X-Message-Number: 2227
Date: Mon, 10 May 93 10:04:46 CDT
From: Brian Wowk <>
Subject: CRYONICS Reply to Charles Platt

Charles Platt:
 
> What worries me, however, is that the money in the Patient 
> Care Fund was put there to care for (and revive?) existing 
> patients in dewars. These patients cannot be moved out of 
> their dewars, because it has been generally agreed (as I 
> understand it) that transition from LN2 to -130 is not a 
> great idea. Therefore, the old patients would be subsidizing 
> the construction of a room to house new patients. 
 
> It seems to me that the only way this is defensible is if the 
> funding from the new patients is gradually used to "pay back" 
> the Patient Care Fund for the old patients. In fact, I 
> suggest there should be two Patient Care Funds, one for 
> patients in dewars, the other for patients in the cold room, 
> so there can be no misunderstanding about the allocation of 
> funds. 
 
        I think this distinction between patients stored with 
different technologies is arbitrary.  I could equally well argue for 
segregation of funds used for maintaining neuropatients in XLC-1520 
dewars and whole body patients in Bigfoots.  Despite frequent and 
sometimes vituperative arguments within Alcor about the merits of each 
over the years, whole body and neuropatients are still maintained from 
the same Patient Care Fund.  (Depending on who you ask, you can get 
various opinions about which class of patients has been subsidizing 
the other.)  The reason funds were never segregrated was that nobody 
would ever seriously suggest compromising the care of one group just 
because the other group proved more economically viable.
 
        A similar situation will exist with coldroom technology.  
Eventually either coldroom patients or LN2 patients will prove cheaper 
to care for.  We are certainly not going to pull the more expensive 
group out of suspension (or pursue their revival less aggressively).  
At worst we will take a loss at the expense of the cheaper group, and 
raise future coldroom minimums if the coldroom causes the loss.  I 
believe, however, that it is much more likely that LN2 patients will 
end up benefiting at the expense of coldroom patients.
 
        A more appropriate question might be whether it is proper to 
spend PCF money on systems to care for patients we have not suspended 
yet.  My reply is that this is exactly what we already do when we buy 
a new Bigfoot dewar for 4 future whole body patients, or a new 
Cephalarium vault for 9 future neuropatients.  Buying a coldroom with 
the PCF will be doing the same thing, albeit on a larger scale.
 
        There is another way to look at this.  Not every penny that 
comes out of the PCF must purchase supplies to care for current 
patients.  Indeed, most PCF purchases are investments made for the 
purpose of future PCF growth.  When we buy a common stock it is not 
because owning that stock immediately benefits patients, but because 
the resulting growth in PCF asset value benefits patients later.
 
        A coldroom is a very valuable asset for the PCF to own.  It 
should be viewed as an investment that will pay large dividends as it 
is filled with patients who are grossly overfunded compared to 
coldroom operating costs.  In other words, a decade from now the PCF 
will be larger if we build a coldroom with it today than if we don't.  
That is how current LN2 patients will benefit from a coldroom 
investment.  We will end up with a bigger PCF for *all* patients. 
 
        The only remaining question is whether the risk level of a 
coldroom investment in inappropriately large for the PCF.  I think 
not, especially because the only risk is cost overrun, not outright 
failure.  Moreover, coldroom economics are so favorable that my cost 
estimates would have to be wrong by more than *a factor of FOUR* for 
the coldroom not to save money in the long term.
 
                                                --- Brian Wowk 

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