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

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Obamacare: Examination and Response
An appraisal of the Affordable Care Act and-- with some guesswork-- its tricky politics. Then, a way to capture major new revenue, even paying down existing Medicare debt, without raising premiums or harming quality care. Then, an offering of reforms even more basic, but more incremental.


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

Suburban Philadelphia

The Main Line
Like all cities, Philadelphia is filling in and choking up with subdivisions and development, in all directions from the center. The last place to fill up is the Welsh Barony, a tip of which can be said to extend all the way in town to the Art Museum.

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

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Philadelphia Reflections is a history of the area around Philadelphia, PA ... William Penn's Quaker Colonies
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CHAPTER FIVE: Lifetime HSAs, Backwards and Forwards

It was my intention to write this book as a critique of the Affordable Care Act, followed by offering what I would put in its place. That's about where you would be if you read the first four chapters. John McClaughry of Vermont and I were the originators of the Medical Savings Account in 1980. Since then I had thought of seven or eight improvements to the act, during the three decades after Bill Archer of the House Ways and Means Committee got Health Savings Accounts enacted into Law. However, several things intervened. Chiefly, the idea grabbed me that Health Savings Accounts could readily become lifetime insurance. That is, individually owned and thus portable, as well as generating long-term compound investment income. Especially the last point; the potential income is enormous.

The Affordable Care Act and this revised new idea could both be viewed as responding to the Constitutional lodging of health insurance regulation inside the fifty states.The Constitution rather definitely excludes healthcare from federal regulation, reinforces the point with the Tenth Amendment, and the McCarran Ferguson Act is implacably explicit a third time. This makes difficulties for interstate businesses, and for people who get new jobs in new states. Many smaller states do not have a large enough population to support more than one health insurance company, thus creating monopolies in many states, and consequent resentment of monopoly behavior. In a sense, Obamacare attempts to solve the difficulty by fragmenting national health insurance, whereas lifetime Health Savings Accounts would solve it by consolidating yearly fragments into a single, portable, policy owned by the individual. Industrial corporations once solved the same difficulty by permitting the corporation to select its "home state" for incorporation. Lifetime HSAs solve it by letting the individual select a managing organization, and indirectly if he chooses, select the home state for its regulatory climate.

While this idea had initial appeal to me, it was soon overwhelmed by discovering that computer-driven innovations in the investment world had made lifetime coverage far easier, less chancy, and considerably more financially attractive, than coverage in annual slices. Added to recent astonishing increases in life expectancy, internally compounded investment income came pretty close to paying for lifetime health costs, because compound interest grows most near its ending, roughly matching healthcare costs, and our increased longevity comes from living long at the end, not merely on average. You could never be sure of that, because the science of medical care is constantly evolving and you don't know where it will go. The once thing you can be certain of, is that restructuring health insurance in this way results in a considerable reduction of health insurance premiums. They might skyrocket, or they might largely disappear, but in any event they will be a lot cheaper than using any other method of paying for them. No doubt critics will find large numbers of nits to pick. But no matter what else turns up, it is going to be pretty hard to match the cost reduction. In fact, the great obstacles to an effective system, like "job lock" and "pre-existing conditions" present no obstacle at all to lifetime HSA, and thus stand exposed as artificial creations of existing health insurance, modeled on term life insurance. Just change to a more natural system, tested for a century as whole-life insurance, and such technical problems simply vanish. Even slow adoption, based on public wariness about a new idea, is an advantage. A change this massive really ought to be adopted slowly and tentatively, so we don't cause chaos by blundering ahead into unexplored territory. If we do it, let's do it on purpose.

Thus the original idea of modestly improving the original Health Savings Accounts, continues to stand on its own two feet. It's what I would offer right away as a supplement to the Affordable Care Act, or to ERISA plans, simply providing comfortable little ways for individual subscribers to ease from annual HSAs into parts, or all, of lifetime HSAs. Right now, anybody under 65 can start an HSA, and any insurance company can offer a product containing little variations of the idea. Any one of the fifty states can change its regulations to make itself attractive as a "home state", as James Madison originally envisioned when he described the laboratories of the states.

And if someone finds a fatal flaw, why shouldn't I thank him, rather than try to bluff past him. So, right off, what are the disadvantages of lifetime coverage? They would seem to be:

1. At the moment, persons receiving Medicare are excluded from starting Health Savings Accounts. During the debate about Obamacare, seniors were therefore remarkably uninterested in a topic which didn't affect them. Very few seem to realize that Medicare is 50% subsidized by the federal taxpayer, and therefore few realize they are quite right to be uneasy Medicare might be "robbed" to pay for Obamacare. No politician is comfortable discussing this issue, for fear his party will be blamed for injuring a perfectly blissful status quo. Naturally, everybody likes the idea of buying a dollar for fifty cents, and everybody likes to imagine payroll deductions and premiums create an impregnable entitlement. The sad truth is the 50% subsidy, paid for by borrowing from foreigners, practically guarantees Medicare will be eyed as a victim, using the "fairness" argument. Seniors on Medicare, of which I am one, should be immediately in favor of a proposal which forestalls such pressure. Unfortunately, right now every one of them is looking toward the sunset, counting on not outliving a threat which isn't going away.

2. The computer revolution, which makes lifetime health insurance even imaginable, has already severely impacted the investment community. It is difficult to foresee which branch of the existing financial community would be natural allies, or natural enemies, of Health Savings Accounts. A remarkably large segment of the investment community already has HSAs for their personal affairs, and the banking community sees a chance that Bank Debit Cards could displace the huge industry of insurance claims processing. Meanwhile, the insurance industry is uncertain whether HSAs are a new revenue source, or a threat to existing lines of business. Meanwhile, the Dodd Frank legislation confuses everyone about winners and losers. Investment advisors have been hit hard by the recession, and are forced to charge $250 per trade when their competitors charge $7.50 for the same service. Just about everybody in the HSA business is uncertain whether HSAs are insurance policies with an attached savings account, or whether they are are investment vehicles with stop-loss insurance attached. It takes time for HSAs to achieve profitable size, so industry leadership hangs back to see what they look like when bigger.

3. There are lots of small advantages, but one big disadvantage. The transition from one system to another takes a long time, perhaps a lifetime for some.

How can we navigate a transition that might take a century to complete?

The answer to the long transition period lies in providing more than one method to close the transition gaps. Start from both ends, and find one or more methods to break into the middle. If lifetime insurance saves money, use some of it to overfund parts of the system as an incentive. When you find people are gaming the system, drop the feature which permits it. If the goal is accepted to speed up the transition, calculate what it is worth to accomplish it, and limit the feature as the transition speeds up. The method proposed in the previous chapter will certainly work out, but a newborn baby will be a Medicare recipient before children's insurance is complete for everyone. The rest of us have already lost some years for compounding, while some of us are already on Medicare and are, as they say, entitled. Therefore, we propose two other ways of getting to the goal. Reducing the cost of healthcare is one, to be taken up in Chapter Six. That one works for everyone's finances at any age.

The other method, which suits people of working age, is the present topic. It has two possible solutions, the issuance of special bonds, and as an inducement for dropping Medicare. In the present environment, using Medicare as a transfer vehicle is unthinkably unwise, politically. It can only be brought up as a voluntary exchange, long in the future when the financial attractiveness of the HSA approach is so well established it has no political downside, and can be used to pay for non-medical retirement costs after HSAs can comfortably cover medical ones. At that point, it would no longer have the stigma of "robbing" Medicare, but might be acceptable as making use of unspendable double coverage.

The safer approach is therefore to issue bonds to smooth out the bumps in what is essentially an equity investment; that's something to do with only the utmost care, and as rarely as possible. To match present cultural patterns, it must be recognized that working parents now fully assume the medical costs for their children, but only have a contingent liability for the medical costs of their retired parents. Therefore, our culture would probably readily accept bond indentures with similar structure, and resist bond issuance which differs significantly. In fact, it is a little difficult to imagine how we could devise any proposal which does not generally follow this pattern. An important feature would be to start the HSA at a very early age, adding as much as 26 years to the duration available for compounding. At 10%, that would be almost four doublings of the investment, and a fairly good start toward the initial goal of $40,000 in the account by age 65, but starting with relatively small investments. True, a bond issue would have interest to pay, but since the interest payment stays within the family it might be made less burdensome than taxes. As a practical demonstration of the superiority of equity investing, its invisible psychological value cannot be overstated. If our nation intends to rely increasingly on investment rather than salaries, it must increase its experience with sensible risks. Whether we like the idea or not, we are collectively taking long strides toward a rentier culture, where our main hope of advancement lies in greater willingness to understand and accept the reasons for market volatility. One of the features of even this attenuated risk-taking, is to recognize that some people will start their investing at the bottom of a dip, while others will start at the top of a peak. The long-term result will smooth it out, but some people are destined to make more profit in an equity market, than others. And some people are destined by the timing of their illnesses to end up with less money in the account than others, too. It may not seem fair, but tampering with investment cycles will not improve it. By establishing a system of buy-ins, both as a transition step and for late-comers, the opportunity of market-timing is created. Almost nothing is more discredited as an investment strategy than market-timing by amateurs, but it probably cannot be avoided here, and will probably exaggerate the differences in account size achieved by members of the same age cohort. Somehow, the attitude must be made general, that nobody would make anything at all in the accounts if we returned to annual premiums; all money in these accounts is "found" money. The books almost certainly will not balance completely at all stages, so it becomes a political question whether to forgive the difference (as Lyndon Johnson did in 1965), or to define it as a subsidy (as Barack Obama seems to be planning for his start-up insurance system.) Perhaps in accounting for residual medical costs, a way can be found to equalize outcomes, but it seems very unwise to tamper directly with such large amounts which are mainly responding to inherent volatility.

There are several other serious matters. They will be briefly noted, and then an omnibus solution presented, the IIOO. Let's answer one inevitable jibe immediately: How can poor folks afford this? They have to be subsidized, that's all, just as they are in every other proposal including Obamacare. It's important to face this, because neglecting it is the route by which every deficit has been incurred, every budget unbalanced. People who spend other people's money characteristically have higher than average health costs, but on the other hand Health Savings Accounts have proved to reduce costs by 30%. When both factors operate at the same time, result are not reliably predicted, but can be monitored. Miscalculations are usually paid for by debts, dropped options and dropped amenities. A politically appointed board would be wise to refuse the assignment to address this, unless contingency instructions are clear, and remain out of their hands. The group responsible for constraining unofficial solutions should be the same one responsible for paying the national debt, since the incentive is the same. When Congress eventually decides how to put a ceiling on the national debt, effective answers to this related issue may become more apparent.

Most of the transition problems (shifting from one-year coverage to lifetime coverage) have to do with whether you are a child, whether your children are gone and forgotten, or whether you are supporting everybody else in your family. As the old saying goes, where you stand depends on where you sit. The unique problem here is complete transition takes so long, that groups will differ significantly on whether to unify forward (child to grandparent) or backward (grandparent to child), until the bright idea occurs to borrow as a child and borrow a second time as a grandparent. The benefits of invested premiums are otherwise obvious to all groups, but the arrangements must be as flexible as possible. Since shifting payment from youth to old age could potentially affect compound investment return for sixty or eighty years, the savings potential to younger people is even more enticing. Except for the possibility they might also have to pay for a third generation -- their own children, as well as their parents and grandchildren. Since the modern use of index funds puts on the table the potential of diversified investment, without stock-picking, at ten percent interest -- issues like this simply must be explored. As long as you don't get overwhelmed by too many transition issues, the achievement looks possible. At ten percent, money compounds to double itself every seven years, and the resulting sums can boggle the mind.

Making ten or twelve percent on safe investments may seem impossible to those who have recently lost thirty percent on the stock market, and of course it is not guaranteed. That is why lifetime health insurance cannot be presented as guaranteeing payments for future services; only fixed-income securities (bonds) can do that, and even they, mostly don't succeed in real terms, or net of inflation. Lifetime health insurance only promises to supply a major portion of future health costs, and has little hope of doing more except by deliberately overfunding the accounts. We are decades into a fiat currency without semblance of backing by monetary metals, and must feel our way. However, the bright side of our new finance system is that transaction costs are steadily declining for reasonably safe passive investing. Professor Ibbotson has demonstrated that total market averages have been remarkably steady for asset classes over the past eighty years, and probably will safely remain so for another century, unless someone devises another Treaty of Versailles. When you invest in the total domestic stock market of America, your investment is guaranteed by the full faith and credit of America, just as surely as if you invested in U.S. Treasury Bonds. In view of the present uncertainties of the Federal Reserve unwinding Quantitative Easing, these are only relative matters, but they are the best anyone can offer.

Still another question comes from people who rightly believe there is no free lunch: Where does the extra money come from? A fast answer is that it comes from correcting a blunder of long standing, called the "pay as you go" system. To some extent, this problem began with the original Blue Cross plans of the 1920s, but it was elevated to its present stature by the Medicare and Medicaid proposals of 1965. By the pay/go approach, this year's premium money is spent for this year's sick people, not the people who paid the premiums. That ruse helped get the program started, but it means current unspent premium money is quickly gone, and thus it means no compound interest or investment income is generated by rather huge revenue collections in the future. Since health expenses rise with advancing age, a great deal of floating premium money might be invested for many decades, if only it had not already been spent. Actual projections are surprisingly large, but I would prefer that others announce their calculations, employing the motto of "Underpromise, but over-perform."

Other substantial sources of reserves exist, nevertheless. Health Savings Accounts now in operation are reporting 30% savings; since it is unlikely this record can be maintained with inpatients, who are generally older, overall savings may well turn out to be closer to 15%. Inflation helped a lot to pay off the original startup costs of 1965, but at least nominally it is true the debt has been paid. We are now free to invest that old transition cost, so to speak, but there is considerable squeamishness about the public sector acquiring equity in the private sector, so Treasury bonds are about the only public sector investment the public will allow. Investment experts are however almost unanimous in feeling that equities provide greater long-term income (see graphs by Ibbottson) and security against inflation. On the other hand, if private individuals invest in common equity with index funds, much less resistance is encountered. Any way you look at it some investment income is better than no income, and for long-term investment, equity is better. For political purposes, it would seem best to restrict investments to U.S. companies, and index funds are less controversial ("gambling with my money") for most small investors than actively managed funds because the savings mostly come from investment expenses. Fifty percent of investors would do better than average, fifty percent would do worse, but not much worse, because total index diversification is at a maximum. Meanwhile, compound interest would be at work, and most people would be astonished to learn how large the long-term appreciation would grow. Tax-free, diversified, and long-term.

Finally the question arises: how can you tell whether income from this source would equal the terminal care costs of fifty years from now? You don't, of course you don't. But this transfer and invest scheme would generate a whole lot of money that presently isn't being generated. If it isn't enough, we will have to do something in addition to it. The monitor and mid-course correction system is expected to detect that more money is required to balance the books, and therefore more money will have to be invested in the Health Savings Accounts. If savings are insufficient, either subsidies or borrowing will have to be resorted to. Experts sometimes will be wrong, so revenue should be raised somewhat higher than the experts think we need. And if it all goes wrong, if we have an atomic war or an expensive cure for cancer, there is always the national debt. Which is where we were to begin with, isn't it?. The extra risk is zero, but the total risk is unchanged.

Independent and Impartial Oversight Organization. (IIOO)Working backwards, a mixed public/private system needs an official backer of last resort, and an experienced crisis management team in place with the authority to act within defined limits. The last resort has to be the full credit of the United States, just as it unfortunately is now with Medicare. What's mainly lacking is a sort of Federal Reserve (Note to Libertarians: Don't Get Excited) in the narrow sense of an independent management team, with a monitoring capability, a mandate from Congress, a limited amount of regulatory authority of its own, and adequate representation from all stakeholders.. It needs to know what is going on, and it needs general authority and trust to act in an emergency. Fundamentally, many proposals may require a system of mid-course corrections particularly in the first decade of operation, at the same time it must not usurp Congressional authority. Congress, on the other hand, must have the restraint of private oversight, to make very certain it does not feel it has a new piggy-bank. Trends in medical care persist for a long time, but it requires experience to project what trends are going to emerge for large populations, since wildly deviant trends for particular individuals appear at almost any time. Experience has shown that such agencies tend to wander from original intent; we need a strong professional private-sector oversight for the public oversight, more like the Supreme Court than like Fannie Mae. Readjusting revenue collection may well prove necessary as the beneficiary pool approaches a time when reasonable projections can be made; meanwhile collecting somewhat overgenerous payments to be safe. This requires a monitoring system and a monitor board who can be trusted not to spend the revenue for unintended purposes, and who will enforce agreements for intended ones. It also requires a backup plan in case something goes wrong. In this case, the ultimate fallback is the Medicare debt, the same as unfortunately it is, at present. Since it is impossible to imagine a single person or institution with all those qualities, it is here recommended that specific constituencies be represented independently, with group power balanced to assure an overall balance of group self-interest in the final decisions.

Keats, Symmetry, and Quakers

"Truth is beauty, beauty truth. That is all ye know and all ye need to know. " The nice lady delivered her message in the Haddonfield Meeting for worship, not long ago. Standing at her bench in the otherwise quiet room. In a few minutes, another member echoed the thought, but I was too taken with the novelty of it to add to the carillon of Quaker responses. The meeting went on to other things, the Service Committee I believe, and then the meeting ended.

The early Friends, it must be recalled, were plain. Reacting adversely to the fancy dresses and high hairdos of the Romantic period, they would not have their own portraits painted, or tombstones on their graves. They did not use the word, but they were utilitarian, admiring a plain way of doing things that made the world a better place to live. Beauty in the classical sense was not something they hated, but it was certainly a thing that used up time and money that might have had better uses. Philadelphia had some theaters and portrait painters, even some sculptors, but with the exception of Elias Hicks, they were almost all Episcopalians. For a century after plain Quaker speech and plain Quaker dress had become curiosities, Philadelphia lagged behind as a center of the arts. Arts and science gradually took over the town, but Quakers were mostly busy with other things when the arts were on display. Science was of course a different matter.

My own experiences as a schoolboy were quite different. English classes, in particular, were all about poetry and simple novels from the Romantic period. I recognized Keats immediately when the lady quoted him. And so it was easy for me to imagine how Romantics of the Federalist period felt about truth and beauty; beauty was all there is. It's truth. It's the classical style. The British had a fling with Romance literature, but the French really took it up. It was the essence of the French Revolution, particularly after they stopped chopping off the heads of aristocrats and fell under the spell of Napoleon. There was something Romantic about war, especially wars of Revolutionary zeal; cavalry charges and gallantry of all sorts. Quakers did not hold with war, and never had a lot of enthusiasm for our own Revolution. In fact, it was during this era that Quakers withdrew from political power, rather than participate in war, let alone leadership in it. Now Jefferson saw things differently; although he was never a soldier, he liked the classics and he admired the Romantics. Whether it was the association with war and gallantry or not, classical architecture became something they studied in the Quaker Colleges, Bryn Mawr in particular, but it had too much aristocracy, pomp and circumstance, to spill over into their houses and places of business.

If Truth is Beauty, then anyone who likes truth has got to like beauty, right? The original name for Quakers was Friends of the Truth. Beauty is symmetry, according to Professor Ian Stewart. Does all this mean that beauty is anything but passably tolerable? Or maybe Truth is beauty and that's all you need to know. Personally, I rather doubt it.

Old Blockley (P.G.H.)

{Old Blockley}
Old Blockley

For a long time, the Philadelphia General Hospital was the largest hospital in town, even growing briefly to seven thousand patients during the Civil War, but leveling off at about three thousand at the beginning of the Twentieth Century. At the end of world War II it had shrunk to about 1500 beds, but it was Medicare and Medicaid in 1965 which finally did it in. By 1977 it was costing the City of Philadelphia about five million dollars as year beyond its revenues to run the place with only 300 patients, while the running expenses of the local private hospitals were actually less, per patient. Titles XVIII(Medicare) and XVIV(Medicaid) of the Social Security act constituted Lyndon Johnson's Great Society, and in effect they made every patient at PGH resemble a walking government check in the mind of hospital administrators. The local hospital association made the argument to then Mayor Rizzo that everybody would be better off if the hospital closed and those government checks were directed to the local voluntary institutions. After a few years, the federal government inevitably squeezed the generosity out of the bargain they would of course now like to abandon. But that's the way it goes. PGH is gone and it isn't coming back. The eighteen acres in Blockley Township, now West Philadelphia, were given to the University of Pennsylvania next door, and gigantic amounts of federal money were contributed to the building of skyscrapers replacements for the original PGH. Ironically, the two hundred children's beds now on the location are fewer in numbers than the three hundred adults once considered too uneconomically few to maintain, and the cost per day of hospitalization is roughly ten times the PGH cost which had been described as unsupportable. The rest of the real estate is built up with buildings involved in medical research, which is also an activity dedicated to working for its own extinction. Discovering a cheap cure for cancer would quickly create a need to fill the vacancies with something else. No one regrets this system of creative destruction, but everyone should regret the diminution of the spirit of local philanthropy which underlay it.

PGH was one of a dozen or so big-city charity hospitals, like Bellevue in New York, Charity in New Orleans, or Cook County Hospital in Chicago. Of these hospitals, PGH had surely been the best, and at the turn of the Twentieth Century a Mayor's commission issued a report about the place which began, "Philadelphia can surely be proud...." Having worked in Bellevue and having visited most of the rest, I can testify that was likely true. When PGH was finally torn down, the walls and floors had such substantial construction that changing the wiring and plumbing to some other purpose had become almost impossible. The PGH nurses were famous for running. Although the alcoholic and drug addicted patients might be called the dregs of society, but the alacrity of the student nurses in running them bedpans or answering other calls, was spectacular to watch. When doctor came on the floor, they jumped to their feet, and were usually ready with the patient's charts, unmasked. Unlike Bellevue, where the floors were creaky and wooden, the open wards at PGH were spacious, clean, well maintained and equipped. At Bellevue the forty bed wards were crowded with sixty or seventy patients, so close together you could almost roll from one end of the room to the other without touching the floor. I can remember seeing one seventeen year-old Bellevue student nurse tending such a ward at night alone, the intern sharpening needles, and the medical resident developing electrocardiograms in the darkroom. None of this would have seemed acceptable at PGH.

{Dr. William Osler}
Dr. William Osler

Old Blockley was the place where modern systems of medical education originated. Up until William Osler came to Philadelphia, medical education mostly consisted of attending eight hours of lectures a day. Osler had an electrifying personality, and wandered among the sick at PGH with a train of students following him. He is much quoted, and once suggested his obituary ought to read, "Here lies the man who took the students into the wards." A somewhat more elegant statement of the value of practical experience was included in his dedication speech at the Boston Library: "To treat patients without books is to sail an uncharted sea. To read books without seeing patients is never to go to sea at all. Osler was somewhat underappreciated during his time in Philadelphia, and went on to found the medical school at Johns Hopkins in Baltimore. Nevertheless, the main reason he later left John Hopkins and went to Oxford was his dismay at the adoption of the "full-time" system, which is to say the faculty stopped having a private practice of their own to act as a gold standard for their research and teaching. When all is said and done, there are some areas of discomfort in the transition of students from observers to actors. The PGH system of learning surgery was commonly reduced to slogan, "See one, do one, teach one," ; things have progressed to the point where it is probably right for the public to insist on greater supervision and control than the old almshouse provided.

The disappearance of old Blockley ended a controversy, or even something of a mystery, about which was the oldest hospital in America, PGH or the Pennsylvania Hospital at 8th and Spruce. There had been a infirmary in Old almshouse at Eleventh Street, and there is no doubt the almshouse was there first. PGH grew out of the almshouse. However, there were many comments at the time of the founding of the Pennsylvania Hospital that it was now the first; that's a strange thing to say when the almshouse was three blocks away. Social historians need to look into the mindset of colonial America, which seems to have included the distinction between the worthy poor and the unworthy poor. Somehow, the founding principal of the Pennsylvania Hospital was to get people back to work who were capable of productive work, possibly even paying for itself in that way. In their minds, apparently just giving solace and help to those who were down and out was not quite the same thing.

The Schools of School House Lane

{Union School founded in 1759}
Union School founded in 1759

The region of Philadelphia defined as Germantown is recorded by the last census as having about 50,000 inhabitants today, 40,000 of whom are of the black race. Germantown has always had an unusual concentration of schools of the highest quality, and here on one street alone there are four. School House Lane runs off to the West of Germantown Avenue, and was originally right at the center of town, the center of action during the Revolutionary War. The most historic of the schools, the Union School founded in 1759, changed its name to Germantown Academy, and more recently picked up and moved to new quarters in Fort Washington. George Washington sent his nephew there, and its building served as a hospital for the wounded in the Battle of Germantown. When Germantown Academy moved out of Germantown, the Pennsylvania School for the Deaf moved into the vacated quarters. This school had been originally founded in 1820, and is one of nearly a hundred special schools for the deaf in the United States, operating as a quasi-public institution for about 170 students. A remarkable thing about all schools for the deaf is the high IQ of their students. Perhaps deaf underachievers are somehow filtered out by the struggle to adapt before they apply for admission, or perhaps there is something about being deaf that makes you smart. In any event, the average SAT scores of students from PSD, like all schools for the deaf, are always in the very highest ranks among secondary schools.

More or less next door to it, fronting on Coulter Street, is the Germantown Friends School(GFS), which enjoys and deserves the reputation of the most intellectually rigorous school in the Philadelphia region. There is little question about the Quakerness of this school, founded in 1845, but relatively few of the students are now Quaker children. It's pretty expensive, and quite uncompromising about its academic standards, but if you want to be accepted by a famous University, this is the place that can boast the most achievement of that variety. By no means all of its graduates become teachers, but alumni of this school do tend to gravitate to the top of academia. That could eventually put them on college admission committees, of course, and perhaps the admission process promotes itself. There can be little doubt that if most of a given college's admission committee happened to play the tuba, that university would soon fill up with tuba players.

{William Penn Charter School}
William Penn Charter School

Further West on School House Lane, is the William Penn Charter School. It's also Quaker, and while it doesn't work quite so hard at it as GFS does, it has plenty of social mission, a great deal more discipline, and plenty of competitive athletics. A minority of its students, also, are Quakers; but as a guess, most of its graduates are headed for disproportionate affluence anyway. The middle school is named for, and was donated by, the former chairman of Morgan Stanley back before Morgan Stanley sold itself to Dean Witter. This school was founded in 1689, and for a long time was located at 12th and Market Streets in Philadelphia, right where the famous PSFS building was built, the one that later converted to Lowe's Hotel .

Finally, near the crossing of Henry Avenue with Schoolhouse Lane, is the Philadelphia University. Since it was founded in 1999 it is the youngest of the schools on School House Lane, specializing in architecture and design, and seems headed for even broader curriculum. The University was formed by the merger of Ravenhill Academy for Girls, and the Philadelphia Textile School. The Textile School was itself formed during the 1876 Philadelphia Centennial, when local industrialists became concerned with how backward America seemed in its quality and design of textiles, compared with other nations which exhibited at that World's Fair. Next door, was once the home of William Weightman, a chemical manufacturer who was reputed to be the richest man in Pennsylvania. After his death, the rather grand estate became the site of the Ravenhill School for Girls, which was the school which could boast Grace Kelly for an alumna. That was natural enough, since she lived just around the corner on Henry Avenue and could walk to school. The contrast between the two ends of School House Lane, Henry Avenue on one end, and Germantown Avenue on the other, is just astounding.

So there you have School House Lane. A few short blocks with three distinguished preparatory schools and a university. Plus, the site of three other famous schools which have either moved or merged. You might think Germantown was the home of myriads of school teachers, but that isn't exactly so. It's hard to say just what this complex anomalous situation proves, except to voice the opinion that it is somehow at the heart of what Philadelphia really is.

Country Auction Modernized

{Pa Turnpike}
Pa Turnpike

Only a decade ago, the Quakertown exit of the Pennsylvania Turnpike made possible a quick trip from the city to the country, letting you off in the cornfields between Sumneytown and Lansdale. Today, the rush hour traffic is as bad as anywhere else, even on the four-lane express highway known as Forty Foot Road. A comfortable two-lane highway would be about forty feet wide, so presumably the name denotes what was once a modern miracle of a two-lane highway, in this case until quite recently. It's all built up for miles, but almost all the commercial buildings are new. Exurban sprawl has positively lurched across the landscape, making prosperous people rich, and poor people prosperous. It won't be long before the housing subdivisions demand traffic signals to protect the school children, speed limits to reduce the collisions by teenagers, and other things destined to bring high-speed travel to a crawl, all day long. When that happens, it won't be called farm country any more.

{Alderfer Auction Company}
Alderfer Auction Company

On Fairground Road, where occasionally corn is still growing, a number of large new commercial enterprises have located, among them a moving and storage company with ten or so truck loading platforms in the back. Behind that is another large new building, also with a parking lot for fifty or so cars, the auction house. Different categories come up for auction on different days, so used furniture for example comes up every few weeks, and has to be stored as things accumulate for the big day. With a moment's thought, you can easily see why the auction is affiliated with or owned by a moving and storage company. As you go through the entrance, you are invited to sign up and identify how you plan to pay, just in case you buy something; the product of this registration is a card with a number in big colored letters. That's your number, your payment arrangement, and soon you will find no one cares anything about you except that number. The auction I was interested in was for used books, one of three or four auctions conducted in different rooms.

{Alderfer Auction Company}

Nearly a hundred people had numbers for used books, maybe a similar number for antique furniture and paintings. Obviously, one other purpose of the registration process is to create a mailing list of customers interested in various objects, possibly linked to a program which sends out flyers and announcements. Country auctions have always been a source of local entertainment, so non-buying spectators are able to come and watch if they wish. There seemed to be few if any casual sight-seers; just about everybody is a buyer, or a potential buyer. Players, as they say.

Most of the customers probably set their alarm clocks for 5 AM or earlier; the auction is centrally located, but most everybody comes from a considerable distance. At 9 AM, very promptly, the auction began, and from his manner you could tell the auctioneer was anxious to get started. The object for sale had been on display for a day, but most people arrived around 7 AM to examine the goods, which are frequently sold in lots, meaning a box full of thirty or forty books more or less on the same topic. At the stroke of nine, the auctioneer chanting began, "Do I have ten dollars, yeh, ten, ten, ten, five, five, ten, fifteen, twenty, twenty, sold for fifteen. Your number, sir?" Two assistants took down the customer number, and the lot number, and the price; one of the two recorded the transaction in a computer, the other on a list by hand. One gathers the man without a computer was on the look-out for shills, people trying to bid up the price without getting stuck for a purchase. The auctioneer repeatedly assured the audience that no one but a real bidder was allowed to bid, you owned it, and no excuses about being confused. When he reached he hundredth sale, he stopped for a drink of water, and proudly noted the first hundred sales took thirty-seven minutes. It required four other assistants to fish out the lots next in line, holding them up for confirmation only, since inspecting them a t as distance was out of the question. After each sale, the assistant dumped the prize in the new owner's lap.

{Pa Turnpike}
Auction Paddle

By one PM, seven hundred lots had been sold, at least five thousand books. Every hundred sales, our leader took a drink of water and made a pleasantry or two, but he was otherwise all business. About two hundred of the sales were handled by a substitute auctioneer, who looked to be twenty years old, but talked faster than any humans being is supposed to talk, affecting a rasping quality of chant. As it came toe to take over, he placed nervously near the microphone, and started chanting the moment it was decent to do so. Obviously, these people loved what they were doing, and had remarkably retentive memories. On several occasions, a buyer had to fumble for his card number, and the auctioneer remembered what the number was before the card was found. New cards are issued every day. Although they were quite brusque about people who made bidding mistakes, on a couple of occasions the auctioneer had been slow in turning the lot number sign in front of him, so the bidding was repeated. The bidding stopped at the same price point, the second time around. It seems to illustrate what libertarians praise so highly about the wisdom of the marketplace; the market price is the "right" price.

And yet entitled to wonder a little. The ordinary run of books thirty or forty years old will sell for between ten and twenty dollars. Books about golf, just about any old book about golf, "go" for about forty dollars. Children's books are about sixty dollars.And, to my great surprise, boxes or albums of old photographs go for over a hundred dollars. A lady next to me excitedly brought a album of old photos back to her seat and thumbed through them. "Are you a dealer?" Yes. "Who buys this stuff?" I don't know, they come in my store and just buy it. Like the Auctioneer, she had a feeling for what the retail price would be, made a calculation, and knew what she could afford to pay wholesale. What the stuff actually represented, why people wanted it, what was a good one and what was a bad one--theses people in the trade had very little idea. But they knew very precisely what a fair price, and gradually lowers it until it sells. Fun Lots of fun. When a familiar insider makes a mistake and pays too much, the others laugh heartily at him. Why this funny system works has long been a mystery, but everyone except a socialist readily acknowledges it does work. At least it works better than any known substitute.

Although the ritual of the country auction has been essentially unchanged for the centuries, it is just another transaction system. In past fifty years, world economy has been transformed by computerized efficiencies in transaction systems, with vast prosperity resulting from small saving endlessly repeated. Banking and Wall Street have concentrated most of the standardized transaction, in perfectly astounding volume; lots and lots of people have become immensely rich for producing small efficiencies in high volume. Those of us who have not become immensely rich can easily identify trivial innovations which resulted in wealth, and we easily sense the unfairness of old photos worth more than books of poetry. After all, the country auction is still grossly inefficient; the seller pays the auction company 20% of the price, and the buyer pays another 10%. There's 3% for the credit card company, and &% for the sales tax. Forty percent of this transaction is going to the middle man, over and over and over again. The goal is to reduce transaction costs to the level of Wall Street, considerably less than one percent, Which still lots of yachts for middle men.

As you walk out of the country auction, it doesn't take a mathematical genius to multiply thirty percent times the number of transactions, times a guess at the average sales price. No wonder these auction people are so cheerful, so much in love with their work. But two other parties are cheerful, too. That is, the buyer and the willing seller.

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 "" - 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 "" - 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 [] and noticed a ton of great resources. I recently had the honor of becoming a part of a new non promotional project on 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
Posted by: SUSAN WILSON   |   Aug 12, 2012 12:49 AM

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