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
... William Penn's Quaker Colonies
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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.
WITH voters watching three weeks before the 2008 American presidential election day, finance ministers and their political masters met to decide a basic question: dare they risk disaster to save the existing system, or play it safe by sacrificing small banks to rescue big ones? That is, guess if the situation is so bad only strong rowers can be allowed in the lifeboat, or whether things are really manageable enough to try to save everybody but at the risk of worse consequences for failure. For example the credit default swap mystery; there are $60 trillion notional value insurance policies in existence to cover $20 trillion of bonds. Is that massive double-counting, or an actual disaster so severe it makes every other consideration trivial? Answer quick, please, the ship looks like it might sink. At first, it seemed strange a Labor government in England would propose saving only the strong until you realize that Prime Minister Brown is protected from his Left, while the Democrats in America want to use a fairness argument to win their election. A Republican lame-duck president must do the deciding, a man who has been shown to be both a tough politician and a fearless gambler; playing things safe is not his style. The Dow Jones average soared a thousand points in a day's trading on the prayer that things were finally under control. But take a look around.
Little Iceland and Switzerland are proud to house some enormous banks. But if those banks approach failure, their homeland treasuries are far too small to bail them out.
On the other hand, little Hungary has a negligible banking system, so Hungarians commonly borrow money from foreign banks. The national currency devalued by half in this crisis, so most Hungarian mortgages doubled in price. Reserve systems based on national governments suddenly look obsolete.
Try another approach. Little Ireland went ahead and guaranteed all deposits in its financial institutions. Money from England and the rest of Europe immediately poured in to enjoy that guarantee, forcing other grumpy nations to match the unwise Irish offer. There's a sense that nations are losing control of their affairs.
Europe consists of 27 nations, of which fifteen are in the Euro zone. There are common currency and a constrained central bank, but can this gaggle of geese possibly agree on concerted action in this crisis? America was once in this situation under the Articles of Confederation, but even after almost losing the Revolutionary War, George Washington was nearly unable to get the colonies to form a union. Even after this experience, the Southern Confederate States later adopted the same system of a central currency without a central government and really did lose their war.
It's hard, nowadays, to know what age to select as dividing childhood from working adults. The age transition is slowly getting older, at least in the public mind. According to the Wall Street Journal, quoting William Kremer of BBC, the following was a quote from the Venetian Ambassador to England in 1500:"The English keep their children at home until the age of seven or nine at the utmost, then put them out, both males and females, to hard service in the houses of other people, binding them generally for another seven or nine years. Everyone, however rich he may be, sends away his children into the houses of others, whilst he in return, receives those of strangers into his own." In the 14th Century, Florentine merchant Paolo of Certaldo advised: "If you have a son that does nothing good, deliver him at once into the hands of a merchant who will send him to another country or send him yourself to one of your close friends. Nothing else can be done. While he remains with you, he will not mend his ways."
In the 20th Century, children were considered adults at 18, when they graduated from high school, then it became 21 or 22 corresponding to a college graduation. And now it is 26, as set down by the rules of the Affordable Care Act, which probably has Graduate School in mind. Or, because of the recession, perhaps it reflects the current difficulty of even a 26-year-old to find employment. This is a book about medical financing, not sociology or anthropology, but it must be noted that the official age of the end of childhood tends to reflect the difference between taking advice from your family and taking the advice of your classmates. In that sense, the education industry is crowding out the advice of the family, with resultant conflict during the period between nine and twenty-six. It seems to be the main source of friction from ninth grade to the end of graduate school, and probably also hastens the decline of religion as an influence since the teachings of school and the teachings of religion are sometimes in conflict. Religion may well play a central role in the coming revulsion against the education industry, judging by the undercurrents of teen-age rebellion. Underneath it, all would appear to be a dispute about the responsibility for paying the child's expenses, in collision with surrendering control of how expenses are to be spent. Just as there is growing rebellion about college expenses, medical care expenses will probably share in the coming rearrangements that appear inevitable. Finally, to get back to it, it is possible that age 26 will be lowered to a new point where parents really could be expected to pay the medical expenses of children, willingly. Meanwhile, the abrupt outwelling of sympathy for a sick person can be expected to blur these boundaries more than in other dependencies.
Admitting it is arbitrary, and mostly to maintain comparable statistics with the Affordable Care Act, we now define children as comprising the age group from birth to age 26, even though they may have risen to officer rank in the military forces, where many would be offended by the idea. For the same reasons, 26 is accepted as the age whose medical bills are "normally" considered the responsibility of parents, within the Health Savings Account system. We would like to recommend they be enrolled in an HSA at birth, with a single payment gifted by the parents at birth, sufficient to pay for all medical care to age 26, and including the option of including the child's own obstetrics in that calculation as well. That is what would be most convenient for insurance administration. Let's do some hypothetical math, along the line of what worked fairly well for somewhat older adults.
The purpose of this table is to illustrate that much might easily be achieved with a 10% return, but the same result cannot be confidently expected from lower returns. Lower returns are a definite possibility over a 26-year span of time. To achieve total health coverage with lower rates of prevailing return will almost certainly require more capital to be invested at the beginning, perhaps four times as much. A 3% return during a 3% inflation period, such as we have had for many years, would amount to standing still. Therefore, a gift of $1000 is going to stretch a great many budgets, so the best this approach can promise is to reduce, not eliminate, childhood health costs. Success can only be achieved by raising premiums later in life to make up the shortfall. It would take a skillful politician indeed to persuade half the population to stretch its budget this way, but we make the calculation in case politics demand it. Because this reproductive controversy would quickly degenerate into wrangles about which parent has what moral duty in the case of a divorce, this looks like an option which the affluent population should probably try, but government intervention in this direction is not easily foreseen.
One virtue in waiting for something to turn up lies in the mathematical near-certainty that things will be much more favorable if the trend toward increased longevity persists. For both mathematical and biological reasons, the curves of revenue and expense are not parallel straight lines. The laws of compound interest which make childhood investing risky, also make investing by old folks easier. While almost ridiculous amounts of money accumulate at 10% in the eighties, even more, ridiculous amounts are generated in the nineties. In the present example, 10% investing heads north of 3 million dollars at age 85, but comfortably exceeds 6 million at age 93. This mathematical pressure is made even greater if terminal care moves eight years later, without much more illness cost in the interval. The longest of long-term trends is for health costs to concentrate in the first year and last years of life: everyone is born, everyone dies. There's a gamble, of course. Living eight years longer may simply present the old geezers with eight additional years of medical costs, or eight more years in a nursing home.
But at least an optional choice becomes necessary because obstetrics and neonatal care are presently included with the mother's health insurance, but sometimes not. A complicating issue with small-amount investing is that the amounts are ordinarily so small that managers of Health Savings Accounts rebel at the administrative overhead. On the other side of it, the generation of compound interest for 26 additional years significantly reduces the cost to the parents to the point almost anyone who achieves middle-class status could afford the single payment option. Generously estimating the lifetime average medical cost, of a child from birth to age 26, to be $10,000, it would take a payment of $925 to cover it all, at interest rates not likely to reappear soon. However, that same $925 would more than generate $4.9 million lifetime revenue to age 91. Assuming, at the other extreme, the mother's investing age to start at 26, her lifetime costs using present prices would be covered up to $412,000 to age 91. All of these suppositions are based on the strong hunch that the present Medicare deficits are unsustainable, not on any wish for them to be so.
When a child, who has been covered by a single payment at birth, reaches his 26th birthday, he finds his medical costs insured to the day of his death aged 91, but perhaps that was not the purpose of the gift. If the parents want the money back, they are probably entitled to it, since financial obligation only extended to age 26. Therefore it is important that some of the surpluses in the fund should be transferable to the original donor as an option. The annual gift tax exclusion probably removes the tax consideration, although it is true that that the Account has carried an option to supplement it, throughout the 26-year interval, and therefore the Account might contain enough money to buy out the second policy. The tax implications are therefore uncertain; when they are clarified, the issue of splitting the policy may be clarified, as well. It would seem that the birth of the first child might be a good time to start the parent's policy, since the parent would want to have some coverage for the obstetrical costs, and therefore often be the owner of ordinary health insurance for that purpose.
One thing remains as an absolute: very few newborn children pay for their own delivery. As a normal thing, all health costs of a child up to age 26 are born by the parent, who either makes the child a gift or loans him the money. Any changes in the law ought to follow the habits of society about this overlap of responsibility.
Childhood Coverage, A Summary. It remains attractive to search for ways to include childhood health costs in an HSA. The small amounts administrative cost could be addressed by issuing an interest-bearing bond at birth, redeemable at age 26, and preferably redeemable by rolling it over into an adult policy. However, no presently foreseeable opportunity to issue 10% bonds with 26-year call protection is available; the bond market simply will not sustain it. If it did sometimes sustain it, its repetition is uncertain. Single-premium insurance might be purchased by grandparents, but any government involvement would probably cause populist resentment. The only available non-subsidy method of funding this problem seems to be to borrow the money from later years when the revenue curve is more favorable.
Borrowing from a pool, especially if funded by unused surpluses which appear at death, might be acceptable as an interest-free return of a moral debt, but most sources are going to require the payment of interest on the loan, which defeats the investment purpose of the HSA. All in all, the best available interest-free loan equivalent would be to raise the cost from the individual's later account. After all, all childhood costs are paid by adults, as an interest-free loan to the next generation. When the child gets to be thirteen years old, the generosity may temporarily seem to have been foolish, but one that is eventually revised. Nevertheless, borrowing from yourself is only fair justice, and if the parents wish to give gifts, let them do it without coercion.
Stephen Brill has written a very professional description of the "Inside baseball" of the Affordable Care Act, from the decision to go ahead with it, through the turmoil of ramming it through Congress, to the badly mismanaged introduction of the insurance exchanges. At the conclusion of this largely critical description entitled America's Bitter Pill , Mr. Brill devotes fifty pages to his own proposal for a better system.
America's Bitter Pill
Essentially, the proposal is for large hospital chains or multi-hospital groups to merge with, or otherwise take over the function of, health insurance companies. And, indeed, there is one little paragraph buried within the Source Notes which seems to be adequate justification for that idea. It's a quotation from a January 5, 2014 article in the Journal of the American Medical Association to the effect there were 831,000 American physicians in 2011, compared with 1,509,000 health insurance employees. The question it raises is plain enough. Why does it take twice as many employees to manage the insurance, as it takes physicians to deliver the care? Surely, a great deal of money could be saved by reducing the health insurance cost, and Mr. Brill's proposal is to let the hospital conglomerates take over the insurance industry.
An important truth is stated, but this particular conclusion is too drastic because it would strip the public of its normal expectation for impartial decisions between two counter-parties. At least, for rare and expensive disputes it would; many other problems need fixing only because employer-based insurance created them. It redefined many small risks as big ones, mostly in response to unwarranted lobbying to extend unwarranted tax dodges. But extending the expendable argument to include what insurance does well (spread the risk of low-volume, high-cost unpredictable expenses), requires proof that other institutions would do it better. I am reluctant to give up catastrophic health insurance while admitting the rest of current health insurance is too costly and expendable.
Bill Gates and Warren Buffett
Others have said the same thing, and no doubt the health insurance industry will mount a defense. My own proposal could be twisted to mean something else, except my way of saying it is that individual patients should take over much of the non-insurance insurance function, by using Health Savings Accounts and thereby reduce their net costs by passive investing in index funds. Since Obamacare was probably only a first step toward something else, replacing health insurance with governmental solvency assurance may have been in the President's mind. But any way you massage the message, there is an essential contribution by insurance which probably cannot be adequately replaced. Anybody at all could suddenly develop a huge medical expense, and be unable to pay for it. The chances of that happening are small, so the cost per person is also modest. Ignoring exceptional cases like Bill Gates and Warren Buffett, everyone needs a catastrophic insurance plan. No proposal for general use is probably workable without "stockholder risk in calculated balance with customer risk-taking". My own succinct criticism of Obamacare is that it has made Catastrophic health insurance illegal for everyone over the age of 30. If a feature like that is essential to ACA success, its own future is doomed, in my opinion.
Theodore Roosevelt
In a sense, the whole thing the matter with the existing system of employer-based insurance is that it boxed itself into a corner of first-dollar coverage, and only modestly retreated from it. That is, instead of initially ensuring the worst health disasters with the lowest premium cost, and progressively lowering the deductible as people could afford it, the Health Insurance industry did it in reverse. It started out with ensuring the cheap stuff before it reached expensive stuff. No wonder one President after another, starting with Teddy Roosevelt, proposed some kind of reform. It's far too late to assign the blame for this misjudgment of the past century, but it is not too late to confess the error and re-design systems with the hope of fixing it. Yes, it is true it would have been cheaper to address the issue thirty or forty years ago, but meanwhile the thirty-year extension of longevity during the 20th Century has a good side, too. The essence of our problem is that, right now, it is whatever it is.
In conclusion, let me set boundaries for whatever hopes this book might arouse. In the first place, HSAs are tax-exempt. The hidden significance is the government will tend to oppose expanding its concepts to other purposes since Treasury will want to retain as much as it can in the taxable category. This tax exemption is limited to health costs, just as Senator Roth's other qualified retirement programs were limited to paying for retirements. That exposes it to accusations of being a tax dodge perhaps, but it's intentionally limited to health and retirement. Moreover, the added "escrow feature" additionally restrains the individual himself from diverting the tax exemption to unintended purposes. So it's constrained, in two directions. I think that's a good thing, keeping too many people from climbing aboard the lifeboat, and sinking it.
Secondly, no amount of tinkering is likely to make HRSAs cover all health and all retirement costs. One or the other perhaps, but not both. The mathematics of health care and its consequence, extended longevity, simply will not stretch that far. By ignoring all the internal steps, forgetting about transition costs and all the rest, the total cost is more than the total revenue. After applying some strategies, the shortfall has been concentrated into retirement. The conclusion is health costs can be covered, maybe, but retirement costs can't. Adding Social Security, a constrained retirement might be possible, but this is the point where any shortfall was designed to emerge. If your retirement plans revolve around HRSAs, you had better plan to supplement them with other sources. And if you then must plan to mix sources, you are always going to need a common fund, and therefore the individual fund must continue as a place to derive funds for a common purpose and possibly extended tax relief for funds of differing size, rather than a communal paradise. Everybody better keep on planning to work longer, to pinch pennies, and earn some outside income. It isn't going to result in everyone living the life of a character in a Jane Austen novel. That's not to say it's nothing to pay for all of the health care and some of the retirement. It would actually be a great achievement. But even that only becomes possible if everything works exactly as planned. And if it won't, don't count on paradise, work toward it.
Bill Roth of Delaware and Bill Archer of Texas made HRSA politically possible, and John Bogle of Pennsylvania made it financially conceivable with passive investing. Dale Yamamoto the actuary devised the system for measuring medical costs at different ages, and my son George then established the probable feasibility of a lifetime financing. My family, including Miriam, Margaret, Stuart, and Janice, applied the "No prophet in your own valley" approach and picked every nit. John McClaughry lurked in Vermont, fearful to see how I would make a mess of his one-liners. God bless you, every one.
In closing, let's restate the argument:
1. Where does the extra money come from? From investing rather than borrowing the healthcare money. That doubles the effective result.
2. Where did the seed money come from? Initially, from HSA tax exemption, and reduced healthcare expenses. Subsequently, from reduced investment costs, and the fact that both lifetime health costs and compound interest follow J-shaped curves, allowing unused early deposits to accumulate until needed later in life, accelerating toward the time they are used. In recent years, the public discovery that unused funds turn into an IRA at age 65, has led to extra depositing within legal limits. (I propose the same incentive system for Medicare.)
3. Isn't this too complex for the average person? Not since the introduction of low-cost "passive" investing.
4. Aren't interest rates too low to accomplish much? Yes, so this increases the attractiveness of a long-term, low-cost, total market, index-fund investing.
5. Aren't fees too high? Often, they are. Stick to funds with a trillion or more invested, and cost of less than a tenth of a percent.
6. I'm afraid to be a pioneer. You aren't a pioneer. Nearly twenty million people have HSAs already. You need to worry about waiting too long to start because you are dealing with J-shaped curves. If you never get sick, you can spend the enhanced money on retirement living.
7. Is that all? By no means. If you want to bedazzle yourself, consider using leads and lags on a. First and Last-year of Life re-insurance, and b. Grandchildren Inheritance Transfers. There's also c. the possibility that science will eliminate some Medicare costs, so the money can then be transferred to retirement. I propose an automatic transfer of Medicare surplus to Social Security, as an incentive. These are all new ways to cope with transitions and to enhance investment income by prolonging its investment periods, but they probably require legislative confirmation.
It would appear both healthcare and compound interest follow J-shaped curves of slightly different shapes over time, sufficiently to encourage the idea that a little manipulation could make achievable, passive investment pay for all legitimate healthcare as we now know it. For example, a single fairy-godmother deposit at birth would rather easily cover the costs of first-year and last-year of life insurance, if interest rates return to a normal 6.5%. That could also be accomplished by saving $5-10 dollars per paycheck from Medicare withholding tax from age 25 to 65, provided the savings were continuously invested at 6.5%. Some might argue such estimated investment return is too high, while others might question whether future generations would be sufficiently frugal to continue the process. But most people would say the amounts estimated are small enough to adjust to such questions. Paying for all of the retirement costs, however, is another order of magnitude.
Just as a lot of people warm to the idea of giving newborns an equal financial start, there is a lingering hope that at retirement, everyone might enjoy a more-or-less similar life of leisure. However, a little calculation of the two shows it would be far more difficult to achieve in the case of retirement. If we can agree on a hypothetical number, perhaps it would be debatable whether a hypothetical $20,000 a year might satisfy most ideas of an adequate pension, particularly when reminded this would amount to $40,000 a year for a retired couple. But then just look at what it would cost.
To achieve this goal, savings of $250,000 would be required at age 65. And to achieve that, several of our favorite strategies look a little marginal. We could transfer an increased Medicare withholding tax of $150 a month for forty years and invest it at 6.5%, at the conclusion of which we would have about $250,000. But the newspapers seem certain fifty percent of the population aged 50, have no liquid savings at all. Daunting though it may be, those might be accurate figures. They may well be rough estimates, but do not augur well for asking new hires at age 25 to put away $150 a month, and keep doing it for forty years. Nor does the fairy godmother approach sound like an easy approach. If we imagine an inheritance or a federal subsidy, it would require a lump-sum deposit of $3500 per person at birth to achieve an individual goal of $250,000 at age 65. Or a deposit of $18,000 at age 25, coming from similarly undefined sources. We might look for ways to stretch out the investment period since it would look as though compound interest has a chance of growing faster than the cost of living. If that approach is tapped, it would require a transfer of $700 to a newborn, assuming a 90-year investment time could be manipulated out of thin air. Or $300 for 104 years, the present definition of perpetuity (one lifetime of 84, plus 21 years). Or $150 for 111 years, hoping life expectancy to increase to 90 years looking one lifespan ahead. The trouble with such projections is not so much the dollar amount, which some would say could be inflated away, but the extended time period. All such extensions exceed the human lifetime, depend on someone else to keep them up for someone, who has himself been dead for decades. It is possible to predict great advances in medicine, in computers, and in transportation. But I would not be willing to predict such advances in human nature.
So I would urge everyone to be satisfied with these suggestions for healthcare, looking elsewhere for help with luxury retirement.
When I had finished writing the first volume of this quartet, I considered adding a bibliography. However, it sounded sort of Stodgy, so it wasn't included. That decision appears to have been a misjudgment since some reviewers criticized the lack of references. A bibliography is therefore found at the end of this volume.
But a bibliography does not satisfy me as a description of the intellectual influences which led to this book. If anyone really cares about the matter, some anecdotes are needed.
First of all, Benjamin Franklin
However, two hundred years after Franklin's death it is possible to see some other effects and to draw some other morals about "perpetual" fire insurance. For example, the effect of compound interest is such that the lump sum payments not only pay for the insurance premium, but it also draws a very handsome cash dividend in addition. As an investment, this fire insurance is so attractive that people have actually been heard to urge a higher assessment of the value of their house, in order to qualify for more insurance! What has developed in our olde towne is a very good illustration of the principle of "adverse selection of risk". Since subscribers with spare capital almost invariably live in more substantial and fireproof houses than average, are better able to afford fire alarms, and are more likely to live near responsible neighbors, they have fewer fires. That makes the insurance less costly, but it does not reduce the legal requirements for reserves. The insurance laws force the perpetual fire insurance into a position of "over-reserving" but since the company is a mutual company, owned by the subscribers, it all comes back as dividends and fancy directors' dinners. Would anyone like more Madeira?
The power of compound interest, and the frustrating inability of most citizens to appreciate it seems to have been an obsession of Franklin's. In his will, he left $500 to the cities of Philadelphia and Boston (he was born there) to be left at compound interest for two centuries. The Boston investors did rather better and generated $xxx million by xxxx, but even Philadelphia had generated $xxx million by XXXX. Poor Richard, of course, knew that the interest growth would seem astounding, and gave the bequest in order to promote self-interested thrift among his countrymen. The idea was simple and obvious enough; Poor Richard didn't need a Hewlett-Packard 12-C pocket calculator. Even more powerful was the insight that human nature would not likely change much in the next two hundred years. People do indeed still need the message about compound interest, and people who are young enough to profit from the concept still resist the arithmetic.
What's Needed to Create an Electronic Claims and Payment System.
1. A coordinated approach. Since everyone is giving up something to get something, there must be a global agreement before anyone will move.
2. The system must focus on one and two-doctor practices. At present, 14% of claims are submitted electronically, but this almost exhausts the market of large-volume provider groups. With a small-provider focus, it follows that packaged systems must be inexpensively provided and maintained by software houses; training and support must be provided by medical societies to their members in large groups. This approach requires universal standards negotiated by payors and organizations representing doctors. The small-volume provider cannot cope with or afford a multiplicity of payor protocols, nor can he cope with frequent changes of the rules.
3. The new systems must be paid for. HCFA could pay a surcharge for electronic submission ("but why should we pay people to send us a bill?"), one carrier could perform the service on behalf of all ("but why should we let a competitor see all of our business secrets?"), the doctors could pay all of the costs ("but why should we pay to do the key entry for the carriers when HCFA has rolled back our fees? "). Since possession of the interest float is a central part of the haggling, it seems easiest to capture a part of the float as the source of the needed transfer of costs within the system.
4. It is unsafe to make any national system changes without first trying a local demonstration project; therefore, negotiations should continue while a pilot program gets going rapidly. Many fears will prove to be unfounded, while many problems will have been unanticipated. The government has experience with this sort of venture and is fairly well equipped to deal with it.
5. Although everyone hates to see a new organizational layer in the system, the providers will probably have to create a new "provider intermediary" to aggregate their data for retransmission as well as negotiable at the interface with the present "payor intermediaries". This is true in part because of HCFA's insistence on the accounting principle that "the agency which prepares the bill should not also be the one to pay that bill." Since this intermediary acts on behalf of providers, will want to control it; the sticky thing is to get HCFA to pay for something which is controlled by others. The interest float seems ideal for this purpose since excessive costs would reduce the income of providers, causing them to raise questions and/or change agents. It also automatically adjusts itself to volume, so that the agency can more comfortably work with multiple payers and providers.
6. Although medical societies act on behalf of their members, their budgets are separate from the members' pocketbook. Furthermore, membership is voluntary and not universal. Therefore, what costs or benefits the members in aggregate is not necessarily the same as a cost or benefit to the societies. Any negotiating process must recognize the distinction between representing members and sharing in their finances.
7. While maximum competition between hardware and software vendors, timeshare computer companies, and long-distance carriers is desirable, there is one small computer software program to interface between provider and insurance company software, utilizing a single common protocol which will be subject to continuous revision while negotiations and the pilot program are underway.
Software developers on both sides of the interface need to know that someone will provide them with the interface so they can go ahead with their parts of the system. Since the specifications will be speculative at the beginning and subject to continuous revision, HCFA should be willing to absorb this cost of buffering, dealing with a designated vendor, in order to be able to assure the industry of stability. This piece of software should be strictly confined t the goal of permitting inputs and outputs to be untroubled by experimental variations in the interface mechanics; it should be mainly regarded as a research tool, although its final form would be operational. To repeat: anyone could develop it when the situation is stabilized, but no unsubsidized vendor could afford to develop it until then. And no one else can budge unless it exists.
Electronic Claims System From the Doctor's Point of View
The doctor would have one of several computer system choices in his office which cost about $2000, employing software which he purchased from one of many existing sources for about another $2000. He and/or his secretary learned to use it at courses provided at the County Medical Society.
When the office closes, the machine turns itself off, but turns itself on again at night and dials a number, redialing it if busy. After connection, it identifies itself and send all of the accumulated claims of the day to a file, then receiving accumulated payment bits of advice and EOB information. The machines then disconnect, but the office computer then reconciles accounts internally, producing revised balances and accounts and takes appropriate actions; it then turns itself off. Next morning, the first process after the start-up is to print out reports about the night's activity.
Back at the collection computer, the aggregated claims are sorted by carrier and transmitted. Carrier information is them received, and sorted by provider, awaiting the evening transmission.
Meanwhile, funds are electronically transmitted into an escrow account, and a money market operation invests the money for a specified period. After the expenses of the operation are deducted, the funds are either: 1) available at that bank for checking by the providers 2) electronically transferred to the providers' banks or 3) used to pay the credit card purchases of the providers on cards utilizing the account.
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.
