told some meetings of 1980 enthusiasts. But it hasn't happened, yet, so the system progressively antagonizes a group they cannot command and cannot do without. Herding cats, I believe it is called.

Philadelphia Reflections

The musings of a physician who served the community for over six decades

Obituary

George R. Fisher, III, M.D.

Corporations: Property, but also Immortal Persons

Evolving Employer Attitudes About Employee Privacy

Some Underlying Principles

It's Time for a Grand Summary

Electronic Medical Records