Amazon Threat Causes Shakeout in the Health-Care Industry

Amazon.com Inc. is casting a long shadow over the health-care industry.

The prospect of the giant Internet retailer entering the business is beginning to cause far-reaching reverberations for a range of companies, roiling the shares of drugstore chains, drug distributors and pharmacy-benefit managers, and potentially precipitating one of the biggest corporate merger deals this year.

On Thursday, the pressure was plain to see. A report that Amazon had received pharmacy-wholesaler licenses in a dozen states triggered a fast and steep selloff that wounded the likes of McKesson Corp., AmerisourceBergen Corp. and Cardinal Health Inc. And late in the day, shares of Aetna Inc. surged after a report that it was in talks to be taken over by CVS Health Corp.

Executives in the drug industry say that Amazon could use its expansive online reach and its logistical muscle to threaten companies that ship and sell medicines to consumers and cut pricing deals with drug makers.

“Size and scale-wise, they can disrupt anywhere they want to disrupt,” said Chip Davis, president of the Association for Accessible Medicines, a trade group for generic medication, in an interview Thursday.

Competitive Squeeze

A deal for Aetna could conceivably move CVS further away from the business of brick-and-mortar retail drugstores and deeper in health services such as pharmacy benefits, where it already has a sizable presence.

Combining Aetna and CVS would create a health-services giant and a bigger competitor for UnitedHealth Group Inc., which is the largest U.S. health insurer and has its own own clinics and a pharmacy-benefits unit.

The presence of Amazon is already being felt by retailers and companies that sell drugs over the counter. The head of of Bayer AG’s consumer-health business said on a conference call with analysts Thursday that the wider shift to online shopping by U.S. consumers was hurting its business. Erica Mann, the division’s chief, dubbed it the “Amazon effect,” saying buyers are looking for value.

At the same time, the pecking order in the health-supply chain is beginning to shift.

Earlier this month, insurance giant Anthem Inc. said it was cutting ties with Express Scripts Holding Co. after a long dispute over pricing and starting its own pharmacy-benefits manager in 2020. A bulked-up CVS and Anthem’s new venture could raise the pressure on Express Scripts, which has touted its independence.

Any tie-up of Aetna and CVS would follow a pair of failed mergers among health insurers. The deals would have reduced the ranks of big U.S. health insurers from five to three, a prospect that led the Justice Department to oppose both prospective tie-ups.

If the Aetna deal happened, “CVS would have a dominant position” in the drug-benefits business, said Michael Rea, founder of Rx Savings Solutions, which has an app that helps patients find low cost drugs.

Pharmacy Threat

Analysts have speculated that Amazon could soon enter the business of selling prescription drugs, threatening to disrupt retail drugstores, drug wholesalers, and the pharmacy-benefits management business. While Amazon has never publicly commented on what its plans may be, CNBC reported this month that the Internet giant could make a decision about selling drugs online by Thanksgiving. The network didn’t name its sources.

McKesson slid 5.2 percent at 4 p.m. in New York, while AmerisourceBergen shares fell 4.2 percent and Express Scripts sank 3.7 percent following the report on Amazon’s state licenses by the St. Louis Post-Dispatch.

Bloomberg News confirmed that Amazon had obtained wholesale-pharmacy licenses in at least 13 states, including Nevada, Idaho, Arizona, North Dakota, Oregon, Alabama, Louisiana, New Jersey, Michigan, Connecticut, New Hampshire, Utah and Iowa. An application is pending in Maine. Some of the licenses were obtained late last year and some this year.

Amazon declined to comment.

The licenses could be part of Amazon’s business-to-business sales effort, which would include sales to hospitals, doctor’s offices and dentists. Amazon on Tuesday announced “Business Prime Shipping,” which brings the quick delivery associated with Amazon household orders to workplaces. 

The Seattle company launched Amazon Business in 2015, offering tractor parts, latex gloves, file folders and millions of other products needed in factories, hospitals, schools and offices. Businesses are shifting their supply shopping online from less-efficient methods such as browsing print catalogs, faxing orders and telephoning sales representatives.

Online business-to-business sales – a broad category that includes pens and paper for the office as well as lab equipment and parts used in factories — will grow to $1.2 trillion in 2021 from $889 billion this year, according to Forrester Research Inc.

On a conference call Thursday with analysts, McKesson CEO John H. Hammergren said the wholesaler doesn’t “take the entry of any competitor lightly,” but said the company already has a large online order operation and similar to what Amazon does logistically. “To some extent, we were Amazon before it was cool to be Amazon.”

    Read more: https://www.bloomberg.com/news/articles/2017-10-26/drug-wholesalers-slump-after-amazon-com-obtains-state-licenses

    NFL’s Litany of Excuses Runs Out After Ratings Fall for Second Year

    TV networks are running out of excuses for the dwindling popularity of the National Football League.

    They blamed the election for ratings declines last year, and hurricanes for a soft week one in September. Protests during the national anthem, and President Donald Trump’s criticism of the league, have faded from the headlines. 

    Advertisers are starting to believe a different explanation: the viewers aren’t coming back. Audiences are down an average 7 percent from a year ago through the first eight weeks of the season, excluding last Monday. That’s on top of a decrease of about 8 percent last season that spurred numerous changes in the broadcasts, from shorter commercials to better matchups earlier in the year.

    “There’s just not as many people watching TV the way they used to watch TV,” said Jeremy Carey, managing director of Optimum Sports, a sports marketing agency. “It’s going to be an issue for advertisers when they can’t reach a large-scale audience the way they have.”

    With CBS Corp., 21st Century Fox Inc. and Walt Disney Co. set to report earnings in the next few days, analysts are bound to raise questions. These companies have used the popularity of the games to extract additional fees from cable operators, promote other shows on their networks and sell lots of commercials. Pro football games drew about $3.5 billion in ad spending last year, including the postseason, according to SMI Media Inc.

    Media companies have spent billions of dollars on the right to air football games, which had been immune to the erosion of viewership for other TV programming. Audiences for TV networks have diminished for years as the growing popularity of online alternatives Netflix and YouTube and the availability of most shows on-demand have reduced the appeal of dramas and comedies. Live TV, like sports, was supposed to be immune, but that theory looks highly questionable now.

    Ratings for the NFL suggest the same societal trends are now affecting the league, even if the declines aren’t as dramatic. The drop in game viewership ranges from 5 percent for NBC’s “Sunday Night Football” to 11 percent for the CBS Sunday package. “Monday Night Football,” on Disney’s ESPN, has attracted more fans this year than a year ago, but the numbers are still down from 2015.

    Viewership of the four main broadcast networks fell 8.7 percent last year, and 12 percent among adults 18 to 49, an important demographic for advertisers.

    CBS’s 11 percent slump for NFL games is the steepest of the networks. Its parent company, which reports earnings after the close Thursday, is more vulnerable than rivals to the trend because the vast majority of its earnings come from the broadcast network. The declines at CBS reinforce a complaint that has gotten louder and louder in recent weeks: The league got greedy in adding the Thursday night game on broadcast.

    Reserving top games for Thursday night robbed other time periods of good match-ups. After a nosedive in ratings at “Monday Night Football” last season, the league has scheduled better games for that time period, further damaging Sunday afternoon.

    “Ratings declines on both general entertainment and NFL programming could be the single biggest point of focus for investors this quarter, and we’re not sure what media companies can say about the health and tone of the ad market to assuage fears,” Steven Cahall, an analyst with RBC Capital Markets, wrote in a note last month.

    Viewership is dropping fast among people under 54 — a key demographic for advertisers — and even faster among those 18 to 34. Audiences for games on CBS, NBC and Fox have slid at least 10 percent among that younger cohort.

    Advertisers aren’t abandoning the NFL, one of the only places they can still reach more than 10 million people at once. But they are growing concerned. John Schnatter, who appears in TV spots on behalf of his Papa John’s Pizza International Inc., laid into the league on a conference call this week, blaming the ratings for his company’s slow revenue growth and calling for the league to put an end to player protests.

    Networks and other advertisers identify a wide range of reasons for the NFL’s struggles. The league has overexposed itself by making highlights available on Facebook, YouTube, Twitter and Snapchat. Identifiable stars like Peyton Manning and Aaron Rodgers have either retired or gotten hurt. The quality of play has deteriorated. Player protests and concussions have driven away some fans.

    Some executives argue viewership of the league has still improved over the long term while dropping for every other show. Yet the amount of time people have spent watching football this season is at the lowest point since 2011, back when there were fewer televised games, according to Mike Mulvihill, Fox Sports’ head of research.

    “The cumulative effect of everything happening in the world at large is having an impact on NFL viewership,” Mulvihill said. “ The league was defying the laws of gravity.”

      Read more: http://www.bloomberg.com/news/articles/2017-11-02/nfl-s-litany-of-excuses-runs-out-as-ratings-fall-for-second-year

      Demanding a Bachelors Degree for a Middle-Skill Job Is Just Plain Dumb

      Ever wonder why employers demand advanced credentials for jobs that don’t seem to require them? So did Joseph Fuller, a professor of management practice at Harvard Business School. He co-led a study that found it’s “a substantive and widespread phenomenon that is making the U.S. labor market more inefficient.” To take one egregious example, two-thirds of job postings for production supervisors require a four-year college degree—even though only 1 in 6 people already doing the job has that credential.

      Credentialism obviously harms job applicants. What’s less obvious is that employers suffer, too. They miss out on new hires who—the study found—work hard, cost less, are easier to hire, and are less likely to quit. In other words, companies are deliberately bypassing a deep pool of talent. At many human resources departments, “Everyone’s strategy is to row as close as they can to the other boats and fish there,” says Fuller.

      What was excusable myopia in a time of high unemployment has become inexcusable at a time when the pool of college grads is severely overfished. The unemployment rate for people with bachelor’s degrees was just 2.3 percent in September, the lowest in nine years.

      The study, released on Oct. 24 by Harvard Business School, Accenture, and Grads of Life, is called . Says the report: “Over time, employers defaulted to using college degrees as a proxy for a candidate’s range and depth of skills. That caused degree inflation to spread to more and more middle-skills jobs.” It adds: “Most employers incur substantial, often hidden, costs by inflating degree requirements, while enjoying few of the benefits they were seeking.”

      The study is based on a survey of 600 business and HR executives, as well as 26 million job postings from 2015 parsed by Burning Glass Technologies, a job-market-analysis company that earlier published its own report on the topic. It found that 70 percent of postings for supervisors of office workers asked for a bachelor’s degree, even though only 34 percent of the people doing the job have one.

      Some major employers have figured out that this doesn’t make sense now, if it ever did. The study says that at Wal-Mart Stores Inc., 75 percent of store managers joined as entry-level employees, and the company has trained more than 225,000 associates through its Wal-Mart Academies. A January article by Bloomberg BNA quotes David Scott, the company’s senior vice president for talent and organizational effectiveness, as saying store managers can earn $170,000 a year without a college degree. “I started out at Wal-Mart as a stock boy myself,” Scott said.

      The report also cites Swiss Post International Holding AG, JPMorgan Chase & Co., Barclays Plc, CVS Health Corp., Expeditors International of Washington Inc., Hasbro Inc., State Street Corp., LifePoint Health Inc., and Chipotle Mexican Grill Inc., among others, for recognizing the value of applicants who lack a four-year degree.

      A few governors have taken the lead in addressing the problem in their states, Fuller says in an interview, citing John Hickenlooper of Colorado, Bill Haslam of Tennessee, and former Governor Jack Markell of Delaware. 

      People without a bachelor’s degree may need more training before digging into the job, but the cost of training is quickly recovered, and the training period itself can be a useful tryout, Fuller says, if it’s in the form of a paid internship, apprenticeship, or work-study program. “Asking for a bachelor’s degree is kind of a lazy man’s way of stipulating what you’re looking for,” he says. “When I witness the person doing the work, I’m making a hiring decision based on seeing a person over time, vs. looking at a résumé. The leading cause of failed hires for this type of job is a soft-skills deficit. For that, observation is invaluable.”

      Say what you want about American health care, but it’s ahead of many other sectors in suppressing credentialism. Nurse practitioners now perform many functions once reserved for physicians—including, in some states, writing prescriptions and even setting up their own practices. This is partly of necessity: There simply aren’t enough doctors to go around. But there’s nothing second-class about the care of a nurse practitioner. “I prefer being treated by them. Because they take their time. They might see me for 20 minutes, 30 minutes. If it’s something that’s complex, they’ll call in a physician,” says John Washlick, a Philadelphia lawyer who specializes in health care. His firm is Buchanan, Ingersoll & Rooney, based in Pittsburgh. 

      I also spoke with Gerald Chertavian, the founder and chief executive officer of Year Up, which trains urban young adults and places them in six-month internships that lead to jobs in finance and tech. Typical trainees go in earning $5,000 a year and come out earning $40,000 a year, Chertavian says. State Street alone has employed more than 500 of them. Employers find that hires from Year Up are staying three or four times as long as conventional hires out of four-year colleges—a major advantage given the high cost of recruiting and filling empty positions. 

      Chertavian says he came out of college with an economics major but no special skills. “I was a Chemical Bank trainee 30 years ago,” he says. “I benefited from at least eight to nine months of full-time classroom training that Chemical put into me.” Companies dropped a lot of their training programs to save money, but now the enlightened ones are reinstating them, he says.

      Harvard’s Fuller is right to focus on the folly of credentialism, Chertavian says. “These young people have the engines in the wings. They come as fully intact planes. But they’ve never been afforded the luxury of a runway.”

        Peter Coy
        Bloomberg Businessweek Columnist

        Peter Coy is the economics editor for Bloomberg Businessweek and covers a wide range of economic issues. He also holds the position of senior writer. Coy joined the magazine in December 1989 as telecommunications editor, then became technology editor in October 1992 and held that position until joining the economics staff. He came to BusinessWeek from the Associated Press in New York, where he had served as a business news writer since 1985.

        Read more: http://www.bloomberg.com/news/articles/2017-10-25/demanding-a-bachelor-s-degree-for-a-middle-skill-job-is-just-plain-dumb

        Opioid Billionaire’s Indictment Opens New Window on Epidemic

        More than a decade after opioid painkillers first exploded across the U.S., John Kapoor found an aggressive way to sell even more, according to prosecutors: He began bribing doctors to prescribe them.

        Speakers’ fees, dinners, entertainment, cash — federal charges unsealed Thursday claim Kapoor’s striving company, Insys Therapeutics Inc., employed all of that and more to spur prescriptions of a highly addictive fentanyl-based drug intended only for cancer patients.

        As President Donald Trump declared at a White House event that opioid abuse represents a public-health emergency, authorities arrested Kapoor in Arizona and painted a stark portrait of how Insys allegedly worked hand in glove with doctors to expand the market for the powerful agents.

        “Selling a highly addictive opioid-cancer pain drug to patients who did not have cancer makes them no better than street-level drug dealers,” Harold Shaw, the top FBI agent in Boston, said of Kapoor and other Insys executives charged earlier in the case.

        The story of the 74-year-old billionaire and the company he founded traces the arc of a crisis that claims 175 lives each day. What began with the over-prescription of painkillers in the late 1990s soon became a race by manufacturers to dispense more and more pills.

        Overdose Risks

        Charged with racketeering conspiracy and other felonies, Kapoor became the highest-ranking pharma executive to be accused of an opioid-related crime, and his arrest may portend charges against companies far larger than Insys, which has a modest $417 million market capitalization.

        In Connecticut, prosecutors have begun a criminal probe of Purdue Pharmaceutical Inc.’s marketing of OxyContin. Scores of states, cities and counties have sued companies including Purdue, Endo International Plc, and Johnson & Johnson’s Janssen Pharmaceuticals, alleging they triggered the opioid epidemic by minimizing the addiction and overdose risks of painkillers such as Percocet.

        But so far, no recent case has been so sweeping as the one against the executives including Kapoor, who made his initial court appearance late Thursday in Phoenix. A U.S. magistrate judge set bail at $1 million and ordered Kapoor to surrender his passport and submit to electronic monitoring. His lawyer, Brian Kelly, said Kapoor posted bail after the hearing.

        This week, a Rhode Island doctor admitted accepting kickbacks from Insys in exchange for writing prescriptions. Earlier this year, two doctors were sentenced to more than 20 years behind bars for accepting bribes from companies including Insys to sell fentanyl-based medications.

        The Kapoor indictment pinpoints the start of the alleged scheme.

        Oral Spray

        It was early 2012, and Insys’s new oral spray of the opioid fentanyl wasn’t selling well. Because it was so addictive, the pain-relief drug was subject to a tightly controlled distribution system, and regulators demanded to be notified about suspicious orders by manufacturers, wholesalers and pharmacies. And the drug wasn’t cheap, so insurers set up barriers for patients seeking it.

        That was when Kapoor and others at Insys went to extremes to dramatically boost sales of the painkiller, prosecutors said. Doling out speaker fees, marketing payments and food and entertainment perks, they allegedly began bribing doctors to prescribe the drug, and then tricked insurers into paying for it.

        One Insys sales executive told subordinates that it didn’t matter whether doctors were entertaining, according to the indictment: “They do not need to be good speakers, they need to write a lot of” Subsys prescriptions, the official said, referring to the brand name of the painkiller.

        Over a two-year period starting in 2013, Chandler, Arizona-based Insys set aside more than $12.2 million for doctors’ speaking fees, prosecutors said. One doctor received as much as $229,640 in speaker fees for appearing at what amounted to “sham events that were mere social gatherings also attended by friends and office staff,” according to the indictment.

        Friends, Family

        The company encouraged doctors to write more prescriptions by hiring their friends and family members to serve as “business liaisons’’ and “business-relation managers,’’ prosecutors said. These support-staff employees worked in the doctors’ offices but were paid by Insys in what the indictment called bribes and kickbacks.

        Insys even made a video featuring a sales rep dressed as a giant fentanyl spray bottle, rapping and dancing to a song that pushed the idea of getting doctors to prescribe higher doses, prosecutors said.

        Others previously charged include Michael Babich, Insys’s former CEO, Alec Burlakoff, the ex-vice president of sales, and Richard Simon, once the company’s national sales director. They all deny wrongdoing.

        Joe McGrath, an Insys spokesman, declined to comment on Kapoor’s indictment in Boston federal court. The company, which wasn’t charged, has reportedly been in settlement talks with the U.S. Justice Department to resolve a probe into its Subsys marketing. The company’s shares fell more than 22 percent to $5.74 in Nasdaq trading.

        The Lawyer Who Beat Big Tobacco Takes On the Opioid Industry

        The first person in his family to attend college, Kapoor rose from modest means in India to become a wealthy health-care entrepreneur, after earning a doctorate in medicinal chemistry at the University of Buffalo in 1972, according to a work-history the school posted.

        He was a plant manager at Invenex Laboratories in New York and later became chief executive officer of LyphoMed, a hospital-products company. He sold LyphoMed to Fujisawa Pharmaceuticals and formed a venture capital firm that invested in health-care companies.

        In 2010, he merged privately held Insys with NeoPharm Inc. to get access to technology to develop pain drugs for cancer patients. Even though he has stepped down as Insys’s chairman and chief executive officer, he still holds more than 60 percent of its stock.

        Kapoor and Babich are also accused of misleading insurers about patients’ diagnoses and the types of pain they suffered that were covered by the Subsys prescriptions tied to the payment scheme, prosecutors said.

        The company’s agents allegedly told insurers that patients were receiving Subsys for “breakthrough pain’’ to secure coverage. They also misled insurers about what other pain drugs patients had tried before being proscribed Subsys, according to the indictment.

        Some lower-level Insys employees have pleaded guilty and are cooperating with prosecutors, according to court papers. Elizabeth Gurrieri, a former manager who oversaw insurance reimbursements, pleaded guilty to one count of conspiring to commit wire fraud in June.

          Read more: http://www.bloomberg.com/news/articles/2017-10-26/insys-therapeutics-founder-charged-in-opioid-fraud-case

          Coming Soon to Washington: An Anti-Trump Hotel for Liberals

          The first thing you’ll see when you walk into Eaton Workshop, a hotel opening in late spring 2018 in Washington, is a custom-commissioned video art installation by AJ Schnack, shown on a series of vintage-style television screens. All day long, it’ll broadcast a montage of footage from the presidential elections of 2012 and 2016 that’s built around one pointed question: How did our country get where it is today?

          It’s not a subtle statement, and it’s not meant to be.

          In Trump’s Washington, Eaton is planting a clear flag as a haven for Democrats. It’s the world’s first politically motivated hotel, the flagship for a global brand that’s built around social activism and community engagement. And it comes with a pedigree: As the daughter of Ka Shui Lo, the creator and executive chairman of Hong Kong-based Langham Hospitality Group Ltd., founder Katherine Lo knows a thing or two about luxury hotels and world-class service.

          The Big Idea

          An artist’s rendering of the reception desk of the Eaton.
          Source: Gachot Studios

          Lo firmly believes that hotels ought to be catalysts for good. In a world where we can be conscious consumers—of everything from clothing to food to baby products—she argues there’s a place for conscious hotels, too. This isn’t a revolutionary idea: Already, 1 Hotels has built a small collection of luxury properties entirely around the idea of sustainability, and Shangri-La Hotels & Resorts has made a significant, brand-wide commitment to bolster community programming for disadvantaged children in all of its destinations. It’s one of many five-star brands that have a conscious ethos but choose not to flaunt it.

          Eaton Workshop is different. With a premise that’s built around liberal activism and civic engagement, the brand will weave a liberal philosophy into every aspect of the guest experience, some more obvious than others.

          Among the subtler points is the significance of the company’s name: a nod to the high-end shopping mall of that name in Montreal that captured the fascination of Ka Shui Lo when he fled the Cultural Revolution in China. The mall, says Katherine, was a beacon of freedom to her father—and when she found an archival photo bearing its old motto, “Progress and better living,” the two Eatons became forever intertwined.

          The Washington hotel—which has 209 rooms just north of the National Mall—will be the brand’s flagship, with a second location opening in Hong Kong in 2018 and new constructions set to rise in San Francisco and Seattle no sooner than 2019.

          A Hotel With an Agenda

          The lobby of the Eaton.
          Source: Gachot Studios

          Among the Washington location’s programming signatures will be a sort of TED talk series driven by the liberal agenda, consisting of fireside chats and rooftop lectures that Lo hopes will be free, open to the public, and streamable as Eaton-branded podcasts. Then comes the art program, which—aside from the political statement piece at check-in—will include commissions from at least a half-dozen up-and-coming local artists and a street-facing exhibition window curated in partnership with local museums and institutions. A co-working space will prioritize memberships for progressive startups, activists, and artists, while a wellness program will offer “inner-health-focused treatments” such as Reiki and sound baths, rather than facials and massages. (Some of these features will roll out a few months after the hotel opens.)

          Just as important, partners and staff will be brought on board, both for their skills in the food and beverage worlds and their activist track records. For instance, Lo saw the cocktail director of the famed Columbia Room, Derek Brown, as a perfect fit to be the hotel’s beverage director—not just because he’s won such awards as magazine’s Bartender of the Year but because he “cares deeply about social justice.” To wit, Brown actively champions policies that fight sexual harassment in the bartending industry and acts as chief spirit advisor for the National Archives.  

          Similarly, Lo says that the “amazing life story” of house chef Tim Ma “perfectly expresses our brand ethos.” The Chinese-American culinary up-and-comer was an engineer at the National Security Agency for years before discovering his true passion in food. At Eaton’s to-be-named restaurant, Ma is planning a menu with a heavy focus on vegetables from an on-site garden.

          A guest who does nothing other than check in, sleep atop Eaton’s organic mattresses, and check out will still have a sense of the hotel’s mission, says Lo. “We plan to have new ideas in the minibar—an activist toolkit, for example, that includes sheets with information to help you call your congresspeople. And if we’d been open during this year’s Women’s March, I could have seen us putting poster boards and markers in the rooms!”

          Political statements such as these will be tailored to each property. In Hong Kong, for instance, Lo says she’d like to replace Bibles in the nightstand drawers with copies of the United Nations Declaration for Human Rights.

          A Place for Thought Leaders (but Not All of Them)

          The library at the Eaton
          Source: Gachot Studios

          Lo understands that Eaton Workshop isn’t for everyone. “Self-selection is definitely one of our strategies,” she says about branding and marketing materials that directly appeal to the “woke” crowd. “We wanted to emphasize that it’s a place for people who are thinking outside the box and want to effect a change in the world,” she says.

          Though she repeatedly talks about fostering a culture of diversity and inclusion, Lo also tells Bloomberg that “the goal isn’t to bring together left and right.” Instead, she wants to create “a diversity of fields and backgrounds as well as gender and ethnicity.” In other words, her hotel should represent the antithesis of the Trump hotel that’s just a few blocks away, offering an intellectual playground to those who may feel marginalized by the current administration’s agenda.

          This is partisan politics playing out on the city’s hotel scene; whether that will hurt or help Lo’s bottom line remains to be seen. But if the Trump Hotel is any indication, Lo may be poised for big success. According to the , the president’s hotel brought in $1.97 million in profits during the first four months of the year, despite business projections that had forecast a loss of $2.1 million.

          “It’s Like a Non-Profit but Better”

          Though her goal is to create a successful, scalable business, Eaton Workshop is not built to pad Lo’s pockets. On the contrary, she sees the entire enterprise as a means to a philanthropic end, and hopes to use the hotel profits to fund community arts initiatives in the brand’s respective destinations. 

          Each location will have a radio station, cinema, and music venue so local talent can produce or showcase work in a state-of-the-art space at low—or no—cost. In Washington, the building’s history as a printing venue has inspired Lo to create a writer’s residency, where investigative reporters can be hosted on site for several months while pursuing important stories.

          Artists will be invited to create short films, podcasts, or other types of content under the emblem of Eaton’s in-house multimedia studio; the results will be available for guests to stream on personal devices, and each piece will feature a clear activist message and a call to action.

          “We’re hoping that our hotel revenues will propel our creative projects,” says Lo, who likens the hotel to “a non-profit, but better.” Still, room rates won’t be extravagant; prices in Washington are likely to hover in the upper $200s. Thankfully, for members of both political parties—who are, no doubt, tired of dropping Benjamins for vodka drinks at the Trump International—the price of a martini should be less radical.

            Read more: http://www.bloomberg.com/news/articles/2017-11-13/coming-soon-to-washington-an-anti-trump-hotel-for-liberals

            Bill Gates announces major donation to advance the fight against Alzheimer’s

            Bill Gates speaks speaks at the Goalkeepers 2017 event on Sept. 20, 2017, in New York City.
            Image: Jamie McCarthy / Getty Images for Bill & Melinda Gates Foundation

            Bill Gates just donated a piece of his fortune to advance the fight against Alzheimer’s disease.

            The philanthropist and Microsoft founder announced in a blog post Monday that he will give $50 million to the Dementia Discovery Fund, a public-private partnership that invests in innovative dementia research. Gates will also donate another $50 million in startups working in Alzheimer’s research.

            Through the Bill and Melinda Gates Foundation, Gates has a long track record of supporting research to eradicate diseases like malaria and polio. But Alzheimer’s disease, which is the most common form of dementia that progressively affects memory and other brain functions, is the first noncommunicable disease he’s fighting.

            The $100 million is his own investment, not his foundation’s. That’s, in part, because it’s personal. 

            “This is something I know a lot about, because men in my family have suffered from Alzheimer’s.”

            “It’s a terrible disease that devastates both those who have it and their loved ones,” Gates wrote in his blog post. “This is something I know a lot about, because men in my family have suffered from Alzheimer’s. I know how awful it is to watch people you love struggle as the disease robs them of their mental capacity, and there is nothing you can do about it. It feels a lot like you’re experiencing a gradual death of the person that you knew.”

            Alzheimer’s disease is the sixth-leading cause of death in the United States, according to the Alzheimer’s Association. An estimated 5.5 million Americans live with Alzheimer’s, and someone new develops the disease every 66 seconds. People of all ages are affected, but 1 in 3 seniors dies with Alzheimer’s or another form of dementia.

            Gates said he spent the last year learning everything he could about Alzheimer’s disease, speaking with researchers, academics, and other industry experts. Those conversations led him to focus on five areas: understanding how the disease unfolds, figuring out how to detect it earlier, funding more innovative and lesser-known drug trials, making it easier for people to enroll in clinical trials, and using data to inform better approaches.

            Gates’ investment in the Dementia Discovery Fund will help support startups as it explores “less mainstream approaches to treating dementia,” he explained.

            “The first Alzheimer’s treatments might not come to fruition for another decade or more, and they will be very expensive at first. Once that day comes, our foundation might look at how we can expand access in poor countries,” Gates wrote, explaining how he might look at the issue beyond his personal investment in the future.

            The announcement is timely, coinciding with National Alzheimer’s Disease Awareness Month in November. The goal of the month is to increase awareness and drive home the fact that as many as 16 million people could live with Alzheimer’s disease by the year 2050.

            “People should be able to enjoy their later years — and we need a breakthrough in Alzheimer’s to fulfill that,” Gates said. “I’m excited to join the fight and can’t wait to see what happens next.”

            Read more: http://mashable.com/2017/11/13/bill-gates-alzheimers-disease-donation/

            Get Rid of Capitalism? Millennials Are Ready to Talk About It

            One of the hottest tickets in New York City this weekend was a discussion on whether to overthrow capitalism.

            The first run of tickets to “Capitalism: A Debate” sold out in a day. So the organizers, a pair of magazines with clear ideological affiliations, socialist and libertarian , found a larger venue: Cooper Union’s 960-capacity Great Hall, the site of an 1860 antislavery speech by Abraham Lincoln. The event sold out once again, this time in eight hours.

            The crowd waiting in a long line to get inside on Friday night was mostly young and mostly male. Asher Kaplan and Gabriel Gutierrez, both 24, hoped the event would be a real-life version of the humorous, anarchic political debates on social media. “So much of this stuff is a battle that’s waged online,” said Gutierrez, who identifies, along with Kaplan, as a “leftist,” if not quite a socialist.

            These days, among young people, socialism is “both a political identity and a culture,” Kaplan said. And it looks increasingly attractive.

            Young Americans have soured on capitalism. In a Harvard University poll conducted last year, 51 percent of 18-to-29 year-olds in the U.S. said they opposed capitalism; only 42 percent expressed support. Among Americans of all ages, by contrast, a Gallup survey last year found that 60 percent held positive views of capitalism.

            A poll released last month found American millennials closely split on the question of what type of society they would prefer to live in: 44 percent picked a socialist country, 42 percent a capitalist one. The poll, conducted by YouGov and the Victims of Communism Memorial Foundation, found that 59 percent of Americans across all age groups preferred to live under capitalism.

            “I’ve seen the failings of modern-day capitalism,” said Grayson SussmanSquires, an 18-year-old student at Wesleyan University who had turned up for the capitalism debate. To him and many of his peers, he said, the notion of well-functioning capitalist order is something recounted only by older people. He was 10 when the financial crisis hit, old to enough to watch his older siblings struggle to get jobs out of college. In high school, SussmanSquires said, he volunteered for the presidential campaign of Vermont Senator Bernie Sanders, a self-described socialist. “It spoke to me in a way nothing had before,” he said.

            Although debate attendees leaned left, several expressed the desire to have their views challenged by the pro-capitalist side. “It’s very easy to exist in a social group where everyone has the same political vibe,” Kaplan said.

            “I’m immersed in one side of the debate,” said Thomas Doscher, 26, a labor organizer who is studying for his LSATs. “I want to hear the other side.”

            The debate pitted two socialist stalwarts, Jacobin founder Bhaskar Sunkara and New York University professor Vivek Chibber, against the defenders of capitalism, Katherine Mangu-Ward, Reason’s editor in chief, and Nick Gillespie, the editor in chief of Reason.com and Reason TV.

            And it was the attempt to rebuff criticism of capitalism that mostly riled up the crowd.

            Chibber argued that the problem with capitalism is the power it has over workers. With the weakening of U.S. labor unions, “we have a complete despotism of the employers,” he said, leading to stagnant wages. When Mangu-Ward countered that Americans aren’t coerced on the job, the crowd erupted in laughter. “Every morning you wake up and you have a decision about whether or not you’re going to go to work,” she insisted, and the audience laughed again.

            Sunkara summed up his argument for socialism as a society that helped people tackle the necessities of life—food, housing, education, health care, childcare. “Wherever we end up, it won’t be a utopia,” he said. “It will still be a place where you might get your heart broken,” or feel lonely, or get indigestion.

            Mangu-Ward replied: “Capitalism kind of [fixes] those things, actually.” There’s the app Tinder to find dates, and Pepto Bismol to cure your upset stomach. “Those are the gifts of capitalism,” she said.

            The arguments stayed mostly abstract. Sunkara and Chibber insisted their idea of democratic socialism shouldn’t be confused with the communist dictatorships that killed millions of people in the 20th century. Mangu-Ward and Gillespie likewise insisted on defending a capitalist ideal, not the current, corrupt reality. “Neither Nick nor I are fans of big business,” she said. “We’re not fans of crony capitalism.”

            Talking theory left little time to wrestle with concrete problems, such as inequality or climate change. That frustrated Nathaniel Granor, a 31-year-old from Brooklyn who said he was worried about millions of people being put out of work by automation such as driverless vehicles.

            “It didn't touch on what I feel is the heart of the matter,” Granor said. Both capitalism and socialism might ideally be ways to improve the world, he concluded, but both can fall short when applied in the real world. 

              Read more: http://www.bloomberg.com/news/articles/2017-11-06/get-rid-of-capitalism-millennials-are-ready-to-talk-about-it

              TripAdvisor apologizes for deleting warnings of rape

              Kristie Love's TripAdvisor review on her vacation in Riviera Maya, Mexico was deleted.
              Image: Darren Carroll/Getty ImageS

              TripAdvisor has apologized to a sexual assault survivor after an investigation revealed the website had deleted posts alleging assaults at resorts in Mexico. The belated apology comes seven years after the attack.

              The Milwaukee Journal Sentinel shared the story of Kristie Love, who had posted on TripAdvisor about her rape at an Iberostar resort in Riviera Maya, Mexico. Love said she had her post removed several times. 

              “Since 2010, when the forum post was removed, our policies and processes have evolved to better provide information like this to other travelers. As a result, when recently brought to our attention, the victim’s initial forum post was republished by our staff,” TripAdvisor wrote in a statement. 

              But it wasn’t just Love. The several-month-long investigation revealed more than a dozen travelers had their posts on TripAdvisor removed for similar reasons. In fact, three people reported being sexually assaulted or raped at the same resort in Mexico and subsequently had their TripAdvisor posts deleted. 

              The problem stems from TripAdvisor’s content moderation. Other crowdsourced review sites like Yelp and social networks like Facebook and Twitter face similar problems with deciding what violates their policies. Mistakes are frequently made. TripAdvisor also tries to manage any hearsay, but the policy appears to inconsistently enforced. 

              “To me, it’s like censoring,” Wendy Avery-Swanson told the Journal Sentinel. She had a post about her blacking out from alcohol served at a swim-up bar removed.

              TripAdvisor provided several different reasons at the time for why their reviews were removed. One instance claimed the post contained language or was about a topic that was not “family friendly.” 

              According to TripAdvisor, the site does allow for negative reviews and stories like Love’s and Avery-Swanson’s. Specifically, its interpretation of the family-friendly guidelines has changed since Love’s review was removed in 2010. 

              “We recognized then that our previous guidelines went too far.”

              “At the time, we had a policy whereby we judged content to be in breach of our guidelines if it did not adhere to family friendly language. More than 7 years ago that meant all language needed to be G-rated. … We recognized then that our previous guidelines went too far in preventing information like this from being shared,” a TripAdvisor spokesperson told Mashable in an email.

              “A simple search of TripAdvisor will show numerous reviews from travelers over the last several years who wrote about their first-hand experiences that include matters of robbery or theft, assault and rape,” the spokesperson continued. 

              It’s worth noting that TripAdvisor’s business model in part relies on users booking through its website. TripAdvisor denied any link between how its content guidelines are applied and its commercial relationships.

              TripAdvisor boasts more than 535 million reviews on hotel, airlines, restaurants, and local attractions. Unlike other companies that help with direct booking like Airbnb, airlines, and hotels, TripAdvisor doesn’t verify that reviews or forum posts are written by people who actually experienced what they wrote about.

              The tech company follows its own publishing guidelines and employs about 300 people to moderate posts and ensure “content integrity,” a spokesperson told the Journal Sentinel. TripAdvisor also relies on software to detect fake reviews. 

              The alleged censorship may fall outside of TripAdvisor’s offices, however. As the Journal Sentinel notes, TripAdvisor allows non-employees known as “trusted community members” to remove posts. The company declined to disclose who they are or how they are chosen but said they are “trusted, highly rated users and volunteers drawn from the global travel community.”  

              TripAdvisor added that these privileges can be removed if a member is “overly promoting” their businesses. These volunteers are unable to remove reviews but do moderate forum posts. 

              After the Journal Sentinel report, TripAdvisor said it is making changes. For example, Love’s post has been reinstated. The site is also creating a “badge” notification that will alert users to health, safety, and discrimination issues. This designation will be based on media reports and other credible sources, TripAdvisor said.

              “We’re currently going through additional quality assurance testing, and expect it to be launched before the end of the year,” a TripAdvisor spokesperson told Mashable

              This post was updated with additional insight from TripAdvisor.

              Read more: http://mashable.com/2017/11/02/tripadvisor-deleted-warnings-rapes-mexico-resorts-journal-sentinel/

              Americans Are Officially Freaking Out

              For those lying awake at night worried about health care, the economy, and an overall feeling of divide between you and your neighbors, there’s at least one source of comfort: Your neighbors might very well be lying awake, too.

              Almost two-thirds of Americans, or 63 percent, report being stressed about the future of the nation, according to the American Psychological Association’s Eleventh Stress in America survey, conducted in August and released on Wednesday.  This worry about the fate of the union tops longstanding stressors such as money (62 percent) and work (61 percent) and also cuts across political proclivities. However, a significantly larger proportion of Democrats (73 percent) reported feeling stress than independents (59 percent) and Republicans (56 percent).

              The “current social divisiveness” in America was reported by 59 percent of those surveyed as a cause of their own malaise. When the APA surveyed Americans a year ago, 52 percent said they were stressed by the presidential campaign. Since then, anxieties have only grown.

              A majority of the more than 3,400 Americans polled, 59 percent, said “they consider this to to be the lowest point in our nation’s history that they can remember.” That sentiment spanned generations, including those that lived through World War II, the Vietnam War, and the terrorist attacks of Sept. 11. (Some 30 percent of people polled cited terrorism as a source of concern, a number that’s likely to rise given the alleged terrorist attack in New York City on Tuesday.)

              “We have a picture that says people are concerned,” said Arthur Evans, APA’s chief executive officer. “Any one data point may not not be so important, but taken together, it starts to paint a picture.”

              The survey didn’t ask respondents specifically about the administration of President Donald Trump, Evans said. He points to the “acrimony in the public discourse” and “the general feeling that we are divided as a country” as being more important than any particular person or political party.

              Yet he and the study note that particular policy issues are a major source of anxiety. Some 43 percent of respondents said health care was a cause. The economy (35 percent) and trust in government (32 percent) also ranked highly, as did hate crimes (31 percent) and crime in general (31 percent). 

               

              “Policymakers need to understand that this is an issue that is important to people, that the uncertainty is having an impact on stress levels, and that stress has an impact on health status,” Evans said, pointing out that the relationship between stress and health is well-established

              • And keeping up with the latest developments is a source of worry all its own. Most Americans—56 percent—said they want to stay informed, but the news causes them stress. (Yet even more, 72 percent, said “the media blows things out of proportion.”)

              The APA survey did find, however, that not everyone is feeling the same degree of anxiety. Women normally report higher levels of stress than men, though worries among both genders tend to rise or fall in tandem. This year, however, they diverged: On a 10-point scale, women reported a slight increase in stress, rising from an average 5.0 in 2016 to 5.1 in 2017, while the level for men dropped, from an average 4.6 to 4.4. 

              Racial divides also exist in reported stress. While the levels among blacks and Hispanics were lower in 2016 than the year before, they rose for both groups in 2017, to 5.2 for Hispanic adults and 5.0 for black adults. Among whites, meanwhile, the average remained the same, at 4.7. 

              The report also notes that many Americans are finding at least one healthy way to feel better: 53 percent reported exercising or doing other physical activity to cope. Social support is also important,  Evans said. “Third,” he says, “I think it’s really important for people to disconnect from the constant barrage of information.” 

              1. The 2017 Stress in America survey was conducted by the Harris Poll on behalf of the APA. It was conducted online between Aug. 2 and Aug. 31, and had 3,440 participants, all ages 18 and up living in the U.S. It included 1,376 men, 2,047 women, 1,088 whites, 810 Hispanics, 808 blacks, 506 Asians and 206 Native Americans. Data were then weighted by age, gender, race/ethnicity, region, education and household income to reflect America's demographics accurately. Interviews were conducted in English and Spanish.

              Read more: http://www.bloomberg.com/news/articles/2017-11-01/americans-are-officially-freaking-out

              Banks Pine for Loan Growth as Clients Wait on Trumps Promises

              President Donald Trump’s pledges to overhaul taxes, trade, infrastructure and health care may thrill some corporate leaders, but it’s causing many to delay expansions. That’s bad for banks.

              Lending growth probably decelerated for a fourth straight quarter in the three months ended Sept. 30 across more than a dozen of the biggest U.S. banks, according to Royal Bank of Canada analysts and Bloomberg calculations. Their total loans may have ticked up just 1.8 percent, the smallest increase in more than two years, as commercial and industrial customers held off on buying equipment and building plants.

              Executives are “hesitant to borrow in the face of uncertainty,” said Jason Goldberg, an analyst at Barclays Plc. “Whether it’s potential tax reform, health-care uncertainties, or they’re unclear what infrastructure spending is going to look like, you’ve definitely seen corporates take a pause.”

              Washington’s inaction has been frustrating bankers for months, a sentiment that may surface anew when they start posting quarterly results this week. During the last round in July, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon lashed out, saying, “There would be much stronger growth if there were more intelligent decisions and less gridlock.” In June, Bank of America Corp. Chief Operating Officer Thomas Montag said corporate clients need clarity to make big investment decisions.

              Trump and his top economic adviser, Gary Cohn, have said they expect the financial industry to help fund growth. But instead, a dearth of progress on big legislation has stymied that business.

              Congressional Republicans spent much of September trying to resurrect a failed health-care bill. Then Trump told lawmakers his $1 trillion infrastructure plan may not rely on public-private partnerships, potentially throwing a wrench into a key priority. The president also released a tax plan that many analysts consider unlikely to win support until designers can prove it won’t balloon the federal deficit.

              For banks, the uncertainties are compounding challenges in lending, which also is being constrained by tighter regulation and slower-than-expected interest-rate hikes — factors that have crimped trading revenue too. Low yields have encouraged firms to issue bonds and use the proceeds to repay bank loans, said Alison Williams, an analyst at Bloomberg Intelligence. U.S. Bancorp CEO Andrew Cecere addressed the challenges at an investor conference last month.

              “With the low yield curve, there was a lot of debt issuance, and that debt issuance was used to pay down some bank lending,” he said. In addition, “there was some more uncertainty that entered the market because of some of the slowdown in the perceived timing of tax policy and trade policy and regulation,” slowing companies’ capital expenditures.

              ‘Mental Signal’

              Corporate executives’ outlook for the next six to 12 months deteriorated in July and August, with some respondents citing heightened policy uncertainty, the Federal Reserve Bank of Chicago said last month. The number of workers on U.S. payrolls declined in September for the first time since 2010, reflecting major disruptions from hurricanes Harvey and Irma.

              For now, bank investors are willing to look beyond that. The 24-company KBW Bank Index surged more than 30 percent from the November election to early March on optimism that Trump’s administration will eventually ease bank regulation, reignite inflation and drive up interest rates. The rally resumed in September as attention shifted to taxes.

              “People were underweight financials for a long time,” said Chris Whalen, an independent analyst and consultant. “When Trump got elected that was a mental signal for these guys that we should increase our allocation.”

              Investors continue to see reasons for optimism. Trump’s plan to cut corporate tax rates would be particularly beneficial for banks, whose burdens are often elevated by a lack of deductions. The six largest U.S. banks could see net income rise $6.4 billion under the administration’s proposal. And lenders still produce big profits. JPMorgan generated $26.5 billion in the 12 months through June, a record for any U.S. bank.

              Mortgage, Autos

              Yet expectations for the third quarter are measured. JPMorgan, the nation’s largest bank, may say Oct. 12 that adjusted profit rose 2 percent to $5.89 billion, according to analysts surveyed by Bloomberg. At Citigroup Inc., set to report the same day, profit probably slipped 1 percent to $3.57 billion.

              Wells Fargo & Co. and Bank of America report the following day and Goldman Sachs Group Inc. and Morgan Stanley release earnings next week.

              There are other reasons for concern. While consumers are still borrowing more, there’s mounting evidence they’re becoming less reliable, potentially ending a period in which losses were low. Credit cards face heightened competition, while an overheated auto market has led some lenders like Wells Fargo to pull back.

              And for mortgage lending, a big driver for banks in the run-up to the 2008 financial crisis, new rules have made it more difficult to make money. Survivors have been buying loans from smaller “correspondent” lenders, a strategy that’s started to run out of room.

              “You will see some pain this quarter,” Whalen said. “JPMorgan and Wells Fargo have been bidding aggressively.”

              Trading Declines

              Trading also is expected to be down, in part because the lack of congressional action has left clients with few reasons to buy or sell. Executives from JPMorgan, Citigroup and Bank of America told investors last month to expect declines ranging from 15 percent to 20 percent in the third quarter from the same period a year ago.

              That may leave investors and analysts looking past this quarter’s results to the end of the year, when lawmakers may have more progress to show on tax policy and other priorities.

              “Banks tend to be more optimistic looking out than they are in the current quarter, so we’ll see,” Barclays’s Goldberg said. “Pipelines are good. At the end of the day though, loan growth is a reflection of the economy and economic growth has been a little bit more subdued than desired.”

                Read more: https://www.bloomberg.com/news/articles/2017-10-09/banks-pine-for-loan-growth-as-clients-wait-on-trump-s-promises