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IN THIS ISSUE – “In the Dark of Night In the Middle of the Day”
- How Does a Legislative Bill Become Law? It Can Be Murky…On Purpose
- GOP Gathered to Re-Boot
- State Supreme Court Must Resolve the Tax Vote Requirement
- Health Coverage Rate Stalls
- Healthcare by Groupon!
- Californians Can Ask About Their Data
- State Bank for Cannabis Growers Delayed to 2020 Legislative Agenda
- Who Pays for Educating Workers?
Capital News & Notes (CN&N) harvests California legislative and regulatory insights from dozens of media and official sources for the past week, tailored to your business and advocacy interests. Please feel free to forward.
READ ALL ABOUT IT!!
FOR THE WEEK ENDING SEPT. 13, 2019
NOTE TO OUR READERS: With the Legislature adjourning for the year late tonight, coverage elaborating on the results will be carefully selected for our Sept. 20 edition.
How Does a Legislative Bill Become Law? It Can Be Murky…On Purpose
PoliticoPro, no link
As the end of the legislative session nears, reminders abound that the state Capitol is home to opaque processes and murky areas of lawmaking, despite recent pushes for more transparency.
Surprises continue to emerge as lawmakers scramble before Friday’s deadline for each house to pass bills. In these final weeks, bills are quietly gutted and amended to mean something entirely new. Deals between legislators and lobbyists are made behind closed doors. Appropriations committees decide the fates of bills in rapid-fire suspense file hearings without testimony, often adding substantive amendments that leave even bill authors surprised.
David Snyder, executive director of the First Amendment Coalition, pointed to a tweet that shook the Capitol last week, in which Gov. Gavin Newsom weighed in late on a bill cracking down on medical vaccine exemptions, seemingly backtracking on his promises to sign it. It took several hours to learn of the specific changes he actually wanted — and three days to see the actual language under consideration.
On Monday, state Sen. Jeff Stone (R-Temecula) accused Democratic lawmakers on the Senate floor of pushing through last-minute amendments “in the dark of night in the middle of the day.”
Newsom’s office offered scant explanation for the last-minute changes, repeating that he wanted everyone involved to “be certain of the rules of the road once the bill becomes law.” That led to speculation about whether he had personal reasons for waffling on the bill at the end of session.
“Newsom’s ever-shifting position on the vaccine bills is one example of the kinds of ambiguity and opacity that can affect the legislative session at the very end, where you can’t tell who’s motivating the decisions of the decision makers or why,” Snyder said. “When you can’t tell that, you have a hard time understanding the meaning of these rapidly shifting positions and what effect they might have on the people of California.”
With goals of increasing legislative transparency, voters passed Proposition 54 in 2016 to require that bills be in print and published online for 72 hours before they are voted on, along with other provisions such as requiring that video recordings of meetings be available online within 24 hours. The initiative backed by the California Republican Party and wealthy GOP activist Charles Munger Jr. also had the support of major newspaper editorial boards and the League of Women Voters.
But it isn’t all it’s cracked up to be, especially amid the chaos of the final hours of the session, according to Snyder.
“I don’t think that it’s doing what it was intended to do, which was help shed more light on the process and put some of this end-of-session scrambling out in the public,” he said. “The rushed process really shuts the people out of the procedures of legislation, and when the people are shut out in this way, it’s no surprise that the legislation that results doesn’t really favor the people. It favors people who can afford to pay lobbyists to cut deals.”
Assemblyman Marc Berman (D-Palo Alto) took to Twitter to voice his frustration about the opaque process during the appropriations suspense hearings. He said he was left in the dark about amendments that eventually led to the demise of his homeless college parking bill that were “forced in” by Senate Appropriations Chairman Anthony Portantino (D-La Cañada Flintridge).
Berman alleged that Larry Galizio, president and CEO of the Community College League of California, which opposed the bill, knew about the amendments before he did.
“Interesting to see that the opponents of my bill knew the details of the amendments that were forced in by [Portantino] 18 hours before they became public, which is when I first saw them,” Berman said on Twitter. “Rather than calling Approps staff (who refused), I should have called [Galizio].”
Galizio, though, said that his intel was merely from watching the rapid-fire hearing himself. “My tweet was sent after the announcement, as I had no foreknowledge of what the committee would decide,” he told POLITICO.
Staff for Assemblyman Ed Chau (D-Monterey Park) were still working last week to parse hostile amendments made by the Senate Appropriations Committee to his CA AB1202 (19R) and their implications for California’s new privacy law. Another Chau bill was silently shelved at the same hearing.
During suspense hearings in May, aides to Assemblyman Kevin McCarty (D-Sacramento) were seen crowding around a TV in his office, furiously taking notes as they watched the auction-style hearings to report changes back to their boss.
The appropriations committees are dedicated to the state’s purse strings, but in Berman’s case, some of the amendments to his CA AB302 (19R) weren’t fiscal — including a provision that would have banned the proposed safe parking lots for homeless college students if they were located within 250 feet of an elementary school.
Portantino wouldn’t comment on the Berman bill amendment, saying he doesn’t speak about any of the suspense file decisions. But he said that’s the way it’s always been, and something lawmakers need to get used to.
“I don’t see it,” he told POLITICO when asked about the criticisms of the suspense file process. “Sometimes you have really good issues and really good policy that you want to see happen, but the execution for one reason or another … sometimes the amendments are beyond the scope of our committee.”
As chairman, Portantino has labeled more bills as “two-year bills,” nominally giving their authors another chance to try the legislation, something he thinks makes the suspense file more tolerable than under past leadership.
“I think the policy committees should have more input. So we’ve expanded the two-year list out of respect, I think, for the authors,” he said. “I’m an author of bills, too. My bills go to a committee, and the committee chair has a different take on a bill than I do. I get disappointed like everybody else. This is all part of the system. That’s the process, and we all try to be as congenial as possible with our perspective.”
The suspense file process has been a part of the Legislature since the 1980s as a way to consider the fiscal impacts of legislation, but it morphed into something new under the direction of former Assembly Speaker Willie Brown, according to Wesley Hussey, a professor of California politics at Sacramento State.
“It became a way for lawmakers to pass or kill legislation without discussion, avoiding major political feuds,” Hussey said. “It’s intentionally opaque because the leadership benefits from that.”
In some cases, legislative leaders may act on behalf of a governor who has serious problems with a bill but doesn’t want to engage in a public dispute or face embarrassment by having to explain an unpopular veto later in the process.
Hussey said that Speaker Anthony Rendon and Senate President Pro Tem Toni Atkins have made it a point to give committee leadership more authority, which has changed some decisions regarding the decades-old suspense file.
But its mystery continues to be an infamous hurdle of California lawmakers.
“Members are scared of the suspense file, and they should be,” Hussey said. “Some members will strip away the fiscal components of their bills so that their bill can avoid the suspense file.”
State Sen. Scott Wiener (D-San Francisco) has felt the sting of the suspense file. His CA SB50 (19R), considered a major housing bill that would have allowed more construction near public transit, was held by the Senate Appropriations Committee in May, shocking the Capitol.
Wiener said “it’s not a complete black box,” saying that committee leadership can and sometimes do consult with bill authors, but that it’s not ideal. “I’m not a huge fan of the appropriations process in both houses. But institutionally, it’s the process we have,” Wiener told POLITICO.
GOP Gathered to Re-Boot
With their dominance dissolved in once-storied bastions like Orange County and ranks reduced to third party status, California Republicans this weekend gathered to reboot and forge strategy for a 2020 comeback — in a solidly blue state where President Donald Trump is wildly unpopular.
The president’s high disapproval ratings in the state failed to dampen the mood of the more than 1,000 California Republicans who descended on the toney Renaissance Indian Wells Resort and Spa starting Friday for what was billed as a special “Training Convention.” The idea was to get inspiration and soak up strategy from Trump insiders and surrogates including campaign manager Brad Parscale, Energy Secretary Rick Perry, and former Wisconsin Governor Scott Walker.
Attendees could choose from no fewer than 35 different sessions on subjects ranging from “Engaging Hispanic Communities” to “Surviving on Liberal College Campuses,” with at least five “Trump Victory Leadership Initiative” classes designed to teach field organizing, volunteer recruitment, the mechanics of “ballot harvesting,” and introduce new tools for voter registration.
The crowd of hardcore Republican loyalists on hand, many snapping up “Trumpifornia” tee shirts, MAGA hats and taking pictures with life-sized cutouts of the President, cheered promises from the party’s top brass that their efforts would “help us grow our California Republican Party while also supporting the president from in-state.”
Parscale, greeted with a standing ovation and excited cheers before speaking to hundreds of excited convention delegates, assured California Republicans of their critical role in the 2020 campaign.
“Many of you are worried that we have written you guys off — that California doesn’t matter,’’ he acknowledged. But, recognizing it as hardly “a swing state,’’ Parscale still pointed to California — a bastion of fundraising, voter contact operations and volunteer firepower — as a lynchpin in “the fight for the future of this country,’’ he said, predicting that “the Trumps will be a dynasty that lasts for decades.”
Asked later if he believes the Trump children represent future candidates, Pascale said: “I just think they’re a dynasty. I think they’re all amazing people…with amazing capabilities. I think you see that from Don Jr. I think you see that from Ivanka. You see it from Jared. You see it from all.”
He also wouldn’t respond to reporters’ questions about whether the president would campaign for candidates in California.
In his speech, Parscale promised GOP loyalists that the Trump Victory Leadership Initiative here would marshall highly sophisticated technology, including use of artificial intelligence which he said would provide more information than ever before on “who the voters are, where they live, how they consume information — and how to contact them.”
“We have the potential to win back eight Congressional seats back to Republicans here in California,’’ Parscale said. He noted that effort alone could bring 50 paid staff to the state in 2020, making it potentially “the largest election day operations’ in state history.
Jessica Millan Patterson, the Latina mother of two who was elected earlier this year to chair the embattled state GOP, called the scope of the party’s training efforts “historic” and said California’s Republican Party is now heavily invested in “engagement” — she rejects the word “outreach” as insufficiently energizing — in an acknowledgment that party must return to the drawing board to attract fresh blood for what she called a “California Republican Comeback.”
“It’s infrastructure…new message, new messengers,’’ Patterson said. “If we don’t have a good foundation, we’re not going to be able to build on top of it.’’ Already, she’s celebrating a payoff, telling delegates this weekend that “we’ve recruited 20,000 new volunteers,’’ doubled the party’s grassroots email and reached 1.4 million voters — in the last month alone.
Education researcher and former Bush adviser Bill Evers, looking around the room at the smiling faces after party faithful heard upbeat stump speeches from a crowd of House candidates from Orange County — a former GOP bastion that this year became majority Democratic — said that the optimism was contagious.
“This is a party in pretty good spirits,’’ he said. “This is not a party that feels down…they think the quality of their candidates is good, they’re raising money — and the fight is on. They want to turn this thing around.”
But the state GOP’s efforts come at a time when the party faces formidable roadblocks. Polls show Donald Trump is historically unpopular with voters here, and he has been the subject of nearly 60 lawsuits from state leaders challenging his moves on issues ranging from auto emissions to immigration.
The GOP reboot is particularly challenging coming on the heels of a 2018 midterm meltdown in which the party lost 7 House seats, and where Democrats regained supermajorities in both houses of the state legislature, and won every statewide seat, including the governorship.
For party leaders and grassroots volunteers alike, a key goal of this weekend’s session is to lay the groundwork to retake those House seats — and, Patterson noted, to install House GOP Leader Kevin McCarthy of Bakersfield in the Speaker’s seat.
Despite the convention’s overwhelmingly pro-Trump mood, a few veteran party outliers this weekend lamented that, in California — birthplace of the Reagan Revolution — the Grand Old Party has diminished itself and dragged down its future prospects by rallying behind Trump.
Assemblyman Chad Mayes, R-Yucca Valley, who has repeatedly warned his party against what he has called Trump’s “toxic” effects — and who with former Gov. Arnold Schwarzenegger co-founded New Way California, an effort to moderate the party — introduced a plank in the party’s platform formally stating the GOP’s object to intolerance and racism. His move, though viewed as likely to pass in a vote Sunday, was seen by some as a clear jab at the president and was denounced by one Tea Party activist “as popular as a stink bomb in an elevator.’’
But Mayes wasn’t alone here in expressing his concerns that in becoming the “party of Trump,’’ the state GOP has all but ensured its destruction in California, a state that is home to the largest number of immigrants and a fast-growing Latino electorate.
Under Trump’s leadership, “less and less people continue to participate. The diversity of thought in conversation has also disappeared,’’ says longtime GOP strategist Luis Alvarado, who didn’t vote for Trump in 2016 — and vows to reject him again in 2020.
“No one can actually point to anything this administration has done effectively. Everything has been geared towards nationalism and partisanship,’’ he said. “There is no way anyone can agree that this president is a president for all the people.”
But Harmeet Dhillon and Shawn Steel, California’s two representatives on the Republican National Committee, say the weekend’s popular training sessions — all closed to media and packed to capacity with party activists — are evidence that the California GOP “2.0” reboot is working.
“Half of our board of directors are under 40,’’ and many of them immigrants or minorities, says Dhillon, an attorney and former state party vice chair who is herself a devout Sikh who immigrated from India. “It’s a different generation and it’s very diverse, and they’re bringing a different perspective with what they care about — digital tools and other things.”
Steel, a former party chair, says his wife, Orange County Supervisor Michelle Park Steel — a Korean immigrant now challenging incumbent Democratic Rep. Harley Rouda in an effort to retake the congressional seat once held by Dana Rohrabacher — is emblematic of the party’s vanguard of new candidates.
“In some of these house races and legislative seats, many of our candidates are Asian American — and the Democrats are running old white guys,’’ he says. “It’s totally flipped.”
Park Steel is only one example of what party leaders are calling an “embarrassment of riches” in the ethnically diverse array of candidates who have lined up for the 2020 cycle even as the state party in recent years has grown older and whiter.
Among them are Young Kim, the first Korean American to serve in the state legislature and now a candidate for the congressional seat held by Democratic Rep. Gil Cisneros; Angela Underwood Jacobs, an African American city councilwoman from Lancaster and Mike Garcia, a former Navy pilot, both hoping to unseat Democratic Rep. Katie Hill in eastern Los Angeles and Ventura County.
Also a party priority, according to NRCC executive director Parker Poling, is the campaign of former Congressman David Valadao; she told GOP delegates he has a double digit lead and is on track to retake his congressional seat from Democratic Rep. T.J. Cox, who unseated him in 2018.
Dhillon says she’s convinced that Republicans have a winning message for California, the world’s fifth largest economy. “The economy is moving and there are job opportunities at every level for people of every color and gender…and what are the Democrats selling?’’ she said. “The world is going to end in 12 years. Climate change as a religion. Abortion in the ninth month. These are not mainstream positions, even on the left. It’s a turnoff.”
Patterson told activists this weekend that Republicans can reboot and win because California Democrats only offer “failed leadership” in a state on a “downward spiral.”
Democrats are “arrogant, complacent and cocky’’ about homelessness, taxation and housing affordability in the state, she said at one point, adding — in a veiled reference to Trump — “it’s no wonder that Democrat politicians want to talk about tweets and, frankly, anything other than their record of failure.’’
The state Supreme Court stirred up a legal hornet’s nest two years ago when it suggested — but didn’t explicitly declare — that a two-thirds vote requirement for specific local tax increases might not apply to measures placed on the ballot via initiative petition.
The supermajority vote requirement dates back to Proposition 13, the iconic property tax limitation adopted in 1978.
Proposition 13 said that while general use tax increases sought by local governments — sales taxes, usually — require only simple majority approval, “special taxes” designated for special purposes face the higher threshold.
The 2017 Supreme Court case had to do with the election date for a marijuana measure in Upland, a city in Southern California, not taxes. But in writing for the 5-2 majority, Justice Mariano-Florentino Cuéllar declared, “Multiple provisions of the state Constitution explicitly constrain the power of local governments to raise taxes. But we will not lightly apply such restrictions on local governments to voter initiatives.” He cited a previous declaration that the initiatives process is “one of the most precious rights of our democratic process.”
The court’s two dissenters disagreed, saying that voters are, in fact, part of their governments and, therefore, the constitution’s provisions apply to them as well.
Almost immediately, those on both sides of California’s perennial tax battles saw the potential in Cuéllar’s words for loosening the vote requirement for special taxes.
In theory, pro-tax forces, such as public employee unions, could sponsor ballot measures to raise special taxes without triggering the two-thirds vote requirement.
Last year, the theory was put to the test in San Francisco when members of the city’s governing body, its Board of Supervisors, personally sponsored two tax increase initiatives, one for the June election and another in November, both listed on the ballot as “Proposition C.”
The June measure, a tax on commercial rents to finance early childhood education and child care services, received 51 percent voter support. The November proposal, a tax on businesses to finance services and housing for the homeless, garnered 61 percent voter support.
With both votes below two-thirds, opponents of the measures sued, contending that they were invalid, but in July, San Francisco Superior Court Judge Ethan Schulman, citing the Upland decision, validated both taxes.
Last week, however, a Superior Court judge in Fresno had a different take. Judge Kimberly Gaab ruled that a 2018 initiative measure raising sales taxes to improve Fresno’s city parks failed because it needed a two-thirds voter supermajority but received just 52.2 percent.
The pro-tax coalition of civic leaders that sponsored Measure P had sued to have it declared a winner based on the Upland decision, but Gaab ruled in favor of the Howard Jarvis Taxpayers Association, which has taken a leading role in defending the supermajority requirement.
“The two-thirds vote requirement applies to all special tax proposals, regardless of the proponent of the proposal,” she wrote.
The San Francisco and Fresno tax measures were three of eight such initiative special tax proposals in California last year to fall short of supermajority approval. The conflicting Superior Court rulings will force the state Supreme Court to make a specific declaration on the issue, rather than allow it to fester due to its implicit suggestion in the Upland case.
The potential effects of what the court ultimately decrees are immense. With local governments and school districts straining to cope with rapidly increasing pension costs that outstrip ordinary revenue growth, local measures to raise taxes have been proliferating and whatever the court decides will reverberate loudly.
California has seen its rate of uninsured residents drop every year since the state’s affordable care marketplace, Covered California, began offering insurance policies, but 2018 was the exception.
The rate stalled last year at 7.2 percent, according to new data from the U.S. Census Bureau, despite the fact that taxpayers were still subject to the individual mandate penalty on their tax returns. Nationally, the rate of uninsured rose to 8.5 percent from 7.9 percent.
The uninsured rate in California looks high when compared with states such as Massachusetts and Vermont that boast the nation’s lowest uninsured rates at 2.8 percent and 4 percent, but quite low when compared with 17.7 percent in Texas and 14.2 percent in Oklahoma.
The leader of California’s state-based insurance marketplace said the Golden State isn’t as far behind Massachusetts and Vermont as these numbers look. Peter V. Lee said roughly 60 percent of uninsured Californians are immigrants who do not qualify for the federal subsidies offered by Covered California because they are undocumented.
Currently, Lee said, about 3 percent of eligible Californians are uninsured, but Gov. Gavin Newsom and the state Legislature passed new laws this year that offer these people greater incentives to sign up for coverage in 2020.
“We have more individuals that, under the Affordable Care Act, aren’t eligible for Medicaid or federal subsidies,” Lee said, “so the fact that we stayed constant (on the uninsured rate) is not bad news. We always want to do more, and I think we’ve seen Gov. Newsom and the Legislature saying, ‘We don’t want to just protect the Affordable Care Act. We want to build on it and go beyond it.”
The Patient Protection and Affordable Care Act of 2010 gave U.S. residents a number of health insurance protections. It provided that people with pre-existing conditions could not be refused coverage, and it allowed parents to keep their dependent children on their coverage until age 26. It also spelled out subsidies to assist people who could not otherwise afford health insurance.
Under the ACA, often referred to as Obamacare, California has seen bigger drops in uninsured residents than any other state, Lee said, from 17.2 percent in 2013 to 7.2 percent today.
People who have received subsidies have pretty much maintained their health insurance coverage over the last two years, Lee said, referring to an August 2019 report from the Centers for Medicare and Medicaid Services that looked at the individual health insurance market from 2016-2018.
“People who got help stayed in, “Lee said. “What we saw nationally was a very dramatic drop in people with coverage that did not get subsidized. In the period from 2016 to 2018, there was a decrease of 2.3 million people dropping out of coverage that did not get subsidies. That was a 44 percent decline.”
The Trump administration not only put less funding into advertising ACA insurance plans but also refused to reimburse insurers for discounts they were required to offer on deductibles and co-payments. Insurers ended up steeply increasing insurance rates to account for that, and many consumers opted out of insurance because of the prices.
The California market, however, saw greater stability than the nation as a whole because Covered California worked closely with insurers to cover costs and sunk millions of dollars into promoting the benefits of being insured.
“We had a drop of about 17 percent, or 170,000 people, but if the rest of the nation had dropped at only the rate California did, there would be 1.5 million more unsubsidized Americans having insurance in 2018 than there were,” Lee said.
Looking back at enrollment this year, Lee said he wouldn’t be surprised to see a census report next year showing that California saw an uptick in the rate of uninsured. 2019 is the year Washington pulled back on the individual mandate, a tax penalty U.S. citizens paid if they didn’t maintain insurance.
The good news, Lee said, is that the governor and Legislature have turned on a dime to react to that policy shift, so the state should see gains in the number of insured residents in 2020.
“These policies include state subsidies to lower the cost of health insurance purchased in the individual marketplace and a requirement for Californians to have health coverage or pay a state penalty,” Graves stated.
Uninsured Californians end up costing all of us more money, Lee said, because they are showing up in the emergency room and not paying their bills, and when that happens, those costs show up as increased expenses for people with insurance. Also, Lee said, if people are not getting the preventive care they need, it will mean higher-cost services down the road.
National Public Radio
Emory University medical fellow Dr. Nicole Herbst was shocked when she saw three patients who came in with abnormal results from chest CT scans they had bought on Groupon.
Similar deals have shown up for various lung, heart and full-body scans across Atlanta, as well as in Oklahoma and California. Groupon also offers discount coupons for expectant parents looking for ultrasounds, sold as “fetal memories.”
While Herbst declined to comment for this story, her sentiments were shared widely by the medical community on social media. The concept of patients using Groupons to get discounted medical care elicited the typical stages of Twitter grief: anger, bargaining and acceptance that this is the medical system today in the United States.
But, ultimately, the use of Groupon and other pricing tools is symptomatic of a health care market where patients desperately want a deal — or at least tools that better nail down their costs before they get care.
“Whether or not a person may philosophically agree that medicine is a business, it is a market,” says Steven Howard, who runs Saint Louis University’s health administration program.
By offering an upfront cost on a coupon site such as Groupon, medical companies are meeting people where they are, Howard argues. It helps drive prices down, he says — all the while marketing the medical businesses.
For Paul Ketchel, CEO and founder of MDsave, a site that contracts with providers to offer discount-priced vouchers on bundled medical treatments and services, the use of medical Groupons and his company’s success speak to the brokenness of the U.S. health care system.
MDsave offers deals at more than 250 hospitals around the country, selling vouchers for anything from MRIs to back surgery. It has experienced rapid growth and expansion in the several years since its launch.
Ketchel credits that growth to the general lack of price transparency in the U.S. health care industry amid rising costs to consumers. “All we are really doing is applying the e-commerce concepts and engineering concepts that have been applied to other industries to health care,” he argues.
“We are like transacting with Expedia or Kayak,” Ketchel says, “while the rest of the health care industry is working with an old-school travel agent.”
Crown Valley Imaging, in Mission Viejo, Calif., has been selling Groupon deals for services including heart scans and full-body CT scans since February 2017 — despite what Crown Valley’s president, Sami Beydoun, called Groupon’s aggressive financial practices. According to him, Groupon dictates the price for its deals based on the competition in the area — and then takes a substantial cut.
“They take about half. It’s kind of brutal. It’s a tough place to market,” Beydoun says. “But, the way I look at it is you’re getting decent marketing.”
Groupon-type deals for health care aren’t new. They were more popular in 2011, 2012 and 2013, when Groupon and its then-competitor LivingSocial were at their height, but the industry has since lost some steam. Groupon stock and valuation have tumbled in recent years, even after buying LivingSocial in 2016.
Groupon did not respond to requests for comment on how many medical offerings it features or its pricing structure.
“Groupon is pleased any time we can save customers time and money on elective services that are important to their daily lives,” spokesman Nicholas Halliwell writesin an emailed statement. “Our marketplace of local services brings affordable dental, chiropractic and eye care, among other procedures and treatments, to our more than 46 million customers daily and helps thousands of medical professional[s] advertise and grow their practices.”
In Atlanta, two imaging centers that each offered discount coupons from Groupon say the deals have driven in new business. Bobbi Henderson, the office manager for Virtual Imaging’s Perimeter Center, says the group has been running the deal for a heart CT scan, complete with consultation, since 2012; it’s currently listed at $26 — a 96% discount. More than 5,000 of the company’s coupons have been sold, according to the Groupon site.
Brittany Swanson, who works in the front office at OutPatient Imaging in the Buckhead neighborhood of Atlanta, says she has seen hundreds of customers come through since the center posted Groupon coupons for mammograms, body scans and other screenings around six months ago. Why did the medical practice turn to Groupon discounts?
“Honestly, we saw the other competition had it,” Swanson says.
A lot of the deals offered are for preventive scans, she says, providing patients incentives to come in.
But Dr. Andrew Bierhals, a radiology safety expert at Washington University in St. Louis’ Edward Mallinckrodt Institute of Radiology, warns that such deals may be leading patients to get unnecessary initial scans — which can lead to unnecessary tests and radiation.
Because mammograms are typically covered by insurance, Swanson says, she believes OutPatient Imaging’s $99 Groupon deal is filling a gap for women who lack insurance. The cost of such breast screenings for those who don’t have insurance varies widely but can be up to several hundred dollars without a discount.
Howard says Groupon has long been used to fill insurance gaps for dental care. Heoften bought such deals over the years to get cheaper dental cleanings when he didn’t have insurance that covered that.
But advanced medical scans involve a higher level of scrutiny, as Chicagoan Anna Beck recently learned. In 2015, she and her husband, Miguel Centeno, were told he needed to get a chest CT after a less advanced X-ray at an urgent care center showed something suspicious.
Since her husband had just been laid off and did not have insurance, they shopped online to look for the cheapest price. They ended up driving out to the suburbs to get a CT scan at an imaging center there.
“I knew that CT scans had such a wide range of costs in a hospital setting,” Beck says. “So going in knowing that I could price check and have some idea of how much I’d be paying and a little more control” was preferable than going to the hospital.
On the drive back into the city though, the imaging center called and told them to go straight to the hospital — the CT had revealed a large mass that turned out to be a germ-cell tumor.
Fortunately, Centeno’s cancer is now in remission, his wife says. But their online shopping cost them more money than if they’d gone straight to the hospital initially. The hospital gave them charity care. And although Beck took along a CD of the scans Centeno had bought online, the hospital ended up taking its own scans as well.
“You’re trying to cut costs by getting a CT out of the hospital,” Beck says. “But they’re just going to redo it anyway.”
Californians Can Ask About Their Data
Wall Street Journal, no link
Starting next year, all California residents will have the right to ask retailers, restaurants, airlines, banks and many other companies to provide them with any personal information they may have, including individual contact information, purchases and loyalty-program history. Consumers also can ask that businesses delete their information, or opt out of letting it be sold.
“You have to find a way to capture all that information and track it so you know what’s happening with that information,” said Dan Koslofsky, associate general counsel for privacy and data security at Gap. “And that’s a pretty significant undertaking for most companies. Unless you’ve been in a regulated space like health care or financial services, you probably haven’t done that previously.”
The California Consumer Privacy Act was designed to make data-trafficking companies and tech giants such as Amazon.com Inc.,Alphabet Inc. ’s Google and Facebook Inc. more transparent about how they handle user data.
But the law, which passed last year and goes into effect Jan. 1, applies to any for-profit business that does business in California and collects data on California residents, as long as its annual revenue tops $25 million, or it holds personal information on at least 50,000 consumers, or it generates at least 50% of its annual revenue from selling user data. Even companies with no physical presence in California but a website that serves Californians are preparing to comply.
Some 500,000 U.S. businesses across all sorts of industries meet that criteria, according to the International Association of Privacy Professionals. They include companies as varied as Starbucks Corp.and Gap, health insurer Aetna Inc., financial-services firm Wells Fargo & Co., American Airlines Group Inc. and toy maker Mattel Inc. —as well as hundreds of thousands of small and medium-size businesses.
Few companies keep all their customer data in one place, and now many are scrambling to build tools to match up individuals’ data across disparate systems, such as directories, purchase histories and customer-service request logs. Companies also have to review their data-sharing arrangements with vendors and disclose them in their terms of service.
Gap had a certain head start because it already brought its European business into compliance with the European Union’s General Data Protection Regulation, which took effect last year and has similar customer-data requirements. To prepare for these laws, Gap’s privacy team interviewed about 200 employees across the company about how they use data.
Many other companies, though, are much further behind. The California law was passed last summer, but many companies delayed preparations during the lengthy amendment process. In a survey PricewaterhouseCoopers conducted last year, only 52% of respondents said they expected their company to be CCPA-compliant by January 2020.
“I’m concerned about people falsely accusing us of having information on them when indeed we don’t,” said Jeff Savage, president of the River Cats, Sacramento’s minor league baseball team, which has more than 100,000 people in its email database. “How do I prove to Joe Smith that I don’t have his info?”
Once the law becomes enforceable, which is expected by next summer, businesses that get a customer data request will have to comply within 45 days or risk pricey fines and possible civil litigation. The law threatens steep damages in the event of a data breach—as high as $7,500 per affected person. Businesses also have to add a “do not sell my personal information” option to their home page where consumers can opt out.
Given the difficulty of maintaining a separate protocol for California’s 39.6 million residents, many businesses are choosing to apply the changes they make for California to the rest of the country. Some anticipate that the California law will become a kind of de facto national standard, much like the state’s standards for auto emissions.
Rena Mears, a principal with the law firm DLA Piper, said, “99% of the businesses that we’re dealing with are choosing to make the law apply to all their U.S. customers.”
The requirements’ complexity has created an opportunity for some tech firms. Microsoft Corp. is preparing compliance software, as is LiveRamp Holdings Inc., as well as startups like SECURITI Inc., Text IQ Inc. and BigID Inc.
Gap said it doesn’t sell data to brokers but does share customer mailing addresses with catalog companies. The retailer’s privacy team has been scrutinizing those contracts and its disclosures to customers to make sure they comply with the California law.
One uncertainty is whether retail loyalty programs—which reward consumers who let a company keep and sometimes sell their data—could be considered a form of discrimination against shoppers who exercise their data rights. Another question is whether a customer who used a credit card in a store but never provided further data would be owed a personal data file. Mr. Koslofsky said Gap wouldn’t store enough data on such a user to be able to identify them and would explain that in response to such a request.
Companies are gearing up for every conceivable scenario, including the possibility that identity thieves may pose as someone else to obtain their data.
If consumers in large numbers opt out of data sales, the greatest impact may be on data vendors and digital-advertising companies.
Los Angeles-based Factual Inc. provides location-tracking software for mobile apps, and then sells the users’ location data to advertisers. If a user allows the app to use his or her location but opts out of having the data sold, Factual would still be obligated to provide the service but wouldn’t be able to include that individual’s data in the segments it sells to ad buyers, Factual’s Chief Marketing Officer Brian Czarny said.
The California state legislature passed the hastily written law in a deal to block a more ambitious ballot initiative. That left the door open for both industry and privacy groups to spend the past year wrangling over amendments to the law, rather than preparing for it.
The bills for software and attorneys can creep up.
“Any Fortune 500 company is going to spend at least $1 million on CCPA compliance” in the law’s first year, said Jay Cline, a principal with PricewaterhouseCoopers. “And we’ve seen budgets as high as $100 million.”
A California bill that would authorize banks and credit unions to do business with cannabis companies on a limited basis has been pulled by its sponsor.
Sen. Bob Hertzberg, D-Los Angeles, announced that he intends to make Senate Bill 51 a two-year bill, re-introducing the legislation in early 2020.
“If we’re going to do this, we have to do it right,” Hertzberg said in prepared remarks. “We owe it to the dozens of cities, counties, and cannabis industry officials who have been supporting this effort to see it through.”
Natural gas-fired power plants, which have crushed the economics of coal, are on the path to being undercut themselves by renewable power and big batteries, a study found.
By 2035, it will be more expensive to run 90% of gas plants being proposed in the U.S. than it will be to build new wind and solar farms equipped with storage systems, according to the report Monday from the Rocky Mountain Institute. It will happen so quickly that gas plants now on the drawing boards will become uneconomical before their owners finish paying for them, the study said.
The development would be a dramatic reversal of fortune for gas plants, which 20 years ago supplied less than 20% of electricity in the U.S. Today that share has jumped to 35% as hydraulic fracturing has made natural gas cheap and plentiful, forcing scores of coal plants to close nationwide.
The authors of the study say they analyzed the costs of construction, fuel and anticipated operations for 68 gigawatts of gas plants proposed across the U.S. They compared those costs to building a combination of solar farms, wind plants and battery systems that, together with conservation efforts, could supply the same amount of electricity and keep the grid stable.
As gas plants lose their edge in power markets, the economics of pipelines will suffer, too, RMI said in a separate study Monday. Even lines now in the planning stages could soon be out of the money, the report found.
“Our story for gas plants is, if you build it, they won’t run — they won’t run at their expected capacity factors,” said Mark Dyson, who co-wrote both reports. “And that filters down to pipelines, too.”
California Forward commentary
Many of the tech entrepreneurs and venture investors in the audience at my recent Bloomberg panel on Trade Schools of the Future came with the impression that disrupting higher education was the key to solving future of work issues. By the end of the discussion, they thought otherwise.
When it comes to the future of work, the big issue is not getting higher education to adopt technology or bypass existing institutions. Rather, the future dilemma lies in figuring out who will pay for the frequency of education and training that is required for us humans to keep up in the next economy.
According to the report, “Taking Action: Positioning Low-Income Workers to Succeed in a Changing Economy,” in the 1970s, one in four jobs required a high school education or less. Today, two in three jobs require at least some post-secondary education or training.
The traditional model of higher education and training is akin to a health immunization. We get a one-time inoculation in the form of a college degree in our early 20s, and this has historically enabled people to weather the cycles of business during their lifespan.
However, the one-time inoculation model no longer suffices for economic resilience in the new norm of education and training. Instead, adults must secure continuous and frequent booster shots of upskilling in order to keep up.
Unfortunately, with student debt burgeoning to $1.5 trillion in 2019, the public coffers can barely afford the former paradigm, much less underwrite a more expensive model where learning is continuous.
Some argue that the private sector should bear the burden of the education and training as was done a generation ago when a stronger employment compact between workers and employers existed. Yes, employers should do their share of internal training and join the trend to offer tuition disbursement for all employees — not just managerial ones.
But that won’t solve the problem because most workers don’t stay with one employer for very long. Employee tenture on jobs has shortened to 4.2 years according to the Bureau of Labor Statistics, with many Americans moving into gig work.
That leaves only individuals to foot the bill. “Today, half of all Americans earn $15 or less per hour,” states the Hatcher Group’s 2019 report calling for a reality check.
It’s clearly time to think outside of the box.
I spoke about this dilemma at the June 2019 Future Workforce Now convening of the National Governors Association in DC. While participating in an ideation session on alternatives for tackling the financing dilemma, my group came up with ideas like the “529C,” a portable continuous learning savings account that both individuals and employers can contribute to like a 501K.
We also saw a need to establish new public financing vehicles. One idea was to have a regional training trust where voters can decide to tax themselves (like a facilities bond) to pay for more in their communities to secure industry-valued credentials.
In addition, we recognized national experiments with income sharing agreements (ISAs) where students are not charged tuition until they start in a job that pays at least a minimum earning threshold of $50,000.
And how can industries where credentials and certifications are crucial to most careers, such as healthcare, help these workers get ahead? Again, think outside the box. SEIU United Healthcare Workers-West union members in California will be taking a vote to contribute their own funds to establish a workers co-op to help union members’ family and friends secure allied health credentials.
Our country is creating asset-poor jobs and, until we find a better way, increased education and training alone cannot not solve the rising inequality. But that’s a topic for another blog post.
The future of work calls for more of us to experiment with new products, services, social structures and policies to find ways to help individuals pace with the economy to come.
Van Ton-Quinlivan is a member of the CA Fwd Leadership Council.
New State Future of Work Commission website: