X-Message-Number: 1945
From: 
Subject: CRYONICS Baseball Dilemma
Date: Fri, 12 Mar 93 01:23:55 PST



To Cryonet
>From Steve Bridge, President
Alcor Life Extension Foundation
March 11, 1993

Re: Mike Darwin's Message: #1929 - Re: Ever Rising Curve ...

Mike says:

>It can be argued that this money was 
>not wasted or misspent, however it can also be agrued that had we set 
>aside the money for a self-insurance approach and foregone many of 
>the "worthwhile" things it was spent on, we would not be having the 
>problems we are having now.


     Mike Darwin makes much of the fact that the Dick Jones money 
should have been spent differently several years ago, and that if we 
had started a self-insurance program or an insurance company that we 
would now be making profits and we would not be in financial 
difficulty.

     I am reminded of a baseball anecdote from a number of years ago.  
(I'm not using the real names because it would take me days to track 
down the story again.)   Coach Johnson's team was behind two runs in 
the ninth inning (that's the LAST inning, for you sports illiterates) 
with one runner on base and a weak-hitting pitcher due to bat next.  
He sent Slugger Kowalski into the game to pinch hit.  Great move.  
Slugger whacks the ball into the bleachers for a home run which ties 
the game and sends it into extra innings.  Slugger replaced the 
pitcher, so in the next inning a new pitcher has to come in to pitch
for Coach Johnson's team (in baseball, once a player has been 
substituted for, he can't return to the game.  He is, in a sense,
"used up.")  That means that Slugger Kowalski is done for the night, 
also, since the new pitcher replaced him.

     Two innings later, the other team has gone ahead by one run 
again, there are two outs, and the game is on the line.  It's the new 
pitcher's turn to bat and he can't hit any better than the first one.   
Coach Johnson looks back at his bench with a worried look on his face, 
wondering which of the last substitutes might be able to save the day.  
>From the crowd comes the inebriated call, "Johnson, you stupid bum!  
If you hadn't already used Kowalski, you'd have him now when you 
needed him!"

     I hope you all get the point without too much elaboration.  If 
Johnson HADN'T used Kowalski before, the game would have been over 
already.

     Without going expenditure by expenditure, I cannot tell how much 
of the Jones money might have been spent inappropriately and how much 
was spent on absolutely essential activities or purchases, without 
which we might be in much WORSE shape today than we are now -- or not 
in existence at all.  (Although I DO know that muuch of that money was 
spent for important legal fees, and $200,000 was placed into the 
Patient Care Fund -- a move that Mike himself pushed hard for.  

     Also, I don't know how long it would have taken to set up a 
reasonable and legal self-insurance program or insurance company nor 
how long it would have taken for such an enterprise to be making 
enough profit to benefit Alcor.  The answer is certainly years, not 
months.  I hope the baseball analogy is clear.

     I should say that, as long as the legalities and financial 
realities of the situation can be met, and if we don't REALLY mind 
several more layers of California (or other state) bureaucracy having 
at us, the insurance idea makes good sense.  I am not morally opposed 
by any means.

     But I still have my doubts about the practicalities.   The plan 
would require capitalization well over $1 million, and it would not be 
free to run.  Let's say that 200 members signed up for this.  If the 
company only had the income from their monthly payments (let's say 
$500.00 per year each on average), the annual net would be only 
$100,000.00.  If ONE of those members was suspended in the first year 
and was a Whole Body Patient, the company would LOSE $20,000 (based 
on Alcor's $120,000 minimum for Whole Body suspension).  And that 
doesn't even count the usual expenses for someone to administer the 
company and the cost of the mind-numbing pile of paperwork that an 
insurance company must file to conform to state and federal regulations.

     It looks to me that a minimum of 5,000 people would have to 
enroll to provide enough income and financial safety.  At this level, 
buying an existing insurance company seems more workable.  Of course, 
that means you inherit all of the liabilities that the small company 
may have along with its advantages.


>From Mike again:

>     5) My frustration at Alcor's failure to address a fee-for-
>service remote standby program knows no bounds.  This is a major 
>source of revenue which has remained untapped.  
> .... [omitted]...
>
>There is a service which is ESSENTIAL to good suspension and which 
>many people perceive they are going to get, which THEY ARE NOT BEING 
>CHARGED FOR AND WHICH THEY HAVE NO ASSURANCE OF RECEIVING.  This is 
>not good and does not bode well for the future.  

     There is certainly no disagreement here.  Mike and I sweat 
through discussions of Standby three years ago and again two years ago; 
but we never came up with a plan that seemed to work fully or which 
many people were willing to accept.  Several other people, including 
the Chamberlains, have had ideas along these lines, though, and most 
of us at Alcor are still VERY interested in bringing a Standby-plan 
into existence.  Ralph and I have been talking about this for quite a 
while and we plan to have the topic on either the April or May 
Business meeting agenda.


Mike one more time:

>     9) To Michael Riskin regarding fiancial improprieties: I stand 
>by what I say.  Taking money out of the Patient Care Fund outside the 
>specifications of contract and stated policy is improper.  I do not 
>call this a small matter and I do not really care what Price-
>Waterhouse, or for that matter what Price-Pfister thinks.  What I 
>care about is whether promises to members were violated.  I maintain 
>that they were.

     Specifics, Mike, not speeches.  Please supply the contract 
language that you think is being violated, so we can examine it.  


Steve Bridge

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