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What to do when healthcare isn't enough

Thu, 2014-04-03 12:48

We were all trying to breathe through our mouths, and despite his obvious pain, 45-year-old Mariano Garcia sat transfixed, watching his podiatrist Dr. David Millili cut through the bandages wrapped around Garcia's left calf.

It was one of those moments that takes forever, the smell filling the air. As the dressings came off, the room went quiet.

Garcia gagged, and Millili balked.

“I don’t have access to treat this right,” Millili said. “I don’t see any maggots or anything. I’m not dealing with this.”

Millili turned to Garcia:  “When was the last time the bandages were changed?”

“Last time I was here,” Garcia said.

Millili was incredulous. “Really? A week?” he said.

Jessica Kourkounis

Millili changing Garcia's bandages.

Garcia’s been coming to Cooper University Hospital in Camden, N.J. for two years now, and everybody in the exam room knows exactly what needs to happen: Those bandages must get changed daily. But no matter how simple it sounds, it’s not happening.

Garcia says it hurts him too much to do it, and visiting nurses say they don’t feel safe going to his neighborhood. Frustrated and defeated, Millili has one choice right now, but he knows sending Garcia to the hospital is just a temporary fix.

“When we finally get things turned in the right direction again for him, how do we keep it that way?” Millili says. “Three weeks after he leaves the hospital, why are we not in the same situation? I can’t control infection. I can’t control pain. I can’t control these wounds.”

The doctor is talking about Garcia, but he may as well be talking about one of the biggest puzzles in this new era of healthcare. How can doctors keep people healthy when they have almost no control over what happens outside the four walls of the hospital?

It’s the edge of the healthcare world.

“A lot of clinical care is kind of like the tree falling in the forest,” saysRebecca Onie who runs the non-profit Health Leads, which works with medical providers to connect their patients to social services. “For example, a patient will come in to manage her diabetes but needs to refrigerate her medication and hasn’t had electricity for six weeks.”

Onie says now that hospitals either must drive down costs, or face what could be crippling financial penalties. Healthcare executives must leave the medical map behind and head out for the uncharted territory.

“They are going to have to begin paying for a set of things that have historically [been] considered outside the scope of traditional healthcare,” she says.

And so we are beginning to see healthcare’s first, hesitant steps, where doctors and hospitals wade into the world of social services. 

Health Leads works with 20 providers, serving some 15,000 families. Kaiser Permanente, one of the top health systems, has several pilot programs, including one in Oregon where ambulance staff act more like social workers – helping solve would-be domestic problems, and avoiding trips to the ER.

“We spend almost 1.5 times more than the next most expensive country and yet our health outcomes are among the very worst in all high income countries,” says Yale public health professor Elizabeth Bradley.

She says it’s no mystery that education, poverty and safety have more to do with a person’s overall health than medical care does. In her book last fall, Bradley and her co-author, Lauren Taylor, found people in countries that spend less on medical care but more on social services were healthier than people in the United States.

“The major reason we are not doing better... the unnamed culprit is that we are probably spending less on the social services than is necessary,” Bradley says.

This social service healthcare frontier isn’t as popular as the California Gold Rush, but it's close. It’s on the tip of tongues at healthcare conferences. The Robert Wood Johnson Foundation identified it earlier this year as one of three critical steps to move healthcare forward. Even the nation’s largest healthcare program for the poor – Medicaid – has signaled its willingness to pay for some care outside the traditional stuff -- for example, air conditioners for asthmatics.

“We recognize that it can’t just be the office visit,” says Dr. Stephen Cha, the chief medical officer for Medicaid. “That’s the core of it, but we have to think about when we face this patient, we are looking at much more than just what we can do in that 15-minute span.”

In this first wave of programs, insurers aren’t paying for job training, hospitals aren’t moving families out of dangerous neighborhoods. But if interventions save money, then the game changes.

Kaiser Permanente’s Raymond Baxter, who oversees several non-medical projects, including the paramedic pilot, says it’s early, but that he sees promise.

“We are now adding a cost to the system in the short term,” he says. “However, if that intervention averts a series of visits to emergency rooms, in the long run you are going to see some real gains here.

Harvard health economist Amitabh Chandra has his doubts. Providers can only save money if they can pinpoint which patients truly benefit – a tall order – he says.

“I think of that as analogous to the man mission to Mars,” Chandra says. “It’s something that can be done. There is no theorem in economics or statistics that says it’s not possible. But you need absolutely terrific data to be able to make that happen. And I’ve just never seen it.”

Chandra’s driving at the X-Factor so often at the crux of healthcare: What can make people change their behavior?

Which brings us back to Mariano Garcia in Camden.

“I wish I could get better and get all this cleared and get me a job and work,” Garcia says.

Garcia’s life is so precarious, his options all risky. If he lands a spot in an inpatient treatment program for his leg, he’s not sure what happens to his one-room apartment.

Jessica Kourkounis

Garcia at home. 

“I don’t want to lose my place because I’ve going to the hospital,” he says. “When I get discharged from the hospital, then I’m where am I going to go out?”

There’s no easy answer, which is what makes wading outside medical care tricky. But hospital staff addressing Garcia’s social needs has helped him keep appointments and – even once or twice – change his own bandages.

What to do when an online review isn't true

Thu, 2014-04-03 12:35
Thursday, April 3, 2014 - 13:32 Spencer Platt/Getty Images

Employees of the online review site Yelp at the East Coast headquarters of the tech company in New York City

Negative, anonymous reviews on websites like Yelp can hurt small businesses.

A carpet cleaner in Virginia says false and malicious reviews on Yelp drove customers away, forcing the company to lay off employees.

Joe Hadeed wants the Virginia Supreme Court to force Yelp to reveal the identities of the people who wrote the negative reviews.

But Virginia law is unusual. In the rest of the country, most judges have protected anonymous online reviews to ensure reviewers are safe from retaliation.

Yelp spokesman Vince Sollitto says the company vets its reviews. “We actually use an algorithm to recommend the most valuable and reliable content. So Yelp only recommends about 75 percent of the content it receives.”

Marketplace for Thursday April 3, 2014by Jeff TylerPodcast Title: What to do when an online review isn't trueStory Type: News StorySyndication: SlackerSoundcloudStitcherSwellPMPApp Respond: No

G4S goes where public forces can't

Thu, 2014-04-03 12:26
Thursday, April 3, 2014 - 13:23 Lars Schmidt/Wikimedia Commons

London based company G4S is the largest private security company in the entire world. It contracts ex-military soliders to go where public forces can’t. The company has about 620,000 employees in 120 different countries, and provides gurard services anywhere from oil fields to nuclear facilities in the U.S.

William Langewiesche wrote about the company in a piece for Vanity Fair called “The Chaos Company”.  He said G4S is a $12 billion a year industry, and that the company has grown so large, that sometimes they have lost control.

“There’s no doubt that that’s a problem for G4S -- as it would be for any company that size. So yes, of course they have problems. And they’re an easy target because they are a private force and this goes against the conventional grain: Where these are either police or military functions... in an ideal world [they] would be performed by a public force.  But you have to compare that to the riots, the killings, the brutatlity done by armies and by police forces.”

Langewiesche said the private security business is not without criticism, but that those who oppose the industry should take a close look at what public forces have actually done.

Marketplace for Thursday April 3, 2014Interview by David GuraPodcast Title: G4S goes where public forces can'tStory Type: InterviewSyndication: SlackerSoundcloudStitcherSwellPMPApp Respond: No

What to do when an online review isn't true

Thu, 2014-04-03 10:32

Negative, anonymous reviews on websites like Yelp can hurt small businesses.

A carpet cleaner in Virginia says false and malicious reviews on Yelp drove customers away, forcing the company to lay off employees.

Joe Hadeed wants the Virginia Supreme Court to force Yelp to reveal the identities of the people who wrote the negative reviews.

But Virginia law is unusual. In the rest of the country, most judges have protected anonymous online reviews to ensure reviewers are safe from retaliation.

Yelp spokesman Vince Sollitto says the company vets its reviews. “We actually use an algorithm to recommend the most valuable and reliable content. So Yelp only recommends about 75 percent of the content it receives.”

G4S goes where public forces can't

Thu, 2014-04-03 10:23

London based company G4S is the largest private security company in the entire world. It contracts ex-military soliders to go where public forces can’t. The company has about 620,000 employees in 120 different countries, and provides gurard services anywhere from oil fields to nuclear facilities in the U.S.

William Langewiesche wrote about the company in a piece for Vanity Fair called “The Chaos Company”.  He said G4S is a $12 billion a year industry, and that the company has grown so large, that sometimes they have lost control.

“There’s no doubt that that’s a problem for G4S -- as it would be for any company that size. So yes, of course they have problems. And they’re an easy target because they are a private force and this goes against the conventional grain: Where these are either police or military functions... in an ideal world [they] would be performed by a public force.  But you have to compare that to the riots, the killings, the brutatlity done by armies and by police forces.”

Langewiesche said the private security business is not without criticism, but that those who oppose the industry should take a close look at what public forces have actually done.

What we look for in a monthly jobs report

Thu, 2014-04-03 09:32

Updated, Friday at 8:35am ET: The U.S. Bureau of Labor Statistics reported domestic employers added 192,000 to non-farm payrolls in the month of March, leaving the current unemployment rate at about 6.7 percent. 

The numbers are considered an important way to check on the nation’s economic vital signs. A couple things we looked for on Friday: 

Was it the weather after all? December and January weren’t so hot... neither in temperature nor in jobs. Whereas in November we added 274,000 jobs,  December we added 84,000, and in January we added 113,000 144,000.  February wasn’t great either at 129,000 197,000 jobs created. [Strikethroughs represent the original BLS estimates, they revised their numbers in the March jobs report released Friday].

Many economists lay equal parts blame and hope at the feet of the cold weather. Having warmed up since January, we might expect to see a bounce upward in total non-farm payroll. If we don’t, there will be more reason to think that it wasn’t really the weather, but rather that our economy is sicklier than we’d imagined.

How close will we inch to the pre-recession jobs peak? It’s a target that looms in the distance of every jobs report these days. The pre-recession peak for total non-farm payroll employment was 138.365 million people (seasonally adjusted) back in January of 2008. In February of 2014, we were tentatively at 137.699 million people (seasonally adjusted) with fulltime jobs. So we have 666,000 more to go. We aren’t going to get that tomorrow, but it’s conceivable we might in three months or so. Something to think about.  

I can’t go without saying, though, that the pre-recession jobs peak is a misleading reference point.

We shouldn’t be happy with the level of employment back in 2007 Because we’ve had lots of new people join the workforce. The Hamilton Project (affiliated with the Brookings Institute) keeps track of the “jobs gap,” which is the number of jobs that the U.S. economy needs to create in order to return to pre-recession employment levels while also absorbing the people who enter the labor force each month.

The date when they'll really catch up? The estimate is 2020.

PODCAST: Fewest first quarter layoffs since 1995

Thu, 2014-04-03 09:26
Thursday, April 3, 2014 - 09:43 Kevork Djansezian/Getty Images

Jobs fair.

American companies announced fewer layoffs January to March than in any first quarter since 1995. Might that be a hint of good things to come in the month's big employment report that's on the way? We consult Diane Swonk, chief economist at Mesirow Financial in Chicago.

Also, when it comes to measuring the health of a country's economy, using the nation's Gross Domestic Product is often the barometer of choice. But as more dollars change hands, why aren't the outcomes always better? There's a new listing of 132 countries that uses 54 different indicators that together measure how well a country is doing in giving its citizens good lives. It's called the Social Progress Index. Michael Green, CEO of the Social Progress Imperative, says that although GDP is important, it doesn't tell the whole story.

Marketplace Morning Report for Thursday April 3, 2014by David BrancaccioPodcast Title: PODCAST: Fewest first quarter layoffs since 1995Syndication: All in onePMPApp Respond: No

Overdraft fees hit a record

Thu, 2014-04-03 09:10
Thursday, April 3, 2014 - 16:02 Spencer Platt/Getty Images

People walk by a Citibank office in midtown Manhattan in New York City.

If you’ve overdrawn your checking account lately, you may have noticed a jump in the penalty. A recent study from economic research firm Moebs Services says the median overdraft charge reached $30 last year—up from $29 the year before.

Banks say they’re trying to make up for lost revenue. Since 2010, customers have to opt in to overdraft plans, which let you buy that $4 latte even when you have just $2 in your account. That’s cut into the fees banks can collect. Moebs says people are also being more careful not to spend money they don’t have.

Marketplace for Thursday April 3, 2014by Amy ScottPodcast Title: Overdraft fees hit a record Story Type: News StorySyndication: SlackerSoundcloudStitcherSwellPMPApp Respond: No

The Ukraine crisis could extend to outer space

Thu, 2014-04-03 09:06

Updated Thursday, April 3: So, as it turns out, the ongoing political tensions in Ukraine will impact things in space. According to a statement released Wednesday, NASA will suspend "the majority of its ongoing engagements with the Russian Federation."

This does not however, include the operation of the International Space Station, which will continue. But travel to Russia, bilateral conferences, and email are all out the (space) window.

As noted below in the original article, NASA hopes  to have rockets launched from U.S. soil by 2017. And this could serve as a wake-up call to Congress. According to the statement, "The choice here is between fully funding the plan to bring space launches back to America or continuing to send millions of dollars to the Russians. It's that simple."

The ongoing political tensions in Ukraine might be one of the biggest diplomatic crises on Earth, but could it affect people in space? Since the American-Russian space partnership is more entwined than ever, it’s something to consider.

Both countries depend on each other to operate in space: Russia uses America's communication services and electrical systems, and (along with 13 other countries) the U.S. and Russia operate the International Space Station. NASA is extremely reliant on Roscosmos (the Russian space agency). The U.S. uses a Russian-built rocket, the RD-180, to put most of its national security payloads into space.

Perhaps most importantly, NASA is not capable of getting Americans off Earth without Russia's involvement. Due to the 2010 retirement of the space shuttle, NASA has been paying Russia around $70 million per astronaut to fly Americans up to the International Space Station. It's conceivable that Russia could simply refuse to let Americans use their Soyuz spacecraft.

According to John Logsdon, a space policy expert who is a professor emeritus at George Washington University, that scenario isn't likely but "it's a possibility."

"I wouldn't rank it as a very high possibility, but the reality is, it is in Russia's ability to do that," Logsdon says.

If that unlikely scenario did happen, we could, Logsdon says, have to wait two years until another American was sent into space – via NASA's Commercial Crew Program, a collaboration between NASA and several spacecraft companies. The basic idea is for NASA to facilitate the development of several spacecraft capable of transporting humans to the space station, and then choose which one it wants to use.

Right now, SpaceX is building the Dragon, Boeing is building the CST 100, and Sierra Nevada is building the Dream Chaser. The plan, as it stands now, is to have one of these spacecraft take Americans to the ISS by the end of 2017.

But this timetable could be rushed, and one of the spacecraft might be able to take off sometime in 2016. This would involve either spending more money for frequent test flights or requiring fewer tests. And fewer tests would make the entire project riskier.

Still, Roscosmos's refusing to cooperate with NASA due to the Ukraine situation is not an expected outcome. NASA spokesman Bob Jacobs expressed that Russia and America have had a long and fruitful partnership in space and emphasized that the partnership wasn't affected by diplomatic crises like the Georgian invasion of 2008.

"Congress even approved an extension of NASA's exemption from the Iran, North Korea, and Syria Nonproliferation Act during that time, which was needed for everything from acquiring Soyuz seats to the purchase of hardware for some of our commercial providers," Jacobs says.

NASA also managed to cooperate with the Russians during the height of the Cold War, which, as diplomatic crises go, was not a minor one. 

Even so, the situation in Ukraine might be the wake-up call to what the U.S. government needs, according to some.

"This dependence on another country, and particularly a former and potentially future geopolitical rival, for things of extreme strategic importance to U.S., is completely unacceptable," says Logsdon.

Many see the situation as a consequence of the government's slashing of the budget for space travel, which has left the U.S. in an unenviable scenario, one that advocates say only a larger budget can fix. And this might have even greater ramifications on the future of space exploration.

"Right now the big players with the money and capabilities are the U.S., Russia, and China," says Brian Weeden, technical advisor to the Secure World Foundation. "Congress has already blocked any cooperation between the U.S. and China on space activities, and the politics behind that are unlikely to change soon. If Russia is now off the table as well, then that could be a serious blow to any major human spaceflight mission to the moon or Mars in the near future. I just don't see how the other countries will be able to afford it without contributions from either Russia or China."

Going beyond GDP to measure economic health

Thu, 2014-04-03 09:04
Thursday, April 3, 2014 - 11:14 Justin Sullivan/Getty Images

A container ship is docked at the Port of Oakland October 30, 2008 in Oakland, California.

When it comes to measuring the health of a country's economy, using the nation's Gross Domestic Product is often the barometer of choice. But as more dollars change hands, why aren't the outcomes always better?

There's a new listing of 132 countries out today that uses 54 different indicators that together measure how well a country is doing in giving its citizens good lives. It's called the Social Progress Index. Michael Green, CEO of the Social Progress Imperative, says that although GDP is important, it doesn't tell the whole story. He joins Marketplace Morning Report host David Brancaccio to discuss the report. 

Marketplace Morning Report for Thursday April 3, 2014Interview by David BrancaccioPodcast Title: New study looks beyond GDP to measure economic healthStory Type: InterviewSyndication: Flipboard BusinessSlackerSoundcloudStitcherBusiness InsiderSwellPMPApp Respond: No

Questioning the reliability of ADP job numbers

Thu, 2014-04-03 08:51
Thursday, April 3, 2014 - 16:47 John Moore/Getty Images

A job applicant and a potential employer shake hands at the 'Denver Hires Job Fair' in Denver, Colorado.

The government will tell us Friday how many jobs were created in March, but a payroll processing company called ADP puts out its own jobs numbers every month, a few days ahead of the government. 

Lately, those numbers have been  off, and economists have been upset. But ADP defends its numbers. “Every month we’re a little above or below, but on average we’re almost right on,” says  Sophia Koropeckyj, an economist at Moody's, which works with ADP to come up with the jobs numbers.

Koropeckyj acknowledges that they’ve tinkered with the formula used to come up with the ADP jobs number, adding information from the Philadelphia Federal Reserve. But she says, there are millions of jobs in this country, and their figure may be off by tens of thousands.

Here are their numbers for this month, via Jeoff Hall at Thomson Reuters:

Avg absolute miss between initial ADP and initial BLS estimates of private payrolls down 33% since methodology change pic.twitter.com/kT1dBiAugU

— Jeoff Hall (@JeoffHall) April 2, 2014

Marketplace for Thursday April 3, 2014by Nancy Marshall-GenzerPodcast Title: Questioning the reliability of ADP job numbersStory Type: News StorySyndication: SlackerSoundcloudStitcherSwellPMPApp Respond: No

What we're looking for in the jobs report

Thu, 2014-04-03 08:37
Thursday, April 3, 2014 - 12:32 Kevork Djansezian/Getty Images

Jobs fair.

At 8:30 a.m. Friday, the Bureau of Labor Statistics will release the nation’s economic vital signs, just as it does every first Friday of the month.  

A couple things to look for:

Was it the weather after all? December and January weren’t so hot... neither in temperature nor in jobs. Whereas in November we added 274,000 jobs, in December we added 84,000. February wasn’t great either at 129,000. 

Many economists lay equal parts blame and hope at the feet of the cold weather. Having warmed up since January, we might expect to see a bounce upward in total non-farm payroll. If we don’t, there will be more reason to think that it wasn’t really the weather, but rather that our economy is sicklier than we’d imagined.

How close will we inch to the pre-recession jobs peak? It’s a target that looms in the distance of every jobs report these days. The pre-recession peak for total non-farm payroll employment was 138.365 million people (seasonally adjusted) back in January of 2008. In February of 2014, we were tentatively at 137.699 million people (seasonally adjusted) with fulltime jobs. So we have 666,000 more to go. We aren’t going to get that tomorrow, but it’s conceivable we might in three months or so. Something to think about.  

I can’t go without saying, though, that the pre-recession jobs peak is a misleading reference point.

We shouldn’t be happy with the level of employment back in 2007 – because we’ve had lots of new people join the workforce. The Hamilton Project (affiliated with the Brookings Institute) keeps track of the “jobs gap,” which is the number of jobs that the U.S. economy needs to create in order to return to pre-recession employment levels while also absorbing the people who enter the labor force each month.

The date when they'll really catch up? The estimate is 2020.

by Sabri Ben-AchourStory Type: News StorySyndication: PMPApp Respond: No

Going beyond GDP to measure economic health

Thu, 2014-04-03 08:14

When it comes to measuring the health of a country's economy, using the nation's Gross Domestic Product is often the barometer of choice. But as more dollars change hands, why aren't the outcomes always better?

There's a new listing of 132 countries out today that uses 54 different indicators that together measure how well a country is doing in giving its citizens good lives. It's called the Social Progress Index. Michael Green, CEO of the Social Progress Imperative, says that although GDP is important, it doesn't tell the whole story. He joins Marketplace Morning Report host David Brancaccio to discuss the report. 

PODCAST: Fewest first quarter layoffs since 1995

Thu, 2014-04-03 06:43

American companies announced fewer layoffs January to March than in any first quarter since 1995. Might that be a hint of good things to come in the month's big employment report that's on the way? We consult Diane Swonk, chief economist at Mesirow Financial in Chicago.

Also, when it comes to measuring the health of a country's economy, using the nation's Gross Domestic Product is often the barometer of choice. But as more dollars change hands, why aren't the outcomes always better? There's a new listing of 132 countries that uses 54 different indicators that together measure how well a country is doing in giving its citizens good lives. It's called the Social Progress Index. Michael Green, CEO of the Social Progress Imperative, says that although GDP is important, it doesn't tell the whole story.

VIDEO: What if Wal-Mart paid its employees more?

Thu, 2014-04-03 05:57

Food stamps turns 50 this year. Since the program was written in to law, it's become one of those government programs that gets a lot of attention from politicians on both the left and the right -- especially recently. 

The program has been growing furiously in the past 15 years. In fact, one in seven Americans is on food stamps today. That's more than twice what the rate was in 2000. Some of that can be explained by changing eligibility requirements and job-losses during the recession. But the fastest growing group of food stamp participants in the last few decades are people who have jobs and work full year-round.

In our series on The Secret Life of a Food Stamp, Marketplace Wealth & Poverty Desk reporter Krissy Clark reports on how big retail chains that employ these workers also themselves take in tens of billions of dollars in food stamps.

In this video, produced by our series partner Slate, we estimate how much more Wal-Mart might have to charge for some products, if it raised wages high enough that a typical worker earned too much to qualify for food stamps.

Note: Eligibility for food stamps varies according to income, number of dependents and other factors. This estimate of Walmart's potential cost from raising wages is based on wages for a Walmart employee with one dependent working 30 hours a week, a typical retail worker based on federal data.

VIDEO: What if Wal-Mart paid its employees more?

Thu, 2014-04-03 05:57

Food stamps turns 50 this year. Since the program was written in to law, it's become one of those government programs that gets a lot of attention from politicians on both the left and the right -- especially recently. 

The program has been growing furiously in the past 15 years. In fact, one in seven Americans is on food stamps today. That's more than twice what the rate was in 2000. Some of that can be explained by changing eligibility requirements and job-losses during the recession. But the fastest growing group of food stamp participants in the last few decades are people who have jobs and work full year-round.

In our series on The Secret Life of a Food Stamp, Marketplace Wealth & Poverty Desk reporter Krissy Clark reports on how big retail chains that employ these workers also themselves take in tens of billions of dollars in food stamps.

In this video, produced by our series partner Slate, we estimate how much more Wal-Mart might have to charge for some products, if it raised wages high enough that a typical worker earned too much to qualify for food stamps.

Note: Eligibility for food stamps varies according to income, number of dependents and other factors. This estimate of Walmart's potential cost from raising wages is based on wages for a Walmart employee with one dependent working 30 hours a week, a typical retail worker based on federal data.

Coinstar goes after the gift-card resale market

Thu, 2014-04-03 02:53

Coinstar is getting deeper into the gift-card market, expanding on its line of new machines that let consumers exchange their unused gift cards—loaded with value—for instant cash.

David Robertson of financial newsletter ‘The Nilson Report’ tells the story of a typical gift card: “Just like you’d get a gift in the old days from Aunt Myrtle of socks that you didn’t want, now you’re getting a prepaid card from Aunt Myrtle to a store you didn’t want to purchase from.”

Now, imagine Aunt Myrtle’s nephew, Spike. He just got a $100 gift card—for J.C. Penney, where he’s not going to shop. So he sells it at the Coinstar Exchange kiosk for the company’s offer of $70. Coinstar unloads it to a partner company—Blackhawk—that markets the card online at CardPool.com. Another consumer buys it for $90. A $20 profit is left over, to be split by Coinstar and Blackhawk.

 

Shea Huffman/Marketplace

 

Coinstar Exchange General Manager Jeff Dirks says the company (a subsidiary of Bellevue, Washington-based Outerwall) sees promise in this business, and is expanding its footprint in several Western States from 400 to approximately 650 in-store machines over the next few months to test the market further.

Dirks says a lot of gift cards are never used. Coinstar is giving card-holders a convenient way to sell unwanted cards, and likely get most of the value back. He says many spend the money in the store where the Coinstar Exchange kiosk is located.

Consumer psychologist Kit Yarrow at Golden Gate University thinks this could help consumers burdened by gift cards.

“If you’re trying to get rid of a gift card, everything in the store is an option, and consumers find that to be sort of a freak out,” says Yarrow. “They almost feel pressure to buy.”

Then, she says, they often spend even more than the gift card is worth—and more than they meant to spend—out of pocket.

Coinstar goes after the gift-card resale market

Thu, 2014-04-03 02:53

Coinstar is getting deeper into the gift-card market, expanding on its line of new machines that let consumers exchange their unused gift cards—loaded with value—for instant cash.

David Robertson of financial newsletter ‘The Nilson Report’ tells the story of a typical gift card: “Just like you’d get a gift in the old days from Aunt Myrtle of socks that you didn’t want, now you’re getting a prepaid card from Aunt Myrtle to a store you didn’t want to purchase from.”

Now, imagine Aunt Myrtle’s nephew, Spike. He just got a $100 gift card—for J.C. Penney, where he’s not going to shop. So he sells it at the Coinstar Exchange kiosk for the company’s offer of $70. Coinstar unloads it to a partner company—Blackhawk—that markets the card online at CardPool.com. Another consumer buys it for $90. A $20 profit is left over, to be split by Coinstar and Blackhawk.

 

Shea Huffman/Marketplace

 

Coinstar Exchange General Manager Jeff Dirks says the company (a subsidiary of Bellevue, Washington-based Outerwall) sees promise in this business, and is expanding its footprint in several Western States from 400 to approximately 650 in-store machines over the next few months to test the market further.

Dirks says a lot of gift cards are never used. Coinstar is giving card-holders a convenient way to sell unwanted cards, and likely get most of the value back. He says many spend the money in the store where the Coinstar Exchange kiosk is located.

Consumer psychologist Kit Yarrow at Golden Gate University thinks this could help consumers burdened by gift cards.

“If you’re trying to get rid of a gift card, everything in the store is an option, and consumers find that to be sort of a freak out,” says Yarrow. “They almost feel pressure to buy.”

Then, she says, they often spend even more than the gift card is worth—and more than they meant to spend—out of pocket.

Saving Medicaid money in Camden, N.J.

Thu, 2014-04-03 02:24

Around the country, hospitals and doctors are teaming up to better manage patients. They're trying to strip away wasteful practices like redundant testing. They’re doing so with what are known as accountable care organizations, or ACOs, and one in Camden, N.J., is drawing attention.

The name may be jargon, but Mark Humowiecki with the Camden Coalition of Healthcare Providers says the concept of an ACO is pretty basic: “Spend more money on primary care in order to keep people out of the hospitals.

Under the ACO model in Camden, insurers give the hospitals and doctors a chunk of money to care for the some 32,000 Medicaid patients in the city. The idea is to make it very easy to get primary care, and avoid unnecessary hospitalizations and ER visits.

If it works, the savings could be immense.

“We think we could save anywhere from 5 to 10 percent of spending,” says Humowiecki. “That’s millions of dollars a year.”

The challenge, says Brookings Institution’s Mark McClellan, is that Medicaid patients often struggle. 

“They may not have regular homes, they may have trouble getting their medications, they may have other stresses in their lives,” McClellan says. “And that is hard work to do.”

As one of about a dozen Medicaid ACOs, Camden is on the front line of the front lines of health reform, says McClellan.

And people are watching. If it works here, Camden becomes a national model.

Hungry for Savings

Thu, 2014-04-03 01:57

This story is part of collaboration with Slate called “The Secret Life of a Food Stamp.” 

Karrie Denniston is standing in the meat department of a Walmart Supercenter peering at the sell-by dates on a stack of pork chops. Denniston, director of hunger relief and nutrition programs at the Walmart Foundation, is at Walmart’s “Store 100,” the showcase Supercenter across the street from company headquarters in Bentonville, Ark. Store 100 is one of thousands of Walmart locations where the company collects billions of pounds of vegetables, dry goods, and other items for its food-donation program. Every day, as part of its anti-hunger initiative, Walmart associates scour the shelves looking for food that falls into a donation sweet spot: just past its sell-by date but still safe to eat. 

Karrie Denniston of the Walmart foundation.

Walmart—which in 2012 made a five-year pledge to donate $2 billion in cash and food to fight hunger—works with local food banks to distribute the meat, in a system of carefully temperature-controlled steps. Denniston holds up a family pack of pork chops. If no one buys it before its sell-by date, “that meat may end up as part of a stew at a local soup kitchen, or it may end up being distributed at a food pantry to a mom so that she can make tacos for her kids,” she says. 

Some of Walmart’s donations end up on the shelves of the Lutheran Social Services food pantry in Columbus, Ohio. “Walmart, Save-a-Lot, Giant Eagle, Kroger, they all send a lot of food back here,” volunteer Jordan Moore says. The donations are “a blessing,” he says. 

But there can be moments that throw him. Recently, a shopper at the food pantry took an item off a shelf and told Moore, “I put this on the shelf, too.” The shopper was a Walmart worker. 

“It’s this cycle that keeps going around and around,” says Jason Elchert, deputy director for the Ohio Association of Foodbanks. “We need to take a deep breath and think about how can we move our country forward.” Elchert says that over the past few years more and more working people in need of food assistance have been showing up at the charities his group serves. These include workers whose food stamps have run out before the end of the month as well as people who still can’t make ends meet even though they make too much to qualify for government food assistance.  (The Supplemental Nutrition Assistance Program, the formal name for food stamps, has an annual gross income cap of just under $25,400 for a household of three.)

Like many anti-hunger advocates who receive donations from corporate retailers known for low wages, Elchert is in a tricky spot when it comes to addressing the paradoxes of the food stamp economy. His group gets financial support from Walmart and other food retailers. “When we’re talking a lot with corporations,” he says, “it’s one of those situations where, well, let's talk about this in some way where we’re not offending them.” 

Matt Habash, president of the Mid-Ohio Foodbank—which has representatives from retail companies including Kroger and Giant Eagle supermarkets on its board—has tried to broach the issue of low wages with his corporate supporters. At a recent board meeting, Habash brought up the idea of promoting a living wage as part of the food bank’s mission. “Some of the folks in that room were employers who knew their wages were not” living wages, Habash says. “They were willing to engage in the conversation,” he says. “But no one employer can do it on their own.” 

Wages might be a sensitive issue to tackle, but there is one cause many big retailers have already come together on: protecting funding for SNAP. The program, which gives low-income families an average of $130 a month in food assistance, is lucrative for stores; food stamps accounted for $76 billion in store revenue in 2013.

But spending on the program has become the subject of protracted debates in recent years as food stamp rolls have soared, largely in response to the poor economy. Congress voted earlier this year to cut $8 billion from SNAP over the next decade, after House Republicans gave up their fight for much larger cuts (that would have reached nearly $40 billion).

In the middle of the battles over food stamp funding, the Ohio Grocers Association sent Congress a joint letter with the state’s Association of Food Banks. They wrote, "Cutting SNAP doesn't just hurt the poor, it hurts business too."

Food banks receive a sizeable proportion of their donations from big stores like Walmart.

“You tend to think that larger retail chains, with their corporate culture and perspective, might be less inclined to support a large, federal program, but certainly on the other side, these programs benefit them tremendously,” says Julie Paradis, former administrator of the Food and Nutrition Service at the Department of Agriculture, which oversees the food stamp program.

Toward the end of the SNAP funding debates in January, I met with Rep. Marcy Kaptur, a Democrat from Ohio (and the daughter of a grocer) who was working to persuade her Republican colleagues to minimize the food stamp cuts. “Walmart is a helpful force, as well as many other retail stores. All the big retailers, the grocers, make a great deal of money” from SNAP, she said. 

Walmart confirms it takes in about 18 percent of U.S. food stamp dollars, a share that would have amounted to more than $13 billion last year. Walmart spokesman David Tovar told me the company did not take a position on the recent food stamp funding cuts but that it likes to be “part of the dialogue” to help elected officials consider the issue of food stamp funding. “We oftentimes will provide useful information about our business, some of the trends we’re seeing, how it’s impacting customers,” Tovar says.

But public lobbying records suggest Walmart is playing a more active role in those discussions. Disclosure forms for the end of 2013, when debate over SNAP funding was in full swing, show that Walmart paid in-house lobbyists $1.9 million. The report itemizes lobbying activity on a broad range of issues, among them SNAP, the farm bill legislation that determines SNAP funding levels, and “discussions regarding Federal Nutrition programs from the consumer and retail perspective.”

Further down the lobbying form, Walmart also disclosed discussing the minimum wage. (Walmart says that it has not taken a stand on the proposed raise to the federal minimum wage to $10.10 but that it’s looking into the effect it would have on its business.)

If you go to Walmart’s headquarters in Bentonville, in a drab brick building that looks more like a public school than a corporate HQ, you will probably hear at least one person quote a certain Walmart aphorism: “EDLC equals EDLP.” Translation: “Every Day Low Costs” equal “Every Day Low Prices.” That’s part of why discount retailers like Walmart take in so many food stamp dollars in the first place, as low-income customers look to get the most bang for their food stamp bucks.

You can think about that equation two different ways. Walmart sees its low prices as a chief force in fighting hunger, says Denniston of the Walmart Foundation. “We want to take the best of what Walmart as a business has to offer and build on that,” she says, “and so one of the greatest assets that we provide to local communities is being a grocer that can bring safe, affordable, nutritious products.”

But one of the Every Day Low Costs that Walmart needs to keep in check is the price of labor. In the EDLC = EDLP equation, low wages help make low prices possible—and if that means some companies don’t pay their workers enough to make ends meet, it’s the government that makes up the difference. 

Additional reporting and production on this story from Jolie Myers and Martha Little.

Part Two: The Secret Life of a Food Stamp

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