X-Message-Number: 1232
From: 
Subject: grist for cryonet
Date: Fri, 25 Sep 92 09:30:22 PDT

 (Perry E. Metzger) writes:

>I would disagree that we should be handling insurance ourselves. I
>think that this is best left to professional insurance companies.

There is a reason for Alcor to get into the insurance business.  Most 
of the cash flow involved in cryonics is making the stockholders of 
insurance companies rich.  And, if and when Alcor gets involved, we 
can buy a professional insurance company or hire insurance 
professionals, and run Alcor from the dividends.  (A contributing 
positive factor is that healthy signups live somewhat longer than the 
actuarials would indicate.  Most Alcor members are also into life 
extension.) 

>Indeed, I would further argue that cryonics in the long run should
>move to unbundle all services. I think that in the long run we would
>be best served by competitive suspension, storage, and trust
>companies.

Perhaps yes, perhaps no.  Vertical integration companies have done 
very well sometimes.  Other times they have not worked out so hot.  In 
any case, I am not so sure that company goals (usually financial) are 
that consistent with getting *me* out on the far end of the process. 

>            One would go to a cryonics broker who for a small fee would
>help one select an insurance company to pay for ones suspension (say,
>Northwest Mutual), a trust company to hold and manage one's money
>post-suspension and otherwise defend one's rights while on ice (like
>Morgan Guarantee or Union Bank of Switzerland, probably via an
>intermediate dummy corporation in a jurisdiction without a rule
>against perpetuities, as per Saul Kent's Reanimation Foundation), a
>suspension vendor (say, a company owned by Mike Darwin or one of his
>competitors), and a company to manage one's body in suspension (say,
>some company in Iowa with a huge dewar farm in an earthquake and bomb
>proof facility, and a small round the clock staff to handle the 10,000
>patients there.) When technology advances enough your trust company
>could select a revival and rehabilitation clinic, as per your
>instructions.

Gad.  If this was the only way to get signed up, my estimate is that 
Alcor would be 1/10th of its current size.  Getting people to deal 
with getting insurance and making all the decisions needed for the 
Alcor paperwork is hard enough.

>You may ask, why bother. The answer is that the more I think about it,
>the more I want my money managed by the trust department at a good
>swiss bank, and the less I want it handled by the board of a
>non-profit corporation, who's motives may be good, but who's members
>must be selected for too wide a variety of skills.

I am not much concerned with getting money into the future, but I am 
about staying alive.  I know that the existing (and hope future) 
management/board would move heaven and earth to keep the patients 
frozen, including converting them to nuero if funding runs low.  Just 
what do you expect a storage company to do if your trust fails to pay? 
I can tell you what one storage company *has* done when they did not 
get paid. 

[deleted]

>Everyone could go for what makes them individually most comfortable.
>There would be no need for people to trust a single organization for
>all services, there would be no bundling issues to worry about, and
>there would be the capacity to use companies of known merit in
>financial management wherever possible.

>I agree that much of this is currently impractical -- however, I
>suggest that we should seriously consider whether, in the long run, we
>would want to move towards more centralization and dependance on one
>organization, which is what the "have Alcor handle its own insurance"
>paradigm would hold us to, and the "have everything become unbundled
>and decentralized" paradigm. Since neither of these alternatives is
>likely to come up within the next year or two, we have a long while to
>discuss the possibilities and come up with the best idea.

I agree that discussion is valuable, and there may well be room in the 
market place for both vertical integrated insurance-and-all non-profit 
organizations and others who will sell cryonics a la carte.  I don't, 
however, believe that it is in principle possible for the "best idea" 
to be determined.  "Best" can only be judged by results--and by the 
time we can judge the results in revived patients, the question will 
be moot. 

BTW, I could well be wrong, but my best guess is that far fewer than 
10,000 patients will be suspended before they start being revived, and 
the practice of cryonics is relegated to the history books.  (Arel's 
estimate is fewer than 500.)

Perry also posted (in reply to Charles Platt):

>>Here's my suggestion for coping with the first problem: When 
>>a member signs up, (s)he pays Alcor a substantial "security 
>>deposit"--something like $10,000. At the end of the first 
>>year of membership, if the member is still alive, Alcor gives 
>>the money back. 
>
>Well, most people don't have $10k around, certainly not $10k they
>could spare, and thus there would be few if any new members.
>
>I really believe this is a case of shooting a fly with a cannon. The
>problem will only really get bad if the number of suspensions gets
>high. If the number of suspensions gets high enough, a simple small
>increase in suspension fees to assure that all suspensions are done at
>a profit and that a full time suspension team can be paid for will be
>sufficient. 

[example deleted]

>Admittedly we don't do that much volume yet. The solution is
>a combination of setting rates so we can support the needed extra
>staff with the expected annual fees from suspensions. Pay as you go as
>with everything else in capitalism.

I read this three or four times before I picked up on the great pun! 

In the long run, Perry's solution would work.  Years back we had fewer 
than a suspension a year, and there was no way we could keep 
suspension services ready on that level of activity.  Relatively 
speaking, business is booming--though it may be a long time before the 
number of suspensions gets to the level it could support the overhead.  
Getting from here to there is going to depend a lot on volunteers and 
overworking the staff. 

[deleted]

>There seems to be some attitude here that we are trying to avoid
>suspensions. I saw someone say "we have to protect the organization
>from last minute signups" and "We have to protect Alcor from elderly
>people". Lets get serious here -- Alcor is in the suspension business.

Yep.

>It should either set its fees for suspensions high enough to cover
>costs on average or let someone else do the job. We can't treat Alcor
>like some exclusive club for healthy people who aren't going to
>actually die. 

Sigh, I suppose not.  Perry, you really should come along and watch a 
transport/suspension when you get the chance.  I think it would give 
you more perspective on what we who are on the front lines have to 
deal with. 

>                The service is of most interest to the dying -- thats
>why dying people are signing up.

An interesting statement which induced me to work the numbers.  Over 
the last year and 3/4 Alcor has grown by about 130 (members? 
clients?).  During that time I count four signups which have been 
suspended by now.  I don't believe there are any others in that group 
who were considered terminal when they signed up.  That would indicate 
that about 1 in 30 new members are "dying people" who sign up.  Just a 
guess but my order-of-magnitude estimate is that the average person 
spends 1 percent of their life as a "known terminal."  So, if people 
signed up independent of this (presumably highly motivating) 
inducement, we might expect one in a hundred instead.  So, Perry is 
right, dying people *do* sign up, but only at a rate of about three 
times the healthy ones.  Hmmm, that also gives an estimate of the 
current potential cryonic client population--if they were all as 
motivated as someone with a terminal diagnosis, Alcor would be all of 
*three times* as large as it is!   Of course, there are other factors 
which are likely holding down the number of terminal signups.  For 
example the problem of paying for it after a lot of medical bills. 

Cost, by the way, is the main barrier I know about which prevents 
people from signing up.  We should think seriously about the price 
elasticity curve when considering any raise in the suspension funding 
or dues. 

>                                  I see no reason this should be a
>problem if we quit trying to subsidize operations with emergency
>standby fees and simply run the show from suspension fees. Hell, if we
>can get large numbers of last minute signups it will substantially
>increase the size of the patient care fund and other large Alcor
>funds, thus increasing Alcor's capacity to invest and indirectly
>allowing the organization to become more stable.

This *might* happen faster than we now think.  It depends on the 
growth rate of the fraction of the population out there who would sign 
up if they became terminal, and the rate at which they actually do 
become terminal.  The second factor is a constant.  The first might 
well be growing much faster than the growth we see from the healthy 
ones.  I think the data points are too sparse to give much trend 
information yet--but we might be able to see a trend in the ratio of 
long term cryonicist vs. terminal signups.  I will ask Mike Perry to 
take a look at this. 

While I don't always agree with him, I really do appreciate Perry 
Metzger's thoughtful postings.

Keith Henson

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