The musings of a physician who served the community for over six decades
367 Topics
Downtown A discussion about downtown area in Philadelphia and connections from today with its historical past.
West of Broad A collection of articles about the area west of Broad Street, Philadelphia, Pennsylvania.
Delaware (State of) Originally the "lower counties" of Pennsylvania, and thus one of three Quaker colonies founded by William Penn, Delaware has developed its own set of traditions and history.
Religious Philadelphia William Penn wanted a colony with religious freedom. A considerable number, if not the majority, of American religious denominations were founded in this city. The main misconception about religious Philadelphia is that it is Quaker-dominated. But the broader misconception is that it is not Quaker-dominated.
Particular Sights to See:Center City Taxi drivers tell tourists that Center City is a "shining city on a hill". During the Industrial Era, the city almost urbanized out to the county line, and then retreated. Right now, the urban center is surrounded by a semi-deserted ring of former factories.
Philadelphia's Middle Urban Ring Philadelphia grew rapidly for seventy years after the Civil War, then gradually lost population. Skyscrapers drain population upwards, suburbs beckon outwards. The result: a ring around center city, mixed prosperous and dilapidated. Future in doubt.
Historical Motor Excursion North of Philadelphia The narrow waist of New Jersey was the upper border of William Penn's vast land holdings, and the outer edge of Quaker influence. In 1776-77, Lord Howe made this strip the main highway of his attempt to subjugate the Colonies.
Land Tour Around Delaware Bay Start in Philadelphia, take two days to tour around Delaware Bay. Down the New Jersey side to Cape May, ferry over to Lewes, tour up to Dover and New Castle, visit Winterthur, Longwood Gardens, Brandywine Battlefield and art museum, then back to Philadelphia. Try it!
Tourist Trips Around Philadelphia and the Quaker Colonies The states of Pennsylvania, Delaware, and southern New Jersey all belonged to William Penn the Quaker. He was the largest private landholder in American history. Using explicit directions, comprehensive touring of the Quaker Colonies takes seven full days. Local residents would need a couple dozen one-day trips to get up to speed.
Touring Philadelphia's Western Regions Philadelpia County had two hundred farms in 1950, but is now thickly settled in all directions. Western regions along the Schuylkill are still spread out somewhat; with many historic estates.
Up the King's High Way New Jersey has a narrow waistline, with New York harbor at one end, and Delaware Bay on the other. Traffic and history travelled the Kings Highway along this path between New York and Philadelphia.
Arch Street: from Sixth to Second When the large meeting house at Fourth and Arch was built, many Quakers moved their houses to the area. At that time, "North of Market" implied the Quaker region of town.
Up Market Street to Sixth and Walnut Millions of eye patients have been asked to read the passage from Franklin's autobiography, "I walked up Market Street, etc." which is commonly printed on eye-test cards. Here's your chance to do it.
Sixth and Walnut over to Broad and Sansom In 1751, the Pennsylvania Hospital at 8th and Spruce was 'way out in the country. Now it is in the center of a city, but the area still remains dominated by medical institutions.
Montgomery and Bucks Counties The Philadelphia metropolitan region has five Pennsylvania counties, four New Jersey counties, one northern county in the state of Delaware. Here are the four Pennsylvania suburban ones.
Northern Overland Escape Path of the Philadelphia Tories 1 of 1 (16) Grievances provoking the American Revolutionary War left many Philadelphians unprovoked. Loyalists often fled to Canada, especially Kingston, Ontario. Decades later the flow of dissidents reversed, Canadian anti-royalists taking refuge south of the border.
City Hall to Chestnut Hill There are lots of ways to go from City Hall to Chestnut Hill, including the train from Suburban Station, or from 11th and Market. This tour imagines your driving your car out the Ben Franklin Parkway to Kelly Drive, and then up the Wissahickon.
Philadelphia Reflections is a history of the area around Philadelphia, PA
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Philadelphia Revelations
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George R. Fisher, III, M.D.
Obituary
George R. Fisher, III, M.D.
Age: 97 of Philadelphia, formerly of Haddonfield
Dr. George Ross Fisher of Philadelphia died on March 9, 2023, surrounded by his loving family.
Born in 1925 in Erie, Pennsylvania, to two teachers, George and Margaret Fisher, he grew up in Pittsburgh, later attending The Lawrenceville School and Yale University (graduating early because of the war). He was very proud of the fact that he was the only person who ever graduated from Yale with a Bachelor of Science in English Literature. He attended Columbia University’s College of Physicians and Surgeons where he met the love of his life, fellow medical student, and future renowned Philadelphia radiologist Mary Stuart Blakely. While dating, they entertained themselves by dressing up in evening attire and crashing fancy Manhattan weddings. They married in 1950 and were each other’s true loves, mutual admirers, and life partners until Mary Stuart passed away in 2006. A Columbia faculty member wrote of him, “This young man’s personality is way off the beaten track, and cannot be evaluated by the customary methods.”
After training at the Pennsylvania Hospital in Philadelphia where he was Chief Resident in Medicine, and spending a year at the NIH, he opened a practice in Endocrinology on Spruce Street where he practiced for sixty years. He also consulted regularly for the employees of Strawbridge and Clothier as well as the Hospital for the Mentally Retarded at Stockley, Delaware. He was beloved by his patients, his guiding philosophy being the adage, “Listen to your patient – he’s telling you his diagnosis.” His patients also told him their stories which gave him an education in all things Philadelphia, the city he passionately loved and which he went on to chronicle in this online blog. Many of these blogs were adapted into a history-oriented tour book, Philadelphia Revelations: Twenty Tours of the Delaware Valley.
He was a true Renaissance Man, interested in everything and everyone, remembering everything he read or heard in complete detail, and endowed with a penetrating intellect which cut to the heart of whatever was being discussed, whether it be medicine, history, literature, economics, investments, politics, science or even lawn care for his home in Haddonfield, NJ where he and his wife raised their four children. He was an “early adopter.” Memories of his children from the 1960s include being taken to visit his colleagues working on the UNIVAC computer at Penn; the air-mail version of the London Economist on the dining room table; and his work on developing a proprietary medical office software using Fortran. His dedication to patients and to his profession extended to his many years representing Pennsylvania to the American Medical Association.
After retiring from his practice in 2003, he started his pioneering “just-in-time” Ross & Perry publishing company, which printed more than 300 new and reprint titles, ranging from Flight Manual for the SR-71 Blackbird Spy Plane (his best seller!) to Terse Verse, a collection of a hundred mostly humorous haikus. He authored four books. In 2013 at age 88, he ran as a Republican for New Jersey Assemblyman for the 6th district (he lost).
A gregarious extrovert, he loved meeting his fellow Philadelphians well into his nineties at the Shakespeare Society, the Global Interdependence Center, the College of Physicians, the Right Angle Club, the Union League, the Haddonfield 65 Club, and the Franklin Inn. He faithfully attended Quaker Meeting in Haddonfield NJ for over 60 years. Later in life he was fortunate to be joined in his life, travels, and adventures by his dear friend Dr. Janice Gordon.
He passed away peacefully, held in the Light and surrounded by his family as they sang to him and read aloud the love letters that he and his wife penned throughout their courtship. In addition to his children – George, Miriam, Margaret, and Stuart – he leaves his three children-in-law, eight grandchildren, three great-grandchildren, and his younger brother, John.
A memorial service, followed by a reception, will be held at the Friends Meeting in Haddonfield New Jersey on April 1 at one in the afternoon. Memorial contributions may be sent to Haddonfield Friends Meeting, 47 Friends Avenue, Haddonfield, NJ 08033.
To this day, no one knows quite what to make of Owen J. Roberts, founder of one of Philadelphia's largest law firms. He was Prosecutor of the Teapot Dome scandal, Dean of the University of Pennsylvania Law School, Republican appointee to the U.S. Supreme Court. But then, he abruptly became the source of one of the most radical revisions of our system of government since the Declaration of Independence. Nothing in his prior career and nothing afterward in his subsequent civic-minded retirement from the Court seemed to suggest any radical turn of character had taken place. He has been compared with a famous baseball pitcher who threw right-handed or left-handed at will, unexpectedly, capriciously, who knows why.
The issue went far beyond one clause in the Constitution, but the commerce clause was the focus point. Under the limited and enumerated powers allowed to Congress by the Constitution was :
The Congress shall have power to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.
That used to be called the interstate commerce clause until the Supreme Court announced its decision in the case of Wickard v. Filburn. When linked with the Tenth Amendment, granting to the States the power to regulate everything not specifically granted to the Federal government, this clause in the Constitution was universally taken to mean that the States had control of commerce within their borders, while Congress would control interstate commerce. Wickard v. Filburn took all that power from the states and gave it to Congress, which henceforth would regulate commerce. John Marshall had certainly triumphed over the hated state legislatures, but the Supreme Court suddenly lost its power to overrule Congress, too. One side had won the old argument, by silencing the umpire. No wonder Franklin Roosevelt started annual celebrations called Jefferson-Jackson Day dinners.
To describe the background: The 1929 stock market crash was quickly followed by the economic Depression of the 1930s. Nothing of this magnitude had been seen before, and there was a stampede to try new and untested solutions. Even government action which actually worsened economic conditions was felt justified if it conveyed to the frightened public the image that its leaders were taking firm action. Since Socialism and Communism were among the solutions grasped for, many unfortunate actions were felt justified as a way to control the Bolshevik threat. Many of these New Deal actions were declared unconstitutional by the Supreme Court since they involved sweeping revisions in the way all commerce, internal to the States as well as interstate, was conducted.
The Depression and financial panic continued through the 1936 Presidential election, which Roosevelt won in a landslide. Immediately after the start of the new term, he announced a plan to increase the number of Justices on the Supreme Court, appointing new ones more to his liking. He was at pains to point out that seven of the nine life incumbents had been appointed by Republican Presidents. This was, of course, the restraint intended by the Constitutional Convention, and the idea of packing the Court with new appointees was exactly what Jefferson and Jackson had tried to do.
Franklin Roosevelt
In the meantime, the case of Filburn, a dairy farmer, came up. One of the New Deal agencies had assigned him a quota of 200 bushels of wheat he could grow on the side, as part of an effort to raise wheat prices by reducing supply. Filburn had raised 400 bushels, but consumed the extra wheat for his own personal use, hardly a matter of interstate commerce. The Court had repeatedly declared laws like this to exceed the interstate commerce limitation and were thus unconstitutional for the Congress to enact.
Well, Owen Roberts changed his position, Filburn lost his case. Forever afterward, this change of position was referred to as the switch in time, that saved nine. Since that time, the Court has rarely had the courage to rule any action of Congress unconstitutional, even though it is true that Congress promptly and resoundingly rejected the court-packing proposal.
And furthermore, the power of the state legislatures has shriveled because all commerce (except insurance and real estate) is federally regulated, with a corresponding vast increase in the size of the Federal bureaucracy, as Congress relentlessly pushes to intervene in commerce among the several states, formerly known as the Interstate Commerce Clause. Franklin Roosevelt had a certain right to gloat at Jefferson-Jackson Day dinners.
A few weeks before he died, Owen Roberts had all his papers burned. Apparently, we will never know whether the present outcome was the result he had in mind. Since he was later the author of Alfred Barnes' will, which strenuously sought to prevent the transfer of the Barnes art collection to Philadelphia County, anything written by a lawyer can apparently be reversed by other lawyers. One would have supposed that either the Original Intent would govern, or else the opinion of the Supreme Court on what the Constitution means, would prevail. Franklin Roosevelt showed us there is a third possibility: the President can overrule the Court by intimidating it.
For decades the AMA House of Delegates has held its semi-annual meeting in the same hotel in Chicago, renting the whole hotel for the purpose. President Obama unveiled his new plan for health reform this year, just as First Lady Clinton did, sixteen years earlier. They both made theatrical entrances, and both gave flawless speeches. Hillary spoke for an hour without notes or mistakes; teleprompters can be hard to see, but Obama ordinarily uses one for his near-daily speeches. The AMA always tries to get advance information, and rumors were circulating that he would have something dramatic to say about tort reform; the rumor was met with delight. Do you suppose, is it possible, he will agree to a cap on awards for pain and suffering? For forty years, the medical profession has been suffering from abusive malpractice suits and has tried out dozens of proposals for reform. For forty years, absolutely nothing has worked except to place a $250,000 "cap" on awards for "pain and suffering". That proposal works, and pretty much works every time it is tried. Do you suppose, do you suppose, we finally have a lawyer President who understands?
Barack Obama
The President had a legislative plan to present, and with tort reform promised as the climax of it, the doctors applauded regularly, and laughed at jokes that were a little weak; that's what was expected of them. As he outlined his plan, it seemed a flop but don't be rude. He proposed to spend a trillion dollars on providing health insurance for 16 million of the 42 million uninsureds and intended to pay for it with a trillion dollars worth of cuts to the reimbursement of hospitals and pharmaceuticals, plus taxes on the rich, defined as roughly every person in his audience. And still, they applauded, even good-naturedly joining into one of his cadence counts. He was building to the climax; tort reform was coming. When he started the topic, there were cheers.
Unfortunately, he saw what they meant, and took pains to announce that he was not at all in favor of a cap on "awards", he didn't believe in that. It was pretty easy to hear the boo-ing. When all was said and done, his plan for ensuring everyone amounted to putting 16 million people on Medicaid, the absolute worst part of the present system. The money to pay for it would be provided by the State Governors, who would somehow get it from the Federal Treasury.
And so, Obama lost the chance of a lifetime, the sort of opportunity Kipling was describing as sixty seconds worth of distance run. Of course, he had been surprised and unprepared, but he was performing in front of surgeons and cardiologists, and directors of emergency rooms, anesthesia, and critical care units. There was scarcely a person watching who had never faced a split-second decision involving life and death, in full knowledge that if a mistake was made, a plaintiff lawyer would pounce. It is my opinion -- I sat in that audience for 25 years -- that if he had said he would try his best to get what we want, the profession would have united around his otherwise feeble plan and tried to help him out with it.
What about Hillary's Shakespearean demureness of a generation earlier? Well, the average life expectancy of Americans is five years longer than it was then, so we really didn't miss her plan a great deal. But fundamentally it was the same plan that California doctors devised during the 1960s. It was then called Foundations for Medical Care, but it was essentially an HMO. When the private insurers took it away from the control of physicians, they turned it from success into a disaster; it's still regarded as an antitrust violation for physicians to run one. The California patients loved it when it was run by doctors, hated it when the insurance companies took it away. The last fifty years of so-called health reform have amounted to building bridges without engineers, flying airplanes without pilots -- and delivering health care without the supervision of physicians.
In a new system involving three hundred million personal situations, some difficulties take time to come to the surface. Other crises can be anticipated in advance. It's like the Salvation Army or the Red Cross: mostly, you get an appeal for donations just before Christmas, but sometimes there's an emergency that comes unexpectedly. Three months before implementation, Obamacare's first crisis seemed somehow steered at small business, since compulsory health insurance for big business was postponed for a year, whereas individuals and small groups were relentlessly ordered to implement on time. Which was it? A rebellion by big business to be pacified, a rebelliousness by small business to be whipped into submission, or a need to have the two separated in time? In 2013 there are only two important elections, for Governor in New Jersey and Virginia, whereas 2014 will have many elections. An administration which seemingly puts politics ahead of every other consideration, undoubtedly takes the calendar into account. The thought suddenly occurs: is this what we can expect in constant succession for the next three years? Are tidbits of information to be timed with current events, while the great mass of information is withheld about the true scope and direction of some new proposal? Even worse, is health insurance regulation to be played off against a similar game in financial regulation, using the issue of Dodd-Frank regulations as a foil? By the way, what happens to our national attention when Syria, China, North Korea or Iran act up? And finally where do we go if the bond market gets fed up with its tormentors, and runs away with interest rates? To be sure, politics ain't beanbag, but does it have to be played like a children's game?
Community rating is a term of art for everybody to pay the same premium, regardless of previous health status. People in bad health get a big bargain, people in good health pay more than their share, and squashing it all together leads to a community rate. Not for everybody in the community, but for every member of an employer group, working for the same company or bargaining unit. By definition, these are healthier people because they were selected for it when they were hired, and for the most part they remained healthier than average just because they were able to work. Inevitably, industries with many women employees had more pregnancies, heavy industry had more accidents than white collar businesses, so community rating worked best in large corporations, while small businesses knew their employees personally and could manipulate the policy benefits to get the best rates for a small minority. Stated broadly, big white collar businesses got the cheapest community rates, heavy industry got higher rates, small businesses got still higher rates, and individual policies had the very highest community rates. When you squash a lot of communities together you might get a real community rate, but competition between insurers soon forced a graded outcome. The Affordable Care Act anticipated that it might at least achieve regional community rates, and still be able to absorb the differences caused by pre-existing condition exclusions, age and gender rate differences, and other purely insurance responses to public demand for truly uniform rates. Actuaries have computers and lots of data at their disposal, so presumably they advised the politicians it was possible to design a system with close-enough-to uniform premiums that any remaining flaws would be excused at the next election. The arithmetic is not so hard, it is the assumptions you have to make.
Whether you are an actuary or a politician, you have to make the assumption that the people who must pay more, will be willing to pay enough more. For that calculation, certain benchmarks are available. There are 42 states which require that the premiums for the subscribers who pay the most, may not exceed five times the premium paid by subscribers who pay the least. State insurance commissioners are charged with protecting the public against insurer bankruptcies, and apparently it is the collective judgment of such officers that companies which allow much greater premium disparities are in risk of consumer rebellion, potentially leading to collapse of the insurance system even for those who are willing to pay more than a 500% premium for it. The term in common use is "unsustainable". Perhaps the nation is fortunate to have had the example of a state which actually attempted to run a system of absolute community premiums.
New York, New York The Mario Cuomo administration of New York attempted such a system in 1992. Premiums rose by more than 30% the first year, enrollment fell by 38% in three years, and among individual subscribers the number fell from 1.2 million to 31,000. For some types of policies, every single insurer in the state abandoned the business.
To return to the present situation, it would appear that individual and small group subscribers were facing premiums much higher than they were willing to pay, and alarming numbers of them indicated they would rather pay the fine than accept the overcharge. At present, these people are being told to take it or leave it, presumably counting on political sympathy plus subsidies to hold them there. They would have to wait at least a year, and very likely longer, to be able to compare their "community rate" with the "community rate" for big business. Even then, there is considerable possibility for creative accounting measures to obscure a fair comparison.
In addition, there is the possibility of U.S. Supreme Court action, questioning the right of the Executive Branch to change a law signed by the Legislative Branch. Even beyond that point, there is a question of equal justice under the law for doing so. In view of the likelihood that it is far easier to implement a few large groups than many small ones, the reasons given for partial postponement seem to require considerable argument to be convincing. The number of instances in which a Constitutional challenge to some feature of the Affordable Care Act is possible, seems to grow regularly. The Court won't hear a case until someone files it, so the Judicial option appears to lie with the opposition.
George Washington soon learned he couldn't defend the country without taxes, so in time the Constitutional Convention lodged firm control over taxes in Congress. If we must have taxes, the people must control them. Except for defense, Congress has ever since been cautious about imposing taxes. Reducing taxes is quite in accord with this attitude, except net reduction of taxes, after raising them first, maybe a little tricky.
Net reduction of taxes is an important argument in favor of tax subsidies for Health Savings Accounts, using them as incentives to healthy people to "tax" themselves while they remain young and healthy. Investing the money internally, the subscribers can meanwhile protect it for their own use when they inevitably grow old and sickly. If interest greater than the rate of inflation is paid, the money returned should exceed the money invested. Investing the money tax-free further helps the process. If people get back more than they contributed, they recognize it as frugal, saving for a rainy day, and so on. Lifetime Health Savings Accounts were designed as a way to enhance this thinking, and are described in Chapter Two. Over thirty years have elapsed since John McClaughry and I met in Ronald Reagan's Executive Office Building in Washington, but there has been a continuing search for ways to strengthen personal savings for health while avoiding temptations to tax our grandchildren, or to make money out of harmless neighbors. Many of the financial novelties naturally derive from models in the financial and insurance industries. This book in largely a result of such thinking.o
But the biggest advance of all has nevertheless come from medical scientists, who reduced the cost of diseases by eliminating one darned disease after another, and meanwhile increased the earning power of compound interest -- by lengthening the life span. We thus luckily encountered a "sweet spot", where conventional interest rates of 6% or better take a sharp turn upward, while 3% of inflation still remains fairly constant. My friends warn me it must yet be shown we have lengthened life enough, or reduced the disease burden, enough to carry all of the medical care. That may well be true, but we seem close enough to justify giving it a trial as a partial solution. Before the debt gets any bigger, that is, and class antagonisms get any worse.
While Health Savings Accounts continue to seem superior to the Affordable Care proposals, you can seldom be quite sure about details until both have been given a fair trial. The word "mandatory" is, therefore, better avoided at the beginning, and awarded only after it has been earned. As a different sort of example, the ERISA (Employee Retirement Income Security Act of 1974) had been years in the making but eventually came out pretty well. In spite of initial misgivings, ERISA got along with the Constitution and its Tenth Amendment, and the McCarran Ferguson Act which depends on them. We had the Supreme Court's assurance the Constitution is not a suicide pact. So with this general line of thinking, and still grumbling about the way the Affordable Care Act was enacted, I had decided to hold off and watch. The 1974 strategy devised in ERISA, by the way, turned out to be fundamentally sound. The law was hundreds of pages long, but its premise was simple. It was to establish pensions and healthcare plans as freestanding companies, substantially independent of the employer who started and paid for them. Having got the central idea right, other issues eventually fell into place. Perhaps something like that could emerge from Obamacare.
Nevertheless, growing costs are ominous for a law proclaiming it intends to make healthcare Affordable. After several years of tinkering, this program stops looking like mere mission-creep and starts to look like faulty reasoning, maybe even the wrong diagnosis. While waiting for the Obama Administration to demonstrate how the Act's present deficiencies could justify rising medical prices and greatly increased regulation, I brushed up seven or eight possible improvements to Health Savings Accounts, just in case. They had been germinating during the decades after Bill Archer, of the House Ways and Means Committee, got Health Savings Accounts enacted. However, my proposed new amendments wouldn't change the issues enough to cause me to write a hostile book. More recently, some newer variations grabbed me: Health Savings Accounts might become lifetime insurance, and thereby save considerably more money, without the fuss Obamacare was causing. Furthermore, in 2007 the nation immediately stumbled into an unrelated financial tangle, almost as bad as the Great Depression of the 1930s. A depression might lower prices, but if it provoked accelerating deflation, we could be cooked. And thirdly, the mistake of the Diagnosis Related Groups was such a simple one, failure to understand it might not be a complete description. Seen in their best light, unrecognized mistakes were about to disrupt a functioning system, while simple solutions were sometimes ignored. Maybe the problem was trying to spend our way out of extravagance, made worse by massive transfers from the private sector to the public one -- actually, just the opposite of what Keynes proposed. And finally, individually owned and thus portable policies, always held the potential for a small compound investment income. But the recent thirty-year extension of average life expectancy is what really changed the rules. The potential for much greater revenue from compound interest made an appearance, simply waiting for the recession to clear, and to be given a chance to prove itself with normal interest rates.
Cost is the main problem. The Affordable Care Act might be making the wrong diagnosis, even though it used the right name. Employer-based insurance did create pre-existing conditions, and job-lock; losing your job did mean losing your health insurance, and often it was a hard choice. If employer-basing caused the problem, why didn't the business community fix it? Is the only possible solution to pass laws against pre-existing conditions and job lock? Maybe, even probably, a better approach was to break, soften, or change the link between health insurance and the employer. Sever that linkage, and the other problems just go away; perhaps less drastic modification could even achieve the same result. ERISA had discovered such a new concept, forty years earlier. Employers might well bristle at the obvious ingratitude, but real causes were creeping up on them unawares. Generations of patronizing legislators had found it easier to raise taxes on the big, bad corporations, than on poor little you and me. Employers had always received a tax deduction for giving away health insurance to employees, but now, aggregate corporate double taxation made it approach fifty percent of corporate revenue. Nobody gives away fifty percent of his income graciously; for its part, the Government thought it couldn't afford to lose such a large source of tax revenue. Big business prefers to avoid the subject, while big government tends to mislabel things. It's mainly a difference in style.
Another issue: the approaching retirement of baby-boomers slowly revealed that Medicare, wonderful old Medicare with nothing whatever wrong with it, had been heavily subsidized by the U.S. Treasury, which was now paying its 50 percent subsidy out of borrowing from foreign countries, notably Communist China. Medicare's companion, Medicaid, subsidized by an elaborate scheme of hospital cost-shifting, transferred most of its losses back to Medicare. And, guess what, the Affordable Care Act transferred 15 million uninsured people into Medicaid. By this time, Medicaid had become hopelessly underfunded and poorly managed, and 15 million angry people were about to find out what they had been dumped into. Other maneuvers affecting the employees of big business are delayed a year or two, so we may not discover what they amount to, until after the next election, four or even five years after enactment. Meanwhile, the Federal Reserve "solved" the problem of mortgage-backed securities by buying three trillion dollars worth of them. That may not seem to have anything to do with Obamacare, except it pretty well crowds out any hope of buying our way lose of this new trouble. And it sure underlined our central problem. There was nothing all that bad about the quality of a fee-for-service healthcare system which gave everybody thirty extra years of life in one century. Two extra years of life expectancy even emerged in the past four calendar years, in fact. Our problem is lack of money. Lack of money, big-time, and Obamacare was going to cost even more. Health Savings Accounts, new style, emerged from all this confusion as a possible rescue for the cost problem. All this, helped me decide to write this book.
There are some who persuasively argue our even bigger problem is Constitutional. Perhaps because I'm a doctor rather than a lawyer, I don't consider the Constitution to be our problem, I consider it to be Mr. Obama's problem. Because the 1787 Constitutional Convention was convened to unite thirteen sovereign colonies into a single nation -- and splitting it into more pieces wasn't on anybody's mind at all -- they reached a compromise, brokered by two Pennsylvanians, John Dickinson, and Benjamin Franklin. The small states wanted unity for defense, but they also wanted to retain control of their local commerce. They knew very well big states would control commerce in a unified national government unless something fundamental was done to prevent it. Speaking in modern terms, a uniform new health insurance system risks being designed to please big cities who mostly want to hold prices down and wakes up. Sparsely settled regions want -- or need -- to be able to raise prices, here and there, when shortages appear, of neurosurgeons or something like that. The full algorithm is: price controls always cause shortages, so shortages are only cured by paying a higher price. Eventually the Constitution was engineered to give power over all commerce to the several states; otherwise, the small states declared there would be no unified nation.
That's how we got a Federal government with only a few limited powers, reserving anything else to the states. Absolutely everything else was to be a power of the states, except to the degree the Civil War caused us to reconsider some details (which Franklin Roosevelt's Supreme Court-packing enlarged). So, that's why the 1787 Constitution effectively lodged health insurance regulation (among many other things) in the fifty states. Furthermore, The Constitution in the later form of the 1945 McCarran Ferguson Act thereby definitively insulates health insurance from federal regulation, reinforcing the point in a very explicit Tenth Amendment. This may regrettably create difficulties for interstate businesses, and for people who get new jobs in new states. Many states have too small a population to support the actuarial needs of more than one health insurance company, thus creating monopolies in many states and consequent resentment of monopoly behavior. So, work it out. But don't give us a uniform national health system.
There, in a nutshell, you have a brief restatement of the Constitution's commerce issue in the language of the Original Intent point of view. The Constitution as a living document is all very well, but there must be some limits to stretching its plain language; otherwise, it becomes hard to understand what in the world people are talking about.
City dwellers have trouble imagining anyone in favor of either higher prices or lower wages, let alone negotiable prices as the central bulwark of a different way of life. The Civil War toned it down a little, but if it is nothing else, our system is tough-minded and realistic, doesn't surrender easily. The U.S. Supreme Court may soon make the Constitution and its central compromises into the central issue of the day, or they may wiggle and squirm out of it. But as long as they keep squirming, cost containment will remain the central commotion of the Affordable Care controversy. In certain parts of the country, price controls are seen as just one step before shortages appear. That's not entirely unsophisticated. As we will see when we come to it, lifetime Health Savings Accounts could materially reduce the sting of the cost issue, and thus made the final decision for me to write this book. The Constitutional issue, possibly, lurks for another day.
The case in point. On the particular Constitutional point, I would comment whole-life insurance companies in the past seem mainly to have addressed the Federal-State issue by obtaining multiple licenses to sell their products, state by state. Which might bring the Constitutional issue right back, because most insurance companies in practice attempt to be compatible with the largest states, just as John Dickinson predicted they would. In effect, the smaller states are forced to accept whatever regulations the big states have chosen first, or else they might have to do without some new product. Whole-life insurance seems rather less subject to the problem of conflicting regulations because that industry inadvertently acquired another trump card. Life insurance mostly uses bonds in its portfolio, matching fixed income with fixed liability. That's a noble thought, but the additional practicality has surely occurred to insurers that state governments issue a lot of bonds, and insurance companies are major customers for bonds.
Lifetime HSAs could solve the problem of differing state regulations by allowing the individual subscriber to select a managing organization domiciled in "foreign" states, and thus indirectly if the individual chooses, select a different home state for its regulatory climate. After all, the nation has changed in two centuries from a culture of farming in the same local region most of your life, to one where it seems normal to change home states almost yearly. Businesses tied to local laws like insurance, do not move easily. The consequence for lifetime Health Savings Accounts might be a niche market for health insurance in small or sparsely settled states, or others which reject specific California or New York State regulations. Paradoxically, California presently has over a million HSA subscribers, so we must not underestimate the ingenuity of necessary workarounds. Eventually, local pressure mounts to change local regulation, doubtless balanced by the attractiveness of acquiring disaffected customers from out-of-state. All of this could be accelerated by internet direct billing. Consequently, to avert this, we propose:
Proposal 6: Companies which manage health insurance products, particularly Health Savings Accounts, should be permitted to select the state in which they are domiciled, but must, therefore, accept the domicile-state's regulation of corporations. Such licensed corporations may sell direct billing products into any other state; but products sold in another state must mainly conform to the regulations of the state in which the particular insurance operates, even to the point of disregarding any conflicting regulations by the state of corporate domicile.
Comment: Fifty years ago, the main function of any State Insurance Commissioner was to assure the continued solvency of insurance companies, so insurance would be available when the customers needed it. In the past few decades, however, many insurance commissioners with populist leanings have viewed themselves as protectors of the public against price gouging. That is, they adopt the big-city, big-state, point of view. One Insurance Commissioner attitude might thus insist on high premiums, Commissioners with another attitude might reward low premiums. Insurance companies should, therefore, welcome laws which make it easier to switch the state of domicile, since the attitudes of insurance commissioners can change very quickly.
Comment: Lifetime insurance was pressed forward by discovering the investment world's computer-driven innovations might make lifetime coverage far easier, less chance, and considerably more financially attractive, than coverage in self-contained annual slices. It is common knowledge in insurance circles that most term life insurance would be unprofitable, except so many people drop their policies. Therefore the attitudes of different states are not completely predictable. Some states are more aggressive than others in adopting new technology, for example.
Changes in Future Cost Volatility. At an advanced age, illnesses are more severe and more sudden. Right now, increasing longevity also mostly affects elderly people who live longer toward the end of life, by widening the interval between the last two major illnesses. You can never be entirely sure that will continue to be the case because medical care and its science constantly evolve. Furthermore, the cost of care often has more to do with the patent status of a drug or device, than with its manufacturing cost, sometimes turning a cheap illness into an expensive one.
One thing you can be sure of, restructuring health insurance in the way to be suggested in Chapter Two, would result in a general reduction of health insurance markup, by exposing local insurance to the more nationwide competition. Health costs themselves might skyrocket, or they might largely disappear, but in any event, will probably end up cheaper than by using other payment methods. No doubt critics will find large numbers of nits to pick since states retain the right to design idiosyncratic regulations, but new regulations would remain semi-optional for residents to the extent some neighboring state disagreed with them. No matter what else turns up, it will be pretty hard to match the cost variation from national marketing, demonstrated by ten minutes of internet cruising. In fact, the great obstacles to an effective system in the past, like "job lock" and "pre-existing conditions", present no obstacle at all to lifetime HSA within an HSA regulatory framework. Many problems would stand exposed as artificial creations of linking health insurance to employers, at least as long as health insurance remains modeled on term life insurance. Just change to a more natural system tested for a century as whole-life insurance, and such technical problems might simply vanish. Even slow adoption, based on public wariness about a new idea, has its advantages.
Although prediction of future sea change is uncertain, a brief review suggests future healthcare financing could very well become highly volatile, in both frequency and costliness. Therefore, spreading the risk with insurance gets more attractive to age groups unable to recover from major financial setbacks. Planners would do well to consider such things as last-year-of life insurance, or some other layer of special reinsurance. Immediately, such ideas raise the question of multiple coverages, with multiple tax exemptions providing room for gaming the system. No doubt, this was the thinking behind imposing regulations prohibiting multiple coverages with HSA, and probably eventually ACA as well. There must be a better way to handle this dilemma than forbidding multiple coverages. Multiple coverages are very apt to be exactly what we will need to encourage. Since living too long and dying too soon are mutually exclusive, consideration should be given to placing tax-deductibility at the time of service, and permitting deductions for the one that actually happens to you. It is thus possible to envision having four or five different coverages, but only one tax deduction. Since the purpose is to spread the risk, we might even go to the extreme of limiting the number of policies that charge premiums, into the one that actually happens to you, but paid out of a common pool. Planners with a more conventional background might well snort at such ideas. Until, of course, they themselves need a life-saving drug costing ten thousand dollars an injection for an extremely rare condition, under a patent which will expire in a year.
So, Let's Get Started with Pilot Experiments in the Willing States. The original idea of modestly improving the original Health Savings Accounts, continues to stand on its own two feet. It's what I would point to right away if you feel unsuited to the Affordable Care Act, or even to ERISA plans. Right now, anybody under 65 (who does not have, or whose spouse does not have) other government health insurance, including Veteran's benefits can enroll in an HSA, and any insurance company can offer a product containing minor variations of the idea, within the limits of the law. A number of Internet sites list sponsors for HSAs. For ease of understanding, we present this idea as if we had two proposals, term and whole life.
Actually, the term-insurance version is the only one which is currently legal, whereas the whole-life variety remains only a proposal. It seems necessary to regard the whole HSA topic as one proposal for immediate use, and a second proposal as a goal for future migration. In fact, almost 12 million people already are subscribers to the term variety, having deposited a total of nearly 23 billion dollars in them. The internet contains brief summaries of their policy variations. At this early stage of development, it is only possible to conjecture that small and sparsely populated states will probably develop more liberal regulations, while bigger and more densely populated states will probably develop bigger and more sophisticated sponsoring organizations. Anyone of the fifty states, however, might someday change its regulations to make itself attractive as a "home state", and at present, it is possible to transfer allegiance.
Unfortunately, current regulations exclude members or dependents of government health insurance programs including veterans' benefits, from depositing new funds in HSAs. It's easy to see why loopholes might allow an individual to get multiple tax exemptions in an unintended way. But loopholes are a two-way street. The early subscribers tend to be younger, averaging about 40 years of age, and probably of better than average health because it would probably require a horizon of two or three years to build up the size of an account to the point where an individual feels adequately protected. That's a result of a $3300 annual contribution limit, and a scarcity of variants of affordable high-deductible catastrophic coverage. This is one instance where "the lower the deductible, the higher the premium" puts the subscriber at risk for the first few years. And that, rather than loophole-seeking, is the reason early adopters are younger, healthier and wealthier; the regulations give them an incentive to be. Let's stop saying, "My way or the highway." If there is a reasonable fear of double tax exemption, the regulation ought to state its real purpose. Otherwise, "Let a hundred flowers bloom", regardless of oriental origins, is a better flag to fly. If a national goal is to get more people to have health insurance, we should be hesitant to impose impediments on it.
When kids get sick, the parents pay the costs. When the grandparents get sick, Medicare may well pay a large part out of tax withholdings, premiums, and government borrowing, but working children still are the last resort for the grandparent generation, if resources fail. What's the common theme, here?
All medical costs, whatever the age of the patient, ultimately rest on the contributions of some working person, aged 21 to 66. The medical payment system is largely driven toward transferring funds from non-sick people to sickly non-working ones. The non-sick increasingly resent this stubborn fact, but as long as we continue an employer-based system it will only get worse. It is necessarily a dangerous hostility to encourage.
Indeed, our whole society is somewhat based on the interdependent family unit, using the assumption breadwinners pay for themselves and children, and are ultimately responsible for their parents as well. It's somewhat dismaying to reflect, that with a decline in the power of religion, a decline of the importance of the family may threaten the stability of many under-examined issues, just like healthcare financing. If the employer or the government supersede the family, the family is still the fall-back; and anyway, all taxes and profits ultimately derive from working people, just not the family's own, particular, working people.
Whole generations vocalize decreased respect for marriage in various ways, but do not seem to have considered the disruption it would cause, to get taken at their word. Viewed both ways, if we discuss the ability to pay for healthcare, we have to admit there is nobody to stand behind those bills, whatever the age of the patient -- except some breadwinner. Then, when we ask whether the country can support the cost of healthcare, we are actually questioning whether a solitary age generation of workers can really afford to pay the current costs of everyone else. Must demographics somehow be twisted to suffice, or can we tweak the system? Can we all live ninety years, and only work for thirty of them?
The Demographic Distribution of Health Costs. Unfortunately, health costs do not self-distribute to match health revenues without some pushing. Mostly, the process is, revenues are twisted to match costs.
About 3% of health costs concentrate in the first year of life, about 15% of costs are generated in the last year of life. The last year of life itself has shifted, from age 47 in 1900 to 83, today. Given some time, longevity will grow to 93. From these facts alone we see a minimum of 18% of costs being redistributed from workers to non-workers, and inter-generational cost shifts as a whole are probably closer to 68%. That's variable and inaccurate because hospitals know you have to be born and you have to die, so they find ways to pay bills, shifting the cost of what isn't mandatory, onto the bills of those who cannot escape. That, in turn, is shifted a second time, to the people who can better afford to pay them. It seems to the business office like money going in and out of the accounting office door, but in fact, it goes in one door and goes out through quite a different door.
Mostly, revenues are twisted to match costs.
Hospital Cost Shifting
It just has to be that way; no other way will work. It isn't rocketing science to figure out, it actually doesn't cost thousands of dollars to deliver a baby, or to pronounce an old fellow dead. Just compare the price of a five-star hotel with the price of (one half of) a semiprivate hospital room or the cost of a frozen food dinner with a hospital meal. This isn't cheating; it's just an institution trying to serve the community.
Indirect Overhead. One of the generalizations which is made fairly, however, is a typical hospital ends up with too much indirect overhead. Somebody has to be paid to mow the lawn, but you can't very well bill patients individually for lawn-cutting. Somebody must answer the telephone for the institution. Over the past centuries, a lot of activity was dumped on the hospital, because hospitals are nice, they are handy, and everybody shares a piece. They are a favorite place to hold local elections on the second Tuesday in November, for example, because they generally have some spare space in the lobby, and they belong to everybody in the community. They have cafeterias and gift shops because that is part of their function. As long as they have them, why can't the community use them? They also have parking garages, partly with the same motive banks use, to issue mortgages for buildings which could be sold for some other use in a pinch. And mortgages are cheap, right now. The point is not they are building things they don't really need, the point is an accumulation of such costs provides a handy vehicle for -- large indirect overhead charges on the cost report. Every overhead cost must eventually be added to some bill, and can thus -- why not-- be re-assigned to areas of the hospital which normally house patients of a target group.
There once was a time when indirect costs avoided elderly patients; as soon as Medicare became an entitlement, the incentives shifted. Now, serious expensive diseases are all migrating into the Medicare age group. As they do with computerized cost-shifting of pediatric units, and as they will when Obamacare pays for some indigents. But please don't pass regulations to suppress the salaries of cost accountants, in order to control all this abuse you have suddenly discovered.
When 100% of the costs must be supported by 20% of the patients, no hospital in existence could stay in business for a week, without cost-shifting. No doubt, most hospital administrators would welcome insurance companies doing this cost-shifting on their own books, but they would be foolish to permit it. Sooner or later, some community activist would protest it was dishonest, and the insurance companies would promptly dump it back in the hospitals' laps. In a sense, hospitals are reinsurers of last resort and must remain reluctant to give away the tools of their trade.
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.
