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The virtual doctor will see you now

Thu, 2015-06-11 02:00

Walgreens, the nation’s largest retail pharmacy chain, has announced plans to provide virtual medical exams to patients in 25 states by the end of the year.

The news is part of a larger trend of giving patients less expensive alternatives to a doctor's office visit.

Patients will be able to use the Walgreens mobile app to access doctors who can then write prescriptions for common ailments such as, say, pinkeye or a sinus infection.

Jon Linkous is CEO of the non-profit American Telemedicine Association. He says the growing trend will increase healthcare access and provide greater convenience.

“Patients who are now customers can look at this application and avoid the long waits that it might take for them to get an appointment at a primary care doctor as well as having to go into a waiting room filled with other sick people,” Linkous says.

Walmart, CVS, and RiteAid are exploring plans to launch their own virtual clinics, but there are also risks. That is according to Andy Haig, director of e-Health at the University of Michigan.

“What's most important that people need to realize is that primary care medicine is a book that is about 20,000 pages wide, and there is a reason for that,” Haig says.

This is a business model, it’s not a quality model," he says. "A few major lawsuits may change things for the better, and I'm hoping that these large companies are smart enough to play the odds and be sure they have good quality and they place limits on their treatment.”

UnitedHealthcare and Anthem are also making plans to roll out telemedicine services by next year.

The virtual doctor will see you now

Thu, 2015-06-11 02:00

Walgreens, the nation’s largest retail pharmacy chain, has announced plans to provide virtual medical exams to patients in 25 states by the end of the year.

The news is part of a larger trend of giving patients less expensive alternatives to a doctor's office visit.

Patients will be able to use the Walgreens mobile app to access doctors who can then write prescriptions for common ailments such as, say, pinkeye or a sinus infection.

Jon Linkous is CEO of the non-profit American Telemedicine Association. He says the growing trend will increase healthcare access and provide greater convenience.

“Patients who are now customers can look at this application and avoid the long waits that it might take for them to get an appointment at a primary care doctor as well as having to go into a waiting room filled with other sick people,” Linkous says.

Walmart, CVS, and RiteAid are exploring plans to launch their own virtual clinics, but there are also risks. That is according to Andy Haig, director of e-Health at the University of Michigan.

“What's most important that people need to realize is that primary care medicine is a book that is about 20,000 pages wide, and there is a reason for that,” Haig says.

This is a business model, it’s not a quality model," he says. "A few major lawsuits may change things for the better, and I'm hoping that these large companies are smart enough to play the odds and be sure they have good quality and they place limits on their treatment.”

UnitedHealthcare and Anthem are also making plans to roll out telemedicine services by next year.

Advocates say insurers are driving away sick customers

Thu, 2015-06-11 02:00

The Department of Health and Human Services is currently in the initial review period for health care plans to be sold on exchanges for the 2016 open enrollment period. They’re making sure plans comply with the complex regulations in the Affordable Care Act, or ACA. But this time around, some groups are objecting to minute details in plans. Advocates and patients say some insurers are designing their benefits to drive away people with preexisting conditions.

One such patient is Sarah Truman, of Portland, Oregon. Truman wakes up every day and sorts through her stockpile of pills. “I take 17 pills a day—on a good day,” she explains.

Truman has psoriasis, the autoimmune disorder that causes flaky and scaly skin. She also has psoriatic arthritis, a related condition that causes painful joint swelling.

Even under her Obamacare plan, she still spends hundreds of dollars each month on co-payments. That's actually an improvement. But one crucial intravenous medication — a type of chemotherapy — costs more than a copay.

“That right now is $15,000 a month, and that’s treated as a co-insurance, not a co-pay,” Truman says.

Since Truman has 20 percent co-insurance rate, she pays 20 percent of the cost: $3,000 a month. Even though she has a well paying job, she still has to go to food banks to afford her kids’ food. Advocates say plans like hers force patients to either pay very high costs or find a different plan, thus undermining the purpose of the affordable care act.

Douglas Jacobs, a masters student in Public health at Harvard University, surveyed how plans priced their drugs

“We found a full one in four plans were practicing what we called 'adverse tiering,'” he says, meaning that the drugs a person needs for a condition are prohibitively expensive under that plan.

“The whole purpose of the Affordable Care Act was to distribute risk in a way that made healthcare affordable to individuals who couldn't get to it before Affordable Care Act was passed,” Jacobs says.

And advocates say the clearest-cut example of adverse tiering was found in Florida by the AIDS Institute.

“There are discrimination protections in the ACA, and they are trying to get around those,” explains Carl Schmid, the AIDS Institute’s vice president of policy.

The AIDS Institute says it's discrimination because some Florida plans put all HIV medications into the highest tier—even generics. Schmid says it’s a tiny nudge to keep expensive groups of people away from those plans. The AIDS Institute objected and sent a letter to the Obama administration.

“The administration has said that this is discrimination,” Schmid says. “Now we need them to enforce the law.”

They also complained to Florida’s insurance regulator, and eventually insurers placed some HIV medications into cheaper tiers. The insurers declined to comment on pending legal matters.

The Department of Health and Human Services is reviewing whether this kind of drug pricing is discrimination on the basis of preexisting conditions. Their ruling should apply by next year’s open enrollment.

Say yes to the Pinterest board

Thu, 2015-06-11 01:59
30 percent

That's the portion of Pinterest boards dedicated that are wedding-themed and set to private. Sometimes, you just want to plan your wedding in secret, and as the Washington Post reports, some of these brides-to-be are only lacking one thing for their perfectly manicured day: an actual groom.

175

That's how many workers have been laid off from J. Crew following a disappointing earnings report. This includes the current head designer, Tom Mora. As CNN Money reports, sales for the company were down 5 percent from this time last year.

8 years

That's how long a new deal between Nike and the NBA will last. As part of the agreement, the Nike swoosh will appear on uniforms, and Nike replaces Adidas as the exclusive provider of clothing for the league. As Time reports, fans and players of were dissatisfied with the style of uniforms provided. Apparently, basketball players don't like sleeves.

5

That's how many subreddits were banned by Reddit for violating its rules on harassment. As Mashable points out, the move is a distinct change in direction for the site, as it has previously let users largely guide the direction of the content. 

$1,000

That's the average savings for customer buying a car from Costco. How does the superstore haggle the deals? By acting as the middleman between manufacturers and buyers, brokering deals on behalf of customers. And since 80 percent of its net revenue comes from member fees, it can afford to focus on lowering prices.

What Big Pharma wants from the big trade deal

Wed, 2015-06-10 13:00

On Wednesday, a few pages from the secret Trans-Pacific Partnership trade agreement were published by Wikileaks and reported on by the New York Times. They seemed to indicate changes that go against the wishes of the pharmaceutical industry, eliminating language that sought to guarantee drug companies “competitive market-derived prices” when they sell overseas. 

But the pharmaceutical industry has been lobbying lawmakers on the TPP since the beginning, and shaping far more than this one section of the agreement, according to Lee Drutman, senior fellow at the New America foundation and author of "The Business of America Is Lobbying."

Jay Taylor, head of international affairs for the Pharmaceutical Research and Manufacturers of America says the industry is seeking, among other things, vital protections of intellectual property. But Judit Rius Sanjuan, head of the Doctors Without Borders' Access Campaign, says these protections could drive up the price of lifesaving drugs in the developing world. 

A California drought loser: pool contractors

Wed, 2015-06-10 13:00

The backyard swimming pool may be an icon of suburban California, but as the state’s drought drags on, it’s a prime target for water conservation. Water utilities are putting in mandatory conservation rules and the swimming pool industry is on the losing end.

The drought is top of mind for many customers that walk into the showroom of Royal Pools in San Jose. “They want to know,” said Royal Pools’ Marc Hannigan. “Our customers who are under contract, whose pools are under way right now, are asking: is there going to be water to fill my pool?”

The concern is real, because almost 30 California cities and water agencies have banned filling new pools with potable water during the drought. Others are considering similar rules, which doesn’t surprise Hannigan. He says pools are an easy target.

“It is very symbolic and it looks good, banning swimming pools,” he said. “Really, swimming pools don’t waste water like people think they do.”

Hannigan is referring to an often-cited analysis by the Santa Margarita Water District comparing the water use in backyard pools to landscaping. A new built-in pool can require 20,000 to 30,000 gallons to fill. After that, it uses much less, just topping off.

“You put a cover on those pools, evaporation is done,” Hannigan said. “Fully half the pools we build here have automatic covers on them.”

A lawn can guzzle 20,000 gallons every year. According to the study, a pool, especially with a cover, can use less than a lawn does over time, but it takes three to five years to reach the break-even point.

Some water utilities say that’s too long to wait, because they’re facing steep cutbacks this year, up to 36 percent of their water use. So the drought rules they’re adopting are designed to send a message.

“The tens of thousands of gallons that it takes to fill a pool may not matter much in aggregate,” said San Jose Mayor Sam Liccardo. “But the reality is that compared to the necessity of the use of water for drinking, for our everyday needs, pools simply aren’t that high a priority.”

Other cities have cited similar concerns, saying in a drought as serious as this one, only essential uses of water should be allowed.

“We’re all in this thing together, and that means we all need to tighten our belts and in some ways, that’s not always comfortable,” Liccardo said.

Hannigan says the pool industry is already feeling pretty uncomfortable.

“What we don’t know is how many people aren’t calling,” he said. “How many people want a pool and are waiting, after four or five years of recession? Now they have the money and wherewithal to put a pool in, and they’re not calling.”

For now, the pool industry is getting creative. In one Bay Area city, Hannigan’s company is planning on filling a new pool by draining an old one and trucking the water over.

A California drought loser: pool contractors

Wed, 2015-06-10 13:00

The backyard swimming pool may be an icon of suburban California, but as the state’s drought drags on, it’s a prime target for water conservation. Water utilities are putting in mandatory conservation rules and the swimming pool industry is on the losing end.

The drought is top of mind for many customers that walk into the showroom of Royal Pools in San Jose. “They want to know,” said Royal Pools’ Marc Hannigan. “Our customers who are under contract, whose pools are under way right now, are asking: is there going to be water to fill my pool?”

The concern is real, because almost 30 California cities and water agencies have banned filling new pools with potable water during the drought. Others are considering similar rules, which doesn’t surprise Hannigan. He says pools are an easy target.

“It is very symbolic and it looks good, banning swimming pools,” he said. “Really, swimming pools don’t waste water like people think they do.”

Hannigan is referring to an often-cited analysis by the Santa Margarita Water District comparing the water use in backyard pools to landscaping. A new built-in pool can require 20,000 to 30,000 gallons to fill. After that, it uses much less, just topping off.

“You put a cover on those pools, evaporation is done,” Hannigan said. “Fully half the pools we build here have automatic covers on them.”

A lawn can guzzle 20,000 gallons every year. According to the study, a pool, especially with a cover, can use less than a lawn does over time, but it takes three to five years to reach the break-even point.

Some water utilities say that’s too long to wait, because they’re facing steep cutbacks this year, up to 36 percent of their water use. So the drought rules they’re adopting are designed to send a message.

“The tens of thousands of gallons that it takes to fill a pool may not matter much in aggregate,” said San Jose Mayor Sam Liccardo. “But the reality is that compared to the necessity of the use of water for drinking, for our everyday needs, pools simply aren’t that high a priority.”

Other cities have cited similar concerns, saying in a drought as serious as this one, only essential uses of water should be allowed.

“We’re all in this thing together, and that means we all need to tighten our belts and in some ways, that’s not always comfortable,” Liccardo said.

Hannigan says the pool industry is already feeling pretty uncomfortable.

“What we don’t know is how many people aren’t calling,” he said. “How many people want a pool and are waiting, after four or five years of recession? Now they have the money and wherewithal to put a pool in, and they’re not calling.”

For now, the pool industry is getting creative. In one Bay Area city, Hannigan’s company is planning on filling a new pool by draining an old one and trucking the water over.

Why bond yields are rising across the world

Wed, 2015-06-10 13:00

Government bond yields have been rising for a couple of months now, but today they hit new highs for the year in the U.S., Japan, Germany and the United Kingdom.

Yields rise when prices fall, and prices fall when investors sell, which a lot of them are doing right now thanks to an improving economy.

"The bond market doesn't like growth. It likes recession much better between the two," says Marilyn Cohen of Envision Capital Management.

Cohen says investors cool to bonds in an improving economy, and that's what is happening now. "Things are looking better in the economy, as far as housing starts, housing sales, durable goods are looking a little bit better, and certainly car sales are looking spectacular," she says.

But there is a dark side to rising bond yields, because it could also be an indication that investors are worried about a lack of liquidity, says Karen Petrou of Federal Financial Analytics.

"We're really looking at the unintended result of well-intentioned crisis reforms," she says.

Those reforms require banks to hold onto more cash. As a result, they are not playing as big a part in buying and selling bonds, which Petrou says is leading to "significant structural changes in the bond market that have the financial system very, very spooked."

But Cohen thinks we are far from crisis mode on that issue, and that while there may be some concern about liquidity, a lot more bonds would have to be sold off at once for there to be a crisis.

For the time being, she says, rising yields will nudge interest rates slightly higher, which should be good for Wall Street and Main Street.

"Most baby boomers that are living on fixed incomes will be very happy that interest rates go up," because that means their monthly retirement incomes will go up, too, Cohen says.

Your favorite see-through Pepsi is returning

Wed, 2015-06-10 13:00


Here's a piece of news before we say goodbye and go kick back and enjoy a nice refreshing beverage. 

It seems possible that one very enthusiastic YouTube campaign could lead to the return of Crystal Pepsi

Remember Crystal Pepsi? From the '90s? It was like Pepsi ... but clear.

Well, this guy on YouTube who goes by LA Beast started a campaign to bring back Crystal Pepsi. 

Because he has 1.2 million subscribers, he got a letter from Pepsi (addressed to "Mr. Beast") suggesting he might be happy with something the company has in store. 

Next stop: grunge rock. (That's a '90s joke, by the way.) 

Just received this from @pepsi on twitter a min agoIt is my duty to share it with all of you. #BringBackCrystalPEPSI pic.twitter.com/hyTbH5spbL

— L.A. Beast (@KevLAbeast) June 8, 2015

Marketing shift now on American Apparel’s laundry list

Wed, 2015-06-10 13:00

American Apparel plans to hang its sexually charged marketing strategy out to dry.

Removing the raciness from its ads and “streamlining its offerings" are all a part of the clothing company's plans to revamp a brand associated with suggestive poses, sexual innuendo and a scandal-ridden founder. 

Operation rebrand comes several months after a power shift. Former American Apparel CEO Dov Charney — a controversial figure with several sexual harassment lawsuits to his name — was ousted in December, with former Warnaco executive Paula Schneider taking his place in January.  

The clothing company will aim to position itself in a “positive, inclusive, socially conscious light” — an ethos pretty different from the one promoted under Charney’s reign.   

“Sex is inextricably linked to fashion and apparel,” Charney told Marketplace’s Kai Ryssdal in an interview last year.

Listen to Kai Ryssdal's extended interview with Dov Charney below: 

Finding affordable housing in an unaffordable place

Wed, 2015-06-10 12:41

You may have noticed some headlines a few months back about how filmmaker George Lucas has decided to get in to the affordable housing business.  In April, he announced plans to spend more than $100 million of his own money to build apartments for workers and low-income seniors on a rural plot of land he owns in Marin, a wealthy county just north of San Francisco where he's lived and worked for many decades.

This news got a lot of coverage and inspired a lot of puns about how Lucas was "Striking Back" against his neighbors, after they'd resisted his earlier efforts to build a movie studio on that same piece of land. But there's a deeper story underneath all this — that has to do with just how hard it can be to build affordable housing in a place that is anything but.

Read more below…

Marin County has some of the most expensive housing in the nation.  The county is full of beaches, redwoods and rolling hills. It’s also right next to San Francisco's booming tech economy.

But Marin has very limited housing stock: more than 80 percent of Marin has been set aside never to be developed.

In Marin, the average monthly rent for a one-bedroom apartment is more than $1,700 dollars. The median home price is more than $800,000. It has one of the highest median incomes and highest levels of income inequality in the nation. Lots of high earners call it home — movie stars, lawyers and doctors. But middle-income folks like teachers and nurses? Not so much. Many of them commute from other less-expensive counties.

And low-income workers mostly cluster in Marin's few higher-density areas near the freeway, doubling or tripling up in units. 

Sharon Mincheff lived in one of those over-crowded apartment buildings in Marin until a few years ago.

 She worked as a care-giver for the elderly. Then she lost her job and couldn't afford her apartment anymore. For a time, she was homeless.

“Everything happened all at once in my life,” Mincheff says. “I was at the age where there’s not a lot of options out there for you.” 

After Mincheff lost her home, she found her way to a shelter. The waiting list to get in to most affordable housing units in the county was more than 10 years long. But a counselor told her that because she was a low-income senior, she would be put on a slightly shorter list. Her wait was about four years. Eventually, there was an open unit at a new affordable complex called Toussin Senior Apartments.

Toussin is located in Kentfield, one of Marin’s most expensive towns. The complex is a little cluster of 13 apartment units. They're painted sage green, Craftsmen style, and designed to blend in as well as they can with the multimillion-dollar homes in the hills just above it, further up a little leafy street. Mincheff says she's discovered affordable housing projects like hers can carry a stigma in some parts of Marin.   

“That you’re gonna get low-life drug addict people,” she says. “I so sometimes want to stand up and yell and scream, you know, that's not what comes here. You don't understand.”

Mary Stompe is the CEO of the nonprofit, PEP Housing, that built Toussin Senior Apartments. She says it took 19 sources of funding to construct the 13 units.  The whole project cost $5.5 million to build. Funding came from a group of government agencies and grants and tax credits.

And each of these sources came with a different set of rules about what exactly their pot of money could be used to fund. 

“If you see my spread sheet,” Stompe says. “It is very large, and it can be mind blowing.”


Explore the cost of building affordable housing around California

Graphic by Tony Wagner | Data: The California Department of Housing and Community Development, the California Tax Credit Allocation Committee, the California Housing Finance Agency and the California Debt Limit Allocation Committee

That’s why Stompe says she’s excited about the latest project she's leading, planned for a former piece of dairy land in northern Marin County.  It is called Grady Ranch. 

At 200 units, it will be one of the biggest affordable housing complexes in Marin County. And it's funded by one source: George Lucas. The filmmaker declined our request for an interview, but his spokesperson said that Lucas just wanted to do something nice for the people of Marin.

But not everyone in the county thinks his affordable housing project is such a nice idea. On Thursday, we'll explore that story.

(Photos: Krissy Clark/Marketplace)

Finding affordable housing in an unaffordable place

Wed, 2015-06-10 12:41

You may have noticed some headlines a few months back about how filmmaker George Lucas has decided to get in to the affordable housing business.  In April, he announced plans to spend more than $100 million of his own money to build apartments for workers and low-income seniors on a rural plot of land he owns in Marin, a wealthy county just north of San Francisco where he's lived and worked for many decades.

This news got a lot of coverage and inspired a lot of puns about how Lucas was "Striking Back" against his neighbors, after they'd resisted his earlier efforts to build a movie studio on that same piece of land. But there's a deeper story underneath all this — that has to do with just how hard it can be to build affordable housing in a place that is anything but.

Read more below…

Marin County has some of the most expensive housing in the nation.  The county is full of beaches, redwoods and rolling hills. It’s also right next to San Francisco's booming tech economy.

But Marin has very limited housing stock: more than 80 percent of Marin has been set aside never to be developed.

In Marin, the average monthly rent for a one-bedroom apartment is more than $1,700 dollars. The median home price is more than $800,000. It has one of the highest median incomes and highest levels of income inequality in the nation. Lots of high earners call it home — movie stars, lawyers and doctors. But middle-income folks like teachers and nurses? Not so much. Many of them commute from other less-expensive counties.

And low-income workers mostly cluster in Marin's few higher-density areas near the freeway, doubling or tripling up in units. 

Sharon Mincheff lived in one of those over-crowded apartment buildings in Marin until a few years ago.

 She worked as a care-giver for the elderly. Then she lost her job and couldn't afford her apartment anymore. For a time, she was homeless.

“Everything happened all at once in my life,” Mincheff says. “I was at the age where there’s not a lot of options out there for you.” 

After Mincheff lost her home, she found her way to a shelter. The waiting list to get in to most affordable housing units in the county was more than 10 years long. But a counselor told her that because she was a low-income senior, she would be put on a slightly shorter list. Her wait was about four years. Eventually, there was an open unit at a new affordable complex called Toussin Senior Apartments.

Toussin is located in Kentfield, one of Marin’s most expensive towns. The complex is a little cluster of 13 apartment units. They're painted sage green, Craftsmen style, and designed to blend in as well as they can with the multimillion-dollar homes in the hills just above it, further up a little leafy street. Mincheff says she's discovered affordable housing projects like hers can carry a stigma in some parts of Marin.   

“That you’re gonna get low-life drug addict people,” she says. “I so sometimes want to stand up and yell and scream, you know, that's not what comes here. You don't understand.”

Mary Stompe is the CEO of the nonprofit, PEP Housing, that built Toussin Senior Apartments. She says it took 19 sources of funding to construct the 13 units.  The whole project cost $5.5 million to build. Funding came from a group of government agencies and grants and tax credits.

And each of these sources came with a different set of rules about what exactly their pot of money could be used to fund. 

“If you see my spread sheet,” Stompe says. “It is very large, and it can be mind blowing.”

 

That’s why Stompe says she’s excited about the latest project she's leading, planned for a former piece of dairy land in northern Marin County.  It is called Grady Ranch. 

At 200 units, it will be one of the biggest affordable housing complexes in Marin County. And it's funded by one source: George Lucas. The filmmaker declined our request for an interview, but his spokesperson said that Lucas just wanted to do something nice for the people of Marin.

But not everyone in the county thinks his affordable housing project is such a nice idea. On Thursday, we'll explore that story.

(Photos: Krissy Clark/Marketplace)

The BlackBerry story isn't over yet

Wed, 2015-06-10 10:24

Not long ago, the BlackBerry the smartphone of choice for businessmen, politicians, sheikhs and celebrities alike. And while there are still plenty of powerful people addicted to their 'CrackBerrys,' as the device is sometimes called, the company behind the phone and email device that once dominated the smartphone market is just barely putting along.

Jacquie McNish and Sean Silcoff are the authors of "Losing the Signal: The Untold Story Behind the Extraordinary Rise and Spectacular Fall of BlackBerry," which chronicles the company’s successes and failures.   

McNish says, in the '90s, BlackBerry (then known as Research in Motion) was in a race to come up with the next big mobile device.

“But no one could get email and text right,” McNish says. “Everyone was making devices that were overcomplicated.”

But when RIM founder Mike Lazaridis came up with a keyboard people could use with their opposable thumbs, BlackBerrys took off. Michael Dell, Oprah and Madonna were all early BlackBerry adopters.

Another big factor in BlackBerry’s explosive success was its BlackBerry Messenger service, or BBM as it’s known. BBM was a hit not only because it was addictive, but because it operated on a very secure platform.

“You had situations in some Middle Eastern countries where women were actually embroidering their BBM addresses inside their burkas and sort of flipping them up discretely to people they wanted to communicate with,” Silcoff says.

Even with its highly popular BBM service and streamlined devices though, RIM had trouble competing once Steve Jobs introduced the iPhone.

“The BlackBerry brought us a piece of the internet, it brought us email,” McNish says. “What Steve Jobs was offering was essentially a mini-computer in the smartphone.”

But the RIM/BlackBerry story isn’t over yet.

“It’s amazing,” Silcoff says. “I think every day we meet people who tell us, you know, ‘I still love my BlackBerry, I’m addicted to it.’”

What’s more, Silcoff believes BlackBerry now has a capable turnaround CEO in John Chen.

“He’s got the company to a point where it’s not losing money,” Silcoff says. “This book is not a eulogy for BlackBerry by any means.”  

PODCAST: Hospital billing

Wed, 2015-06-10 03:00

Interest rates in Germany rose to their highest since late last summer. Is the German economy gaining some steam? We explore. And a new study sheds light on how hospitals make their money. We look at why not all patients are created (or at least billed) equally. Plus, with Etsy's shares tanking, we take a look at what's behind this, especially considering the hype of their recent IPO. 

Who pays for hospitals' high prices?

Wed, 2015-06-10 02:00

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.

Labor Department may extend overtime to more workers

Wed, 2015-06-10 02:00

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.

 

 

How streaming is changing the music industry

Wed, 2015-06-10 02:00

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.

Why Etsy's stock has fallen by half in two months

Wed, 2015-06-10 02:00

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.

A snack bar smorgasbord

Wed, 2015-06-10 01:47
$200 million

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.

How bad are Chicago's debt problems, really?

Tue, 2015-06-09 13:00

Chicago is in serious financial trouble, with hundreds of millions of dollars due on a pension debt of more than $20 billion. The city’s school district also faces a deficit of a billion dollars or more.

The troubles have prompted bond-rating agency Moody’s to downgrade the credit ratings for the city, the school district and the park district to junk status — giving Chicago the worst credit rating of any big city after Detroit.

In our third biggest city, how does that even happen?

As a Chicago native, I know it’s bad, but the idea that Chicago invites serious comparisons with Detroit is surprising. For an outsider’s perspective, I call Todd Ely, who teaches public finance at the University of Colorado.

“As an academic — and one who goes to conferences on exciting things like budgeting and financial management,” Ely says, “whenever the folks from Illinois stand up to talk, everybody kind of looks and says, ‘Soooo, tell us what’s happening now...’”

A local expert confirms Ely’s judgment that even in a moment when state and local finances seem under pressure everywhere, Chicago and Illinois look especially bad.

Ralph Martire, who runs the Center for Tax and Budget Accountability, a local policy group, responds with a sigh when I ask, "are we really the worst?"

“Yeah, kind of we are,” Martire says. “Our debt per capita is really some of the highest in the nation.”

The reason will sound familiar. We owe our pension plans, like a lot of other places, but more.  We skipped payments — a lot of them, more than most. We said we’d pay it back eventually, and, as Martire says, “This is eventually.”

Chicago faces an additional obstacle to digging itself out: the Illinois constitution. Ours, unlike most, explicitly forbids reneging on pension benefits. The state supreme court issued a stern reminder to that effect on May 8, in a ruling that put a damper on plans to address the problem by cutting benefits.

The ruling triggered the downgrade from Moody’s — the downgrade itself also threatens to be expensive for the city, triggering higher interest rates when we borrow money, and possibly some penalties.

“We really don’t know what the fiscal impact will be,” Martire says, “but it’s not going to be insignificant.”

The problem can’t be fixed simply by cutting wasteful spending, he says. Not that waste and abuse aren’t a problem here — they are — but overall spending isn’t lavish.

“You look at the city of Chicago, spending’s been cut,” Martire says. “You look at the state of Illinois, spending’s really been cut. We’re one of the lowest-spending states in the nation, across the board, despite having the fifth-largest population.”

To see what below-average spending looks like, I went to visit another set of local experts: Erika Wozniak, a fifth-grade teacher, and her students at Oriole Park Elementary School on Chicago’s Northwest Side. On the morning of my visit, the students discussed how a financial meltdown for Chicago’s public schools — called “CPS” by locals — would affect them.

“If CPS went bankrupted, the classrooms would be too small to fit the students,” said one student. “And if you ever had a question for the teacher, you wouldn’t be able to get to the question, because there’d be too many kids in the classroom.”

“And how many students do we have in our classroom?” Ms. Wozniak asked the class.

“Thirty-six.”

There are no desks in the classroom. Instead, the students crowd around tables, with a crate of books and supplies beside each child’s feet.

However, Ralph Martire has a proposal to sort this out. “It’s not rocket science,” he says. “It’s something we call ‘math.’”

It also involves something politicians find distasteful: raising taxes. Economically, this is something Chicago could probably do.  

“Chicago is a regional, national, and global hub,” says William Glasgall, who watches state and local finance for the Volcker Alliance. “It’s an information-based economy. The financial-services industry in Chicago is large and powerful."

In other words, unlike other cities with big problems — say, Detroit — Chicago has a tax base. And compared to New York or California, taxes here are relatively low.

It is true that compared to neighboring states like Indiana or Kentucky, they’re on the high side. However, Glasgall says, taxes are not necessarily the only reason businesses choose locations. “Are all those financial services firms really going to move to Wisconsin?”

In terms of its tax base, Chicago might do itself more damage by failing to raise taxes, says Todd Ely, the public-finance scholar. He says he’s been wondering, "Would entrepreneurs choose Chicago as a place to start a business right now?"

“Personally I wouldn’t,” Ely says. “Even though I think it’s a great city.”

Not, he says, because taxes are too high. But because all the chaos — under-funded services, fiscal uncertainty — is bad for business.

“When do you start having businesses leave,” he asks, “that are concerned about the schools? That are worried about — I mean, uncertainty’s bad for business.”

At least one of the kids at Oriole Park has the same idea.

“If CPS goes bankrupt, then I'll end up going to a different CPS,” says one boy. “California public schools.”

So, that’s one family ready to vote with their feet … for higher taxes. 

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