The musings of a physician who served the community for over six decades
367 Topics
Downtown A discussion about downtown area in Philadelphia and connections from today with its historical past.
West of Broad A collection of articles about the area west of Broad Street, Philadelphia, Pennsylvania.
Delaware (State of) Originally the "lower counties" of Pennsylvania, and thus one of three Quaker colonies founded by William Penn, Delaware has developed its own set of traditions and history.
Religious Philadelphia William Penn wanted a colony with religious freedom. A considerable number, if not the majority, of American religious denominations were founded in this city. The main misconception about religious Philadelphia is that it is Quaker-dominated. But the broader misconception is that it is not Quaker-dominated.
Particular Sights to See:Center City Taxi drivers tell tourists that Center City is a "shining city on a hill". During the Industrial Era, the city almost urbanized out to the county line, and then retreated. Right now, the urban center is surrounded by a semi-deserted ring of former factories.
Philadelphia's Middle Urban Ring Philadelphia grew rapidly for seventy years after the Civil War, then gradually lost population. Skyscrapers drain population upwards, suburbs beckon outwards. The result: a ring around center city, mixed prosperous and dilapidated. Future in doubt.
Historical Motor Excursion North of Philadelphia The narrow waist of New Jersey was the upper border of William Penn's vast land holdings, and the outer edge of Quaker influence. In 1776-77, Lord Howe made this strip the main highway of his attempt to subjugate the Colonies.
Land Tour Around Delaware Bay Start in Philadelphia, take two days to tour around Delaware Bay. Down the New Jersey side to Cape May, ferry over to Lewes, tour up to Dover and New Castle, visit Winterthur, Longwood Gardens, Brandywine Battlefield and art museum, then back to Philadelphia. Try it!
Tourist Trips Around Philadelphia and the Quaker Colonies The states of Pennsylvania, Delaware, and southern New Jersey all belonged to William Penn the Quaker. He was the largest private landholder in American history. Using explicit directions, comprehensive touring of the Quaker Colonies takes seven full days. Local residents would need a couple dozen one-day trips to get up to speed.
Touring Philadelphia's Western Regions Philadelpia County had two hundred farms in 1950, but is now thickly settled in all directions. Western regions along the Schuylkill are still spread out somewhat; with many historic estates.
Up the King's High Way New Jersey has a narrow waistline, with New York harbor at one end, and Delaware Bay on the other. Traffic and history travelled the Kings Highway along this path between New York and Philadelphia.
Arch Street: from Sixth to Second When the large meeting house at Fourth and Arch was built, many Quakers moved their houses to the area. At that time, "North of Market" implied the Quaker region of town.
Up Market Street to Sixth and Walnut Millions of eye patients have been asked to read the passage from Franklin's autobiography, "I walked up Market Street, etc." which is commonly printed on eye-test cards. Here's your chance to do it.
Sixth and Walnut over to Broad and Sansom In 1751, the Pennsylvania Hospital at 8th and Spruce was 'way out in the country. Now it is in the center of a city, but the area still remains dominated by medical institutions.
Montgomery and Bucks Counties The Philadelphia metropolitan region has five Pennsylvania counties, four New Jersey counties, one northern county in the state of Delaware. Here are the four Pennsylvania suburban ones.
Northern Overland Escape Path of the Philadelphia Tories 1 of 1 (16) Grievances provoking the American Revolutionary War left many Philadelphians unprovoked. Loyalists often fled to Canada, especially Kingston, Ontario. Decades later the flow of dissidents reversed, Canadian anti-royalists taking refuge south of the border.
City Hall to Chestnut Hill There are lots of ways to go from City Hall to Chestnut Hill, including the train from Suburban Station, or from 11th and Market. This tour imagines your driving your car out the Ben Franklin Parkway to Kelly Drive, and then up the Wissahickon.
Philadelphia Reflections is a history of the area around Philadelphia, PA
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Philadelphia Revelations
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George R. Fisher, III, M.D.
Obituary
George R. Fisher, III, M.D.
Age: 97 of Philadelphia, formerly of Haddonfield
Dr. George Ross Fisher of Philadelphia died on March 9, 2023, surrounded by his loving family.
Born in 1925 in Erie, Pennsylvania, to two teachers, George and Margaret Fisher, he grew up in Pittsburgh, later attending The Lawrenceville School and Yale University (graduating early because of the war). He was very proud of the fact that he was the only person who ever graduated from Yale with a Bachelor of Science in English Literature. He attended Columbia University’s College of Physicians and Surgeons where he met the love of his life, fellow medical student, and future renowned Philadelphia radiologist Mary Stuart Blakely. While dating, they entertained themselves by dressing up in evening attire and crashing fancy Manhattan weddings. They married in 1950 and were each other’s true loves, mutual admirers, and life partners until Mary Stuart passed away in 2006. A Columbia faculty member wrote of him, “This young man’s personality is way off the beaten track, and cannot be evaluated by the customary methods.”
After training at the Pennsylvania Hospital in Philadelphia where he was Chief Resident in Medicine, and spending a year at the NIH, he opened a practice in Endocrinology on Spruce Street where he practiced for sixty years. He also consulted regularly for the employees of Strawbridge and Clothier as well as the Hospital for the Mentally Retarded at Stockley, Delaware. He was beloved by his patients, his guiding philosophy being the adage, “Listen to your patient – he’s telling you his diagnosis.” His patients also told him their stories which gave him an education in all things Philadelphia, the city he passionately loved and which he went on to chronicle in this online blog. Many of these blogs were adapted into a history-oriented tour book, Philadelphia Revelations: Twenty Tours of the Delaware Valley.
He was a true Renaissance Man, interested in everything and everyone, remembering everything he read or heard in complete detail, and endowed with a penetrating intellect which cut to the heart of whatever was being discussed, whether it be medicine, history, literature, economics, investments, politics, science or even lawn care for his home in Haddonfield, NJ where he and his wife raised their four children. He was an “early adopter.” Memories of his children from the 1960s include being taken to visit his colleagues working on the UNIVAC computer at Penn; the air-mail version of the London Economist on the dining room table; and his work on developing a proprietary medical office software using Fortran. His dedication to patients and to his profession extended to his many years representing Pennsylvania to the American Medical Association.
After retiring from his practice in 2003, he started his pioneering “just-in-time” Ross & Perry publishing company, which printed more than 300 new and reprint titles, ranging from Flight Manual for the SR-71 Blackbird Spy Plane (his best seller!) to Terse Verse, a collection of a hundred mostly humorous haikus. He authored four books. In 2013 at age 88, he ran as a Republican for New Jersey Assemblyman for the 6th district (he lost).
A gregarious extrovert, he loved meeting his fellow Philadelphians well into his nineties at the Shakespeare Society, the Global Interdependence Center, the College of Physicians, the Right Angle Club, the Union League, the Haddonfield 65 Club, and the Franklin Inn. He faithfully attended Quaker Meeting in Haddonfield NJ for over 60 years. Later in life he was fortunate to be joined in his life, travels, and adventures by his dear friend Dr. Janice Gordon.
He passed away peacefully, held in the Light and surrounded by his family as they sang to him and read aloud the love letters that he and his wife penned throughout their courtship. In addition to his children – George, Miriam, Margaret, and Stuart – he leaves his three children-in-law, eight grandchildren, three great-grandchildren, and his younger brother, John.
A memorial service, followed by a reception, will be held at the Friends Meeting in Haddonfield New Jersey on April 1 at one in the afternoon. Memorial contributions may be sent to Haddonfield Friends Meeting, 47 Friends Avenue, Haddonfield, NJ 08033.
In 1920, the University of Pennsylvania graduated 34 students with B.A. degrees, and 134 with M.D. degrees. Today, the campus is a little self-contained city of 50,000 inhabitants. The transformation of the campus during that period is an outward expression of revolutionary expansion of the student body, involving demolitions, restorations, new construction. And the nearly constant shortage of parking space.
David Hollenberg
David Hollenberg, the University Architect, recently gave the Franklin Inn Club an interesting description of the University from the point of view of bricks and mortar. Since almost every building on the campus is undergoing or plans to undergo a major building project, he had a lot of material to cover. The disappearance of the railroad-based industrial area of West Philadelphia has been an economic problem for the city, but of course, this abundance of vacant land has created a major opportunity for the University of Pennsylvania. One reflection of this abundance is the opportunity to become the developer for much of the whole region around the campus, working with private developers who wish to be in the University area, and are therefore willing to coordinate their plans with those of the University. It's a remarkable opportunity. Since it comes at the time of a major economic downturn, one can only hope that the University does not impoverish itself taking advantage of this good luck.
Jonathan E. Rhoads
As the graduation statistics illustrate, not so long ago the University was largely a medical school, with appendages. There are rumors of considerable friction from time to time, between the President of the University and the Dean of the Medical School as to who was boss; it is easy to imagine the trustees swinging from one side to the other. The most notable Provost of the University in modern times was Jonathan Rhoads, who also happened to be Professor of Surgery. If you know Quakers, you know that disputes were seldom rancorous. And if you know Jonathan, you know he almost always won the disputes.
Cira Center
While today, the dominant change is caused by the Cira Center buildings and the acquisition of the former Post Office building, it is well to keep in mind that the new Cancer Center is a billion-dollar project. A great deal of the medical school expansion is centered on burgeoning research, particularly in molecular biology, largely financed by the National Institutes of Health. While the leaders of the NIH have long struggled with Congress to keep politics out of both the administration and the substance of research, it seems to old-timers that the politicians are slowly winning. Senator Specter's seniority on the Appropriations Committee may have had as much to do with the prosperity of West Philadelphia, as the quality of research, however eminent. We are about to find out, and if things go hard with us in favor of say Chicago, it could be a wrenching experience. Most of those research buildings cost more to heat, air-condition, insure and clean than the entire tuition base of the students; and they wouldn't be good for much if you tried to sell them.
The University is almost unique in being located on contiguous land, near existing public transportation, and occupying substantial old structures capable of renovation to new purposes. Mr. Hollenberg was asked whether it was cheaper to grow like this within a city, or whether it is cheaper to plant a totally new university in several open corn fields, as we often see happen. While this is a hard question to answer, and depends to some extent on the type of architect in charge, it is his view that big-city restoration is a considerably cheaper way to expand than building from scratch on open land, although if you are starting the institution itself from scratch, there isn't much choice but the cornfield.
And then, there is the ancient argument between academics and bricks and mortar. Development officers agree that it is easier to raise donations when you can name a building for the donor; grand visions for new frontiers of teaching are a much harder sell. So a question does hang over this expansion, however exciting, whether the endowment will keep up with the structures, once the excitement of physical expansion dies down. These are definitely things to worry about, but right now you seize the opportunities as they go past, leaving integration to your successors to figure out.
The problems of paying for the healthcare costs of the first year of life are relatively small financially, but create large unexpected problems throughout healthcare payment design. According to CSS, the first year of life accounts for 3% of total lifetime costs, while all of the childhood up to age 21 only totals 8%. By contrast, the Medicare age group accounts for 50% of costs. But the little tail is wagging the dog.
Without any prior earning capacity, pre-funding the 3% is out of the question unless Congress permits transfers of some sort from others. Legally, that means the parents, but the parents are usually pretty young and impecunious themselves. All manner of matrimonial tangles can occur, but even in the life of a blissful young couple, paying off that heavy cost may take several years to work around. It is hard to believe this issue would not delay the next pregnancy or even sometimes put it out of the question. There is little question younger mothers have a much easier obstetrical time of it than if they wait until they can afford the cost. The whole concept of a "valuable" baby was largely unknown seventy years ago. In my day as an intern, if a lady miscarried, well, just wait a couple of months and have another. The present generation of mothers are aghast at such callous attitudes, but that attitudinal shift is why we once had so many orphanages, and today have so few. The high cost of obstetrics must have something to do with it. We hear it said that women going to work caused a drop in the birth rate, but there is little doubt some of this was the reverse.
The employer-based system of health insurance has some advantages, and one of them is to create family-plan health insurance. Having now lived through two economic depressions, I can be pretty sure the present epidemic of fatherless children will somewhat subside as the economy recovers. But no doubt the traditional family structure has been permanently modified, so the residual will probably be felt like a decline of the popularity of family insurance. With only one poorly paid and overworked parent to support a pregnancy's cost, the burden is much increased.
Birth and death are nevertheless the two medical costs which no one can completely evade. Hospitals understand this as well as anyone else. So, responding to the pressures of high hospital ingredient costs, the hospital financial officer shifts costs toward obstetrical and terminal illness care or its surrogate markers. Cost accountants have to be careful because if they shift it to indigents who pay nothing, they will be cost-shifting themselves out of business. But if they can somehow identify insured obstetrical patients, they shift vigorously, and the employer will end up paying for it. So we see the response of putting ultra-high prices on the services, drugs, and equipment of the obstetrical unit, just in case somebody, or some insurance might pay for them. Within a DRG system which permits a 2% profit margin on inpatients during a 2% inflation, a hospital administrator has to do a lot of tap-dancing around the obstetrical issue, and many hospitals have just abandoned the service entirely.
And finally, the trial lawyers. The trial bar has treated each wave of healthcare reform like Austrian soldiers at the Siege of Vienna -- a failure to win any skirmish could lead to the extermination of all their family, if not the extinction of their civilization. Consequently, when lawyers hear talk of the concentration of malpractice lawsuits in obstetrics, they brace themselves for another charge of the tort reform Brigade. Any personal injury lawyer who reached this paragraph, needn't read more than five words to realize the bugle has blown, again. Slips and falls, and asbestos -- be hanged, those doctors are now after obstetrics. That's right, I am, although the real legal culprit is found in excessive awards for pain and suffering. Elected judges have a hand in that part.
It took me years of working in medical economics to realize how destructive malpractice suits against obstetricians can be. Although 80% of suits are won by the defendant, it raises malpractice premiums to encounter a succession of nuisance suits which fail. It's been some time since I was active in the field, but at one time I was told 80% of obstetricians had been sued, and many annual premiums for obstetrician insurance were over $100,000 a year apiece. If that's no longer true I am sorry, but I have the impression it is still true. In Florida, recently, annual malpractice insurance premiums for obstetricians briefly went over $200,000
The closest I can come to a conciliatory explanation is this. Some years ago, a state law was passed and widely imitated, to the effect that a plaintiff for a child should be given extra years after the age of 21 for the statute of limitations to run. If the time to prepare a case for a newborn is extended 25 years, it is probably not surprising that records will be lost by then, adverse witnesses will have died or lost their recollections, and so cases without living defense witnesses will be uncovered. Impecunious and therefore judgment-proof defendants may become prosperous during 25 passing years. The doctor may have retired and thus lost a reason for patients to avoid using him. Or the patient may have become divorced and need the money. And so on. So I have a lawyerly proposal for a lawyerly issue. Malpractice insurance comes in two varieties, claims made, and occurrence. In both cases, the incident must have happened while the insurance was in force. In the occurrence policy, it does not matter when the claim was made. But in the claims-made policy, the insurance must still be in force when the claim is made. The loophole may be closed by purchasing additional "tail" insurance, but after a while, it gets dropped.
Proposal 24: That a new form of "tail" insurance be devised for children and obstetrics, which covers economic damages but not "Pain and Suffering". Comment: the great majority of awards are not for economic damages, because that is generally covered by health insurance. The vast majority of spectacular awards are for pain and suffering, which cannot be measured, denied or remedied.
Proposal 25: That hospitals and others involved in cost accounting be encouraged to cost-shift the indirect costs of obstetrics, to other departments of a general hospital, to whatever extent is possible.
Overview. To be brief about it, health spending now crowds toward the end of life, with most heavy spending after age 65, but most earning power comes before 65. Disregarding the complicated history of how we got there, we are borrowing to pay for Medicare, but not earning market interest on the idle money collected from younger people. Potentially, the two age groups could unify their finances and get more or less dual savings. That's the dream advanced by the single-payer advocates, but on examination, the cost, politics, and complexities prove too overwhelming for that approach. It would be a mess, and nothing else could be accomplished by the government for decades to come. It is our contention the use of Health Savings Accounts as a transfer vehicle would be much easier than unifying insurance programs, solving most of the problems, avoiding most of the obstacles.
But that's only part of the health financing problem. At the opposite front end of life, children concentrate medical expenses toward their first day of life but have absolutely no way to pre-pay the expenses from their own income. They might add thirty years to the compound interest in Health Savings Accounts if they only had some money. Thus if you aspire to serve lifetime financing, you seemingly require two clashing systems, roughly the opposite of each other, at the beginning and end of life. Not to mention the working class in the middle, largely funded by employers who frequently change. Those people who largely support the whole system, have such constraints on their financing it is probably not feasible even to discuss unifying them for decades into the future. Connecting, yes; unifying, as little as possible, Therefore, this book passes over single payer and concentrates on lower-hanging fruit.
Essentially, this book proposes the Health Savings Account as a unifying financial bridge between programs, one account per individual lifetime, serving many disparate programs. It is designed to be implemented in pieces and designed to be phased in. The reader will probably be surprised at how simple some things are likely to be, once it is conceded the patient ought to be in charge of what others are now deciding for him.
Prepare yourself for one big rearrangement of thinking, however. Extended retirement costs are a direct consequence of superior healthcare. They are five times as expensive as healthcare itself, and can only conceivably be partly paid for, with money saved from the rest of the healthcare budget. But eventually, new revenues must be found. It's a devastating realization, but it contains the seed of solving the problem.
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The initial reaction was to treat workers and retirees as two different classes of people, relying on one to tax the other, ignoring any restlessness about the cost of paying for someone else. But retirees now move to different communities, even different states, almost sorting into two different nations. Furthermore, the gap gets wider, with good health leading to longer retirements. Government is forced to be the paymaster for an expanding free lunch for strangers.
become entitled to tax their parents for health and education, for longer stretches of increasing alienation. Give things a little time, however, and it's possible to anticipate this additional third of the population feels entitled to tax the working third, deploying the enforcement powers of the government intermediary. Between them, the non-working two thirds will constitute a majority, so even politics may not forestall the problem. To earn more requires more education. To work more should entitle a peaceful retirement. Somewhere, we got on this wrong path for the right reasons.
If the present system could be disentangled without destroying it, the potential exists to earn money before the funds are needed and spend them later. The PThe initial reaction was to treat workers and retirees as two different classes of people, relying on one to tax the other, ignoring any restlessness about the cost of paying for someone else. But retirees now move to different communities, even different states, almost sorting into two different nations. Furthermore, the gap gets wider, with good health leading to longer retirements. Government is forced to be the paymaster for an expanding free lunch for strangers.
The book before you is not a list of dooms and glooms. It is a proposal to protect a functioning society by regarding child, parent, and grandparent as different stages of the same person's life, all with a united interest in preserving the system. Specifically, we build upon the idea of a Health Savings Account, one account per person throughout one lifetime, as a financial way to illustrate a social point. If you spend too much too early, you won't have much left for later. This proposal is voluntary, you don't have to do it, but in some ways, that's another advantage. No matter what system is used, ultimate protection lies in the sympathy of more fortunate people. Sympathy will last longer if everyone appears to have done his level best--for himself, and with plenty of warning if it wasn't sufficient. Ultimately, there is no escaping the use of insurance for unexpected catastrophes, but that's the last resort. Only an insurance salesman would argue for unlimited insurance for everyone, all the time. And only someone who knows very little about insurance would believe insurance is a form of printing money. Voluntary isn't one-size fits all. Voluntary doesn't dump 340 million subscribers on an untested system, all at one time.
Either voluntary or mandatory, the consequences of our present dangerous path eventually fall on the individual, leaving nothing but the unlimited (?) sympathy of others for protection. The working generation must always subsidize the two dependent generations, but it's the individual at different ages instead of as anonymous classes of strangers. For a final twist, we propose to address this problem by adding the incentive of a second problem we didn't even have until a few years ago. It isn't a trick; everything looks in retrospect as if it could have been predicted.
The cost of a third-party system can be found in the difference between two costs, first-dollar cost, and high-deductible.
Three Surprises. Curiously, the new concept had to be tested before it could be fully understood by its originators. A bit of history may help explain how it came about. The basic concept of Health Savings Accounts was developed in 1981 by John McClaury and me, while John was Senior Policy Advisor in the Reagan White House. Derived from the IRA concept developed by Senator Bill Roth of Delaware, it started as a Christmas Savings Account to build up the deductible for a (high-deductible) Catastrophic health insurance. After testing, the realization dawned that the real deductible was the unpaid portion of the deductible in the account, eventually becoming zero -- because the (linked) insurance premium did not rise as the real deductible declined. Eventually, the HSA emerged with first-dollar coverage for the same price as high-deductible insurance. The modest saving of the deductible within your own hands, plus the relief of that burden upon the insurance company, essentially high-lighted the undue cost of first-dollar coverage.
A different way of enlarging that point emerged from the tendency of non-insurance HSA managers to use debit cards for medical payments, instead of claims forms. Although there must be more temptation to chisel in the absence of strict scrutiny, the debit-card system essentially depended on the client to howl if his own money was suspected of being mis-spent. When you spend a third party's money, there's far less concern than when spending your own. The relative absence of chiseling cost was defining the true cost and effectiveness of third-party policing. And since the cost was seemingly much greater to police than not to police, it exposed the second true cost of using the third parties at all.
That was one surprise, but a more gratifying development was an appreciable fall in medical costs in spite of minimal cost-reduction efforts. At first, this was attributed to the ("adverse") selection of unusually frugal clients, but in time the real incentive emerged: the provisions of the HSA act permitted any surplus at age 65 to be turned into an IRA. That is, an incentive had been created to save health money for retirement, substituting personal responsibility for insurance company vigilance. And the hidden cost of using a third-party system was approximated by the resulting difference between the two costs.
But a third zinger in the system took longer to emerge. What was mainly motivating subscribers to be stingy and vigilant was the provision in the enabling law that when the owner reached Medicare age, the Health Savings Account turned into an IRA, Bill Roth's Individual Retirement Account. The name itself suggested motivation. As improved health care spread among the elderly, they lived longer and longer. Gradually and grudgingly, it was recognized that extended longevity was an unfunded cost of Medicare. There was Social Security, of course, long left in the dust of thirty extra years of longevity. It might have satisfied Bismarck, but it was essentially negligible in the face of really extended longevity -- which eventually proved to be five times as expensive as the rest of health care. What's worse, its cost is even harder to approximate than the future cost of health care, because everyone has his own definition of a "decent" retirement. An underfunded retirement is a stronger incentive to watch your pennies than a specified one, because there is no one, not even the demonized one percent, who can be certain there will be enough left to last. Wasn't that enough incentive to get anybody's attention?
For the purposes of this book, the strength of that last incentive was its most important feature. Almost anybody could tell at a glance the cost of Medicare was what stopped "single payer" in its tracks, what paralyzed Congress on healthcare, and what defied solutions from any direction. Medicare was the "third rail" of politics -- touch it and you are dead. But with a new retirement entitlement looming which almost made Medicare costs laughable, it was a new ball game. In the new environment, third-party reimbursement was itself standing in the road of lowering everybody's costs through rearranging the payment stream. Medicare became a symbol of what the problem was, not just a lobbying benefit. Increased retirement cost was, in short, a central cost of health care, and anyone who stood in the way of fixing it was misguided. Because it is closest to retirement, Medicare is in fact the first thing you must change, but you better do it very carefully. And by the way, you better do it pretty soon.
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This study of Health Savings (and Retirement) Accounts was begun thirty years ago, with intensity in the past five years. During most of that time, it was paying for health costs which were the central concern. Paying a big chunk of health costs would be an achievement, paying for it all would be an impossible dream. Therefore, paying for the whole healthcare system was the earlier goal of my proposals. If it fell short, well, it paid for a big part of it. Either way, we could afford to leave Medicare alone. But once Medicare came into focus as the main impediment to solving an even bigger problem for exactly the same age group, "saving" it becomes a relatively small issue. New revenue must be found, the quality of care must not be injured, and -- most of all -- public opinion must be re-directed. This is a specialist's game, but the public is now the real player.
Resource Assessment. Adding up all the other economies of Health (and Retirement) Savings Accounts, but now also including the retirement costs, the conclusion is left that HRS As might stretch to pay for health costs, and some but not all retirement costs. Much of the shortfall comes from difficulty stating a "decent" retirement payment which would satisfy most people. That's enough for a Trappist monk is not enough for a movie star, and what will be called decent in 60 years is pretty hard to say. So the most we should promise is healthcare plus some retirement; supplement more generous retirement as you are able. Even promising that much is a stretch, but is certainly superior to healthcare plans without the discipline of individual ownership. Unfortunately, it forces the individual to some choices he must make for himself, versus allowing some big anonymous corporation to do it all for him at a hefty markup. Let's specify the two big dangers he must navigate:
Imperfect Agents Theoretically, the best result anyone could provide would be to give a newborn baby a couple of hundred dollars at birth, let a big corporation do the investing, and pay a million dollars worth of bills over the next ninety years on his behalf, at no charge. The long investing period would provide some astonishing returns, and it would be entirely carefree for the customer.
Unfortunately, experience over thousands of years has demonstrated agents will eventually extract much of the profit for themselves. Countless kings have been known to shave the edges of gold coins, even more, have been found to have employed inflation of the currency to pay their own bills. Investment managers are almost invariably well compensated, usually for mediocre returns. William Penn, the largest private landholder in history, was put in debtors prison by his wayward agent, as was Robert Morris, the financier of the American Revolution. Whole-life insurance companies are the closest approximation of an agent for a Health Savings Account who might propose to get paid a level premium for decades before paying out a benefit for a dead client. They seem to survive by promising a single defined fixed-dollar benefit and counting on inflation to work for them as it does for dictators, overseen by an insurance commissioner. Unfortunately, they have the moral hazard of falling back on other surviving firms to bail out bankruptcy, and the political hazard of trying to force premiums downward for the taxpayer without any reliable benchmark. Just how much they have been rescued by lengthened longevity is something only an actuary knows. Long ago, the situation was summarized by the question, "And where are the customers' yachts?"
Inexperienced Solo Management. If Warren Buffett had an HSA, he would have no problem managing it, and neither would a great many other savvy folks. The problem is to make the management so simple and standard that expenses can be kept low without injuring investment returns, for the average citizen. This consideration almost drives the conclusion the lifetime would be best divided into at least three component parts, with benchmarks and averages published regularly, since the medical and beneficiary problems divide into the same three (childhood, working age, and retirement) components. It begins to look as though a new profession of fee-for-service advisors needs to become educated and distribute themselves widely, perhaps in local bank branches. As will be described in later sections, the need is for the income stream to be kept in balance with the probable expenditures, adjusted for inflation or deflation. It is not to achieve the maximum possible revenue return, regardless of risk. That is to say, the purpose of the HRSA is not to make as much money as possible, but to be sure as much medical need as possible can be satisfied by the revenue available. Let's put it all in a nutshell: There's a big difference between designing a system to cover a public need inexpensively -- and designing a business model to make a profit. But that's not nearly as big a problem, as doing both at the same time.
After Assessing Obstacles Comes Strategy. Most HSAs make payments with a debit card suitable for passive investing (utilizing total market index funds) for inexperienced investors and for otherwise undesignated accounts. However, there's a technical problem: the earning period is not the first stage of life; it's the second, following nearly a third of life in childhood and educational dependency or debt. Health expenses in the childhood third of lifespan may be comparatively small, but the earning capacity is essentially zero. This unconquerable fact leads to splitting investment considerations into three stages, the first and last thirds subsidized by the middle one. The result is, two systems feeding off the middle third in opposite ways, requiring opposite approaches. Somehow, it must all come out in balance at the end. And remember, it starts with a deficit in the obstetrical delivery room unless we re-arrange something else.
If you spend too much too early, you won't have anything left for later.
In our discussion of medical finances, we assume everybody's books will balance. What about people who don't do any bookkeeping, what about taxation? Well, the vendors of medical care keep books which include payments by individuals and include expenses of running their businesses. Such items are either written off as trivial, or they are attributed to non-medical expenses, and of course, there is the black market. But let's look at medical education.
Sweat Equity. In the old days, interne and resident salaries were zero, or close to it. Student nurses may even have paid some tuition to the hospital. No great effort was made to account for the value of such training, so its effect was largely ignored. Nowadays, however, the medical students often go deeply into debt, and pay back their debt out of salaries earned a few years later, paid for either by working spouses or government training grants to the hospital. Or, more likely, they are paid back out of salaries paid by the hospital but reimbursed by Medicare. The medical school indebtedness is often as much as $150,000 per graduate, accounted for by government student loans, and the pay-back is arranged by the hospital paying salaries of at least $30,000 per year out of patient revenue, either government grants or health insurance, at least half of it government-supported insurance. It's pretty hard to say which category of patient is paying for resident training, isn't it? This is the back door by which government funding enters the scene.
Nurse training follows different but similar gyrations, making it overall pretty hard to assert these trainees are milking the system. They were once egregiously underpaid, and money fell in front of them, so they picked it up. It all comes to a lot of money, but as a rule, they did nothing underhanded to get it. In fact, if you net out the loan repayment, they are still working awfully hard to make very little. The big winners are the hospitals and the health insurance companies, big losers are the taxpayers. Take a look at the administrative salaries, and you can see immediately where the money is going. The trainees can tell you they are righting a previous wrong, merely recovering their sweat equity. The administrators have a more difficult job justifying the institution's windfall.
We could go on, pointing to government self-protection leading to DRG, and consequently to moving inpatients to the outpatient area; and the shifting of nurse's training to the university campus where they seldom see a patient. But the thrust of this section is somewhat different. It is to explain how the 50% employer-based age group appears to support so much subsidy from so little surplus. Government financing is a large new source of support, making reliance on the patients for revenue considerably less necessary. It remains to be seen whether such relief is permanent, or merely a response to the present economic recession. Since employer generosity too, is appreciably funded by taxpayers, rectification could lead to a downward spiral, leaving only the elimination of the disease by research as painless relief. Even so, let me remind the reader of the expensive longevity- enhancement implied by that solution.
All in all, it looks like revenue enhancement is the best approach, and the Lifetime Health Savings Account seems the most feasible untried approach to it. Its maxims: the best way to have enough, is to have too much. And within the limits of reasonable compassion, make every ship sail on its own bottom.
Education: Yale University, BS, Columbia University, MD. Graduate work Pennsylvania Hospital, Jefferson Hospital, National Institutes of Health, Bethesda.
Physician: Former Trustee, College of Physicians of Philadelphia, Delegate to AMA for 25 years-over 100 Resolutions Prompted 50 Reports from the Board of Trustees. Mostly about Medical Economics
Book Publishers: Since 2002, Ross& Perry, Inc., Originally in Washington, D.C. Moved to Haddonfield in 2004. (276 Books)
Author: 5 Books Originator: Health Savings Accounts
High Point: Invited to address White House Health Policy Group and Congressional Committee (2 Times)
Organizations: Mason, Former President, Professional Standards Review Organizations, Right Angle Club, Society of Friends.
109 Volumes
Philadephia: America's Capital, 1774-1800 The Continental Congress met in Philadelphia from 1774 to 1788. Next, the new republic had its capital here from 1790 to 1800. Thoroughly Quaker Philadelphia was in the center of the founding twenty-five years when, and where, the enduring political institutions of America emerged.
Philadelphia: Decline and Fall (1900-2060) The world's richest industrial city in 1900, was defeated and dejected by 1950. Why? Digby Baltzell blamed it on the Quakers. Others blame the Erie Canal, and Andrew Jackson, or maybe Martin van Buren. Some say the city-county consolidation of 1858. Others blame the unions. We rather favor the decline of family business and the rise of the modern corporation in its place.
Originally the "lower counties" of Pennsylvania, and thus one of three Quaker colonies founded by William Penn, Delaware has developed its own set of traditions and history.
Start in Philadelphia, take two days to tour around Delaware Bay. Down the New Jersey side to Cape May, ferry over to Lewes, tour up to Dover and New Castle, visit Winterthur, Longwood Gardens, Brandywine Battlefield and art museum, then back to Philadelphia. Try it!
Millions of eye patients have been asked to read the passage from Franklin's autobiography, "I walked up Market Street, etc." which is commonly printed on eye-test cards. Here's your chance to do it.
In 1751, the Pennsylvania Hospital at 8th and Spruce was 'way out in the country. Now it is in the center of a city, but the area still remains dominated by medical institutions.
Grievances provoking the American Revolutionary War left many Philadelphians unprovoked. Loyalists often fled to Canada, especially Kingston, Ontario. Decades later the flow of dissidents reversed, Canadian anti-royalists taking refuge south of the border.
