PHILADELPHIA REFLECTIONS
The musings of a Philadelphia Physician who has served the community for six decades

209 Topics

HSA BOOK
New topic 2014-08-28 21:50:07 description

Obamacare: Spare Parts for a Book
Maybe these should have been included, but it was decided to leave them out.

Right Angle Club: 2014
New topic 2013-11-19 20:22:11 description

New Directions for Health Savings Accounts
Important differences exist between Health Savings Accounts, Flexible Spending Accounts, (and now) Lifetime Health Savings Accounts. Sometimes abbreviated as HSA, FSA, L-HSA, Congress should make it easier to switch between them. All three are superior to "pay as you go" health insurance now in use, largely unmodified by Obamacare. We here propose a new and far cheaper departure, resembling whole-life health insurance, as contrasted with term insurance. (www.philadelphia-reflections.com/topic/262.htm)

Decline and Fall of Philadelphia
New topic 2014-08-06 21:48:20 description

Click for more Topics

Philadelphia Reflections is a history of the area around Philadelphia, PA ... William Penn's Quaker Colonies
plus medicine, economics and politics ... 1806 articles in all

  • Try the search box to the left if you don't see what you're looking for.

Hospitals Shift Costs Three Ways

{Safeway Store}
Safeway Store

The CEO of Safeway Stores recently offered his own company's preventive approaches as an example of what the nation can do to reduce health costs. He's undoubtedly sincere, but he's quite wrong; he just shifted costs to Medicare. This is only one of three ways, major ways, cost-shifting is misleading us. Let's explain that.

Average life expectancy is increasing at more than two years per decade, but people always eventually die. Since health care costs are heaviest in the last year or two of life, extending life will soon push nearly all those heavy terminal costs from employer based insurance -- into Medicare. To die at age 64 costs Blue Cross a lot; but to die at 65 just costs Medicare a lot. Either way, the cost is exactly the same, it doesn't save Society as a whole any money at all. Let's put it another way: dying at age 64 costs the employer and the employees; but dying at 65 costs the taxpayers. Increasing longevity is constantly pushing more costs from employers to Medicare, and not just in Safeway; the prospect is that soon substantially all major sickness costs will tend to shift into Medicare. (To explain the failure of most employer insurance premiums to fall comparably in response to this shift, one must look elsewhere). But just a minute. Medicare is 50% subsidized by the government, and the employer writes off half of the cost as a business expense. That ought to mean it doesn't make much difference to anyone involved, except for one thing. Some employers have two employees and some have two hundred thousand employees. The amount of tax write-off is multiplied by the number of employees, so some employers can only write off a little, while an occasional employer might even make a profit on giving away health insurance. Economists agree that fringe benefits eventually and proportionately reduce the pay packet, so ultimately the employed patient pays the bill, the Medicare patient doesn't.

{Medicare}
Medicare

But instead of going down that trail, let's look at a second form of cost-shifting. Government payers and a few other monopolists are able to pay hospitals less than actual costs, and get away with it. The worst offenders are state governors administering Medicaid, where the underpayment is roughly 30%, in spite of federal reimbursement to the states for most of it, at full price. The resulting profit is used for various state purposes, mainly nursing home reimbursement. For the most part, such diverted funds are used for purposes not easily eliminated, so it is unlikely there will be much cost reduction for government if the scam is acknowledged and merely shifted to a different line in the ledger. To avoid bankruptcy, hospitals raise the rates for other health insurance plans -- and the uninsured. Employers are paying for most of it, so they stand to gain from reform, only to face higher state taxes as matters readjust. We have yet to learn where these costs will shift if the federal government takes over the costs of the uninsured; the current Obamacare plan is to shift 15 million uninsured persons to Medicaid. To a major degree, the federal government and its taxpayers are already paying for a lot of this uninsured cost, through the Medicaid shift. So its present dilemma is whether to continue to pay for it twice.

There's still a third cost-shift. In 1983, Medicare stopped reimbursing hospitals fee-for-service (itemized inpatient bills are still prepared but are meaningless fictions) and for thirty years has paid by the diagnosis, not the service, for inpatients. Consequently, per beneficiary inpatient costs have only risen 18% in five years, while outpatient costs have risen 47%. Costs are not the same as prices, which are even worse distorted. To a large extent, changes in costs are really changes in accounting practices, driving changes in actual practices. Skilled nursing and home care costs are rising even faster. When you hear fee-for-service payments attacked, it is this apparent overpayment of outpatient costs which is the source of complaint. But to pay out-patient medical costs in any way other than fee-for-service would imply an almost unimaginable restructuring of the medical system, without any proof it would save money. It will be very interesting to learn what contorted proposal is about to emerge.

{top quote}
Medicare +6% Medicaid -30%
Private Insured +32% {bottom quote}
58% Hospitals Lose Money

Not only do these shifts provoke inpatient nursing shortages, they start a war for patients between hospitals and office-based physicians. Hospitals are winning this war for business, but they are losing money to do so. If the public ever demands a stop to loss-leaders, net insurance premiums will probably rise; if the public doesn't wake up in time, some hospitals will probably go broke. The difference between a hospital which makes money and one which loses money is based on whether there is enough out-patient revenue to compensate for the hidden tax which the state effectively imposes on hospitals in order to pay for nursing homes. The obscurity of the present payment system is quite expensive, and the present beneficiaries of it are the Medicaid nursing homes. Obamacare essentially provided health insurance to 15 million uninsured by the process of placing them on Medicaid, so the consequences are going to be an interesting juggling act to watch.

{top quote}
5-year Change:
Inpatient +18% Outpatient +47% {bottom quote}
5-Year Hospital Costs

Just notice, for example, that neither Medicare nor private health insurance pays below costs, if you look at total national balances. Private insurers are paying hospitals 32% more than actual inpatient costs, while Medicare is paying 6% more than national cost. And yet 58% of hospitals are losing money. The magic in this formula lies in the losses incurred by state Medicaid but shifted to other payers. It could fairly be said we are just looking at a maldistribution of the uninsured, as a cost, and a maldistribution of non-inpatient revenues, as a profit, among the nation's hospitals. To what extent such maldistribution reflects uneven patient quality, as the loser hospitals claim, or provider inefficiency, as the winner hospitals would say, -- merely starts a distraction of attention which could last twenty years while we examine it.

And disruptions enough to take decades to fix.


Comments on Diagnosis Related Groups (DRG)

The American Medical Association

For a system which has worked well, the use of Diagnosis Related Groups (DRG) for inpatient reimbursement has a bizarre history. It led to some disastrous results, nevertheless, and should be thoroughly reworked. In a sense, the story begins eighty years ago. The American Medical Association had decided all of disease, ultimately all of medical care, would be better understood if it were first reduced to a systematized code. Originally, the code was visualized as a six digit complex, with the first three digits defining anatomical location, and the second set of three digits specifying the cause of the disease. That meant a code for a thousand diseases in a thousand locations, or a million disorders just for a beginning. IBM was called as a consultant, who advised them just to get a numerical code for everything, and mathematicians could easily make it usable for calculating machines, the forerunners of computers. Apparently, some of these consultants had worked with a system which had produced great success for the U.S. Census. A third group of three digits was soon added, to make a nine-digit Standard Nomenclature of Diseases and Operations , familiarly known as SNODO, which could identify a hunded million different operations. The pathology profession subsequently added a fourth set of digits, for microscopic features, so we are now up to a hundred million microscopic conditions. The team of physicians who worked on coding the medical universe contains many names which are now famous, including Robert F. Loeb and Dana Atchley of The College of Physicians and Surgeons of Columbia University. For at least thirty years, the Joint Commission on the Accreditation of Hospitals (an AMA and AHA joint affiliate) enforced the rule that every discharge summary from every accredited hospital in America must code and index every discharge diagnosis in SNODO code. It was tedious work, kept alive by the future prospect of developing an Electronic Medical Record in 1940.

Robert F. Loeb

After twenty years or so of this enormous task, the Medical Records Librarians rebelled. The labor effort was burdensome, and the librarians were in an occupational position to observe how little use was being made of it. On their demand, a new coding system was adopted, called the International Classification of Diseases , (ICDA) which was limited to the one thousand commonest discharge diagnoses , therefore limited to the charts which the librarians could confidently observe would be used. Limiting the code by 99% also limited the cost and effort of coding, and was considered an important retreat from over-enthusiasm. Meanwhile, the development of the SNODO code by a handful of true believers continued to fill up the coding gaps, soon using and exceeding the capacity of the 12-column IBM punch card (originally, ten digits plus metadata). Unfortunately, the code was in danger of collapsing from this unanticipated expansion, and computers had not yet advanced to the point where they could rescue SNODO from the limitations apparent to its users. The ICDA coding scheme sufficed for immediate purposes, and the punched-card calculator system was at least a decade away from evolving the computer into a practical substitute. The professional difference was this: the doctors understood the coding system, and could code most charts by logic. The record librarians could not encipher the code by logic, and a thousand codes was the limit of what they could memorize. All the medical world eventually abandoned SNODO, except the pathologists who immediately saw that ICDA could never approach their greatly expanded needs. Eventually pathologists took SDODO over, expanded and redesigned the basic framework, and produced what they are rightly proud of, an elegant code book called SNOMED which obeyed meaningful internal rules. It was still however, a huge and expensive book.

Dana Atchley

Meanwhile, a group at Yale went in the opposite direction of reducing the ICDA code (which eventually expanded to 10,000 entries, too large for many purposes) back down to 200 of the commonest diagnosis clusters. They termed their product Diagnosis-Related Groups (DRG) , which made no pretense of being complete, but was small enough to be memorized by those who used it frequently. To summarize what happened next when Medicare adopted DRG for payment purposes: both DRG and ICDA started to expand, and SNOMED was relegated to the role of code book for hermit pathologists. But ICDA was fast losing its praise for being compact, and a growing feeling developed that DRG derived from it was far too small and crude for what physicians could now realize was going to play a very large and important role in everybody's finances. There really was no quick fix, because both DRG and the underlying ICDA designs were based on frequency of occurance rather than precision and logic. Furthermore, the copyright was owned by professional societies who had little interest in the finances, and considerable interest in reducing the burdensome coding workload. By now, however, computers had made the task of code translation a trivial one. Like the three bears of Goldilocks, some codes were too large and some were too small, but at least there were three of them, each crippled in a different way. Comparatively few doctors understood what was going on, and in spite of their vital interest at stake, had trouble getting over their hatred of the boring coding task. Since this whole issue of data coding and summarization has taken on major importance to the success of the Affordable Care Act, in some circles the uproar has become a political war dance. Let Obama do the coding, if he likes it so much.

The small field of those who are interested in such matters has decided to expand both the specificity and the reach of ICDA, which is now up to its tenth edition of revision. That does not seem to some of us to be a sensible approach. We have an elegant code in SNOMED, which is unfortunately too big to use; expanding ICDA seems destined to reach the same fate, on the rebound from being too small. We now have ample data on what is common. The most efficient approach would at first seem to be condensing the highly specific SNOMED to a useful size, based on frequency of use. While such a condensed volume could be printed as a book, we are now at a point where every record room within the hospitals of the nation is equipped with one or more computers, and expansiveness of the code is no longer anyone's problem. This whole process could now rather easily be automated for its original purpose of classifying disease populations. A further condensation of the condensed version could be used for payment purposes, adding a great deal more practical nuance. You would suppose that everyone could see that paying the same amount of money for a disease of the toe, as for a disease of the eye, merely because they were both too uncommon to have specific codes -- was either going to bankrupt someone, or enrich someone else. And that's only money. Any scientific or diagnostic decision based on a code of "All other" was going to make computerized medical records worthless.

SNOMED

In automated form, SNOMED is quite ready to be revised still further in other directions for other purposes. It could, for once, integrate the accounting and demographic functions with the rest of medical care. But a great many other useful functions can be imagined, once computers have a stable platform on which to build, and the task of coding without much physician input burden can be safely undertaken. Safe, that is, from the danger that the whole coding framework will get changed, again and again. In a certain sense, this is similar to the brilliant choice by Apple of the Unix skeleton, when Microsoft Windows seized on quicker expedients. A great many sub-professions seem to wish to have their own codes for their own purposes, and resist the idea that a physician code should be imposed on them. However, medical care and hospital care are medical functions, and their accounting and demographics will always eventually return to its medical professional core. Meanwhile, notice what happened to DRG, so crude it relegates most diseases to the category of "All Other". The fact of the matter is, it is a crude approximation, some cases paid on the high side, some on the low side of true costs. The surprising usefulness has almost nothing to do with medical content, and almost everything to do with having enough case volume to remain in balance. The highly prized profit margin of 2% or 3% can easily be gamed by admitting slightly more cases of the kind that are profitable, or by the government adjusting just a few DRGs to profitable status. Meanwhile, the rest of the enterprise becomes progressively more expensive because it once lost its meaningful connection to revenue with service benefits, and now has very little direct relation to costs. It is a precarious thing, for institutional solvency to depend on internal balancing of the case load within one set of four walls. Through their accountants and their record librarians, it drives the institution into a futile chase after high patient volume with inevitably higher administrative costs. Of course we need to change with the times. But some basic truths never change, and one of them is that every ship should sail on its own bottom.

Let's get specific. In the first place, allowing only a 2% profit margin during a 3% national inflation is nothing but a political football. But if some fair profit margin could be agreed to, it is only an average among hospitals. You might as well reduce the DRG to four payments, and reimburse hospitals on the basis of which wall the patient faces. With enough tinkering, you could arrive at the desired total hospital reimbursement to match any profit margin you establish, totally disregarding the diagnoses of any patients. Quite obviously, you must code the diagnosis to whatever number of digits it requires to identify the unique condition. You could match up all of the hundred dollar cases and all of the fifty thousand dollar cases, call that a number and pay. But such an effort is just a waste of time. Somebody has to go to the trouble of coding every single diagnosis down to the point where the code is meaningful, and assign a relative value among them. Only at that point would it be legitimate to assign a dollar amount to each relative value. And you have to maintain the code as treatments change, which will be quite frequently. You can do it, and you can computerize it. But there is no guarantee that charging itemized bills wouldn't be cheaper. DRG in its present form is nothing but a crude rationing system; get rid of it, or spend the money to make it work.

So that's how DRG got to be be what it is. It's perfectly astounding that such a rough approximation, devised for other purposes, could be so successfully employed to pay for billions of dollars of Medicare inpatient care, and that payment by diagnosis could very likely spread to all medical care. Unfortunately, there is another system participant's way to describe it: inpatient hospital care has been lumped into a rationing system which constrains national inpatient care to a 2% overall average profit margin. Payment by diagnosis ignores both cost and content. It does not matter how long the patient stays or how many tests he gets, or how many expensive hospitals swallow up inexpensive ones. Meanwhile, emergency rooms and satellite medical clinics do not suit themselves to a supposed linkage between the diagnosis and the cost, and their much more generous profit margins permit profit margins that support what has become a hospital conglomerate. And the fun part is this: squeezing physician income against a "Sustainable" Growth Rate creates the "doc fix", which annually blackmails physicians into acquiescence past the November elections.

DRG Cartoon

A sustainable growth rate is a term borrowed from financial economics, implying the rate at which a company may grow without borrowing more money. It is essentially calculated by subtracting dividends from return on investment. A sustainable growth rate in Medicare is calculated by a formula ten pages long, modified every year in special ways which closely resemble "earmarks", but containing special adjustments for changing work hour components, malpractice cost components, etc. It is an enormous task for the Physician Payment Commission to determine yearly changes in thousands of medical services, and it must be a frustrating one for them to see their painstaking calculations tossed aside every year by Congress in response to howls from the various professions. The debate every year has long since shifted from expert calculations to a simple threat that physician reimbursement will be cut. Each year it is cut, and each year Congress relents on the cut at the last moment. This keeps the AMA in a constant state of agitation, and it keeps physicians in a constant posture of supplication. At the end of 2013, the proposed cut in reimbursement had grown to 26%. When almost every physician has an overhead of 50%, a cut of 26% from a 50% net is pretty meaningful. And every year the financial attractiveness of joining a hospital clinic for a dependable salary grows, with consequent improvement in the overall economics of the hospital conglomerate.

But the DRG system threatens the patients, too. After discharge from a hospital, the patient is sent a multi-page itemized bill, usually without mention that actual reimbursement is the DRG rate, far lower than the "list price" on the bill. The "patient responsibility" is often zero because of contract provisions, but the bill is for thousands or even hundreds of thousands of dollars. The DRG payment to the hospital is not zero, but it is far less than the total on the itemized bill, and is seldom revealed. Well, one message it sends is pretty clear: "This is what you would be charged, if you didn't have Insurance X." The shortfall in revenue is made up by shifting the cost formula to charge the emergency room and the outpatients, who are not suitable for anything resembling the present DRG. If the hospital does not have enough outpatient work to sustain the inpatient losses, its only recourse is to call the architects and build a bigger outpatient department. To fill it, just buy up a neighboring group practice or two of neighborhood doctors.

Increasingly, as the old surgeon remarked, the main value of health insurance is to keep the hospital from fleecing you. Some day, hospitals will be very sorry they were complicit in this.


Which Obamacare Plan Fits Best With Health Savings Accounts?

Health Savings Plans were designed over thirty years ago, well before the Affordable Care Act was passed. The ACA provides catastrophic coverage, but only to persons under the age of 30, and only in hardship cases over that age. Generally speaking, the Obamacare catastrophic options are not entirely suitable as required linkages to HSA. The regulations could be changed to remedy that awkwardness, and should be. However, all of the Obamacare options do contain a fairly large deductible, so it is of interest to see if any of them would serve the purpose of a required high-deductible policy, to be linked to Health Savings Accounts. No matter what happens to the legislation and its regulations, it is still of interest to make a cost comparison which uses the most nearly suitable ACA option.

Furthermore, the ACA introduces the interesting concept of an annual upper limit to patient out-of-pocket costs, which really means there is a hidden re-insurance at work. That seems like a useful innovation, which would eliminate the need to design a special re-insurance program for Health Savings Accounts, providing we can find a way to fit the two together. The unknown person who devised this idea is to be congratulated.

{top quote}
None of the Obamacare "metal" options is entirely suitable for a Health Savings Account. {bottom quote}
A high deductible is itself a desirable feature, while co-pay or coinsurance, is undesirable. The typical 20% co-pay feature is too small to have any restraining effect, and would have been dropped as useless, except for one thing. A 20% co-pay will reduce the premium by 20%, a 34% co-pay would reduce premiums by 34%. Therefore, in the heat of a salesman making a pitch, it is useful to be able to make the premium just about anything requested, so the marketing departments usually press for inclusion of a "flexible" co-pay feature. But it is really just a smoke-screen. The effect of a deductible on premiums, on the other hand, is rather difficult to calculate, whereas its potential effect on patient behavior is striking. Just think for a moment of the effect: the higher you raise the deductible, the lower you make the premium. I very well remember the time when the AMA offered a $25,000 deductible for $100 yearly premium. If we had stuck with that idea during the intervening fifty years, we might not be in a pickle about rising health care costs.

So the bottom line is this: even the Obamacare metal plans demonstrate that the higher the deductible, the lower the premium. Since the bronze plan has the highest deductible and the lowest premium, it is definitely the one to choose for linking to a Health Savings Account. It's nowhere close to a $100-dollar premium, however, and is not at all what I would have designed for the purpose. But if you must have an ACA high-deductible, take this one. And indeed, you probably must. The U.S. Supreme Court decision that it isn't a penalty, it is a tax, has been worked around by saying you have to pay a penalty of 1% of your income, unless the small tax penalty is larger, which it seldom will be. A young person might be able to pay the small tax penalty with his first job, but it will soon creep up on him that he really has to pay 1% of his income, when he is so unlucky as to get a raise in salary.

{top quote}
But, the bronze plan has the highest deductible and the lowest premium. {bottom quote}
So the way we would advise using the HSA has three components: 1. Choose the cheapest plan with the highest deductible. 2. Try to build up the HSA to $6000 as quickly as you can, by contributing the full $3300 limit even when you don't need to. 3. Try not to spend the funds in the tax-sheltered account, unless you don't have any fully-taxed funds at your disposal when you get sick. If your Health Savings Account contains a $6000 special-purpose fund for unexpected medical costs, compound investment income will make it grow considerably faster when you are young, at a time when mathematics will make it grow fastest in the long run. Remember, you aren't required to do this, but take my word for it; it will make for much better lifetime health financing, if you have the funds.


Appendix: Smothered to Death in Greenbacks

Here's my macroeconomic nightmare, brought on by thinking too much about paying for health care costs, and supposing, just supposing, we were successful in doing it. The equivalent nightmare would be to imagine that some multi-billionaire walked into the offices of Vanguard or Fidelity, and said he would like to speak to the manager. After he had a cup of coffee, he would explain that he wanted to make a deposit of $5 trillion dollars in a total-market index fund. After an initial reaction resembling a Grade B comedy movie, the manager would begin to see the idea was pretty disruptive.

In the first place, $5 trillion is more than twice the size of the largest index fund currently in existence. We're getting there, but at the moment no one can be entirely certain what it would do. It might take months or even years to feed that much money into the markets without creating violence. That one buyer alone would dominate the stock markets of the world, bankrupting some, enriching others. In the Grade B movie I envision, dozens of beautiful starlets would be sent around for the sole purpose of learning what our buyer was buying next week. And what would he care, he would tell them. If he decided to make a big sale, markets would tumble, maybe crash.

Now, assuming this money was honest and not "dirty" as they say, the consequence of steady buying in huge amounts would be to flood the markets with liquidity. There might well be spurts of both directions, but in general the addition of this much money concentrated in the stock market, would send the price of stocks up, in response to supply and demand. If the price of stock is generally raised without underlying business transactions to justify it, earnings per share would go down. In the long run, that could send the value of stocks down, resulting in inflation, because it would be possible to sell more stock without raising prices. In any event, reducing the scarcity of stocks would lessen the value of capital, compared with the value of labor. Reducing the value of capital would itself cause disorders in the economy before the markets regained equilibrium. Prices of labor-intensive goods would rise, prices of things which could be automated by using capital, would fall. It would create new winners and losers; new elites.

For these reasons, students of economics generally hate macroeconomics. It's important, but it's hard to make final conclusions. In our Grade B movie, the bald-headed little manager ends the scene by jumping out the window.


What Other House?

Before the First World War, it was common for prosperous families to have two houses, like migrating birds. There was the big house in center city, and a second place to go in the summer to get away from typhoid and malaria. In the early days before municipal water departments, sources of clean water for home use and sewage disposal often dictated the location of such annual migrations. In time, a wider variety of destinations appeared. Summer arrangements might be a summer cottage on a lake, or a mansion in Bar Harbor. Friendly local Indians and good land for fresh vegetables or milk cows made an attraction. Usually there was some sort of recreational attraction, perhaps a summer hotel where the family went every summer, located along a railroad for easy commuting. Along the East Coast, it was common to own a beach house along the Jersey shore, and for fashionable people it was common to have a summer place along the Main Line. Germantown was the first summer colony, started by the Allen family and soon followed by the Chews at Cliveden, who also had a house on Third street next door to George Washington, and to Powell, the Mayor of the city. There were Germans in Germantown, of course, but they were not in the same circle, any more than the "permanent residents" of the New Jersey barrier islands mix in with the "summer folk", today. If you look at the big houses along Spruce and Pine Streets, you will see little neighboring houses in the next-door alleys. Sometimes these little houses had three rooms on three floors, and were called "Father, Son and Holy Ghost" houses. Sometimes these houses were for servants, sometimes for local tradesmen.

It later turned out that the geographical size of the city was to make a significant difference. In a small village, there is little difference between the town and the countryside, but after a while significant differences in taxes appear, particularly when our system of government begins to encourage federal, state and local taxes to become the legal or traditional province of a particular level of government. The tendency was for taxes to focus on government services from which people would be reluctant to flee. If people lived in the city for the schools, school taxes were applied to real estate. The federal system of dependence on income taxes on the other hand, reflected an indifference to where you happened to live. This started a cat and mouse game among municipalities,states and counties, which unfortunately contributed to the direction of tax flight, when there appeared to be a reason to flee.

During the Depression of the 1930s, that new threat appeared. Maintaining two houses soon seemed a needless extravagence, and it made sense to sell one of them. At that point, a choice had to be made, and the advent of the automobile made it entirely practical to live in the suburbs and commute to the city. A small town found it made little difference, but a medium sized city gave the suburbs an attractiveness. In the case of Philadelphia, the city-county consolidation widened the geographical reach of city taxes, before taxes and land values reached the inviting cliff where they abruptly fell to rural levels. By that time, clean water and friendly Indians were less important than taxes and upkeep. Some people had very bad luck in the Market, sold the big house, and moved into the little house behind it. More often than not, the big, house was converted into apartments or just plain torn down, or else it fell into shabbiness and the whole neighborhood deteriorated. After twenty years, everything got so bad in Society Hill, that you could buy any one of the mansions for $1500. It was a spiral, of course, and although you could buy a house for $1500, and resell it twenty years later for a million, during the intervening twenty years it was worth your life to go out on the street at night. Or so it seemed, until Richardson Dilworth built a brand-new mansion on 6th Street, and Society Hill started its revival. So, with this little bit of real estate history you ought to be able to summon up the tolerance to smile, when a senior partner of a law firm at a party tells you, "Philadelphia declined because everybody had two houses, and sold one of them." Not exactly everybody, but mostly everybody in the leadership did.

In fact, that was seemingly true for everybody, because the cohesiveness of Philadelphia culture led the followers to follow. But there was a next stage, after that. Bargain hunters found their bargains, word spread among immigrants from the South, and mansions turned into slums. To some extent, this migration was balanced by a white migration to the South, seeking cheap land and fleeing expensive union labor. Before long, air conditioning made this a natural, bearable counter-migration. In colonial days, just about everybody had a summer house for mainly health reasons, but now there was a new force causing people to relocate entirely in the suburbs. The tax cliff created by the city-county consolidation artificially raised city land values in anticipation of expanding settlement. It suddenly became cheaper to relocate or rebuild an entire facility just over the city/county line, in accordance with newer concepts of one-story buildings instead of three-story factories near a waterfall. And then a new way of life grew up around this necessity, with only the leaders returning to the city for banking, clubs, and opera "during the season". Invisibly, sanitation and air conditioning had removed the economic reason behind the former social structure, but permanent Philadelphia residents continued its customs while the Gilded Age was invisibly making it all a little silly. But hit it with a depression, ruin the industrial base supporting it, and then watch it disintegrate. Housing patterns didn't cause the problem, but new ones certainly made it hard to recover the good old ways, once they disappeared.


I want to thank you for this wonderful resource. I find it fascinating. May I offer one correction? In the section "Rittenhouse Square Area" there is reference to the Van Rensselaer home at 18th and Walnut Streets and its having a brief fling as a club. I believe in 1942 to about 1974/5 the Penn Athletic Club was located in the mansion. The Penn AC was a good club, a good neighbor and a very good steward of the building - especially the interior. It's my understanding that very unfortunately later occupants gutted much of the very well-preserved original, or close to original, interiors. I suppose by today's standards the Van Rensselaer-Penn Athletic Club relationship could be described as a fairly long marriage. The City of Philadelphia played a large role in my life and that of my family, and your splendid website brings back many happy memories. For me and many others, however, there is also deep sadness concerning the decline of so much of the once great city and the loss of most of its once innumerable commercial institutions. Please keep-up your fine work. Your's is a first-class work.
Posted by: John D. Mealmaker   |   Aug 14, 2014 2:24 AM
Dr. Fisher, The name Philadelphia University was adopted in 1999, as you write, but the institution dates to 1884 and has been on School House Lane since the 1940s. It acquired the former properties of the Lankenau School and Ravenhill Academy, but it did not "merge" with either of them. I hope this helps when you update your site.
Posted by: David Breiner   |   Jun 11, 2014 10:05 PM
Hello Dr. Fisher, I was looking for an e-mail address and this is what I could find. I must tell you my Mother who you treated for years passed away last May. She was so ill with so many problems. I am sure you remember Peggy Marchesani. We often spoke of you and how much we missed you as our Dr. You also treated my daughter Michele who will be 40. I am living in the Doylestown area and have been seeing the Dr's there.. I just had my thyroid removed do to cancer. I have my fingers crossed they get the medicine right. I am not happy with my Endochronologist she refuses to give me Amour. I spoke with my Family Dr who said he will take care of it. I also discovered I have Hemachromatosisand two genetic components. I have a good Hematologist who is monitoring me closely. I must say you would find all of this challenging. Take care and I just wanted to convey this to you . You were way ahead of your time. Thank you, Joyce Gross
Posted by: Joyce Gross   |   Apr 4, 2014 2:06 AM
I come upon these articles from time to time and I always love them. Is the author still alive and available to talk with high school students? Larry Lawrence F. Filippone History Dept. The Lawrenceville School
Posted by: Lawrence Filippone   |   Mar 18, 2014 6:33 PM
Thank you for your articles, with a utilitarian interest, honestly, in your writing on the Wagner Free Institute of Science [partly at "...blog/1588.htm" - with being happy to post that url but the software here not allowing for the full address:)!] I am researching the Institute, partly for an upcoming (and non-paid) presentation and wanted to ask if I might use your article's reproduction for the Thomas Sully portrait of William Wagner, with full credit. Thanks very much for any assistance you can offer here. Josh Silver Philadelphia
Posted by: Josh Silver   |   Jun 2, 2013 1:39 PM
Thank you for your articles, with a utilitarian interest, honestly, in your writing on the Wagner Free Institute of Science [partly at "...blog/1588.htm" - with being happy to post that url but the software here not allowing for the full address:)!] I am researching the Institute, partly for an upcoming (and non-paid) presentation and wanted to ask if I might use your article's reproduction for the Thomas Sully portrait of William Wagner, with full credit. Thanks very much for any assistance you can offer here. Josh Silver Philadelphia
Posted by: Josh Silver   |   Jun 2, 2013 1:39 PM
George, Mary Laney passed away last November. I was one of her pall bearers. She had a bad last year. However, I am glad that you remembered her and her great work. I will post your report at St Christopher's and pass this along to her husband Earl. Best wishes Peter Hunt
Posted by: Peter Hunt   |   Mar 28, 2013 7:12 PM
Hello, my name is Martin. I came across [http://www.philadelphia-reflections.com/blog/1705.htm] and noticed a ton of great resources. I recently had the honor of becoming a part of a new non promotional project on AlcoholicCirrhosis.com. We decided to put together a brief guide about cirrhosis, and the dangers of drinking. We have received a lot of positive feedback and I wanted to suggest that we get listed on the above mentioned page under The National Institutes of Health. Let me know what you think and if you have any further requirements or suggestions.
Posted by: Martin   |   Jan 1, 2013 8:51 AM
I FIND THIS VERY INTERESTING, INDEED. I AM HOWEVER, SEARCHING FOR THE ANCESTOR WE HAVE BEEN TOLD WAS JOSEPH M. WILSON OF JORDAN TOWNSHIP IN WHITESIDE CO. IL USA. MY HUSBAND WAS ORPHANED AND WITH LITTLE CONTACT WITH HIS FATHERS SIDE OF THE FAMILY THE 9TH OF 10 SURVIVING CHILDREN SINCE ALL ARE DECEASED BUT, ONE). I HAVE HOPED TO FIND HIS CONNECTION AS TO THE STORIES RELATED BY SEVERAL OF HIS DECEASED RELATIVES THAT WE ARE CONNECTED TO THE WILSON MILL FAMILY HISTORY. OF JOSEPH AND FRANCES. MY HUSBAND WAS ALSO, FAMILY TO: GRANDFATHER RANSOM (ISABELLA)WILSON & HIS BROTHER WILLIAM; OF ELKHORN GROVE CARROLL CO. IL USA AND HIS SON JOSEPH WILSON(NANCY). I?WE( MY SONS AND NEPHEWS NEICES AND GRANDDAUGHTERS IN COLLEGE... WERE HOPING THAT NOW THAT I AM ON THE COMPUTER AND WITH YOUR HELP THRU THE GENELOGICAL SOCIETY TO YOUR ADDRESS WE MAY FIND THE FAMILY WE SEEK. MY LATE HUSBAND AND I DROVE PAST THE SITE OF THE FIELD WHERE JOSEPH AND FAANCES ARE BURIED , THE CEDARS ARE GONE AND IT IS NOW FIELD. I HAVE BEEN HOPING TO FIND THE LINK FOR OVER 30 FAMILY TO PAY TRIBUTE TO THOSE WHO HAVE GONE BEFORE AND PERSEVERED TO BRING US THE LIFE WHICH WE ENJOY AND SERVE, TODAY. I RECEIVED ONLY THIS WEEK BY A FLUKE AN EMAIL WITH PHOTOS FROM A 3RD COUSIN THAT FOUND MY EMAIL ON A COUSINS EMAIL ADDRESS AFTER INQUIRING AND INTRODUCING HIMSLEF: AND HE TOOK THE TIME TO SEND MANY PHOTOS AND HISTORY OF GRANDPARENTS AND FAMILY AS WE HAVE HAD NONE. WE STILL DON'T HAVE A PHOTO OF HIS MOTHER AND FATHER. WHAT I HAVE OF THE TREE, I AM ANXIOUS TO SHARE WITH FAMILY THAT IS SEEKING HISTORY, AS I STILL AM HOPEFUL TO FIND IT IN TIME FOR THE DEADLINE AUG. 30 TYPED AND DELIVERED TO MY MARTIN HOUSE MUSEUM WHERE I AM A MEMBER. MY HUSBAND WAS A MASTER MASON WHILE IN LODGE WITH THE COUPLE THAT DONATED THE HOUSE TO BE A MUSEUM. THANK YOU FOR YOUR TIME AND THE GRAT WORK YOU HAVE ALL DONE ON THIS HISTORY. WE WERE LIFE MEMBERS OF THE LUTHERAN CHURCH BUT , THERE IS NOT ONE IN OUR TOWN, SO I FOUND THE REFORMED CHURCH,OF WHICH, I AM VERY HAPPY TO BE A PART. THANK YOU .
Posted by: SUSAN WILSON   |   Aug 12, 2012 12:49 AM

Please Let Us Know What You Think


(HTML tags provide better formatting)

Because of robot spam we ask you to confirm your comment: we will send you an email containing a link to click. We apologize for this inconvenience but this ensures the quality of the comments. (Your email will not be displayed.)
Thank you.