Philadelphia Reflections

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


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The foregoing should suffice as a summary of this book's proposal.

The next section describes some of the other serious problems with healthcare and how they got that way in the past century. Sometimes more funding will help these problems, sometimes it won't. For the past century, the foremost student of the matter, Roger Ibottson, has shown the equity stock market has averaged about an 11-12.7% total return. Investors in index funds of the same stock have received about 5%. Three percent of this attrition is ascribed to inflation, leaving another three percent unaccounted for. Money managers use the residual 3% for expenses and to buy bonds as a safety measure. While the law of large numbers will ordinarily account for the ordinary jiggles of the stock market, there is some other cycle at work causing a severe crash every 25-30 years. It is thought wise to set aside 25-40% of the portfolio in bonds to ride out such "black swan" storms. This, in essence is the central issue of the third section. The final section describes other variations of the Health Savings Account concept, particularly as it involves transitions from other funding mechanisms.

SECTION TWO: Hidden Economics of Healthcare

SECTION TWO: Hidden Economics of Healthcare

By this time, the reader has got part of the idea behind writing this book. The Health Savings Account is legal and popular. Because of the difficulties of the Affordable Care Act, I expanded HSA to compete with President Obama's system. The proposed replacement will be described, after we discuss the problems it hopes to repair. Meanwhile, right now there's the Classical Health Savings Account, for those who would like to join the millions of subscribers who already have one.

There's a lot more to suggest, but it must be preceded by some background, mostly about the Employer-based system. It's what our predominant health system has been for a century. It served us well, but may have out-lived its usefulness. We'll return to the expanded Health Savings Accounts (L-HSA) after we bring the reader up to speed about the things underneath it. Leading to a short but rather sweeping proposal for what to do about it.


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SECTION TWO: Hidden Economics of Healthcare