George R. Fisher, III, M.D.

Obituary

George R. Fisher, III, M.D.

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

Dr. George Ross Fisher of Philadelphia died on March 9, 2023, surrounded by his loving family.

Born in 1925 in Erie, Pennsylvania, to two teachers, George and Margaret Fisher, he grew up in Pittsburgh, later attending The Lawrenceville School and Yale University (graduating early because of the war). He was very proud of the fact that he was the only person who ever graduated from Yale with a Bachelor of Science in English Literature. He attended Columbia University’s College of Physicians and Surgeons where he met the love of his life, fellow medical student, and future renowned Philadelphia radiologist Mary Stuart Blakely. While dating, they entertained themselves by dressing up in evening attire and crashing fancy Manhattan weddings. They married in 1950 and were each other’s true loves, mutual admirers, and life partners until Mary Stuart passed away in 2006. A Columbia faculty member wrote of him, “This young man’s personality is way off the beaten track, and cannot be evaluated by the customary methods.”

After training at the Pennsylvania Hospital in Philadelphia where he was Chief Resident in Medicine, and spending a year at the NIH, he opened a practice in Endocrinology on Spruce Street where he practiced for sixty years. He also consulted regularly for the employees of Strawbridge and Clothier as well as the Hospital for the Mentally Retarded at Stockley, Delaware. He was beloved by his patients, his guiding philosophy being the adage, “Listen to your patient – he’s telling you his diagnosis.” His patients also told him their stories which gave him an education in all things Philadelphia, the city he passionately loved and which he went on to chronicle in this online blog. Many of these blogs were adapted into a history-oriented tour book, Philadelphia Revelations: Twenty Tours of the Delaware Valley.

He was a true Renaissance Man, interested in everything and everyone, remembering everything he read or heard in complete detail, and endowed with a penetrating intellect which cut to the heart of whatever was being discussed, whether it be medicine, history, literature, economics, investments, politics, science or even lawn care for his home in Haddonfield, NJ where he and his wife raised their four children. He was an “early adopter.” Memories of his children from the 1960s include being taken to visit his colleagues working on the UNIVAC computer at Penn; the air-mail version of the London Economist on the dining room table; and his work on developing a proprietary medical office software using Fortran. His dedication to patients and to his profession extended to his many years representing Pennsylvania to the American Medical Association.

After retiring from his practice in 2003, he started his pioneering “just-in-time” Ross & Perry publishing company, which printed more than 300 new and reprint titles, ranging from Flight Manual for the SR-71 Blackbird Spy Plane (his best seller!) to Terse Verse, a collection of a hundred mostly humorous haikus. He authored four books. In 2013 at age 88, he ran as a Republican for New Jersey Assemblyman for the 6th district (he lost).

A gregarious extrovert, he loved meeting his fellow Philadelphians well into his nineties at the Shakespeare Society, the Global Interdependence Center, the College of Physicians, the Right Angle Club, the Union League, the Haddonfield 65 Club, and the Franklin Inn. He faithfully attended Quaker Meeting in Haddonfield NJ for over 60 years. Later in life he was fortunate to be joined in his life, travels, and adventures by his dear friend Dr. Janice Gordon.

He passed away peacefully, held in the Light and surrounded by his family as they sang to him and read aloud the love letters that he and his wife penned throughout their courtship. In addition to his children – George, Miriam, Margaret, and Stuart – he leaves his three children-in-law, eight grandchildren, three great-grandchildren, and his younger brother, John.

A memorial service, followed by a reception, will be held at the Friends Meeting in Haddonfield New Jersey on April 1 at one in the afternoon. Memorial contributions may be sent to Haddonfield Friends Meeting, 47 Friends Avenue, Haddonfield, NJ 08033.

Block Captains

Ed Asner

A block captain is not a ward leader, at least not most of the time. The block leaders of Philadelphia are mostly self-appointed, de facto captains, and yes, they are mostly middle-aged black ladies. Their attitude is that politicians are there to serve the community, not the other way around. At a recent meeting, the leader of the Block Captain's Association called out to the nodding, approving group, "Call your councilman. We elect those people, put 'em to work!"

This enthusiastic group of several hundred grass-roots leaders meets several times a year in, of all places, the hallowed auditorium of the Philadelphia County Medical Society, but doctors are not running this show. Nor is the City Health Department, nor the Department of Streets, nor the various mental health and social service agencies that send representatives. The federal government expressed considerable gratitude in being able to address this group because their new Medicare prescription card was so terribly hard to explain (i.e. it was terribly hard to understand). The genius of the block captain movement is that it appoints leaders to understand what the establishment is trying to say, and then figures out a way to say it. You can make free flu shots available, even take them to the home or workplace, but most people won't accept them unless it is explained by someone they trust. Dead birds don't spread disease, mosquitoes do, but that really sounds a little unlikely. To believe that, you first need the word of a respected local leader. The U.S. Army is built around its sergeants, in the same way. That's in fact how things work at every social level, but in Philadelphia's black communities, it is finally becoming organized. For example, they like pamphlets. Pamphlets are what give sergeants credibility back in the neighborhood.

Success has a thousand fathers, failure is an orphan, so it's now hard to know who started this. Eve Asner, the sister of Ed Asner the movie star, can claim credit for starting a group called Philadelphia More Beautiful, dedicated to cleaning up the messes of the slums, and applying social pressures of a loud and effective sort to irresponsible neighbors. And then, along came the Deputy Health Commissioner Larry Robinson with HEAT. During a hot summer, it was possible for a hundred children and old folks to die of heat prostration because they were confused by dehydration and did things which made matters worse for themselves. The block captains were ideally situated to know who was in danger, who hadn't appeared outside in a day or two, and thus who might need to be forced to drink water or go to an air-conditioned movie. Training the block captains to recognize the signs of trouble fit nicely into the Health Department's ability to measure results with computers. Last year, only seven people died of heat prostration, and everybody knows whose block they lived in.

The Medical Society pays for everybody's lunch at the block captain's meeting, and it is a calculated policy. Every doctor knows how useless it is to talk in terms of calories, carbohydrates, high unsaturated fat content, and water-soluble vitamins. Pamphlets help, but what really works is to serve the block captains a lunch and tell them, now this is what we're talking about. Heaven only knows how that gets translated back in the neighborhood, but surely the first step is to give the block captain an unmistakable message. The Medicare bureaucrat looked visibly relieved when her painfully convoluted explanation of the Medicare prescription card was reduced to about two sentences by questioners in the audience: If you have Medicaid coverage, forget it. If you don't, that card's worth about $600. And this here pamphlet proves I know what I'm talking about.

There did not seem to be a scrap of ideology or power hunger or self-serving -- the usual hallmarks of politics as we commonly observe it. The over-riding principle on which these highly disparate groups are operating together is, pick a problem, and solve it.

August, 2007: Sudden Financial Jolt

For the moment, the broadly unanticipated behavior of world bond markets remains a conundrum. {bottom quote}

Alan Greenspan, Feb.16, 2005

In early August, 2007 the stock market was sailing along nicely. A great many people were on vacation. September is traditionally the month for severe market reversals, but this year in early August there was not much sign of an impending jolt. The stock market's Dow Jones Industrial Average had reached an all-time peak over 14,000. Long term interest rates were abnormally low, it is true, but that anomaly had gone on uneventfully for years; anyway, even Alan Greenspan said he didn't understand it. Suddenly, the Dow Jones Industrial Average dropped 400 points in ten minutes, on heavy volume. It takes a big volume of sales to move the market that much, that quickly. Somebody knows something, but I don't know what it is, was the thought at ten thousand trading desks watching computer screens, worldwide. A quick check with networked friends showed that nobody else seemed to know what was stirring things up, either. In retrospect, we still don't know who did the first heavy selling, but it soon spread to hedge funds. Hedge funds have a lot of money, and vast banks of computers to do their selling. When the computers of heavy traders detect sudden selling volume, they are programmed to sell, too. Don't ask questions; somebody must know something, so get out, get out the door without a backward look. Not only was someone selling big, but probably selling short. The commentators on cable TV started jumping up and down, talking all at once.

Graph: Prices of 10-yr Bonds

About a day later, someone made a shrewd guess. The problem seemed to center on those low-interest rates for long-term bonds because those low rates were abruptly going higher. In the language of the market, the "spread" between short-term and long term rates was widening or at least returning to normal. Not knowing why the spread had narrowed, no one knew why it had stopped being narrow; but it was nevertheless a clue where the problem might be centered. About a month later, rising interest rates seemed even more central when clues to many other suggested culprits had proved false. The selling concentrated on blue-chip stocks, but there was nothing the matter with blue chips. They had been sold because other markets were frozen with fear; if someone needed cash, there was nothing else the market would buy. The "quants", the traders who programmed computers to react without thinking, had merely reacted in sports jargon, to a 'head fake' in the blue chips. Meanwhile, interest rates continued to spread apart; someone big was selling a lot of long-term bonds, and was really serious about it.

Alan Greenspan

Come to think of it, if long-term interest rates were returning to normal because someone was selling bonds, then, of course, they had been too low for years because someone else was buying too many bonds. Maybe the Middle East oil barons had a hand in it, but more likely it was the Chinese government, who were known to hold a trillion dollars of U.S. Treasury bonds. Some years ago, Chairman Alan Greenspan of the Federal Reserve worried out loud that by historical standards, public markets [in this case, the Chinese government] were agreeing to accept interest rates for long term debt that seemed much too low for the risks undertaken in loaning it. Worse still, the reasons were unclear. Greenspan called it -- a conundrum. Home mortgages are long term debt, and here's maybe another clue. For political reasons, tax laws had effectively made mortgages the cheapest way to borrow. For another, the reverse mortgage, or home equity loan innovation, transformed home mortgages into the equivalent of ATM machines. A great many young people who might have been better off renting a place to live were persuaded that owning a house was essential to improving 18% credit card interest into 6% mortgages, and tax-sheltered 6% at that. Hidden in this borrowing revolution was the unrecognized temptation to maintain far less owner investment in the house that had been true in the past. It became cheaper to borrow, riskier to loan. American homebuyers were subsidized to borrow, and for whatever reason, Chinese were inclined to lend.

If interest rates go up, the value of bonds with low coupons goes down. Plenty of non-Chinese owned bonds, mainly American banks, and insurance companies. If these bonds had been purchased as long-term investments, there was no sense in selling them, and it was merely annoying that stock market prices for bank and insurance stocks dropped to reflect this lessened value of their holdings. If the banks and insurance companies merely held the bonds to maturity as they had always planned to do, bond values would return to their original price. True, there were rumors that bonds related to California and Florida real estate were in an unsound bubble. But if every one of those bonds became worthless, which was unlikely, it would only amount to $100 billion in losses. That's, of course, a lot of money, but easily absorbed by a big economy. Many of those bonds were insured, and at least half of real estate value is usually recovered in mortgage foreclosure. A lot of people would be inconvenienced by markets frozen with fear, and panic selling of various sorts would make the markets volatile. But this was mainly a liquidity crisis, roughly equivalent to a man with a $20 bill who was temporarily unable to get a candy bar out of a dispensing machine.

Supported by such talk, the stock market went down moderately but steadily. After a year, it was down two thousand points, or perhaps 15%. We seemed likely to have a recession, but periodic recessions are a healthy way to correct irrational exuberance. Most Americans do not own Florida and California real estate, don't use the banks and insurance companies in those regions, and have a reserved opinion about those who do. Somehow, it was overlooked that the very first banks to collapse in this upheaval had been in Germany, France and England.

In retrospect, in 2011 we

Revising, Amending, and Skirting The Constitution

Tiananmen Square

In some foreign countries, people who dislike the government about some issue wait for a clear day and go in the streets to riot. Some of our own younger people who spent a little too much time abroad have likewise occasionally called their friends on a cell phone and agreed to pour out into our town squares to protest. When you try that in Tienanmen Square (1989) or similar places, machine guns can suddenly end the meeting (2,500 dead). We had the Boston Massacre of 1770 (5 people killed) and Kent State of 1970 (4 people killed), where newsmedia somewhat over-dramatized the risk involved. In general, most Americans feel public demonstrations are neither very dangerous nor very useful.

Chief Justice, John Marshall,

One measure of Constitutional effectiveness can be found in just this public attitude. The citizenry has been told and generally believe that methods for addressing grievances have been provided in the legislative, judicial and executive branches, ultimately leading to the Constitution itself as the last point of appeal. The 1787 framers in Philadelphia probably had this design in mind, but it was not until the third Chief Justice, John Marshall, made it his life's work that the elegance of the system became widely appreciated. The Constitution is the capstone of our system; every citizen's grievance can be appealed within it. If things are sufficiently dire, even the Constitution can be changed.

second Constitutional Convention

A second Constitutional Convention could be called, but most lawyers shudder at what chaos might emerge from making multiple changes without waiting to see how a few worked out. For practical purposes, therefore, amending the Constitution is the last recourse when the government goes astray. Amendments don't easily succeed; hundreds were proposed in two hundred years but only two dozen were adopted. In totalitarian countries, millions of amendments might be envisioned, but either nothing significant would be adopted, or nothing significant would be enforced. In our country, it is sufficiently difficult to succeed that frivolous or ill-advised proposals are discarded or modified into less extreme forms by "due process". But enough amendments do succeed to keep the populace out of street protests. Amendments can succeed, if you and the proposal are really serious. So far the only real appeal beyond an amendment has been another amendment.

Judge Benjamin Cardozo

The step provided before an amendment is to appeal to the Supreme Court. That happens about a hundred times a year, with the generally satisfying outcome. Perhaps the only serious criticism of the Supreme Court is the difficulty of "gaining cert.", which is the process of petitioning the Court to take the case, by granting a writ of certiorari. Only about 2% of petitions are allowed to present their arguments, and the Court has protected itself from overwhelming volume by limiting its caseload to instances of conflicts between circuits, and cases involving sovereignty of some sort. For such a selective process to remain acceptable, implicitly the rulings of the various Circuit Courts of Appeal would also have to enjoy general approval. That such is the case is evidenced by the fame and distinction reached by certain Judges of Appeals Courts, like Benjamin Cardozo, Learned Hand, and Richard Posner. In Cardozo's case, he was finally appointed to the Supreme Court, but at such an advanced age and short tenure that his Supreme Court reputation is rather modest; he achieved his reputation as an Appellate Judge. The failure of Robert Bork and several others to achieve Senate ratification illustrates a somewhat different version of the same issue: that the higher courts, not just the Supreme Court, are generally held to do as good a job as human systems allow; supremely gifted judges are not exclusively in the Supreme Court. As you go lower in the court system, more dissatisfaction can be heard, ultimately reaching slander accompanied by knowing grins, such as "You show me a hundred thousand dollars, and I'll show you a Philadelphia judge." Whenever criminals meet justice, such mutterings can be expected. But the point to emphasize is that there are no muttered challenges to the contention that the higher you go in the Judiciary, the more distinguished the judge is likely to be.

That's the federal judiciary, of course. State judiciaries are held in less esteem, although they have the power to put people in jail forever, award multimillion-dollar verdicts and modify the climate of business. Somehow, the prestige of these judicial systems has eroded to the point where a joke can be heard that being a state supreme court justice is a pretty good way to start a law practice. It's hard to know whether prestige has disappeared because of performance, or the reverse. Whether the steady erosion of state legislative power by Congress has resulted in a parallel loss of status in the judiciary is a serious question. In that case, of course, there is very little the judiciary itself can do about it.

Dred Scott

In two hundred years, hundreds of amendments have been submitted to overturn Supreme Court rulings which displeased someone. Only three have succeeded. The first was the overturning of Chisholm v. Georgia by the Eleventh Amendment, reflecting a largely unspoken wish to employ state sovereignty to continue the anti-British animosities of the Revolutionary War. While understandable enough, this approach is most unfortunate. The second is the overturning of the Dred Scott decision on the legitimacy of the Fugitive Slave Law by the Thirteenth Amendment. While the outcome meets general approval, here is another court position which could only be changed by winning a war. And finally, the legitimacy of the graduated income tax as an allowable private taking was established by the Sixteenth Amendment, overturning an entirely legitimate decision in Pollack v. Farmers Loan and Trust that the original Constitution prohibited it. In each case, the desired remedy only existed in changing the Constitution. Dissenters are free under the First Amendment to describe such a Court decision as asinine, but it is going to continue to stand. Some will be tempted to circumvent the whole process in order to achieve their goal, and two examples come to mind. In the court-packing episode of 1937, most impartial observers would agree that the Supreme Court was forced to reverse its decision under threat of coercion by President Franklin Roosevelt. Amendment of the Constitution was a choice open to him, but he chose another way. The Commerce Clause of Article I, Section 8 now continues to read:

The Congress shall have power to .........Regulate Commerce with foreign nations, and among the several states, and with the Indian Tribes

just exactly as it did when for 150 years everyone referred to it as the Interstate Commerce Clause. What has changed is the declaration that Congress may regulate all commerce of any sort, without fear of challenge in the court system. Whatever chances Roosevelt might have had to amend the Interstate Commerce Clause before this uproar, it is clear he could never have achieved its amendment afterward.

The second instance of circumvention is related to the same episode. The insurance industry was highly displeased to find itself regulated by federal agencies, and within six weeks successfully lobbied the McCarran Ferguson Act into law. Congress could not overturn or make an exception to a Supreme Court ruling, but it accomplished the same result by prohibiting federal agencies from taking action in the business of insurance. To maintain regulation for insurance, all of the various states then passed laws establishing insurance regulatory mechanisms, and insurance regulation migrated back to the states. It is now difficult to know whether the same exception could have been created by then re-amending the Constitution. But since the advent of wide-spread current dissatisfaction with health insurance, it pretty clear that an amendment imitating McCarran Ferguson would never pass, today.

John Jay the Chief Justice

Finally, the Eleventh Amendment may not have been such a good idea, either. The dispute in 1793 (although it avoided saying so) was about compelling Americans to pay just debts regardless of the person they owed them to. And that included paying debts to former Loyalists. John Jay the Chief Justice was sent to England to negotiate a treaty to settle this matter, but after both nations ratified the treaty, state laws were passed to supersede it. From this evolved the issue of whether a treaty takes precedence over American laws, and the ensuing battle firmly established the preemption of Congress by treaties. Two hundred years later, when the British are our allies and Revolutionary debts fade in significance, many people are uneasy about such clear-cut deference to treaties. Our unwillingness to join the League of Nations, and sign the Kyoto Agreement, or enter into many other international cooperative ventures are related to uneasiness about the unintended expansive power inherent in the Constitutional location of a foreign treaty, enacted at a time of limited communication. We are doomed by demography to perpetual minority status in world forums but forced by economic success to exert leadership or become a target. There is no immediate emergency, but the prescribed generalities of enacting or enforcing treaties need sober reflection in the era of instant communication.

Obamacare's Constitutionality

President Barack Obama

Any idea of a smoothly orchestrated introduction of the new law was jarringly interrupted by the U. S. Supreme Court, which granted a hearing to a complaint by 26 State Attorney Generals, that the ACA Act was unconstitutional. It was big news that the whole Affordable Care Act might be set aside without selling a single policy of insurance. The timing (before the Act had actually been implemented) served to guarantee that the constitutional issue, and only that issue, would be discussed at this Supreme Court hearing. By implication, there might be more than one episode to these hearings.

While many could have declaimed for an hour without notes, about difficult issues perceived in the Obama health plan, questioning its constitutionality had scarcely entered most minds. Then of a sudden, near the end of March 2012, a case testing the constitutionality of mandatory health insurance was granted certiorari and very promptly argued for three full days before the U.S. Supreme Court. Twenty-six state attorneys general brought that case, so it was not trivial. In jest, one Justice quipped he would rather throw out the whole case than being forced to spend a year just reading 2500 pages of it. But Justices are practiced in the art of quickly getting to the heart of a matter; it soon boiled down to one issue: was it constitutional for Congress to force the whole nation to purchase health insurance? Is there no limit in the Constitution about what the federal government can force all citizens to do, even though the federal government itself is severely limited in scope? Even though the Tenth Amendment states that anything not specifically granted to the federal becomes the province of the states? Would a people who fought an armed revolution for eight years over a 2-cent tax on tea, now consent to a much larger requirement which it was not constitutionally authorized to impose? Most people finally wrapped their heads around some formulation of this non-medical concept to a point where they vaguely understood what the Judges were arguing about. This was beginning to look like a topic where We The People made a covenant with our elected leaders, and reserve the sole right to change it.

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. {bottom quote}

Tenth Amendment

The Constitution describes a Federal system in which, a few enumerated powers are granted to the national government but every other power is reserved to the state legislatures. The Constitution had to be ratified by the states to go into effect, and the states had such strong reservations about the surrender of more than a handful of powers that they would not ratify the document unless the concept of enumeration was restated by the Tenth Amendment. If states could not be persuaded of the need for a particular power to be national, they might refuse to ratify a document which enabled permanent quarrels about the issue. That wariness explains why The Bill of Rights goes to the extra trouble of declaring certain powers are forbidden to any level of government.

Separation of powers further explains why Mr. Romney's mandatory health insurance plan might be legal for the Massachusetts legislature but prohibited to Congress. After Chief Justice Roberts got through with it, whether that truly remains the case will now depend on whether it is described as a tax, a penalty, a cost, or whatever, and only if the U.S. Supreme Court later agrees that was a proper definition. Because -- to be considered a tax it must be too small to be considered coercion. The law itself apparently does not underline this distinction in a way the Justices felt they could approve. Indeed, while Mr. Obama in his speeches firmly declared it was not a tax, later White House "officials" declared it might be. There was agreement the Federal government could tax, but no acknowledgment that taxes might have any purpose other than revenue.

Under circumstances widely visible on television, however, it was clear that the House of Representatives had been offered no opportunity to comment on this and many other points in this legislation. To a layman, that fact itself seems as clear a violation of constitutional intent as almost any other issue, since the Constitution indicates no idea was ever contemplated that any President might construct laws, nor like the courts, interpret their meaning. The first three Presidents repeatedly raised the question of whether they had the authority to do certain things we now take for granted. And Thomas Jefferson was similarly boxed in by a clever Chief Justice, who said, in effect, Agree to This Decision, or be Prepared to Get a Worse One. The Constitution says it is the function of the Executive branch to enforce the law, "faithfully". Presumably, all of the thousands of regulations issued by the Executive Branch under this law must meet the same test.

Given that the Justices now hold it constitutional for the federal Congress to mandate universal health insurance, based on some authority within taxation, the immediate next issue is paying for it. Millions of citizens, usually young and healthy but sometimes for religious reasons, do not want to buy health insurance and would be forced to do so by this law because the only available alternative is to pay a revenue tax. The purpose of including them is to overcharge people who will predictably under-use community-rated insurance, and thus enable the surplus to reduce costs for those who do want to buy health insurance. (Here, the Court had the pleasure of reducing an unusually opaque law to an unusually succinct summary.) To avoid the charge of a "taking", the Administration must either surrender on the universal mandatory point or else surrender the level premiums of community rating. The lawyers for the complaining attorneys general laid great stress on this particular issue in their arguments, and it occasioned much of the discussion from the bench. However, until the law is in action there is as yet no cause for damages.

Here it will depend on whether you call it a permissible activity for Massachusetts or for the Federal government. The Constitutional point seems to be that it is a legitimate Federal power to tax for the "general welfare", so it now becomes essential to know if the taxes for noncompliance in Obamacare are really a penalty. The Justices seemed to be questioning whether the whole scheme would collapse with the forced subsidy eliminated, and because of that be deemed to have been a "general welfare purpose" adequate to meet the constitutional requirement of a permissible enumerated purpose. Lawyers can generally find such a defined purpose in the words of the Constitution, even if they have to dip into the penumbras and emanations of the words. So the question might just devolve into whether a majority of the Justices wish to declare the penumbra to be within the enumerated powers of Congress. To all of this, the lawyers for the attorneys' general reply that such an enumerated power is impossible because there is no limit to what could be done by this method. Congress would then be allowed to mandate that everyone eat broccoli for dinner, or buy a General Motors car in order to pay for the deficits of rescuing that company from bankruptcy. Almost anything could be mandated by establishing a penalty called a tax; including a mandate that everyone buys a product in order to pay for the deficits of mandating it, illustrates there exists at least one circularity of enumerating something like a power of Congress. According to this reasoning, mandated health insurance cannot, therefore, be an enumerated power of Congress, either now or at any time in the future. The sort of speculative law outlined in this paragraph is exactly the sort of thing the Supreme Court dislikes and shows the utility of denying access to the courts to anyone who cannot claim "standing", defined as a claim of actual injury from a law.

The Justices undoubtedly had to weigh the fact that the American public has a strong distaste for this sort of convoluted reasoning, which sounds like a convention of Jesuit priests having fun. On many other occasions, however, the public has accepted the judgment of people it hired to understand this sort of thing; that's called respect for the law. Eighty years ago in the Roosevelt court-packing case, there was the same sort of collision between the Court and the President, and the Court knuckled under even though the public supported the Court. In both cases, the Court seemed to be yielding to the President, with the unspoken compromise that the President would not pursue his earlier course with quite so much vigor. Since the really central 1937 question of overturning the Interstate Commerce clause ("Commerce among the several states") was left unaddressed, the velvet glove might yet contain an iron fist.

Admonitions: Using the Transition to Lifetime Health Insurance as an Inflation Restraint

Inflation Protection. Let's imagine the typical individual has reached the point where he is writing his will at the age of 90. He has followed our advice, created an HSA, dutifully funded it, and reached the point where his medical expenses are mostly behind him, but -- he has a meaningful amount of money left in the HSA. The existing legislation is pretty relaxed about that, allowing him to convert his HSA into an IRA, and follow its rules for inheritance. That's fine because it has created an incentive all these years, to save just a little extra money in the HSA for contingencies; after paying taxes, he can spend it as he pleases.

The Escrow Fund. It may be fine, but it eventually comes to an end in the face of terminal care costs; at that point, the future is damned. Since most people never know for certain which episode will be the last, indifference to insured costs is fairly general. There needs to be additional restraint against medical cost inflation. We propose that a compartment of Medical Savings Accounts be designated as a single-purpose escrow fund, adhering to the model of buying a life membership in a club, except in this case, it can only buy lifetime health coverage from Medicare. Annually, his fund manager transfers a sum to the individual escrow fund, calculated to reach a buyout price for Medicare coverage at some later age, and assuming the investment income achieves a stated goal. The individual may borrow against the escrow to pay current medical expenses and may need a subsidy to do so, but the escrow may not be spent down. (It continues to generate investment return to the fund which in normal circumstances would exceed the loan interest). At any time he has enough money, our Medicare subscriber can make a voluntary deal with Medicare as follows: If he will turn his escrow fund over to Medicare at his death, then Medicare will no longer collect his full Medicare premiums, starting today. That's a good offer or a bad one, depending on his life expectancy and how much is in the escrow fund; as of today's rules that would typically be several thousand dollars. That's a bad deal for the government if there is inflation. However, for individuals at any age down to age 26, it would seemingly always have made a better deal if he had only made it a year or two earlier. If it had been offered at age 65, it would have made a tremendously better deal than at age 90, because so many more premiums would lie ahead. And before that, if the deal were offered to a working person it could extend to skipping the 6% Medicare payroll tax deductions, which could be a stupendous deal. So let's go back and make a counter-offer using this inflation restraint. It's called the accordion plan, where both the government and the individual must agree on the best year to clinch it, depending on how everything is going. Unfortunately, any system like this requires an unimpeachable monitor.

Buying Out of Medicare. The average person over age 65 is haunted by the possibility that his living expenses will someday exceed his income, so he likes to have as much of his anticipated expenses pre-paid as possible. (He likes to be offered life membership in a club, for example.) So, he proposes to Medicare that they do the arithmetic and tells him at what age they think he could stop paying payroll taxes and/or Medicare premiums to Medicare and pay them into his escrow fund so that he becomes paid-up and no longer cares about medical cost inflation. And if there is no point in time when the two are clearly equal, then how much would he have to supplement the escrow fund from his savings to reach the goal. Since the law of large numbers enables Medicare to predict its average costs with greater precision than the individual can predict his own, a difference between the two prices represents the individual's fear that he might incur substantially higher than average costs. Half of the Medicare beneficiaries will, and half won't, but any individual's actual chances are largely a lottery. So, a substantial number of people would take the deal on terms favorable to Medicare. This isn't exactly the proposal we plan to make, but it illustrates the principle.

Part of the secret of the current proposal is that the individual can have the advantage (and bear the risks) of investing in the equity of private companies, whereas we would squirm if the government owned a big chunk of American private business. Notice for example how quickly the government sold back the stock of General Motors after it had bailed it out. Private individuals might indeed make 10% return on index funds of the entire U.S. stock market, given a 90-year horizon, (and under the discipline that you can't buy high and sell low, because we won't let you sell other than for medical costs). Furthermore, the government can't sell it for you, because you own it independently. This deal would fall apart if inflation unbalanced it, but the value of stocks and the cost of medical care will respond to inflation at about the same rate, providing you wait long enough and use big enough numbers. Nevertheless, it would only seem prudent to appoint an independent agency to monitor and control matters, particularly because stockbrokers are not considered to be fiduciaries, putting the client's interest ahead of their own. In spite of that fact, most people would be astonished at how fast a fund will grow at 10%. Medicare can't get such investment income, because in 1965 it was decided to use the "pay as you go" system, but it is clear that Medicare would sustain much higher debts if we abruptly cut off its payroll tax and premium income. So this process should require each individual to take at least ten years to switch completely, holding each person's "paid up" goal as ransom if he participates in reckless medical spending, and delaying the government's acquiring the escrow if they permit such spending. We are apparently never going back to using gold bars to frustrate government-endorsed inflation of the currency, so we have to devise other self-balancing restraints like this one.

In these days of burdensome health insurance costs, it is useful to consider how health insurance might emulate what is normally done with "whole-life" life insurance. Most life insurance clients to understand that total premiums amount to less than the face value of the policy, while considerably more than the face value is often paid out to the beneficiary. The apparently miraculous appearance of extra money is accounted for, by the ability of the insurance company to invest the premiums until they are needed for benefits. True, life insurance has also prospered from the stretching of longevity by improved healthcare, but that windfall also applies to health insurance. In both cases, improved longevity is hoped-for but not guaranteed, and adds to the safety reserves. The issues to be pondered are how to set final rates so far in advance. Or, if you wait to see how costs actually develop, how to give a useful benefit to someone who by that time is already dead. The life insurance companies have devised their way of managing this awkwardness, which requires public trust in the good faith of their counterparty. Results vary between companies, but in the long run, it doesn't pay to cheat.

The Need for Transparency and the Image of Fair and Square. Transition from an old system to a new one is a familiar problem for legislators. In our case, it may actually facilitate matters by restraining the impulse to take on too much difficulty, all at once. Every citizen is covered for hospital costs in Medicare Part A, and the great majority are covered for physician and outpatient costs by Medicare Part B. Part C is only partial and voluntary, Part D is still on trial. For this discussion, we need not describe the varying ways that Medicare Part A, B, C, and D collect premiums or the historical reasons why they differ. It should be emphasized early, however, that overall direct income falls short of covering overall Medicare benefit costs by 50%, so Medicare is 50% subsidized, and therefore not nearly as stable as the public assumes. It would help a lot, for example, if debt just stops being called an asset on the balance sheets. Everybody enjoys getting a dollar for fifty cents, so the program is more popular than it would be if euphemistic revenue descriptions were discontinued. It is particularly worrisome, that the popular alternative of a "single-payer system" implies simply extending Medicare to persons of all ages. But it also implies extending the 50% hidden tax subsidy to all ages so single-payer consolidation would add an even more unsustainable burden to the national deficit. This apparently irrelevant comment helps explain why the public expected Obamacare to be cheaper than it proved to be, and adds considerably to the urgency to find other revenue sources during a protracted economic recession, for what are proving to be unexpectedly high prices. Hence, the need for more subsidy than was anticipated. The consequent income redistribution is widely resented. Time and again we return to George Washington's central maxim as president: honesty is the best policy.

How To Recycle the Income {bottom quote}

Terminal Care is Mostly Medicare

Go With the Flow. To return to the point, almost everybody now dies with terminal expenses covered by Medicare. The medical industry waits for about six months, and eventually gets paid for its services by Medicare, incompletely perhaps, but for the most part. From this is derived the insurance shorthand concept of the "last year of Life costs" which largely represents terminal illness. Along with the obstetrical costs of being born, these two costs are the only two we can safely assume will continue forever. Everything else is like the Federal Reserve's Quantitative Easing. We can be certain it will stop, but we have no idea how long it will take. While we can perceive that medical progress is largely a matter of removing diseases from the list, the allied perception is that younger people are always going to be somewhat healthier than older ones. There will be exceptions like HIV/AIDS, but the perception is probably permanent. Since progressively older people are supported by savings and wealth transfers, the concept of investing the savings of younger people in order to sustain them when they get older, seems a dependable one. It also seems safe to assume that people will resent it less if it is their own money, rather than drawn from a public pool. That is, savings will be resented less than taxes, incentives will be resented less than coercion, and the final outcome will be the accumulation of more savings within private hands than within national treasuries.

Now add the idealized extra specifics: if subscribers by contribution, gift or subsidy create a Health Savings Account early in life, and Medicare can be induced to reduce its own premiums out of recognition of equivalent reserves in the funds, the future payment of (at least) last-year-of-life costs could be assured -- and current premiums for Medicare could be accordingly reduced, putting the money back in people's pockets. In this way, Medicare and the subscriber would adjust to the benefits of a major new revenue source, the investment proceeds of the Health Savings Accounts. A whole bundle of uncertainties absolutely do remain -- the zig-zag of interest rates, the volatility of the stock market, the elimination of some diseases, the creation of expensive new treatments, the actual longevity of the population, and the constant menace of inflation -- but one certainty survives. To a significant degree, a new source of income would effectively lower the cost of health care, even though it may not have paid for all of it precisely. No rationing, no income redistribution, no great change in how medicine is practiced. The opportunity seems too attractive to dismiss, but it must be continuously and openly monitored.

Income is fairly predictable, Future Costs are not. {bottom quote}

Balancing the Books

Simplify. Since the ultimate outcome is uncertain and will surely vary from predicted, adequate provision must be made for both the possibility of surplus and deficiency. Because of possible surplus, residuals should be allowed to pass through inheritance, or to be spent for non-medical purposes, or both, as incentives to compliance rather than circumvention. Because of potential shortfalls, some process for early detection and freezing of shortfalls should also be created, leading to subsidies, and restitution of subsidies, under defined circumstances. To the maximum degree feasible, the "accordion" principle should be employed, whereby benefits are expanded or contracted to reflect surplus and deficiency in the individual Health Savings Account, and indirectly, the growing success or failure of the scheme. Furthermore, the use of average costs rather than specific ones is encouraged, thus making it easier to deal with average lifetime health costs. In a computer age, it is almost as easy to report 300 million individual accounts as to measure by average performance, but it leads to intolerable public confusion about what is happening to the program. If achievable, a transformation from annual bills to lifetime costs would allow the elimination of pre-existing condition exclusions almost without effort, since lifetime liability would remain unlinked to HSA balances, and even largely unaffected by individual catastrophic illness if pooling is added. It might require considerable research, however, to detect the creation of unforeseen loopholes to game the system. Ultimately, that is a gigantic undertaking. The more we can simplify it with self-enforcing incentives, the more likely we can perform the essentials well, side-stepping all the work and aggravation of playing cops and robbers.

Get Started. The two quickest ways to induce large numbers of people to create Health Savings Accounts would be to add a permanent rollover feature to Flexible Spending Accounts, which currently contain a use-it-or-lose-it feature. Because of the cost to employers, it would be a useful opportunity to remind them of the inequity they have enjoyed from seventy years of Henry Kaiser tax exemption. And the second accelerant would be to eliminate the income tax discrimination against it, by allowing health insurance premiums to qualify for purchase by Health Savings Accounts, and thus to become tax-deductible like almost everybody else's health insurance.

Philadelphia Reflections

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

Obituary

George R. Fisher, III, M.D.

Block Captains

August, 2007: Sudden Financial Jolt

Revising, Amending, and Skirting The Constitution

Obamacare's Constitutionality

Admonitions: Using the Transition to Lifetime Health Insurance as an Inflation Restraint