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.

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