National / International News
A new Johns Hopkins University study published Monday in the journal Health Affairs says that a number of mostly for-profit hospitals are charging certain groups of patients ten times the rates paid out to Medicare for the same procedures.
The key thing to understand in the realm of hospital pricing is negotiation, or rather, the lack of negotiation.
At hospitals, there’s a price that Medicare pays for its patients, and then there’s the list price charged to everyone else, usually about three times higher.
Dr. Gerard Anderson, director of the Johns Hopkins Center of Hospital Finance and Management and coauthor of the study, says some hospitals mark up their prices about ten times, and some are stuck with that sticker price "because the auto insurers and the workers' compensation insurers are not able to negotiate prices."
And that means higher workers' compensation and automobile premiums for everyone else. The study says this also pushes up costs for everyone else because hospitals can say they’re regularly underpaid when negotiating prices.
Jarrod Bernstein is spokesperson for CarePoint Health, which owns CarePoint Health Bayonne Medical Center in Bayonne, N.J., which is the second most expensive hospital on the top 50 list published in the study. Bernstein says CarePoint's prices are a result of serving many low-income customers. "Being out of network is not a business strategy, it is a survival strategy," Bernstein says.
CarePoint is calling for an overhaul of the healthcare reimbursement system. In the meantime, its hospital’s list price for treating pneumonia is about $200,000, while Medicare pays out just under $10,000.
As early as this week, the Labor Department will consider updating overtime laws. Currently, salaried workers are eligible for overtime only if they are paid less than $23,660 a year, or $455 a week. The new rules would bump that threshold to as much as $52,000.
The new rules would affect workers with low salaries who now put in long hours with no overtime. Arindrajit Dube, associate professor of economics at the University of Massachusetts Amherst, points to the example of a shift supervisor at McDonald’s.
“She is hardly someone we think of as an executive employee, but the law does not require McDonald’s to pay her overtime even if she works 50 hours a week,” he says.
Dube says what seems like a huge jump in the overtime threshold simply brings things up to 1975 standards, adjusting for inflation. The effect?
“We’re talking about as many as 10 million workers getting a raise,” Dube says.
A National Retail Federation report says the change could cost businesses $5 billion a year. But Stephen Trejo, economics professor at the University of Texas at Austin, says employers will make adjustments, like cutting straight-time pay.
“There’s not going to be pressure on firms to raise their wages,” he says.
He adds that workers might be better off in the short term, but it might just even out in the long term.
By the time Kina Grannis signed with a major record label, she already had a small but loyal online audience of about 10,000 people.
They had helped her win a major online music video contest. The prize was an appearance in a 2008 Super Bowl ad and a record contract.
Months later, when Grannis met with her label, she found out that what had seemed to be a dream come true was actually very different in reality.
"They had a plan to have me rewrite an entire album, have me co-write it with professional songwriters and be something that they approved of," Grannis says. "Which I get. But for me, music is so personal, so important to me, that the idea of sitting awkwardly in a room with strangers and having to create with them, in a way that was very unnatural to me, did not seem right."
Grannis says she also did not want to throw away a number of songs she had already written, which were proving popular on YouTube.
"My music is me, and the idea of having to sacrifice all of that to do it their way didn't make sense," Grannis says.
So, instead, she did something that she had never imagined just a couple of years earlier when she was struggling to establish herself and get noticed. She dropped the label.
"It became very clear to me that I would be able to find people, and I had found people in the world, that did want to hear my music," Grannis says.
Grannis' gamble paid off. Today, she has more than 1 million subscribers to her YouTube channel, where she regularly releases music videos.
Streaming music is transforming the music industry. Apple, which announced this week that it is also entering the streaming music universe, is the latest in a number of companies that are changing the business model from one of purchased content to one of, essentially, rented content.
But while the business model is changing, the path between musicians and audiences is expanding. Artists have a lot more avenues today, compared to even a few years ago.
"More new music will be discovered than used to be the case, when relatively few gatekeepers were controlling relatively tight playlists," says Larry Miller, a professor at NYU and host of the podcast Musonomics.
"It's now possible for almost any artist to access one of the broad distribution networks that feeds Apple, Spotify, Deezer, Rdio, Pandora and everybody else," Miller says.
So, getting heard is easier. But getting paid is harder. Musicians, in particular, have been complaining about streaming's business model, which pays less than a penny per stream. It's eating away sales of albums and mp3's.
"In prior eras, a small artist, or an independent label ... could probably get by with selling 10,000, 50,000 copies of a thing," says Casey Rae, CEO of the Future of Music Coalition. "Whereas if you translate that to fractions of pennies from streams, it's much, much harder to pay your rent."
Fractions of pennies add up, at least for big labels. Last month, Warner Music Group reported that, for the first time, its revenues from streaming surpassed downloads. But, individual artists aren't necessarily sharing in that bounty. Even Kina Grannis, whose videos have generated millions of views on YouTube, makes little money online.
"Ad revenue for me is pretty small," Grannis says. "Although YouTube is what fuels the entire thing."
What YouTube fuels is interest in her as an artist and in concert tours. Those tours generate the most income, Grannis says, including from merchandise sales and CD sales.
In just under a decade, Etsy has gone from a furniture maker's dream of an online crafts marketplace to a $3.3 billion publicly traded company to a company worth roughly half that.
Wedbush analyst Gil Luria's explanation for the two-month slide in its stock price involves a cardboard box full of Etsy goods.
"I've bought my wife, you know, handmade jewelry. I've bought her hand-embroidered artwork. And most recently I've ordered a lot of counterfeit merchandise," says Gil Luria, analyst at Wedbush Securities.
He keeps them as evidence, to back up his claims that the company has been slow to crack down on counterfeit and copyright- and trademark-infringing goods.
"I actually found it to be twenty times more likely that you'll find a counterfeit item on Etsy than on Alibaba or Ebay," he says.
His bearish assessment of Etsy is that its push for growth has meant allowing counterfeit, copyright-infringing as well as factory-made goods—all of which ultimately water down its homespun image.
That image is on full display at a "craft party" under the Manhattan Bridge in Brooklyn.
An Etsy event beneath the Manhattan Bridge in Brooklyn, NY.Tobin Low
"There's tinsel, there's balloons, there's lots of kids making crafts," says Cindy Peng, who sells jewelry as Cindy Penguin.
At the next table, Tamara Garvey is even more gung-ho. "I love Etsy so much, I wouldn't sell at any other marketplace," she says.
Tamara Garvey sells her illustrations at an Etsy event in Brooklyn, NY.Tobin Low
But what's next for Etsy depends on there being enough sellers like Peng and Garvey to make up for sellers like Sherry Truitt. She sold handmade cufflinks made out of vintage maps on Etsy for seven years, but quit when she says her wares started getting crowded out of the search results by factory-made versions.
"Now it looks like Ebay or Amazon. And some of the companies sell on all three," she says.
The question now is whether Etsy will be able to defend and grow its DIY niche in the face of competition from the likes of Amazon's forthcoming handmade marketplace. It's this speculation about the future, more than how many cuff links were sold today, that determines the company's stock price.
"You say how can you justify that market cap based upon its current operations, and the answer is you can't," says Jay Ritter, professor of finance at the University of Florida.
If that makes this whole stock price question sound speculative, it should. Ritter says the way tech companies are valued on their future profitability is why the prices jump up and down so much. It's also why he says the last time a stock price fall like Etsy's was commonplace was during the Internet bubble of fifteen years ago.
That's how much Atlantic Broadband is paying to acquire regional telecom Metrocast Communications of Connecticut. Beyond the Time Warners and the T-Mobiles and the DirectTVs, plenty of smaller cable and satellite providers are going merge-crazy, often in a bid to become bigger and more efficient, though sometimes just because everyone else is doing it.$12
That's how much Jack Ma, CEO of Chinese e-commerce site Alibaba, made per hour when he was an English teacher. With a $25 billion IPO, the company is certainly providing Ma with a significant bump in pay. But at a speech at the Economics Club of New York on Tuesday, Ma stated that he was much happier as a teacher, given the stress he currently faces as head of such a large company. As the South China Morning Post reports, Ma said, "If I had another life, I would keep my company private."2
The number of state attorneys — in New York and Connecticut — investigating Apple for antitrust violations, the Verge reports. A letter from Universal Music Group responding to a subpoena has made the rumored probe public for the first time. Last month, several news organizations reported Apple was pushing record labels to in turn press Spotify to drop its free, ad-supported streaming service.7 years
That's how long Sherry Truitt sold her handmade cufflinks on Etsy before removing her business from the site. The reason? Truitt saw her products being crowded out of search results by factory-made products also sold on Etsy. As the company faces the reality of its stock dropping by nearly half in the last decade or so, Etsy sellers are questioning what happens next as the company opens the doors to larger manufacturers and as Amazon prepares to enter the handmade market.1,012
That's how many nutrition and snack bars are on the market now, the Wall Street Journal reports. Ten years ago there were 226, and they cost half as much, on average. The snack bar business is high-margin and growing quickly, combining convenience with nutrition — or at least the appearance of nutrition.2019
That's the year by which some of Tesla's shareholders have proposed getting rid of "animal-sourced material" in the design of its cars. Think leather interiors. Two shareholders in particular — Mark and Elizabeth Peters — proposed the change. Elizabeth Peters referred to leather seats as made of the "skins of sentient beings that suffer unspeakable horror." As Bloomberg reports, the proposal was rejected, as Tesla's board feared that such an initiative would distract from the mission of getting the cars to market.