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.
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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.
Fire, huge fire. The Corinthos disaster of January 30, 1975, was the biggest fire in Philadelphia history, and one hopes the biggest forevermore. Its immensity has possibly lessened attention for some associated issues which are nevertheless quite important, too. Like the issue of punitive damages in a lawsuit, or the need to balance environmental damage with a national need for energy independence. And the changing ways that law firms charge their clients. We hope the relatives of the victims will not be offended if the tragedy is used to illustrate these other important issues.
On that cold winter day, two big tanker ships were tied up alongside the opposite banks of the Delaware River at Marcus Hook. The Corinthos was a 754-foot tanker with a capacity of 400,000 barrels of crude oil, tied up on the Pennsylvania side at the British Petroleum dock with perhaps 300,000 barrels still in its tanks at the time of the disaster. At the same time, the 660-foot tanker Edgar M. Queen
Edgar M. Queeny
with roughly 250,000 barrels of specialty chemicals in its hold, let go its moorings to the Monsanto Chemical dock directly across the river in New Jersey, intending to turn around and head upstream to discharge the rest of its cargo at the Mantua Creek Terminal near Paulsboro. Curiously, a tanker is more likely to explode when it is half empty because there is more opportunity for mixing oxygen with the combustible liquid sloshing around. A tug stood by to assist the turn, but the master of the Queeny felt there was ample room to make the turn under her own power. With no one paying particular attention to this routine maneuver, the Queeny seemed (to only casual observers) to head directly across the river, ramming straight into the side of the Corinthos. Actually, the Queeny had engaged in a number of backing and filling maneuvers, and the sailors aboard were appalled that it seemed to lack enough backing power to stop its headlong lunge at the Corinthos. There was an almost immediate explosion on the Corinthos, and luckily the Queeny broke free with only its bow badly damaged. Otherwise, the fire might have been twice as large as it proved to be with only the Corinthos burning. The explosion and fire killed twenty-five sailors and dockworkers, burned for days, devastated the neighborhood and occupied the efforts of three dozen fire companies. A graphic account of the fire and fire fighting was written by none other than Curt Weldon who was later to become Congressman from the district, but was then a volunteer fireman active in the Corinthos tragedy.
There were surprising water shortages in this fire on the river because the falling tides would take the water's edge too far away from the suction devices for the fire hoses on the shore. The tide would also rise above a gash in the side of the burning ship, floating water in and then oil up to the point where it would flow out of the ship onto the surface of the river. Oil floated two miles upstream from the burning ship and ignited a U.S. Navy destroyer which was tied up at that point. Observers in airplanes estimated the oil spill was eventually fifty miles long. All of these factors played a role in the decision whether to try to put the fire out at the dock or let it burn out; experts continue to argue which would have been better. There were always dangers the burning ship would break loose and float in unexpected directions, that the oil slick would ignite for its full length, and that storage tanks on shore would be ignited. The initial explosion had blown huge pieces of iron half a mile away, and the ground near the ship was littered with charred, dismembered pieces of flesh from the victims.
, Of course, there was a big lawsuit. When a ship is tied up at a dock it certainly feels aggrieved when another ship crosses a river and rams it. The time-honored principle of admiralty law holds that the owner of an offending ship is not liable for damages greater than the salvage value of its own hulk, which in this case might have been about $3 million. The underlying assumption is that the owner has no way of knowing what is going on thousands of miles away, no control over it, no power to respond in a useful way. Enter Richard Palmer, counsel for the Corinthos. Palmer was aware that the National Transportation Safety Board collects information about ship maintenance inspections in order to share useful information for the benefit of everyone. His inquiry revealed that the inspections of the Queeny for four years before the crash had repeatedly demonstrated that the stern engine had a damaged turbine, and was only able to drive the ship at 50% of its rated power. Why this turbine had not been repaired was now irrelevant; the owners of the ship did have relevant information and had failed to act in a timely safe fashion. The limitation of liability to the salvage value of the hulk now no longer applied if the negligence was judged relevant. The defendants, the owners of the Queeny, decided to settle. While the size of the settlement is a secret of the court, it is fair to guess that it approached the full value of the suit, which was $11 million. Mr. Palmer, by using his experience to surmise that maintenance records might be available at the Transportation Agency, and recognizing that the awareness of the owner might switch the basis for the compensation award from hulk value (of the defendant's ship) to the extent of the damage (to the plaintiff's ship), probably tripled the damage settlement.
Reflections on the extraordinary benefit to the client from a comparatively short period of work by the lawyer leads to a discussion about the proper basis for lawyers fees. Senior lawyers feel that the computer has revolutionized lawyer billing practices, and not for the better. Because it is now possible to produce itemized billing which summarizes conversations of less than a minute in duration, services for the settlement of estates can be many pages long, mostly for rather routine business. Matrimonial lawyers are entitled to charge for hours of listening to inconsequential recriminations; lawyers can bill for hours of time spent reading documents into a recording machine, or sitting wordlessly at depositions. Since the time expended can now be flawlessly measured and recorded on computers, there is little room for a client to remonstrate about their fairness. Discomfort about this system underlies much sympathy for billing for contingent fees, where the lawyer is gambling all of his expenses and effort against a generous proportion of the award if he wins the case, nothing at all if he loses. This latter system, customary in slip and fall cases and justified as permitting the poor client to have proper representation, undoubtedly promotes questionable class action suits and often leads to accepting personal liability suits which should be rejected for lack of merit. The thinking underlying personal injury firms is widely said to be: most insurance companies will settle for modest awards in cases without merit because the defense costs would be no less than that amount, and occasionally a personal liability case gets lucky and extracts a huge award.
Listen to one old-time lawyer describe how legal billing used to be. After the case was over, the lawyer and the client sat down to a discussion of what was involved in the legal work, and what it accomplished for the client. A winning case has more evident value than a losing one, provided the lawyer can effectively describe the professional skills that helped bring it about. The whole discussion is aimed at having both parties leave the discussion satisfied. To the extent that both parties actually are satisfied with the value of the services, the esteem and reputation of the legal profession are enhanced. And the lawyer is a happy and contented member of a grateful community. If he can occasionally claim a staggering fee for a brief but brilliant performance, as in the case of the explosive fire on the Corinthos -- well, more power to him.
It does not take much familiarity with oil refineries to make you realize that cargoes of crude oil are a very dangerous business. We are accustomed to hearing jeers at those who protest, "Not in my backyard", and we deplore those who would jeopardize our national security to protect a few fish and trees in the neighborhood of potential oil spills. Since we do have to import oil and we do therefore have to jeopardize a few selected neighborhoods to accomplish this vital service, the opponents are sadly destined to lose their protests. But that doesn't mean their concerns are trivial. The shipping and refining of oil are dangerous. We just have to live with it and be ready to pay for its associated costs.
The CEO of Safeway Stores recently offered his company's preventive approaches as an example of what the nation can do to reduce health costs. He's undoubtedly sincere, but quite wrong; Safeway just shifted costs to Medicare. This is only one of several ways, major ways, cost-shifting is misleading us. Let's explain.
Average life expectancy is increasing at more than two years per decade, but of course, people eventually die. Since health care costs are heaviest in the last year or two of life, extending life will soon push nearly all those heavy terminal costs from employer-based insurance -- into Medicare. To die at age 64 costs Blue Cross a lot; but to die at 65 gets Medicare to pay for it. Either way, the cost is exactly the same, it doesn't save Society as a whole any money at all. Let's put it another way: dying at age 64 costs the employer and the employees, but dying at 65 costs the taxpayers. This means Medicare costs will surely rise, but in this case, it's a reason to rejoice.
Increasing longevity is constantly pushing more costs from employers to Medicare, and not just in Safeway; the prospect is that soon substantially all major sickness costs will shift into Medicare. (To explain the failure of most employer insurance premiums to fall comparably in response to this shift, one must look elsewhere). But just a minute. Medicare is 50% subsidized by the government, and the employer writes off half of the cost as a business expense. That ought to mean it doesn't make much difference to anyone involved, except for one thing. Some employers have two employees and some have two hundred thousand employees. The amount of tax write-off is multiplied by the number of employees, so some employers can only write off a little, while an occasional employer might even make a profit on using health insurance for calisthenics. Economists agree that fringe benefits eventually and proportionately come out of the pay packet, so ultimately the employed patient benefits from the reduced bill, his employer pays less, and the Medicare costs the taxpayers more.
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But instead of going down that trail, let's look at the second form of cost-shifting. Government payers and a few other monopolists are able to pay hospitals less than actual costs and get away with it. The worst offenders are state governors administering Medicaid, where the underpayment is roughly 30%, in spite of federal reimbursement to the states for most of it, at full price. The resulting profit is used for various state purposes, mainly nursing home reimbursement. For the most part, such diverted funds are used for purposes not easily eliminated, so it is unlikely there will be much cost reduction for the government if the scam is acknowledged and merely shifted to a different line in the ledger. To avoid bankruptcy, hospitals raise the rates for other health insurance plans -- and the uninsured. Employers are paying for most of it, so they stand to gain from reform, only to face higher state taxes as matters readjust. We have yet to learn where these costs will shift if the federal government takes over the costs of the uninsured; the current Obamacare plan is to shift 15 million uninsured persons to Medicaid. To a major degree, the federal government and its taxpayers are already paying for a lot of this uninsured cost, through the Medicaid shift. So its present dilemma is whether to continue to pay for it twice.
There's still a third cost-shift. In 1983, Medicare stopped reimbursing hospitals fee-for-service (itemized inpatient bills are still prepared but are meaningless fictions) and for thirty years has paid by the diagnosis, not the service, for inpatients. Consequently, per beneficiary inpatient costs have only risen 18% in five years, while outpatient costs have risen 47%. Costs are not the same as prices, which are even worse distorted. To a large extent, changes in costs are really changes in accounting practices, driving changes in actual practices. Skilled nursing and home care costs are rising even faster. When you hear fee-for-service payments attacked, it is this apparent overpayment of outpatient costs which is the source of the complaint. But to pay out-patient medical costs in any way other than fee-for-service would imply an almost unimaginable restructuring of the medical system, without any proof it would save money. It will be very interesting to learn what contorted proposal is about to emerge.
Medicare +6%
Medicaid -30%
Private Insured +32%
58% of Hospitals Lose Money
Not only do these shifts provoke inpatient nursing shortages, but they also start a war for patients between hospitals and office-based physicians. Hospitals are winning this war for business, but are losing money doing so. If the public ever demands a stop to loss-leaders, net insurance premiums will probably rise. The difference between a hospital which makes money and one which loses money is based on whether there is enough extra out-patient revenue to compensate for the hidden tax which the state effectively imposes on hospitals in order to pay for nursing homes. The obscurity of the present payment system is quite expensive, and the present beneficiaries of it are the Medicaid nursing homes. Obamacare essentially provides health insurance to 15 million uninsureds by the process of placing them on Medicaid, so the consequences are going to be an interesting juggling act to watch.
5-year Change:
Inpatient +18%
Outpatient +47%
5-Year Hospital Costs
Just notice, for example, that neither Medicare nor private health insurance pays below costs if you look at total national balances. Private insurers are paying hospitals 32% more than actual inpatient costs, while Medicare is paying 6% more than national cost. And yet 58% of hospitals are losing money. The magic in this formula lies in the losses incurred by state Medicaid but shifted to other payers. It could fairly be said we are just looking at a maldistribution of the uninsured, as a cost, and a maldistribution of non-inpatient revenues, as a profit, among the nation's hospitals. To what extent such maldistribution reflects uneven patient quality, as the loser hospitals claim, or provider inefficiency, as the winner hospitals would say, -- merely starts a distraction of attention which could last twenty years while we examine it.
During the Obamacare uproar, I was giving some speeches, and I can tell you that old folks didn't care a hoot, one way or the other. Obamacare wasn't going to affect their medical care at all, so they had only one passing concern. They were afraid Obamacare would cost so much, it would be necessary to raid Medicare to support the promises. As long as no one brought up that issue, retirees didn't care. But as soon as I tested them on the point, they uncoiled like a spring. Plenty of politicians saw the same phenomenon, and nick-named Medicare insurance reform "the Third Rail of Politics". Just touch it, and you're dead. The mathematics is already so strong, no mathematical argument is going to influence any opinion. Essentially, there's a way to make Medicare almost free, but it doesn't matter. What matters is if politics get ugly, political candidates will say almost anything. Right now, and for some time to come, nobody wants to listen to mathematical arguments. They want to know if a red-mouthed opponent can upset them at the polls, by using reckless attacks. They can, and will, and there isn't much that can be done about it. The consequence is, the easiest argument for using compound interest to pay for health insurance is to privatize Medicare, but it has the most political obstacles to overcome.
Whereas, using the same approach for younger people has difficult math because of the shorter time periods. But it has a much easier time of it politically, because young people often don't have insurance, or need insurance, and so they have very little to lose. Furthermore, the regulations issued for Obamacare were often selected for the purpose of hindering Heath Savings Accounts. Much of the coming battle in Congress will be fought over trenches and fences, seemingly erected for the purpose of making progress difficult. That will be true for more than Health Savings Accounts, but that fact is just another irrelevance.
Here's another unexpected twist which will influence future trends. When Medicare emerged from the sausage factory of legislative construction, the hospital part (Part A) was entirely funded by government subsidy, and therefore is an obvious target for adding revenue, based on the fairness argument. That tends to crowd this heavy expense into the category funded by something else and makes the pressure stronger. By another quirk of legislation, Medicare is a subchapter of the Social Security Act, which is now starting to need revenue. So the mechanism already exists to merge retirement income with Medicare surplus, if we ever get a Medicare surplus. The doctor reimbursement part of the Act (Part B) is what people nominally pay for when they pay their Medicare premiums. Now, add the DRG squeeze into the mixture.
Seeing hospital revenue for inpatients squeezed by the DRG, the hospitals have responded by enlarging their outpatient areas and hiring practicing doctors to join their staff on (somewhat above-market level) salary. Although hospitals pay higher salaries, there can be little doubt they would squeeze those inflated salaries if revenue got squeezed. Meanwhile, Medicare is confronted with a mass movement of doctors from Part B to Part A, and so it raises the premiums in extraordinary jumps, which only affects the premium still more. Unless things are changed, that means there will be less money for Social Security, and the hope of merging the two programs will be greatly injured. Meanwhile, if the hospitals squeeze the salaries, there will be a surge of physician returnees to private practice, ultimately raising Part B premiums, or else lowering physician incomes, leading to a doctor shortage unless reimbursement is raised, and new medical schools founded. Patchwork will be applied. The long-run consequence of single-payer would be to slow the merger of Medicare with Social Security. The latter merger would have some mutual advantages, whereas merging Medicare with private insurance would be an acrimonious take-over of one way of life by the other. What a tangled web we weave.
Dear reader, please bear with the next three paragraphs. There's nothing entirely new. All of these ideas have been around for a long time, but are reshuffled into somewhat surprising recombination. We assume the reader has accepted our brief excursions into compound interest, escrow accounts, the J-shaped lifetime health expenses, and the complexities of pre-paying the cost of newborns. Our whole economy is built on debt and its extension called credit. However, everyone guiltily knows is it better to be paid interest than to pay it. Everyone knows life expectancy has lengthened, but not everyone realizes the cost implications. And even Aristotle despaired of the way we ignore the way compound interest sharply increases at the far end; it's J-shaped, too. Let's start by re-emphasizing what everyone supposedly knows already.
The Cushion. The first hypothetical graph illustrates a tax-free escrow account, into which only $400 is deposited at birth, and terminates at death 90 years later, accumulating wealth until age 65 but then spending it down for retirement. The numbers are arbitrary. That is, it begins with a manageable sum but eventually produces a modest retirement, just by sitting still. This is the "accordion" we employ to substitute for our obvious inability to project costs and revenue for a century ahead. It assumes an average income of 6.5%, which is justified by the history of the past fifty years, which show a high of 8.6% and a low of 4.5% in successive thirty-year slices. Actually, as my son shows in the appendix, it is the more conservative modal value rather than the average, to satisfy actuaries who will be asked about it. We have only partial data for fifty years before then, and even sketchier data for a century before that. But the data seem to justify the same conclusion for a long time, in spite of countless wars and recessions. This isn't the plan, it is the cushion which would support the plan if it failed, intended to show our proposals remain within the limit of what is conceivable. No one, of course, can claim to predict the future with precision.
Measurement Inaccuracies. According to accountants, revenue always equals costs, accountants then stretch things a bit to make it happen. But in projecting the future we sometimes substitute one for the other because data is more available. When you dig into how these numbers are produced, you see their premises, hence their inaccuracies, are sometimes quite different. That's a fact which misleads the reader when the two curves are superimposed, allegedly displaying profits and deficits as the difference between cost and revenue. Sometimes it also misleads executives, who have to scramble to keep the company (or the nation) afloat in a mismatch. Without going into boring details, this explains much of the empiricism of the planning process. Sometimes, just sometimes, the Board of Directors acting on logic, knows better than the CEO, acting on data. In healthcare, the central actor is the dismaying alacrity with which costs react to reimbursement.
A Harpoon for Leviathan. And having long experience with the conflict between the welfare of the individual patient and the welfare of the organization, doctors instinctively resist the efficiencies which allegedly result from placing centralized control more and more remotely. Remote, that is, from the patient, who then suffers from the choices being made. Therefore, the "disintermediation" which is implied by individual health accounts immediately appeals to physicians and should appeal to patients, even though it is easily shown that running a tight ship is best for the organization. Therefore, while using Abraham Flexner's ideas as a model ultimately added thirty years to life expectancy, it could not stop its own momentum to adjust to the retirement consequences of improved longevity. People instinctively sense some control must be restored to the patient. Even if they were not so much cheaper, giving patients individual control of their own Health Account balances is the least disruptive place to give patients a harpoon for Leviathan. Prices have wandered too far from costs, and that's a fact.
The Plan in Outline. We assume many things will remain unchanged. Health costs will remain J-shaped, low at the beginning, high at the end. We assume life will continue in three stages: dependent children for thirty years, working and earning for thirty years, and retirement for thirty years, all more or less. We assume some transfer system must exist, so the one-third in the middle can support the two-thirds at the ends. And we assume that research efforts (now $33 billion yearly) will continue until there are essentially only two costs left: the first year of life and the last year of life. Diseases will first concentrate on Medicare, and then gradually fade away. There will be many ups and downs before it takes place, but eventually, that will be the final configuration. Since there are many programs for health, broken up and overlapping, eventually most of the existing structures will change, merge, or disappear. We started with health costs paramount but will end with retirement costs dominant, birth and death continuing as appreciable costs. Finally, most of the next century will be spent in the transition from what we have now, to birth, education, retirement, and death, with education, perhaps going its own way.
The Plan. Technically, the plan revolves around birth and death re-insurance, possibly renamed First and Last-year of Life Re-insurance. Assuming this is the final configuration toward which we are working, our new plan should deliberately aim for it, meanwhile coping with the individual changes science forces on us. One lucky thing is that everybody alive has already been born, so it is not so urgent to cope with that transition quite so urgently. That's good because the transition to the last year-of-life will be complicated enough. Re-imbursing Medicare for terminal care costs should reduce the Medicare withholding tax for working people, allowing that amount to be directly transferred to escrowed partitions of individual HRSAs, instead of indirectly through intermediaries. Growth of this money in the escrow would be the new money for the system, so the individual must negotiate an income rate with his HSA vendor, at least matching the Medicare inflation rate, before he would be able to accept the system of transfers. However, the amount needed is astonishingly small, since it multiplies many times in the process. The transfer, or whatever it is eventually called, of $100 from the withholding tax to the escrow fund at age 25, would generate (at 6.5%) $100,000 at the person's death at age 84. The cost of the last year of life, currently, is said to be $25,000. Paying for the rest of Medicare at current prices might require $300 more. Paying for all of Medicare plus a retirement income from 65 to 84 would depend on what you think is a moderate retirement. But paying an additional retirement of $20,000 a year (amounting to $40,000 per couple) would cost an additional $4000. That's a lot of money, but remember the present total contribution to the withholding tax is $227 billion, or roughly $6800 per worker per year. There's no need for precision in such numbers, but beneficiaries and benefits get added so quickly it is silly to be more precise. The conclusion is obvious that there is plenty of money in this approach. The potential difficulty lies in the transition.
Don't turn your head to spit. Please remember that the secret of this approach is to use two funds gathering income simultaneously from opposite directions. Since 7% of income doubles the fund in approximately ten years, using two funds in opposite directions results in doubling the doublings. The success of the venture thus lies in maintaining a reasonable income in competition with your own intermediaries throughout, either through excessive fees or confiscation by the sovereign. Whether the danger is called default, inflation, or outright confiscation, the expression for this is "imperfect agency", and it has endured as long as governments. The only nation with a Constitution to last 200 years can be the only nation to resist imperfect agency, as well. But it won't happen without vigilance. Since some of the religious divines in my own family tarnished their record, the advice they give in Texas is, "Don't turn your head to spit."
There's a deficit in this system, occasioned in 1965 when generations of new Medicare recipients (like my own mother) were given Medicare without contributing to its costs. Congress will have to decide how to cope with this, possibly by absorbing it, possibly by taxing heirs of the beneficiary (like me), who will probably protest about ex post facto. If that approach is blocked, the new investment money will have to be taxed for it, somewhat delaying its benefits. However, transition costs are nothing new to Congress, and a variety of methods have historically been applied. This proposal eventually envisions enlargement to include the second-to-last year of life, etc, while the first year of life might even start from birth to age 25. Working from both ends, the transitions should eventually be complete, and Medicare should gradually shrink. So long as the excesses in the system eventually go to support retirement income, it should be possible to grow our way out of the Entitlement squeeze. Its long term hopes probably rests on research discovering cures for expensive diseases, diminishing the costs of Medicare, but longevity will also increase, so increased retirement costs must be considered as well. This proposal must be considered a long-term transition plan of uncertain length. Present beneficiaries of Medicare can rest assured that dual systems are practically inevitable for quite some time.
It is the present intent to regard the Affordable Care Act as revenue-neutral since it is not possible to predict what it will actually be. So the problem of the first-year-of-life may not need to be addressed immediately, but ultimately the plan is to over-fund the last-year costs by about $400 (sound familiar?) and distribute $100 to funding newborns by inheritance at the death of what would be their grandparent, reserving the remaining $300 for the last year of their parents. To make all of this come out right, the present 2.1 births per mother would translate into $200 per child generation and $400 per grandchild generation. But there are four grandparents, so it remains $100 apiece per grandchild.
Let's now turn to health insurance for newborns, which pose new difficulties.
Spending for healthcare crowds toward the end of life, while money to pay for it is generated before age 65. Potentially, the two age groups could unify their finances and get dual savings. Only the transfers need to be unified, using Health Savings Accounts as the transfer vehicle, allowing compound interest beyond the boundaries of individual insurance programs. The incentive is created to keep what you don't use, for your retirement.
That's not all. There is no way for a newborn to pre-pay his expenses. Someone must give children some money. Indeed, adding children to a new HSA system might add twenty-some years to the compound interest in Health Savings Accounts, if they only had some money. They don't.
So two systems need a change, roughly the opposite of each other. One faces toward the beginning of life and the other faces toward the end. (Even this conception finds the working class in the middle, largely funded by employers who change often and have other concerns foremost.) Working people aged 25-65 support this whole system, but have so many constraints on their financing it is not possible even to discuss them until the politics subside a little. Connect, yes; unify, only when you can.
Essentially, it is proposed: The HSA expanding into a unifying financial bridge between programs, one account per individual lifetime, serving many largely unchanged programs. Phased-in finance, minimizing changes in the delivery system. It's surprising at how simple some dilemmas become, once the individual patient decides what others now decide for him.
Prepare yourself for one big rearrangement of thinking, however. Extended retirement is a direct consequence of superior healthcare. Retirement could become five times as expensive as healthcare itself, and still be described as a predictable outcome of good healthcare. Where are new revenues -- to keep both of them -- to come from? Read on.
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.
