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
plus medicine, economics and politics ... nearly 4,000 articles in all
Philadelphia Reflections now has a companion tour book! Buy it on Amazon
Philadelphia Revelations
Try the search box to the left if you don't see what you're looking for on this page.
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.
Many of the a older houses in Philadelphia still have Plaques to the front wall, usually between two windows on the second story. These are the symbols of colonial fire companies, signifying that this particular house had paid its dues to a particular company and was entitled to its services if it ever had a fire. There are two exceptions to this rule, one showing four hands gripping wrists (the fireman's "carry" technique), which was the symbol of Franklin's fire insurance company, otherwise known as the "Contributionship". The other shows a Green Tree, the symbol of a competitor fire insurance company which found a business opportunity in ensuring houses with a tree on the property, something the Contributionship declined to cover. These fire insurance companies are the only survivors of a type called "perpetual" fire insurance. Since the Contributionship is the oldest fire company in America, while the
Green Tree company was fairly recently involved a controversy with its directors some of the most prominent people in the City they generate highly interesting histories, as organizations.
But in many ways, the more interesting feature about them is their unique business plan, which contains some important lessons for the rest of the insurance industry, particularly health insurance. Since health insurance is now one of the great unsolved problems of national life, it is perhaps worth a little trouble to understand perpetual insurance as a concept. It isn't that hard, so stick with it.
A fire insurance company has to figure out each year's risk of fires and set a premium large enough to pay for that risk, but not so large as to drive away business. If there's some unspent money left over at the end of the year, that profit belongs to the company. When Ben Franklin was starting the first fire insurance, he had no way of guessing what the risk was going to be, so he guessed far on the high side. So as to keep from scaring away his customers, the agreement was that any surplus would be applied to the following years, invested in the meantime. After a while, the investment income was enough to pay for the fires, plus enough to pay a dividend and to return the whole investment if the home-owner wanted to move to another house. Here was perpetual fire insurance. A returnable, lump-sum investment paid for the fire insurance, paid a nice dividend, and you got your money back if you wanted it. Its most extreme example was the policy taken out by thePennsylvania Hospital during colonial times, which still pays about 15,000 annual dividend, plus they have had fire insurance for two centuries from an investment which seems trivial in retrospect. Why doesn't everyone have perpetual fire insurance? Why is it now a quaint little forgotten idea that almost no one knows about?
the 1929 crash
There are conspiracy theories, of course, that greedy insurance companies prefer to sell you a more expensive product that is more profitable for them; forget that line of argument. A more plausible criticism is that the managers of perpetual insurance have to take a long-term view of risk. The perpetual companies are reluctant to insure a house that has any significant chance of having a fire, ever. Philadelphia long ago prohibited wooden structures, however, and the building codes have become progressively more strict. Another source of customer reluctance grew out of the 1929 crash, which destroyed for generations the confidence of the public, and for that matter the board of directors, in the safety of long term investments. If the investments become too timid, they will generate a reduced return, and inflation of the cost of replacing a burned-down building may slowly pull ahead of the investment income which is supposed to cover it. The tax laws will inevitably change over a period of time which describes itself as perpetual, and somehow or other the investment safety may become impaired by politics.
A more subtle risk is inherent in the nature of building materials. If you have a stone house, you expect to have your fire insurance restore you to a stone house. But houses were built of the stone when a stone was locally abundant, and cheap. Nowadays, it gets harder and more expensive to find and transport suitable stone, and much harder to find a skilled stone mason. One of the reasons you hire an architect is to direct you to the newer, more modern materials and techniques, and away from obsolete, expensive materials of the past. In summary, therefore, the managers of the company must establish a set of predictions about the perpetual risk of your house burning down, and the perpetual cost of replacing it. If they guess too low, the money you invested will eventually run out, and you will be left with a perpetual promise, but no money in the treasury to pay for it. All of this woeful, fearful whimpering, however, must be set against a two hundred year history of a simply glorious investment opportunity. You have to trust your company to be smart and, to be honest. Who trusts anyone, any more?
of the community when all is said and done, this system is designed to keep indirect costs within reasonable boundaries. If that aggregate is spoken of as a single product, its costs can be grouped together as company-wide costs. In the case of Apple, the main costs outside direct production costs are research and development, marketing and administration. In the case of hospitals, in addition to direct production costs, there is usually less marketing cost than a manufacturer would experience and considerably more charity. By calculating the variation of prices to costs among different products, it is possible to see which particular product is carrying the burden, and which product is being subsidized. In the case of hospitals, this analysis would permit an outside opinion to form about the fairness of such cross-subsidy, which is most commonly motivated by local competition. The neighbor hospital has some expensive gizmo and we don't; we buy a gizmo to keep up with them and subsidize its cost by overcharging for everything else. Decades ago there was a rage for establishing planning commissions to determine how many gizmos a community needs, but it was largely dropped because of bickering about what is normal business flexibility in every industry. It is now generally agreed that hospitals should have the business latitude to make these choices themselves, and suffer the consequences if unrelated prices get pushed out of line by cross-subsidies of excessive expansion.
Indirect costs are a much harder matter to judge. Some administrators are paid too much, some renovations are excessive, some charity is really poor debt collection; but if these things are passed off to insurance companies, who pass them off to the public, they can unduly escalate. Direct costs are whatever they are, but indirect costs are more a matter of opinion. Some insight can be gained by measuring the ratios of direct to indirect costs, and then making a national comparison of those ratios with peer institutions, a process that is hampered by the traditional regulation by states instead of nationally. Since the cost of health care has long been rising faster than the cost of living, the suspicion is fostered that insurance companies put up less price resistance than a marketplace without them would. Since the cost of major illness is often beyond the means of its victims, insurance does seem to be called for, and the higher the cost the more that is true. For more than seventy-five years, health insurance has been in the middle, between the party who wants lower prices, and the party who wants higher ones. That may well have been a bad decision, requiring some experimentation with a return toward "indemnity insurance" and away from "service benefits". That is, the insurance pays money to the patient, and the patient then pays the bill. An indemnity system protects the insurance company from cost overruns, and this at least removes the pressure for the insurance company and the hospital to collude against the patients' financial interest. Once a suspicion arises that there could be some degree of collusion between the two, it is possible to see that using insurers to police a hospital's indirect costs may be something to discourage. Alternatively, it might be possible to apply patient copayment to the indirect, but not the direct, hospital costs. At the moment, copayments have little or no effect on patient utilization, but the selective application of them might be worth at least a pilot study, to see if they could dampen prices better than they affect service volume. A copayment of 20% of the indirect cost component of a patient's bill would certainly draw attention. Even a 1% copayment would dramatize the point.
Hospital prices have been inflated far too much, and far too irregularly, to serve as cost signals. In order to minimize the true cost of charity care, the services more heavily used by the indigent have had their indirect costs minimized by cost-shifting them away to better-reimbursed departments; it is a perfectly natural thing to do. Poorly utilized departments are subsidized by better-reimbursed ones; so what else is new? To assign a fixed ratio of charges to costs would greatly hamper the flexibility needed to keep the institution from failing. But without some understood relationship between the posted, stated price and its true cost, the hospital doctors are quite unable to design a cost-effective treatment strategy. Knowing very well the lack of relationship between prices and costs, the doctors freely admit they disregard the prices entirely. While allegiance to what is scientifically best is not completely bad, it is not necessary to be so blind to the economics of the various alternatives. In time, it will lead to the design of model treatment strategies by committees. That is not itself a bad thing, except for the way it undermines individual thinking by the professional who is closest to the specifics of a case. That is a debilitating thing; a bad thing if you wish. It certainly lessens the potential for minimizing the cost of care, which is the flag it is flying. Some way must be found to improve the usefulness of prices as a guide to costs, an imperative which is otherwise certain to lead to the use of some degree of force to achieve it. And that would be a really bad thing.
from the for the Hospitals tend to be either for-profit corporations like Apple or nonprofit corporations with a different accounting system. It may help a little to know that for-profit corporations are measured by their profitability, while nonprofits are measured by the increase (or decrease) in their assets compared with last year. Items enclosed on a balance sheet with parentheses have always gone in an (unfavorable) direction. Increases (or decreases) in assets are intended to include gifts and variations in stock market prices. However, increases (or decreases) in assets like fine art don't count at all. Sometimes that can be highly misleading, as when the Barnes Art Collection increased in value by billions of dollars. Other assets, like buildings and equipment, are measured by depreciation, which is not always parallel to market prices. There is a movement favoring "mark-to-market", but investment firms are particularly opposed to marking to market, because temporary drops in market price are sometimes unrealistic, only requiring a little time to recover, a phenomenon sometimes seen in endowment funds, as well. Conventional measures of success, like the profit margin and the increase in net assets for nonprofits, are generally useful. But they can also conceal many traps. The most prominent one is to introduce these concepts when someone questions why everything costs so much as if to imply that it is unlikely that a hospital could be overcharging when it is only generating a 2% profit.
The ten dollar aspirin tablet is usually introduced at this point in the discussion, balanced by descriptions of accident room patients who try to pay nothing at all. The discussion is now one of cost-shifting. It must be obvious that the cost to charge ratio is well over a thousand percent for the aspirin, whereas Apple probably is less than a hundred percent for everything they sell you. Perhaps not, perhaps it is over a thousand percent for a number of retail items. In any event, the problem for the hospital customer is he has no way of telling what is being given free to bring the overall cost to charges down to 5%. That is, he is given no role in choosing the charity he is supporting, but he knows it varies widely between hospitals. He has to have some trust that the institution is behaving in a responsible way, which is difficult when he sees new and glistening hospital interiors or reads of seven-figure executives. Perhaps it is a little unfair to blame the trustees for avoiding embarrassing questions with no particular justification, but it does not seem unfair to ask that the hospital cost accountant prepare meaningful reports to both the management and the trustees. To the management first, to allow them time to look into oddities in the reports before having to answer for them. But no matter how it is handled, the cost accountant should be made more central than he usually is.
Every item ought to be assigned a cost to charge ratio, both inclusive and exclusive of overhead costs. It is usual to include overhead by a so-called step-down process since overhead must be paid and it generates no charges at all, only costs. But to include it in the net cost to charge ratio is potentially to bury one of the things you are trying to discover: is the overhead excessive? Having determined that point, it may be legitimate to re-include overhead in the "net" calculation of the cost to charges. Hence the suggestion of reporting it both ways. No one doubts the books balance; the items of expenditure include most of the costs. The essential issue is whether this is all pretty expedient, whether too much frivolous expenditure is being permitted by shifting its cost to certain profit centers. When this cost to charge system is compared among other hospitals or other years in the same hospital, it is possible to recognize the unusual items or departments quickly. However, the beginning trustee or utilization reviewer may need to have the costs and charges stripped out and aggregated, to highlight the highly deviant figures for ready appraisal. Consequently, it may be necessary for the insurance company to require reports of certain items, structured in that way. Other such reports may be needed to identify overpaid employees, or overstaffed departments, usually as patients and dollars per employee, compared with other institutions. Ultimately, it may even be necessary to establish norms, but that begins to resemble micromanaged cost control, when peer pressure may be all that is required.
Over the years, much experience and lore have accumulated about running a life insurance company. Because the managers ordinarily are responsible to others who have risked private capital, more latitude can be extended to them than to taxpayer-owned entities. Consequently, it may be wise to obtain experienced counsel to suggest some business limits and latitudes which need to be authorized by law. The following is meant to suggest some areas which may need attention. And a lifetime Health Savings Account has at least one unique difference with whole-life insurance. A moment's thought about Lifetime Health Savings Accounts immediately highlights it. Life insurance has only one benefit claim, the death benefit. Once the flow of premiums begins, only one liability by a life insurer has to be made, the length and risk of individual longevity. The relationship goes on autopilot and a rough match can be made between the pool of bonds and the pool of policies at any time, adjusting only for policy additions and subtractions, or for fluctuations in the bond market. A Health Savings Account, on the other hand, must anticipate a possibly constant stream of deposits and withdrawals.
It is probably true, more money will be deposited in whole-life insurance in response to a fixed annual premium billing, than if deposits are optional in date and amount, so it probably would be wise for the manager of a lifetime Health Savings Account to calculate annually what deposit is needed, for each client to meet his goal, judged by his age and past progress. He should send reminder notices for the "suggested" amount. The purpose of health insurance is to provide money for healthcare when absolutely needed, building up a fund for potentially even more urgent future emergencies. We have partially surrendered the right to mandate the amount, in favor of creating incentives to save it. Consequently, there will be a more constant drain on the investment reserves, matched by a somewhat greater inflow needed from outside sources. The Law of Large Numbers will smooth this out as it does with bank balances, but some volatility is unavoidable.
Since the general inclination is to limit the Catastrophic health coverage to hospitalizations, the attrition to their independent reserves in the account balance should be constrained (not limited) to paying at least one deductible, by adding one deductible to the escrow section, to reassure the hospital it is available. The non-escrowed balance would then more closely reflect the growing retirement savings earned by the arrangement. Since the Catastrophic Insurer is ordinarily an independent company, coordination is essential for long-term coverage. We can get more specific, but for now, the risks to be managed are outpatient costs, less frequent but larger inpatient deductibles, and what for now we can call "all other". All three could usefully use reasonably independent escrows, which repeated display would encourage.
Overdrawn Claims. Since any client might be hit by a truck within a week of establishing an account, new customers present the biggest problem with getting escrowed reserves established. A large front-end payment can be required, and eligibility for benefits can be delayed. Lines of credit may have a place. Otherwise, established customers must fund and be compensated for the risk of early claims. Most organizations will probably elect some combination of the several approaches, with some combination of selecting which phase of the combined insurance should or should not subsidize the others, and how it should be repaid, and at what age. Bond issues are a possibility.
Overestimated Reserves. In the long run, solvency will depend on deliberate over-reserving, gradually reduced as experience accumulates. The basic premise is young people are comparatively healthy, whereas most of the heavy sickness costs will appear as the client approaches and attains retirement, many years later. Compound investment income will grow over time. There may be periods of mismatch between accumulating and invading reserves, so there should also be a provision for intergenerational borrowing and repayment, the size of which will be established at the onset. Every effort should be made to reduce these shortfalls by overestimating the need for them, possibly based on archived statistics from the term-insurance era. Nevertheless, future shortfalls and future bubbles will both be steadily predictable, and unexpectedly volatile, so over-reserving must be seen as permanently advisable. The consequence of all this is a continuing need for some allowable non-medical use of surpluses, such as conversion to retirement accounts, in order to generate reluctance to invade the reserves. The importance of this easily overlooked necessity is very great.
Proposal 8: Congress should state the principle that necessary Health Savings Account reserves should be somewhat overestimated at all times, linked to the incentive that individual non-medical uses of surpluses should be permitted at times when they are generally unneeded for health purposes.
Underestimated Reserves. And almost of equal importance is the need for early warning when reserves are threatening to become inadequate, in spite of every effort to overestimate them. Some sophisticated body must be created to oversee the growth of aggregated reserves, mandating increased contribution rates from subscribers. Since some subscribers could discover an increased contribution rate is a hardship, the oversight body must have the right to reduce benefits to uncooperative subscribers. That is, instead of reimbursing at 100% of the cost, they may have to impose a seldom-used rate of less than that. In order to perform this unpopular task, the oversight body must have access to better information than the public does, to be in a position to impose small steps rather than big steps. Under all these unpleasant circumstances, Congress could make the upper limit for contributions more flexible. At the moment, it is $3300 a year. However, while that amount now seems adequate enough, the figure is entirely arbitrary, probably set to prevent speculators from abusing the tax exemption. Therefore, if the upper limit is raised to address underestimated reserves, money might well be forthcoming to address the underestimate, which by then might have proved to be no underestimate at all.
Proposal 9: Congress should authorize the Executive Branch to raise the upper annual limit for deposits to Health Savings Accounts, whenever (and for such time as) average HSA reserves fall below an advisable level.
At my age, I reflect on inheritance tax once in a while. It's taxed at sixty percent, but there's some consolation. Every time I spend a dollar, I tell myself I'm really only spending forty cents. In spite of a lifetime of resisting such thoughts, it does affect my attitude about spending. And it must affect corporate decision-makers, at least somewhat, as a consequence of paying twice as much income tax as I do. Come to think of it, corporate tax is a double tax on the earnings of the shareholder. Since corporations flourished as outgrowths of the Industrial Revolution, they are probably an extremely efficient way to conduct business, or they couldn't withstand such tax treatment. No doubt, small businesses resent their disadvantage.
But the point to notice is how this tax treatment must affect willingness to spend company money. When companies give a dollar of health insurance to an employee, it really only costs them forty or fifty cents. It isn't even the employer's money, it's the government's tax money. And since the employee gets the insurance for something like seventy-five cents on the dollar counting his own tax reduction, the resistance to spending is even further reduced. As a matter of fact, a clever financial officer can improve on these numbers, but the point is sufficiently made without going into that complexity. Both the employee and the shareholder enjoy a greatly reduced reluctance to spend company money on health care. It just has to be true. And it also just has to be true that the half of us who don't get such a tax dodge, resent it.
It must additionally be true, avoiding this heavy taxation is a major factor in why we have had an employer-based system for a century, with progressive inflation in evidence. It probably contributes to our willingness to tolerate a loss of coverage when employment terminates, and steady price inflation when it doesn't. Rather than go on with a list of problems created by the loss of price resistance, let's get down to the root, in the very design of the system. We have had the wrong kind of insurance for a century. Now that corporate income tax has risen to the highest in the world, our corporations are seen to be fleeing to foreign countries to escape it. So, perhaps it is time to do something about it.
Health insurance is upside down. It pays for small items, and then it runs out of money for big ones. "First-dollar coverage" was once the favored style, but nowadays, for the most part, a token deductible is imposed, but the principle is the same. Even before the Great Depression, young people had comparatively little serious illness and demanded "something for their money." In a sense, it really doesn't matter what the motive was, we started with ensuring small illnesses and tended to run out of funds when expenses really got heavy. Whereas, if we had been concerned with getting the most insurance for the money, we would have begun with very expensive illnesses and then paid for cheap ones only if money was left over. Expensive illness is a threat to everyone, but medical catastrophes are fairly rare. The technical way to achieve this is well worked out, it's called high-deductible insurance, and its motto is "The higher the deductible, the cheaper the premium." Back in the 1960s, I was offered a $25,000 deductible policy for $100 a year. I forget, but I believe it had a top limit of a million dollars coverage. Almost everyone would be floored by a million dollars of expenses, but almost everyone (in spite of their protests) could afford $100.
Although you probably couldn't get the same prices, that still seems like the kind of health insurance everyone ought to have. And, regardless of current discussions, it's the kind of insurance we are always going to have unless we wake up.
If you can afford the kind of coverage that includes paying for cough drops, go ahead buy it. But if you are talking about mandatory coverage for everyone, start with catastrophic coverage and then shrink the deductible to what you or the government can afford. And then stop, because you can't afford it. There's really nothing hard about this..
The Affordable Care Act was announced as mandating health insurance for everyone, but about thirty million people were specifically excluded. The healthcare problems of seven million prison inmates, eight million unemployable, and eleven million illegal immigrants were too specialized to be included in a program which hoped to be one-size fits all. Quite properly, such special outliers would be better handled by special programs designed for their special needs.
The Affordable Care Act (ACA) is now central to Administration attention, and Medicare may be deemed too hot to handle in an election campaign. Nevertheless, we elected here to discuss Medicare but not the ACA. Retirement, childhood, and how to unify complete the list--pretty much all that's left surrounding, but excluding the ACA, election or no election. That emphasizes what had been evaded or neglected, and avoids direct confrontation with the ACA, preparing for the day when that big gorilla is either confirmed or abandoned. It's obviously too expensive, and it remains to be seen whether it can be fixed, or must be abandoned. In our alternative scheme, all of the lifetime healthcare would be financially connected to a single lifetime Health Savings Account, one account per person, but the delivery systems would remain semi-autonomous. ACA could surely live in peace with the HRSAs, and could even peacefully adopt the HSA approach. That would save money, but the questions left are whether it would save enough to be worth the trouble, and whether politics will allow it. Like the European Union, it's surely easier to describe than to accomplish.
Retirement as a Medical Issue. The news is precarious for retirement funding. We begin with the far end of life, where most health cost and all retirement cost concentrates. While retirement is parallel in time to Medicare, we begin to recognize increased longevity as an outcome of better health. If one is to help pay for the other, they must, in the Medicare case, draw their funds from the same pool. That's Medicare, which most people don't want to change, but is the first thing which must change. Because unchanged it costs too much to leave anything for retirement.
Although the Industrial Revolution brought many lifestyle improvements in the past two centuries, it also brought turmoil. The idea of leisure time may once have been a reward for the upper 1%, but actually, most of the population never dreamed of any leisure time. The novels of the "Lost Generation" after the first World War often revolved around the discovery of unfamiliar leisure pursuits by members of social classes newly learning about such things. The moral, then and now, seems to be that leisure is no bed of roses.
We must assign a reasonable definition to a "decent" retirement, provide for a marginal one, and leave the rest to our own sources of wealth.
The cultural response seems to be that leisure was best reserved for retirement, although the younger generation sometimes rebelled, wanting some of it sooner. In any event, Medicare surely extended retirement longevity. (Overextended it, if you believe it will be impossible to pay for.) After all, retirement is a continuous cost, while illness is episodic. There are ways of calculating costs which depict retirement as five times as expensive as healthcare. But Medicare cost averages thirteen thousand dollars a year and rising. That's a pretty meager retirement, and when you discover Medicare is 50% borrowed, you question how many people could retire on $26,000 a year per person, on public sector revenues. If you see retirement as a couple of old folks, you wonder where they would get $52,000 a year, for thirty years. Add Medicare to retirement, and you begin to get absolutely impossible numbers. There seems no possible way to handle this except to provide for subsistence retirement, plus Medicare, and let everyone find some way to get whatever extra he needs, or defines as "decent". And that defines retirement cost as equal to medical costs when both costs could rise appreciably. The Health Savings Account method of accomplishing this is to put retirement at the end of the financial line, funded by the residuals of the other pearls on the string. You keep what's left. Another way is to retire later, or best of all, find some remunerative way to fill your time and use your experience.
Medicare As a Financial Issue. Medicare is about half paid-for, half borrowed, but it's really totally under water. According to Mrs. Sibelius, about half of Medicare expenditures are supported by the general fund or general taxation. The general fund is in deficit, however, providing some fairness to the description of Medicare as a fund borrowed from the Chinese, although China and Japan combined only purchase 13% of ten-year Treasury bonds. In the event of Medicare default, the main creditor victims will be U.S. citizens. The purchasers may change, but the deficit looks to be permanent. Until deficits are paid off, it will remain true that Medicare provides a dollar of care for fifty cents. That sounds wonderful until it suddenly sounds terrible. Medicare is bleeding money. If you want to know how brutal our government can get, read the section later on, about the Diagnosis Related Groups.
About half of the Medicare deficit is paid as you go, about another half is borrowed; only a quarter of the budget is current revenue from the beneficiary age group.
An accountant might say, Medicare's cash revenue is roughly divided between premiums paid by the beneficiaries, and pre-paid as a payroll tax of 3% on workers not yet old enough for benefits. (About half of this wage tax comes directly from the employee, another half from the employer. We skip over the technicalities that some parts of the program are tied to one fund, other parts to another, and also some are subject to higher income tax). About a quarter of Medicare is paid in advance on a "pay-as-you-go" basis, which is to say some people pay current costs of other people -- they are definitely not saved in anticipation of the contributors becoming beneficiaries, as the term "Trust Fund" implies.
A second quarter is indeed paid and spent by current beneficiaries as Medicare premiums. That is, about half of the deficit is paying as you go, another half is borrowed from foreigners; only half of the deficit is matched by current revenue from the beneficiary age group. Nevertheless, the payers of pay-as-you-go are about thirty years younger than the spenders of it. If we put the youngsters' cash to work for thirty years, what interest rate would it take to grow one dollar into three? The answer is about five to seven percent. For quicker understanding, a few unfamiliar tools are needed:
First and Last Years of Life Re-Insurance By far the best proposal for refinancing Medicare, however, is to anticipate the way science is going to re-design costs. In the long, long, run, there should be very little medical cost left, except for the first and last years of life. We have no idea how long it will take, but that's the direction things are almost sure to be going.
So, phase in a restructuring of funding for both children and elderly first, and then add in the rest of a lifespan, step by step. That way, you first fund an obligation you are always sure to have. Be sure to do it in such a way that maximizes the investment income at compound interest. This might be a project under construction for decades, but its first step would be to begin funding for the Last Four Years of Life, which happens to be an early proposal in refinancing Medicare. Since the reader may be unprepared for the topic, it is considered in a free-standing way, in the next section.
Pay at the time, or pre-pay in advance?> At first, it might seem frugal to have people pay for what they spend; let them pay for what it costs, when you know who ran up the cost. But in the case of birth and death, it's going to be 100%, and the amount of it is a lottery. By far the more important issue is the compound interest you earn by paying in advance. Using the rule of thumb that money at 7% will double in ten years, a life expectancy of 90 should double 9 times from birth to death. That is, a dollar at birth is worth $512 at death.
What's more, 50% of Medicare is reported to be spent in the last four years of someone's life. That's likely to represent terminal care, but it doesn't matter. If you prepay those four years, the rest of Medicare has its cost cut in half. In those two simple statements is found the nut of paying for half of Medicare for $100 -- ninety years from now. It's up to actuaries and accountants to find the "sweet spot", of the most revenue enhancement for the shortest time of investment.
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.
