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.
News reports began to surface that big business was talking to Democrats in the White House
about major revisions in the national health delivery system. That in itself was news, because big business normally forbids its employees to talk with regulators, and does not commonly welcome any new regulations. But the Clinton Administration was looking for political allies, while the business community was willing to examine proposals to lighten the burden of employer-based health insurance. The discussions soon probed whether a common system might reduce government costs of Medicare and Medicaid, and simultaneously reduce the costs of employer-paid health insurance. For years, big business had been suspicious that the health community had somehow forced employers to pay an unfairly large share of other people's health costs, through some arcane manipulation of hospital cost accounting. Their term was cost shifting.
The administrators of government programs believed the same thing was happening to them. Since the only group left to benefit were uninsured, the arithmetic was somehow wrong. A 7% population group, most of whom are young and healthy, could not account for annual premium jumps far in excess of the cost of living, occasionally as much as 30% in one year. In both governmental and business minds, the main beneficiaries of cost-shifting must be the hospitals themselves, and the doctors who control them. Somehow, it seems not to have occurred to them that this news was brought to them by their fiscal agents, the health insurance companies, and was therefore likely slanted to avoid attention to middle-man costs. Whenever major negotiations are to be held, CEOs and top politicians take over to make the deals, necessarily basing their judgments on filtered information. Since this is a familiar situation, they employ high-priced consultants.
Clark Havighurst
The five hundred secret members of Mrs. Clinton's task force were willing to listen to the ideas of anyone who had political clout, especially staff members of Congressional committee chairmen. But these people had been struggling with the problem for fifty years to no avail, so the emphasis had to be on change, on big new ideas. Universities and think tanks were especially welcome to comment, and
Clark Havighurst was particularly influential. But there had to be some kind of track record, some practical experience on which to base such an enormous national initiative. The best available model was the Health Maintenance Organization (HMO), whose most famous proponent was Paul Ellwood, a former midwestern pediatric neurologist who had gravitated into health insurance consulting. Ellwood had a vacation home in Jackson Hole, Wyoming, where he then gathered the non-government component of this movement into his front parlor. Insurance companies, human resources officials, academics, and in later stages the news media, were given the Word, an opportunity to criticize, and an opportunity to have their views coordinated with the government group in Washington. There was a rough division of labor, establishing general regions of dominance; but ultimately, the two components intended to fit together in a unified health system for the whole country, bar none. The business community began to see that inevitably, in that case, the final overarching decisions would be made in Congress.
Employer-based health insurance. Although improved health care has added moderately to working years of life, a lot of people hate to work, whereas to other minds, thirty years of improved longevity mostly result in a thirty-year vacation after the end of productive careers. The famous American work ethic is not universally celebrated. Pensions and savings sometimes only partially anticipate the cost of enjoying this health windfall, which unfortunately competes with yet another unexpected cost, the steadily increasing expense of dying. These changes were both rapid and unexpected, so confusion is inevitable.
There is still another way of describing this readjustment to a wonderful scientific windfall: Most sick people are now either too old to work or else too young to work, even before they get sick. Health costs therefore relentlessly concentrate toward the first year of life and the last year of life. The strategy we developed of hiding the health costs of the young and the old within the health costs of the worker class confronts the new reality: middle-aged people have many fewer health costs, themselves. That leaves less room to hide the costs of the sickly young and the sickly old, which all along have been buried within the premiums of workers' health insurance. Let's face a fact: Those who are neither near the first year nor the last year, must somehow pay for those who are -- because there is nobody else.
Hiding the health costs of the young and the old within the health costs of the worker class confronts the new reality: middle-aged people have many fewer health costs, themselves.
What does this have to do with employer-based insurance? In the 1920s a rough acknowledgment was made that healthy working people must obviously support sick people who can't work. So it was devised that basing insurance on employee groups (if their dependents were included) might make a good start toward a national solution. Employer-based health insurance was a brilliant improvisation, but as life expectancy continued to lengthen, the gap between retirement and death also relentlessly widened. In 1943, discriminatory tax deduction slipped in, via Henry Kaiser, badly injuring the atmosphere of fairness for employer-based health insurance. Federal Medicare for the elderly was devised in 1965, and state Medicaid for the poor. They helped but didn't entirely cover the gaps either, and we are coming to learn how much we had to borrow to pay for it.
So now we have the Affordable Health Care Act, commonly called Obamacare. It remains to be seen whether even Obamacare can be made to stretch, because thirty years is a long time between retirement and the last year of life, and fifty years a long time to wait to judge results. With wars, globalization of industry and depressions to contend with, the task is hard, perhaps too hard. Unfortunately, having passed a law containing the Affordable Care Act mandates, we must try to do it in 2014, and do it in a rather utopian way for everybody at once. For what amounts to a level "community" premium for everyone, we must make no allowance for differing costs and pre-existing conditions, economic or medical. Many of these wounds are self-inflicted, costing the program many sympathizers who might have endorsed the same goals at a slower pace.
We Had a Secret Plan. It might as well be mentioned that Americans once nursed a secret plan for all this. We consented to spend incredible amounts of money on medical research for eliminating the disease. In fact, we made a pretty good try, considering we never officially admitted it was our goal. If there is no disease, there will be no medical costs to worry about, right? Directly confronted, eliminating acute disease would unfortunately still leave those first and last years to be paid for. There was just no escaping it, everyone has to be born, everyone has to die. And while substantially eliminating disease among the young and middle-aged is an important economic stimulant, it also lengthened life expectancy by almost thirty years in a single century. Those who managed to prosper were indeed rewarded with a thirty-year vacation, but some of the windfalls had to be set aside for those whose luck was bad, destined to spend thirty years in the shadows. It was a big, bold gamble, and in an American sense, we won it. Never acknowledging it was a goal, no one could say we lost it.
Americans will help others if they can, but first, they must be convinced that others cannot pull them down.
We are now engaged in a great upheaval described as insurance reform, to test whether a great nation which secretly believes it can do anything, can satisfy both those who believe it has attempted too much, and those fearful it will fail by aiming too low. Arguments abound. One description of victory would be this: we must abandon the essentially European idea of rich and poor as permanent classes of society. In its place, we should reaffirm the traditional Whig position that rich and poor are largely two or three, or four, stages of every American's life. In Lincoln's view, we all arrived as poor immigrants, gradually worked our way upward in society, usually taking several generations to reach the top. No more than a handful of born aristocrats ever immigrated to America. In a revised version of the same epic poem, all infants are poor, adolescents are always confused, and gradually we become self-sufficient members of society; eventually, we all die. Whigism refuses to see us as members of tribes, some eternally rich, some eternally poor; Whigs mainly hope that Liberty and personal responsibility will be sufficient to preserve the more perfect union. In Lincoln's case, it was a close call, but we made it, even then.
Obviously, people with income must support the disabled, since there is no one else to do it; equally obviously, the nation has not evolved to the point where it can be done by having one angry tribe tax another. Instead, what is needed is to organize some sort of insurance pool in which younger people contribute for their own individual future, recognizing frankly that people will chiefly fear the system cannot keep its fingers off the money to give it back eighty years later. That's really all that is essential, since many models have tested the insurance market, and watched eyes glaze over with the details.
Young people must subsidize sick old people, all right, but the only old person you surely enjoy subsidizing is yourself. For the moment, forget about the difficult transitions, about which 2500 pages of the law were written and will prove to be too little. The challenge to the country is whether we collectively have the courage to stake our lifetime earnings on the proposition that the average person can save enough of average lifetime earnings to pay for average lifetime medical costs, and still have enough left for a comfortable life. If he can't, this scheme is not going to work, because even if he can, the scheme might still fail. A thousand folksy mottos teach us that Americans will help others if they can, but first, they must be convinced that others cannot pull them down.
The Law of Compounded Interest. There's a seldom mentioned advantage to individually owned and selected insurance-like pooling of lifetime health costs. If insurance premiums are pooled, stored, and invested by professionals, they will gather investment income, or compound interest in quantities which always surprise a newcomer. To wit: money at 10% will double in seven years. Or, stretched over long time periods, the owner can withdraw 4% a year, forever, and still have as much as he started with. Within ages, 25 to 75 exists an opportunity for five doublings at 7% or 3,200%. Hidden in this is another incentive: if you only spend half as much money on healthcare as average, you can eke out another doubling, making it 6,400%. Transforming medical insurance from term insurance to a "whole life" insurance model carries the potential for vastly diminishing the lifetime cost to the average subscriber, but that opportunity probably did not exist a century ago. We may say we sacrifice this new opportunity because we do not quite believe it, but in fact, we mostly do not trust any government to give it back, eighty years later.
"Whole life" insurance model carries a potential for vastly diminishing the lifetime cost to the average subscriber which did not exist a century ago.
This paper, therefore, urges a voluntary approach, individually owned and individually selected, primarily because it seems safer to go a little slower than we could if we just followed a command. Anything which includes the word "mandatory" also forbids the testing of alternatives. At least theoretically, alternative approaches are forbidden forever, with the implication that nothing better will ever be possible. At the barest minimum, the Affordable Care Act must be amended to encourage the testing of new ideas by Congress and by state governments. Another similarly hampering word to avoid, is "perpetual", but it seems more conciliatory to avoid the word "insurance" and to outline the nature of this proposal as a non-insurance savings mechanism limited to lifetime health expenditures. To a framework of five proposals, about a dozen other features are later described but held in reserve, waiting to be added slowly as the system can absorb them. This is neither an Executive Branch initiative nor an insurance company product. It is a national strategy, which starts with individual Health Savings Accounts and builds on that foundation. It adds a high-deductible health insurance policy, preferably without co-payments. It strips down the benefits offered by the HSA to the first and last years of life, to prove the concept safely, and to pay for transition costs. After that, it should expand like an accordion to cover as much as it can afford. Beyond that point, we can argue some more, but we are aiming for maximum elimination of complication and subsidy, not because they are necessarily bad, but because they should in time be unnecessary.
That's the good side of C-HSA. What continued to bother me was it was close to providing lifetime healthcare financing, but without much latitude. Perhaps it would be better to settle for half, or a quarter, which would certainly have plenty of latitude for revenue shortfalls. Better still, perhaps a way could be found to phase it in, but stop when it runs low on money. Because it contained so many little pleasant surprises, however, I decided to press onward to see if others could be found.
Whole-life insurance is more profitable than term insurance, but it requires more capital.
What emerged were these new ideas:
1. Multi-year policies. To go from a term-insurance model to a whole-life model, using the life insurance approach. This would take advantage of the uptick of the yield curve in compound interest discovered by Aristotle long ago, inflecting at about the forty year mark. And advances in science would provide some extra years of longevity, to take advantage of it.
2. Escrowed Sub-Accounts. Instead of one big balance, it became apparent that some funds were intended for long-term use, and were therefore entitled to different interest rates ( checking account, savings account, investment account), which the account manager would wish to have locked for a given time or purpose (66th birthday, ten-year certain, $10,000 minimum, etc.).
3. No age limitations. Further longevity could be introduced by making HSA a lifetime compounding experience, cradle to grave, but how to fund it remains an issue concentrated on the life alternatives facing those, age 21-66.
4. Birth and death insurance, catastrophic, disability, etc. Exploring the idea of HSA from birth, I came to realize the extra cost of the first year of life was a serious impediment to all pre-funded health schemes, since one can scarcely expect a newborn child to finance a debt of 3% of lifetime costs, in advance. To make matters worse, the same is even true of the 8% of lifetime costs up to age 21. Thinking that one over, I came to see why nobody had ever devised a really adequate scheme for lifetime coverage. Seen in that light, it became clear the consequences justified solutions which might upset ancient viewpoints about a vital and sensitive subject. Whether recent turmoil (about same-sex marriage, unmarried mothers and the like,) would soften resistance or harden it, was just a guess. The result of this thinking was birth-and-death insurance, covering only the first and last years of life. Furthermore, it became easier to contemplate the issue of perpetuities, or inheritance from grandparent to grandchild. The laws already sanction inheritance to 21 years after the birth of the last living descendant, generally adequate for the purposes in mind here. All such special-needs insurance tends to reduce the remaining liability of general-purpose insurance, and typically is not workable unless the two insurers coordinate with each other and keep adequate records of their compacts.
5. Passive Investing and Dis-intermediation.The whole concept of "passive" index investing was borrowed from John Bogle of Vanguard and Burton Malkiel of Princeton. Recent difficulties in the fixed-income market make stocks seem just as safe as bonds to more people, and generally they provide more yield. The historical asset tables of Roger Ibottson of Yale inspired further confidence in the approach. Having absorbed this lesson, the concept of replacing an advisor with a safe deposit box emerged, although custodial accounts are not expensive. This maneuver could shift the "black swan" risk from the agent to the investor, assuming the agent has not shifted it, already. Ownership of common stock may not be entirely perpetual, but partial ownership of an index fund containing a trillion dollars worth of common stocks, certainly does seem perpetual enough for ordinary purposes.
6. Zero-balance protection devices. The potential that someone might figure out a way to game this system had to be considered, in view of the staggering magnitude of this proposed funding system if it caught on. The brake which suggested itself was to force the balances to return to zero at least once in a time period, and possibly many times oftener, if necessary. Offhand, I do not see how this system could be gamed, so the power to impose zero balances at a trigger level of balance, is a credible threat if it impends.
7. Total-market Index funds as a currency standard. One throw-away idea emerges from this analysis. The world economy went off the gold standard some years ago, and since then has adjusted its currency by inflation targeting. In the recent credit crash, however, the Federal Reserve has been unable to reach the 2% goal for some time, for unknown reasons. If the reason for this remains unclear, or if the reason is unsatisfactory, it seems to me the total market index of the nation's common stock would be a superior proxy for re-basing the currency on the national economy. If other nations copied this standard, their central banks could agree on a system of leveraging it between currencies, but the essential fact would remain that each nation's currency was a proxy related to its national economy, ultimately based on the marketplace. That might even restore matters to where they stood before 1913, when the Federal Reserve was created. This certainly would be superior to what some people accuse the Federal Reserve of plotting (expunging our considerable debt to the Chinese by inflating our currency.) As people say, this matter is above my pay grade, but it certainly would have the advantage of stabilizing the medical system, and ultimately the retirement system. The need for protection against bit-coins might be kept in mind. If it prevented entitlements from off-the-books accounting, I would consider index funds as a currency standard, a considerable advance.
The addition of some or all of the above seven or eight features would provide more than enough extra money to fund the entire medical system until such time as it was forced, by scientific advances, to become a retirement fund with a small medical component. We have the rough estimate of $350,000 average lifetime medical cost, but no way at all of judging the average retirement cost, so this concept will have to terminate in fifty years or so, or when the data catches up with the theory. After all, the limit of desirable retirement income is not infinite for everybody, but it is obvious it is infinite for some people.
This synopsis of the additional concepts for Health Savings Accounts concentrates on paying for healthcare with a cash cushion in reserve, so it does not dwell on technicalities, favorable or unfavorable. It does however skip over one theoretical issue of some importance: where does this money come from? Linked to that is the wry observation that it proposes to reduce medical costs by spending gambling money from the stock market. Since people who would say that, show no reluctance to hurt my feelings, let me make a forceful reply.
The designers of the Medicare program in 1965 faced a huge transition problem, too, and nevertheless, plunged ahead in spite of badly underestimated future costs. So, although revenue surfaced in the HSA proposal had been there all along, it was never gathered and put to use -- wasted, let us quietly say. I do not blame Wilbur Cohen or Bill Kissick for making concessions to get it started. There is little else they could do from 1965 to 1975 except adopt a "pay as you go" strategy. But sometime after 1975 that was no longer the case, and the new opportunity was neglected in a befuddled realization that costs were going to escalate rapidly, although hidden from sight. A great many free-loaders were added during the transition, and there was little to do except wait for them to die. So, yes, things were allowed to get worse than they needed to get, but as a nation we happened to be even luckier than we deserved to be, as scientists eliminated dozens of diseases we might have had to pay for. Until the end of that race between costs and revenues had come into sight, it was not possible to guess which one would win.
So now it is our turn to make proposals. We must face similar daunting problems of transition by a partially paid-up constituency, headed into a fully-expanded set of benefits for at least thirty years. Plus a huge and undeclared national debt from borrowing to pay for previous mistakes. I have tried to be generous in my assessment of the 1965 achievement, which was considerable. Let us see whether the opposition party can bring itself to respond generously and without intransigence, however vigorously they may subject the issue to adversary process. It doesn't mean to be a punishment, it means to be a rescue.
Study of Health Savings (and Retirement) Accounts was begun thirty years ago, increasing rapidly in the past five years. During that time, paying for unknowable health costs emerged as the central concern. At a recent Congressional hearing, the actuary testified his estimate of the first ten years of costs for "Medicare for everybody" to be 40 trillion dollars in addition to present costs, which will themselves require additional revenue in 5 or so years to avoid bankruptcy. Retirement costs would require even more additional revenue. Furthermore, it would take at least five years to make such a massive transition, possibly ten years.
This emergency testimony before the "Speaker's Rules Committee" seemed to be Nancy Pelosi's signaling we should lower our sights on such impossible spending proposals, no matter how many Democrat candidates for President endorse them. Paying a big chunk of health costs would be a significant achievement, paying for two issues simultaneously might just be an impossible dream. Nevertheless, paying for the whole healthcare system was something the public expected to happen quite soon, and would punish the ruling political party if it didn't sacrifice everything else to achieve it. We might afford to leave Medicare alone. But when eventually Medicare came into focus as the main impediment to solving a double problem for exactly the same age group; "saving" it becomes a relatively minor issue. New revenue must be found, the quality of care must not be injured, and -- most of all -- public opinion must be satisfied. This is a specialist's game, but avoidance of a disappointing outcome is becoming a decisive player. As Congress dithers, it only becomes clearer that deficit financing from foreign enemies cannot continue much longer.
Resource Assessment. Adding up all the economies of Health (and Retirement) Savings Accounts, but now also including the retirement costs, the conclusion is left that HSAs might somehow pay for health costs, plus some but not all retirement costs. Much of the shortfall comes from difficulty stating a "decent" retirement payment which would satisfy most people. What is enough for a Trappist monk is not enough for a movie star, and what will be called decent in 60 years is pretty hard to say. So at most, we should aspire is healthcare plus some retirement; supplementing retirement as we can. Even promising that much is a stretch, but is certainly superior to government healthcare plans without the discipline of individual ownership. Unfortunately, that forces the individual to some choices he must make for himself, versus allowing some big anonymous corporation to do it all for him at a hefty administrative markup. Let's specify the two big dangers the individual must navigate:
Imperfect Agents Theoretically, even the best anyone could provide from HSAs (we jump ahead, here) would be to give a newborn baby a couple of hundred dollars at birth, let a big corporation do the saving and investing, and pay out a million dollars for medical bills (that's what total health costs over the next ninety years might cost} on his behalf, at no charge. The long investing period could provide some astonishing returns, but it would not be entirely carefree for the customer. For example, it might actually cost that much, not just be borrowed with every intention of defaulting on the loan.
Unfortunately, experience over thousands of years has demonstrated agents -- especially governments--will eventually extract much of the resulting profit for themselves. Countless kings have been known to shave the edges of gold coins, some of them have been found to have employed inflation of the currency to pay their own bills. Investment managers are almost invariably well compensated, usually for mediocre returns, so this cost must be automated with index funds. William Penn, the largest private landholder in history, was put into debtors prison by his wayward agent, as was Robert Morris, the financier of the American Revolution. Whole-life insurance companies are the closest approximation of an agent for a Health Savings Account who might propose to get paid a level premium for decades before paying out a benefit for a dead client. They seem to survive by promising a single defined fixed-dollar benefit and counting on inflation to work for them as it sometimes does for dictators, overseen by an honest insurance commissioner. Unfortunately, they have the moral hazard of falling back on other surviving firms to bail out bankruptcies, and the political hazard of trying to force premiums downward for the taxpayer without reliable benchmarks or overgenerous recompense. Just how much they have been rescued by lengthened longevity is something only an actuary knows. Long ago, the imperfect agency situation was summarized by the question, "And where are the customers' yachts?"
Inexperienced Solo Management. If Warren Buffett had an HSA, he would have no problem managing it, and neither would a great many other savvy folks. The problem is to make the management so simple and standard that expenses can be kept low without injuring investment returns -- for the average citizen. This consideration almost drives the conclusion that lifetime health costs might be best divided into at least three component parts, with benchmarks and averages published regularly, since the medical and beneficiary problems divide into the same three (childhood, working age, and retirement) components. It begins to look as though a new profession of fee-for-service advisors needs to become educated and distributed widely, perhaps in local bank branches. As will be described in later sections, the need is for the income stream to be kept in balance with the probable expenditures, adjusted for inflation or deflation. It is not, to achieve the maximum possible revenue return, regardless of risk. That is to say, the purpose of the HRSA is not to make as much money as possible, but to be sure as much medical need as possible can be satisfied by the revenue available. Let's put it all in a nutshell: There's a big difference between designing a system to cover a public need inexpensively -- and designing a business model to make a profit. But even that's not nearly as big a problem, as trying to do both at the same time.
After Assessing Obstacles Comes Strategy. Most HSAs make payments with a debit card suitable for passive investing (utilizing total market index funds) for inexperienced investors and for otherwise undesignated accounts. However, there's a technical problem: the earning period is not the first stage of life; it's the second, following nearly a third of life in childhood and educational dependency or debt. Health expenses in the childhood third of lifespan may be comparatively small, but the earning capacity is essentially zero. This unconquerable fact leads to splitting investment considerations into three stages, the first and last thirds subsidized by the middle one. The result is, two systems feeding off the middle third in opposite ways, requiring opposite approaches, and jumping between generations. Somehow, it must all come out in balance at the end. And remember, it starts with a deficit in the obstetrical delivery room unless we re-arrange something else. There is no choice but to take things one at a time.
If you spend too much too early, you won't have anything left for later.
The 1975 annual meeting of the Association of foundations for Medical Care was, as usual, a provocative and informative forum for mutual exchange of ideas. An entire day was devoted to exploring the problems which need to be solved in order to get an Independent Practice Association off the ground and solvent. How do you attract subscribers? How do you enlist the support of physicians?
One disturbing problem was not resolved, however, and the failure even to discuss possible solutions seems even more disturbing to me. That problem is this: what mechanism will be devised to set fair medical fees if your IPA should be so successful that it enlists every physician and sells every subscriber? That is, how do you anticipate the problems of a monopoly? While it is understandable that the potential problems of success are swept aside at a time when the immediate problem is to achieve a viable toe hold, it would be tragic to allow the time of formative philosophy to pass without the setting of goals.
Our fees are now set by the marketplace. As Adam Smith remarked, if you charge too much you lose to your competitors, and if you charge too little you will go bankrupt. The price of everything, Adam Smith said, is therefore always fair and right in a freely competitive market place. The fees of an insurance mechanism are therefore also fair and right if they are "usual and customary". The strong implication of that little phrase is that somewhat a competitive market exists as a standard.
In Pennsylvania we are peculiarly in a position to see what happens when a good hearted idea like Blue Shield becomes so successful that the market place disappears. What happens when you destroy the marketplace is that fees are set by committees, later demand to be a majority of the committee, and eventually demand to exclude physicians from the committees entirely on the argument that the foxes should not be watching the hen house. Frustrated by skillful insistence on charter and by-laws, such customer groups then resort to a different approach: They apply political pressure on the Insurance Commissioner to deny permission for premium increases. This whole process can be summarized as substituting the political process for the market mechanism. There are, after all, more patients than doctors, and this distortion of the marketplace inevitably leads to downward pressure on fees. If you accept Adam Smith's dictum that fees set by the market mechanism must have been fair, it follows that this whole shift leads to fees which must be unfairly low.
Well what do we do about this? First, let us acknowledge one left-handed fairness to it. It is very noticeable that there is no movement at all for IPA's are concentrated in the medically overserved areas because they almost invariably develop as an opposite reaction to closed-panel group practices in their areas. The whole pre-API movement has a suspicious look about it of having no genuine concern about pre-payment, but rather the motivations of a consumer cooperative movement. It is hard to know what to think of this. It certainly does add a disincentive to practice in overserved areas, and probably causes a certain number of outraged physicians to migrate to underserved areas. However, to the extent that physicians are willing to accept less income in order to have the other advantages of living in the suburbs, it can be expected that the total cost to the overserved community will remain the same or rise if the physicians surplus is reduced. Therefore, in the long run, the effort of starting HMOs is self-defeating financially except for those consumer power groups who can take special opportunities for themselves. The other less forward consumers will find themselves with fewer physicians availability, at higher costs.
To return to the problem of preserving a market mechanism for the establishment of fees, several ideas seem worth considering:
1. Limit the market penetration of any group to 20% of the market in its area.
2. Require that no group may exceed a 10% market penetration unless at least four other groups are genuinely competing with it.
3. Identify one whole specialty of medicine as excluded from the "total" coverage of the insurance plan, and use this free-enterprise specialty as a reference group for fees of other specialties. The relative value system would expand from this base.
4. Never start an IPA unless a closed-panel program exists in the area.
There are a number of unpleasant or demonstrably ineffective measurer which could be tried.
5. Limit physician income to a "reasonable" level.
6. Deductible and coinsurance.
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.
