X-Message-Number: 22901 Date: Fri, 21 Nov 2003 12:50:39 -0500 (EST) From: Charles Platt <> Subject: Ponzi game Randy Wicker wrote: > I am not being cynical accusatory nor negative here. > However, despite the idealistic good intentions of those > involved, it seems to me that all cryonics organizations > are essentially what are sometimes described as Ponzi games > in financial circles. I would not classify cryonics as a Ponzi scheme, but as Mr. Wicker says, both of the active full-service organizations have made a pledge which would be unthinkable in comparable businesses such as health care. The cryonics organizations have pledged that the minimum fee for your cryopreservation will remain fixed for the indefinite future, regardless of inflation and other factors, even if you live for another 50 years before you need to be cryopreserved. This policy would make sense if members were required to pay their cryopreservation fee in advance, at the time they join. The organization could then earn interest from the deposited fee, to keep pace with rising service costs. However, virtually no one pays in advance in this way. The issue has been raised and discussed from time to time, but there are other financial issues which worry me even more. I am not familiar with CI figures, so I'll use Alcor figures in the following assessment. Alcor has almost 60 cryopatients and more than 600 members. The organization acquired the cryopatients over a period of more than 30 years. Even at the very modest average rate of fewer than 2 cases per year, maintaining standby, transport, and perfusion service has been a massive task requiring a lot of time, equipment, and labor. Many volunteers and paid staff have burned out along the way. If you consider all the costs associated with handling cases, I feel that the payments received from patients are grossly inadequate. Even when we add Alcor's current membership fees of almost $400 per person per year (lower fees are collected from additional family members and students), the organization still requires donations or bequests to close its financial gap, just to deal with the current case load. In the future, the case load can only increase (assuming there is no sudden breakthrough in longevity treatments that greatly extend the life expectancy of members). The current number of Alcor members is more than 10 times the number of patients who received treatment during the past three decades, and more members are joining all the time. Also, as I pointed out in an article in Cryonics magazine, Alcor now has a higher proportion of members who are aged over 50 than ever before. From this perspective, the membership of a cryonics organization represents a huge future liability which cannot be met with current available human and financial resources. The Cryonics Institute incurs less of a liability because it does not usually perform standbys and relies primarily on its network of morticians to provide initial care. Still, CI patients do receive (or have received) some treatment at the organization, and of course they have to be maintained in liquid nitrogen. I am told that CI sets aside a smaller amount for maintenance of patients, and has fewer paid staff; but like Alcor, it has depended on bequests and/or donations. This does not constitute a Ponzi scheme, because there is no intention to defraud anyone. Also I do believe that the organizations will manage to respond somehow to the future caseload, one way or another. But I'm not sure how this will be paid for under current policies, and I believe the commitment to guarantee a fixed minimum cryopreservation fee may have to be revised for new members at some time in the future. Rate This Message: http://www.cryonet.org/cgi-bin/rate.cgi?msg=22901