Hospital fraud: Guess this helps explain all those ambulances dropping off homeless patients in Skid Row. Hospitals in L.A. and OC were allegedly processing thousands of indigents who did not need care, and then billing Medicare and Medi-Cal. The massive scheme involved street-level operatives who apparently came up with the patients - as well as Dr. Rudra Sabaratnam, CEO of City of Angels Medical Center, who faces criminal charges. From the LAT:
Some of the homeless patients involved received tests or treatments that were potentially harmful, authorities said. The "depravity" of the alleged scheme startled authorities, said Salvador Hernandez, assistant director in charge of the FBI's Los Angeles office. "The defendants are accused of preying on the homeless and exploiting their desperate conditions for personal gain," he said.
In addition to City of Angels, agents earlier Wednesday swarmed Los Angeles Metropolitan Medical Center and Tustin Hospital and Medical Center in Orange County. Pacific Health Corp., which owns both hospitals, said in a statement that it had cooperated with authorities and believed it would be cleared of any illegal conduct.
Rebate checks running out?: Discounters like Costco and Wal-Mart fared the best last month, and some non-discounters, like J.C. Penney and Gap, said second-quarter earnings will be stronger than expected. But July's overall same-store sales numbers fell short of expectations. "With the end of the stimulus checks, we know consumers are spending more cautiously," said Eduardo Castro-Wright, head of Wal-Mart's U.S. operations. Of the 33 retailers that had reported same-store sales results this morning, only 39 percent topped analyst estimates, while 61 percent fell short. (CNBC, WSJ)
Stocks take dip: The Dow is off more than 100 points in early trading. An unexpected jump in jobless claims and those not-so-great retail numbers are being cited.
Defaults piling up: Mortgages from the first half of 2007 are collapsing at a faster pace than the ones in 2006 (and those weren't anything to write home about). Until the bad loans are fully digested, "foreclosures will remain at record highs, the financial system will be under severe stress and the broader economy will sputter," Mark Zandi, chief economist of Moody's Economy.com., told the WSJ. At least loans originated in the fourth quarter of 2007 and early 2008 appear to be performing better.
Economists and industry officials say several factors may account for the dismal performance of the class of 2007. Home prices were falling sharply in much of the country by 2007, meaning many borrowers who took out loans in that year for nearly the full price of the home now owe more than the home is worth. These borrowers are particularly vulnerable to a weakening economy, and have difficulty selling or refinancing if they lose their job. Questionable business practices may have played a role, too.
Movie-going takes dip: Or so says a new study that challenges the conventional wisdom about Hollywood being recession proof. L.A. market research firm Interpret found that 52 percent of those surveyed said they were seeing fewer movies at the multiplex, compared with 35 percent of respondents who said they were attending fewer live sports events. Film admissions so far this year are down 3.3 percent from 2007 - despite the current success of the Batman film "The Dark Knight." From the WSJ:
About 68% of those surveyed said that they had recently decreased the amount of money they spend on entertainment. Consumers seem to save by staying home; only 5% of respondents said they are seeing more movies at the theater, though half of the respondents said they are watching more television at home. The only leisure activity that respondents said they were doing less of besides going to the movies was dining out (63%). And when asked if they had decided not to buy one of seven specific items in the last six months because of "concern over the economy," more respondents chose movie ticket than a range of options, including a car, DVD, videogame system and house.
Local bank in trouble: Regulators have ordered Vineyard National Bank of Corona to stop accepting brokered deposits, the volatile hot-money accounts that chase after the highest-yielding CDs. Vineyard has $2 billion in deposits - that's quite small - and branches in Orange, Los Angeles, Marin, Riverside, San Bernardino and San Diego counties. It's been hit hard by the real estate crunch. (LAT)
No smoking proposal: The ban would cover lighting up on restaurant patios, outside office towers, and in hotel lobbies. Councilman Bernard Parks plans to introduce the measure on Friday, and if approved L.A. would become the largest U.S. city to adopt a comprehensive smoking ban for all public places. Such a ban is already in place in Bev Hills, Burbank, Calabasas and Santa Monica. (LABJ)