what if inflation is higher than that? should Alcor be buying contracts that pay out if inflation is higher than that?
Furthermore, what if long-term average expenses are greater than the 2% quoted in the post?
For example: relocation and rebuilding costs if current facilities become unsuitable over the next few centuries for internal or external reasons, liquid nitrogen becomes more expensive, equipment needs more maintenance in future, and so on.
The model in the post seems like it could be boiled down to "current expenses are ~2%, current real returns are ~3%, therefore all will be good".
My article focuses on a stable scenario for Alcor without an economic crisis. I believe Alcor could just as well survive 4% inflation, as they are very wealthy. Historically, it’s clear that Alcor has weathered the subprime crisis and other economic downturns, as well as a number of lawsuits from people who didn’t understand biostasis, lawsuits that unfortunately cost them a lot of money. We have no way of knowing for sure whether this trend will continue, but economically speaking, Alcor seems to have fairly good chances of surviving long enough for its cryopatients to be revived.
In the August 1990 issue of Cryonics magazine published by the Alcor Life Extension Foundation offering human cryopreservation services, Michael R. Perry, the official historian of the foundation, published an article detailing a mathematical model aimed at calculating the long-term care costs of patients over time and, by extension, their maintenance until the development of revival technology or their thawing and theoretical death.
Since then, costs have changed, and I propose here an updated version of his mathematical model, which will indirectly allow us to assess the probability that the Alcor Foundation will survive through the centuries and succeed in its mission to save human and animal lives. The model will of course take into account the Alcor Patient Care Trust (PCT), which manages the long-term care of cryopatients. The goal of this article is to evaluate whether Alcor will be able to continue paying for the maintenance of these cryopatients for centuries if necessary.
(Author’s note: to designate a cephalon surgically separated from the torso, also called a body, I will use the term cephalopatient rather than neuropatient. A cephalopatient refers to a patient whose only the cephalic part of the body is maintained in long-term care in LN2, liquid nitrogen. The torsos of cephalopatient patients are generally cremated. Historically, Alcor uses the term neuropatients to refer to an isolated cephalon, but I personally use the term neuropatient to refer to a brain extracted alone from its skull; these terms were suggested by Max More and Jacob Cook.)
The minimum amounts currently requested by Alcor for human cryopreservation are $220,000 for a whole-body suspension and $80,000 for a cephalopatient. While these rates may seem excessive for middle-class individuals, they are accessible to the majority of the population in developed countries through life insurance or an investment fund in case of uninsurability. Life insurance premiums can, however, easily exceed $100 per month depending on the member’s age and health.
Alcor has a separate account to pay for the long-term care of these patients, the Alcor Patient Care Trust (PCT). In the 2022 financial statements of the foundation, it is indicated that the PCT contained $17,322,440. The PCT should be seen as a kind of piggy bank that generates interest each year. The formula is as follows: d = c ÷ i. Here, d is the capital, c is the annual cost in dollars that must be covered, and i is the real yield that can be withdrawn each year. At the time of writing, Alcor manages 252 cryopatients. We will use the 2022 figures for the example and use the number 248 patients. We will therefore calculate the implicit capital per patient: 17,322,440 ÷ 248 = $69,849. In short, if we divided the 2022 PCT by patients, we would get $69,849. However, it should be considered that this is simply an indicator because Alcor has minimum money requirements for whole-body patients and cephalopatient patients.
Now that we have a basis, we can move on to the calculations.
If we apply the 3% annual spending rule, each patient therefore “receives” $2,095 per year for funding long-term care, since 3% of $69,849 gives approximately $2,095. Once again, I must emphasize that these figures only apply if Alcor were only taking care of whole-body patients. Rates will differ between a whole-body patient and a cephalopatient. In order to project into the future while accounting for inflation, current rates must be multiplied by compounded inflation factors. For example, for a whole-body patient, we take $220,000 with an annual inflation of 2.5% over 25 years. So we take $220,000 and multiply it each year by 1.025 for 25 years. This gives approximately $436,700. The currently requested rate for cephalopreservation, at $80,000, would then rise to $159,000.
The Patient Care Trust contained approximately $17,322,440 in 2022. Suppose that, of 248 patients, about one-third choose Whole-Body preservation and two-thirds choose cephalopreservation. For Whole-Body patients, this amounts to about 83 patients (248 ÷ 3 ≈ 83). For cephalopatients, this amounts to about 165 patients (248 × 2 ÷ 3 ≈ 165).
The proportional total capital for Whole-Body patients is 1 ÷ 3 of the total PCT, or approximately $5,774,147 (17,322,440 ÷ 3 ≈ 5,774,147). Divided by 83 patients, this gives an average capital per Whole-Body patient of $69,500 (5,774,147 ÷ 83 ≈ 69,500). The total capital for cephalopatients is 2 ÷ 3 of the total PCT, or approximately $11,548,293 (17,322,440 × 2 ÷ 3 ≈ 11,548,293). Divided by 165 patients, the average capital per cephalopatient is about $69,990 (11,548,293 ÷ 165 ≈ 69,990). For Whole-Body patients, 2% of $69,500 gives approximately $1,390 per year (69,500 × 0.02 ≈ 1,390). For cephalopatients, 2% of $69,990 gives approximately $1,400 per year (69,990 × 0.02 ≈ 1,400).
If the PCT yields a real return of 3% per year:
The interest therefore exceeds the annual 2% expenditure:
In conclusion, with these optimistic yet realistic assumptions, the PCT should be able to cover the long-term care of Alcor patients for a theoretically infinite duration. In practice, it should survive for several centuries, more than enough to await the development of revival technology. I therefore believe that Alcor patients are largely secure and will be reanimated in the future, rejuvenated and restored.