Treasury Will Not Mint $1 Trillion Coin to Raise Debt Ceiling





WASHINGTON — The Treasury Department said Saturday that it will not mint a trillion-dollar platinum coin to head off an imminent battle with Congress over raising the government’s borrowing limit.


“Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” Anthony Coley, a Treasury spokesman, said in a written statement.


The Obama administration has indicated that the only way for the country to avoid a cash-management crisis as soon as next month is for Congress to raise the “debt ceiling,” which is the statutory limit on government borrowing. The cap is $16.4 trillion.


“There are only two options to deal with the debt limit: Congress can pay its bills, or it can fail to act and put the nation into default,” Jay Carney, the White House press secretary, said in a statement. “Congress needs to do its job.”


In recent weeks, some Republicans have indicated that they would not agree to raise the debt limit unless Democrats agreed to make cuts to entitlement programs like Social Security.


The White House has said it would not negotiate spending cuts in exchange for Congressional authority to borrow more, and it has insisted that Congress raise the ceiling as a matter of course, to cover expenses already authorized by Congress. In broader fiscal negotiations, it has said it would not agree to spending cuts without commensurate tax increases.


The idea of minting a trillion-dollar coin drew wide if puzzling attention recently after some bloggers and economic commentators had suggested it as an alternative to involving Congress.


By virtue of an obscure law meant to apply to commemorative coins, the Treasury secretary could order the production of a high-denomination platinum coin and deposit it at the Federal Reserve, where it would count as a government asset and give the country more breathing room under its debt ceiling. Once Congress raised the debt ceiling, the Treasury secretary could then order the coin destroyed.


Mr. Carney, the press secretary, fielded questions about the theoretical tactic at a news conference last week. But the idea is now formally off the table.


The White House has also rejected the idea that it could mount a challenge to the debt ceiling itself, on the strength of the Fourteenth Amendment to the Constitution, which holds that the “validity of the public debt” of the United States “shall not be questioned.”


The Washington Post earlier published a report that the Obama administration had rejected the platinum-coin idea.


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DWP will allow customers to sell back excess solar energy









Los Angeles Department of Water and Power customers for the first time will be able to sell back excess solar energy created on rooftops and parking lots under a new program approved Friday by the city utility's board of commissioners.


Described as the largest urban rooftop solar program of its kind in the nation, the so-called feed-in-tariff program would pay customers 17 cents per kilowatt hour for energy produced on their own equipment. The DWP has already accepted more than a dozen applicants and will be taking dozens more as it accepts contracts for up to 100 megawatts of solar power through 2016.


Environmentalists, business supporters and solar vendors were thrilled by the vote. Feed-in-tariff programs help generate jobs and economic activity while decreasing greenhouse gas emissions, they say.





"Today's vote is a major step forward for the economic and environmental sustainability of Los Angeles," said Mary Leslie, President of the Los Angeles Business Council, a group advocating the Clean LA Solar program since 2009.


Fred Pickel, the city's ratepayer advocate, told commissioners that 17 cents per kilowatt hour was above market rates and could force significant rate increases on DWP customers. Higher DWP bills could drive jobs away, Pickel told the board.


But the board unanimously decided to move ahead, and to reassess the program at regular intervals.


In March, the commission will decide whether to add an additional 50 megawatts of energy to the buyback program. The full 150-megawatt program would create enough solar energy to power 34,000 Los Angeles homes, advocates say.


Once qualified, DWP customers with large multi-family dwellings, warehouses, school facilities and parking lots can sell solar energy at 17 cents per kilowatt hour. The DWP is offering a tiered-pricing schedule that drops to 13 cents per kilowatt hour as energy contracts are reserved, DWP officials said.


Single-family homes generally don't produce enough energy to qualify.


Some of the contracts will be set aside for smaller solar producers to give them a better shot at winning slots, officials said. Customers participating in other solar-incentive initiatives, such as net-metering, do not qualify for the buyback contracts, DWP officials said.


Environmental groups have long pushed for a feed-in-tariff, arguing that it would spur more commercial property owners to go solar. Sacramento and San Diego have their own versions, and Florida is experimenting with buybacks.


Evan Gillespie, campaign representative for the Sierra Club's Beyond Coal Campaign, said the vote will allow the DWP to curtail its dependence on out-of-state energy generators. In addition, it promises 4,500 jobs and $500,000 in new economic activity for the city, he said.


"In the 21st century, it is simply unacceptable for 40% of L.A.'s energy to come from aging out-of-state polluting coal-fired power plants,'' Gillespie said.


Following the vote, Toronto-based Solar Provider Group announced that it would expand its operations in Los Angeles by opening an office and hiring 30 people. The company plans to invest up to $50 million by the end of 2016, said president Christian Wentzel.


"This program provides us with the stability we need to enter the U.S. solar market,'' he said.


DWP staffers recommended a 17-cents-per-kilowatt-hour rate as a starting point to reflect the relatively higher cost of buying solar energy compared to other commodities. The cost of getting the program up and running will raise the average residential monthly electric bill by about 4 cents, according to a staff report.


The DWP will hire an administrator and about 30 other people to operate the program, but most of those costs will be reimbursed by program participants, the report said.


Expanding local solar power is a key strategy for the DWP to meet the state-mandated renewable energy level of 33% by 2020.


catherine.saillant@latimes.com





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Evan Rachel Wood expecting first child with actor Jamie Bell






LOS ANGELES (Reuters) – Actress Evan Rachel Wood said on Friday that she and her husband, British actor Jamie Bell, are expecting their first child.


“Thanks for all your warm wishes,” Wood, 25, wrote on her Twitter account. “We are very happy. I’m gonna be a mama!”






Moments earlier, Wood posted a picture of the pregnancy book “What to Expect When You’re Expecting” on the social media site.


It will be the first child for both Wood and Bell, who wed in October.


Wood rose to Hollywood stardom for her roles in 2008′s “The Wrestler” and the 2003 coming-of-age drama “Thirteen.” She was nominated for an Emmy award for the 2011 television mini-series “Mildred Pierce.”


Bell, 26, found fame as the teen star of “Billy Elliot,” about a ballet dancer growing up in a tough coal mining town in northern England. He won a British BAFTA award for the role and has since appeared in adventure movies such as “The Eagle.”


(Reporting by Eric Kelsey; editing by Philip Barbara)


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Makers of Violent Video Games Marshal Support to Fend Off Regulation





WASHINGTON — With the Newtown, Conn., massacre spurring concern over violent video games, makers of popular games like Call of Duty and Mortal Kombat are rallying Congressional support to try to fend off their biggest regulatory threat in two decades.







Alex Wong/Getty Images

Vice President Joseph R. Biden Jr. meeting Friday with video game industry executives, a response to last month's massacre.







The $60 billion industry is facing intense political pressure from an unlikely alliance of critics who say that violent imagery in video games has contributed to a culture of violence. Vice President Joseph R. Biden Jr. met with industry executives on Friday to discuss the concerns, highlighting the issue’s prominence.


No clear link has emerged between the Connecticut rampage and the gunman Adam Lanza’s interest in video games. Even so, the industry’s detractors want to see a federal study on the impact of violent gaming, as well as cigarette-style warning labels and other measures to curb the games’ graphic imagery.


“Connecticut has changed things,” Representative Frank R. Wolf, a Virginia Republican and a frequent critic of what he terms the shocking violence of games, said in an interview. “I don’t know what we’re going to do, but we’re going to do something.”


Gun laws have been the Obama administration’s central focus in considering responses to the shootings. But a violent media culture is being scrutinized, too, alongside mental health laws and policies.


“The stool has three legs, and this is one of them,” Mr. Wolf said of violent video games.


Studies on the impact of gaming violence offer conflicting evidence. But science aside, public rhetoric has clearly shifted since the shootings, with politicians and even the National Rifle Association — normally a fan of shooting games — quick to blame video games and Hollywood movies for inuring children to violence.


“I don’t let games like Call of Duty in my house,” Gov. Chris Christie of New Jersey said this week on MSNBC. “You cannot tell me that a kid sitting in a basement for hours playing Call of Duty and killing people over and over and over again does not desensitize that child to the real-life effects of violence.”


Residents in Southington, Conn., 30 miles northeast of Newtown, went so far as to organize a rally to destroy violent games. (The event was canceled this week.) Mr. Biden, meeting with some of the industry’s biggest manufacturers and retailers, withheld judgment on whether graphic games fuel violence. But he added quickly, “You all know the judgment other people have made.”


Industry executives are steeling for a political battle, and they have strong support from Congress as well as from the courts.


Industry representatives have already spoken with more than a dozen lawmakers’ offices since the shootings, urging them to resist threatened regulations. They say video games are a harmless, legally protected diversion already well regulated by the industry itself through ratings that restricting some games to “mature” audiences.


With game makers on the defensive, they have begun pulling together scientific research, legal opinions and marketing studies to make their case to federal officials.


“This has been litigated all the way to the Supreme Court,” Michael Gallagher, chief executive of the industry’s main lobbying arm, said in an interview, referring to a 2011 ruling that rejected a California ban on selling violent games to minors on First Amendment grounds.


Twenty years ago, with graphic video games still a nascent technology, manufacturers faced similar threats of a crackdown over violent games. Even Captain Kangaroo — Bob Keeshan — lobbied for stricter oversight. The industry, heading off government action, responded at that time by creating the ratings labels, similar to movie ratings, that are ubiquitous on store shelves today.


This time, with a more formidable presence in Washington, the industry is not so willing to discuss voluntary concessions.


Game makers have spent more than $20 million since 2008 on federal lobbying, and millions more on campaign donations.


Mr. Gallagher’s group, the Entertainment Software Association, has five outside lobbying firms to push its interests in Washington. And the industry has enjoyed not only a hands-off approach from Congress, which has rejected past efforts to toughen regulations, but also tax breaks that have spurred sharp growth.


Game makers even have their own bipartisan Congressional caucus, with 39 lawmakers joining to keep the industry competitive.


Michael D. Shear contributed reporting.



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Court Says Pfizer Can Be Sued by Man Who Took Generic


The Alabama Supreme Court ruled on Friday that a patient could sue a brand-name company for failing to warn about a drug’s risks even though he had taken a generic version of the product that the company did not make.


Although the decision applies only to Alabama, it is likely to be closely read by lawyers with similar cases pending around the country whose clients have been barred from suing generic companies because of a recent United States Supreme Court ruling.


“It has national implications,” said Bill Curtis, a Dallas lawyer who has filed hundreds of similar cases in several states. “I suspect that now, like most folks, if a client comes into my office, I’d be suing both the generic they took and the brand who’s responsible for the label.”


In the Alabama case, the plaintiff, Danny Weeks, claimed that he had developed a movement disorder known as tardive dyskinesia after taking generic versions of Reglan to treat his acid reflux. Mr. Weeks sued Actavis and Teva, the generic companies that made the drugs he took, as well as Wyeth, which developed the drug, for failing to adequately warn about Reglan’s risks.


In 2009, the Food and Drug Administration required all manufacturers of metoclopramide, the generic name for Reglan, to place stronger warnings on their labels detailing a link between long-term use of the drug and tardive dyskinesia. Hundreds of lawsuits have been filed by patients who claim that Wyeth failed to properly warn about Reglan’s risks.


The chances of those claims against the generic companies succeeding are unclear after a 2011 Supreme Court decision, Pliva v. Mensing, which ruled that generic drug companies had no control over what their labels said and so could not be sued for failing to alert patients about the risks of taking their drugs. With few exceptions, generic manufacturers are required to use the same labels as the brand names.


The suit was filed in a federal court in Alabama because Mr. Weeks lives in Alabama and the drug companies are based elsewhere. The federal court asked the Alabama Supreme Court whether a branded company could be sued in such a case.


In its decision on Friday, the Alabama Supreme Court ruled that “an omission or defect in the labeling for the brand-name drug would necessarily be repeated in the generic labeling, foreseeably causing harm to a patient who ingested the generic product.”


Kevin Newsom, a lawyer for Pfizer, which acquired Wyeth in 2009, described the decision as an outlier. He said more than 70 court decisions, including four from federal appeals courts, had taken the opposite view. Representatives for brand-name companies have argued that they cannot be held liable for injuries caused by products they did not manufacture. “It comes as something of a surprise because it is contrary to the overwhelming weight of authority on this issue nationwide,” he said. He said two other decisions have held similar views as the Alabama court.


The court ruled that Mr. Weeks could go ahead with his lawsuit based on what Mr. Newsom described as a “unique wrinkle” in Alabama state law: that third parties like Wyeth can be held liable for a person’s injury if that third party provided false or misleading information that led to the injury. Mr. Weeks is arguing that Wyeth misinformed his doctor, not Mr. Weeks himself.


Sheldon Gilbert, a lawyer with the National Chamber Litigation Center, which advocates for the Chamber of Commerce and filed a brief in the case, said plaintiffs’ lawyers were likely to see the Alabama decision as a lucrative opening. “What we’ve seen again and again and again is that the trial lawyers get a decision that they think is good and they all flock to that jurisdiction,” he said.


Chris Hood, a lawyer for Mr. Weeks, said, “When someone’s hurt by a generic tablet and that injury can be laid at the feet of misinformation about the drug, then there’s only one party who can be held responsible,” he said, “the branded company.”


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Irvine City Council overhauls oversight, spending on Great Park









Capping a raucous eight-hour-plus meeting, the Irvine City Council early Wednesday voted to overhaul the oversight and spending on the beleaguered Orange County Great Park while authorizing an audit of the more than $220 million that so far has been spent on the ambitious project.


A newly elected City Council majority voted 3 to 2 to terminate contracts with two firms that had been paid a combined $1.1 million a year for consulting, lobbying, marketing and public relations. One of those firms — Forde & Mollrich public relations — has been paid $12.4 million since county voters approved the Great Park plan in 2002.


"We need to stop talking about building a Great Park and actually start building a Great Park," council member Jeff Lalloway said.





The council, by the same split vote, also changed the composition of the Great Park's board of directors, shedding four non-elected members and handing control to Irvine's five council members.


The actions mark a significant turning point in the decade-long effort to turn the former El Toro Marine base into a 1,447-acre municipal park with man-made canyons, rivers, forests and gardens that planners hoped would rival New York's Central Park.


The city hoped to finish and maintain the park for years to come with $1.4 billion in state redevelopment funds. But that money vanished last year as part of the cutbacks to deal with California's massive budget deficit.


"We've gone through $220 million, but where has it gone?" council member Christina Shea said of the project's initial funding from developers in exchange for the right to build around the site. "The fact of the matter is the money is almost gone. It can't be business as usual."


The council majority said the changes will bring accountability and efficiencies to a project that critics say has been larded with wasteful spending and no-bid contracts. For all that has been spent, only about 200 acres of the park has been developed and half of that is leased to farmers.


But council members Larry Agran and Beth Krom, who have steered the course of the project since its inception, voted against reconfiguring the Great Park's board of directors and canceling the contracts with the two firms.


Krom has called the move a "witch hunt" against her and Agran. Feuding between liberal and conservative factions on the council has long shaped Irvine politics.


"This is a power play," she said. "There's a new sheriff in town."


The council meeting stretched long into the night, with the final vote coming Wednesday at 1:34 a.m. Tensions were high in the packed chambers with cheering, clapping and heckling coming from the crowd.


At one point council member Lalloway lamented that he "couldn't hear himself think."


During public comments, newly elected Orange County Supervisor Todd Spitzer chastised the council for "fighting like schoolchildren." Earlier this week he said that if the Irvine's new council majority can't make progress on the Great Park, he would seek a ballot initiative to have the county take over.


And Spitzer angrily told Agran that his stewardship of the project had been a failure.


"You know what?" he said. "It's their vision now. You're in the minority."


mike.anton@latimes.com


rhea.mahbubani@latimes.com





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Academy Launches Oscar App on Android, Amazon






LOS ANGELES (TheWrap.com) – The Academy launched its official Oscars app on Android and Amazon on Thursday, expanding its initiative to direct fans’ attention from the television to the second screen.


The app, already available on the iPad and iPhone, was made available for free on the Google Play store and the Amazon app store, the Academy said. According to iTunes, the iPad app was updated earlier on Wednesday.






Developed by the Academy and Disney/ABC Television Group’s digital media arm, the app allows users to see behind-the-scenes videos and stories with host Seth MacFarlane and search information about the nominees. It also features a “My Picks” ballot on which users can organize their dream-team of winners.


On Oscar night on February 24, the app will feature “Backstage Pass,” a live telecast from more than a dozen cameras placed on the Red Carpet and throughout the Dolby Theatre – in the press room, the control room, backstage and elsewhere.


And a ticker on the app will notify when a users’ favorite actor and actress arrives on stage.


“We’re always looking for ways to bring fans closer to the show and this app provides a unique and fun way to do that,” Josh Spector, the managing director of digital media and marketing for the Academy, said in a statement. “More fans than ever will be able to enjoy the full Oscar experience now that our app is available to Droid users.”


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Adele to join in Hollywood’s Golden Globe party






LOS ANGELES (Reuters) – Pop star Adele is set to attend the Golden Globes ceremony in Beverly Hills on Sunday in what will be her first public appearance since giving birth to a boy in October.


Golden Globe organizers said the 24-year-old British singer would be attending as a nominee, rather than a performer. Her “Skyfall” theme song for the latest James Bond movie is in the running for best original song at the Golden Globes – one of Hollywood’s biggest awards shows.






The “Someone Like You” singer gave birth to her first child in October with her partner, Simon Konecki, but has since kept out of the public eye.


She performed and co-wrote the theme song for “Skyfall,” a $ 1 billion box office hit, while her Grammy-winning heartbreak album “21″ scored the rare feat in December of topping all U.S. album sales for a second straight year.


Adele will find herself mingling with some of Hollywood’s biggest movie and TV stars on January 13, including Golden Globe presenters George Clooney, Jennifer Lopez and Meryl Streep, and nominees such as Jon Hamm, Ben Affleck, Daniel Day-Lewis, Helen Mirren, Leonardo DiCaprio, Anne Hathaway and Kevin Costner.


(Reporting By Jill Serjeant; Editing by Eric Walsh)


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Personal Health: Keeping Firearms Away From Children

I doubt that our forebears who ratified the Second Amendment in 1791 ever imagined how carelessly and callously firearms would be used centuries later. Witness the senseless slaughter of 20 innocent children and 6 adults last month in Newtown, Conn. As a mother of two and grandmother of four, I can’t imagine a more painful loss.

If you are as concerned as I am about the safety of your children and grandchildren, consider that it may be time for a grass-roots movement, comparable to Mothers Against Drunk Driving, to help break the stranglehold the National Rifle Association seems to have on our elected officials. Do you really want, as the association proposed, an armed guard in every school?

The Connecticut massacre occurred just two months after the American Academy of Pediatrics issued a new policy statement on firearm-related injuries to children. Murder and accidental shootings were not the academy’s only concerns. “Suicides among the young are typically impulsive,” the statement noted, “and easy access to lethal weapons largely determines outcome.”

In an article published online last month in The New England Journal of Medicine, Dr. Judith S. Palfrey, a pediatrician at Boston Children’s Hospital, and her husband, Dr. Sean Palfrey, also a pediatrician in Boston, highlighted the shocking statistics.



Every day in the United States, 18 children and young adults between the ages of 1 and 24 die from gun-related injuries. That makes guns the second leading cause of death in young people — twice the number of deaths from cancer, five times the deaths from heart disease and 15 times the deaths from infections.

Dr. Judith S. Palfrey has seen this heartbreak up close. “My niece, who was sad about something, might be alive today if she hadn’t had such easy access to a handgun at age 18,” she told me.

The United States has the dubious distinction of leading high-income countries in firearm homicides, suicides and unintentional deaths among young people. Among American children ages 5 to 14, an international study showed that firearm suicide rates were six times higher, and death rates from unintentional firearm injuries 10 times higher, than in other high-income countries.

Innocent Victims

The Palfreys said they were haunted by the death of one of their patients, a 12-year-old boy who went on an errand for his mother and was caught in the cross-fire of a gun battle. The boy had shortly before written a letter to his mother expressing his desire to become a doctor.

And Dr. Sean Palfrey recalls “with horror” picking up a loaded .22-caliber rifle, at age 11 or 12, and threatening his baby sitter with it. “This scared the hell out of me and remains seared in my memory. I could have killed this person.”

In explaining why he had a gun, he said, “I’m a great-grandson of Theodore Roosevelt, who was a hunter as well as a naturalist, and when I grew up guns were an acceptable part of youth. I took target practice and was an N.R.A. member myself as a child. We had guns for hunting, not automatic weapons that can shoot hundreds of rounds within seconds.”

Now, he said, “I do all my shooting with a camera. This is not the same world it was when the Second Amendment was written. Guns have to be removed so that they can’t be accessed by those who are immature, impulsive or mentally ill.”

In their article, the Palfreys pointed out that “little children explore their worlds without understanding danger, and in one unsupervised moment, an encounter with a gun can end in fatality.” School-age children who see guns used on television, in movies or video games “don’t necessarily understand that people who are really shot may really die,” they said.

Among teenagers, who may fight over girlfriends or sneakers, or have their judgment impaired by drugs or alcohol, “a fistfight may cause transient injuries, but a gunfight can kill rivals, friends, or innocent bystanders,” the pediatricians wrote. Among depressed adolescents, they said, “less than 5 percent of suicide attempts involving drugs are lethal, but 90 percent of those involving guns are.”

Preventing Access

In a 2006 study of gun-owning Americans with children under age 18, 21.7 percent stored a gun loaded, 31.5 percent stored one unlocked, and 8.3 percent stored at least one gun unlocked and loaded. And in households with adolescents ages 13 to 17, firearms were left unlocked 41.7 percent of the time.

These are accidents, or worse, waiting to happen, and the pediatrics academy reiterated its earlier recommendations that pediatricians talk to parents about guns in the home and their safe storage, and follow up by distributing cable locks.

To limit unauthorized access to guns, the academy recommended the use of trigger locks, lockboxes, personalized safety mechanisms, and trigger pressures that are too high for young children.

Still, the academy emphasized, “the safest home for a child or adolescent is one without firearms.”

The Palfreys said that when one of their colleagues asked a mother about guns in her home, she responded, “Why, yes, I have a loaded gun in the drawer of my bedside table.” It was only then the woman realized that this could be a danger to her child, Dr. Judith Palfrey said.

The academy also called for restoring the federal ban, in effect from 1994 to 2004, on the sale of assault weapons to the general public. None of the many attempts to renew it have succeeded in Congress.

The Supreme Court ruled in 2010, in the case of McDonald v. the City of Chicago, that the due process clause of the Fourteenth Amendment applied to provisions of the Second Amendment, and prevented states and localities from restricting citizens’ right to bear arms. The academy stated that the ruling “set the stage for Second Amendment legal challenges to local and state gun laws, including laws requiring the safe storage of firearms and trigger locks, as well as laws aimed at protecting children from firearms.”

In 2011, Florida passed legislation that raised First Amendment questions by forbidding doctors to ask families about guns in the home. Although a permanent injunction against the law was issued, Gov. Rick Scott has appealed the ruling. At the federal level, wording introduced into the Affordable Care Act restricts collection of data on guns in the home.


This post has been revised to reflect the following correction:

Correction: January 11, 2013

The Personal Health column on Tuesday, about firearms and children, using information from The New England Journal of Medicine, misstated the number of children and young adults between the ages of 1 and 24 who die each day in the United States from gun-related injuries. Eighteen people between the ages of 1 and 24 die every day — not seven people between those ages. (Seven deaths a day is the number for children and young adults between the ages of 1 and 19.) And the article misstated part of a Supreme Court ruling. In the case of McDonald v. the City of Chicago in 2010, the court ruled that the due process clause of the Fourteenth Amendment — not the equal protection clause — applied to provisions of the Second Amendment, which guarantees the right to keep and bear arms.

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Electronic Records Systems Have Not Reduced Health Costs, Report Says





The conversion to electronic health records has failed so far to produce the hoped-for savings in health care costs and has had mixed results, at best, in improving efficiency and patient care, according to a new analysis by the influential RAND Corporation.







Jim Wilson/The New York Times

Dr. Alvin Rajkomar tracks patient data on a Samsung Galaxy Note. A new report questions whether electronic records reduce health care costs.







Optimistic predictions by RAND in 2005 helped drive explosive growth in the electronic records industry and encouraged the federal government to give billions of dollars in financial incentives to hospitals and doctors that put the systems in place.


“We’ve not achieved the productivity and quality benefits that are unquestionably there for the taking,” said Dr. Arthur L. Kellermann, one of the authors of a reassessment by RAND that was published in this month’s edition of Health Affairs, an academic journal.


RAND’s 2005 report was paid for by a group of companies, including General Electric and Cerner Corporation, that have profited by developing and selling electronic records systems to hospitals and physician practices. Cerner’s revenue has nearly tripled since the report was released, to a projected $3 billion in 2013, from $1 billion in 2005.


The report predicted that widespread use of electronic records could save the United States health care system at least $81 billion a year, a figure RAND now says was overstated. The study was widely praised within the technology industry and helped persuade Congress and the Obama administration to authorize billions of dollars in federal stimulus money in 2009 to help hospitals and doctors pay for the installation of electronic records systems.


“RAND got a lot of attention and a lot of buzz with the original analysis,” said Dr. Kellermann, who was not involved in the 2005 study. “The industry quickly embraced it.”


But evidence of significant savings is scant, and there is increasing concern that electronic records have actually added to costs by making it easier to bill more for some services.


Health care spending has risen $800 billion since the first report was issued, according to federal figures. The reasons are many, from the aging of the baby boomer population, to the cost of medical advances, to higher usage of medical services over all.


Officials at RAND said their new analysis did not try to put a dollar figure on how much electronic record-keeping had helped or hurt efforts to reduce costs. But the firm’s acknowledgment that its earlier analysis was overly optimistic adds to a chorus of concern about the cost of the new systems and the haste with which they have been adopted.


The recent analysis was sharply critical of the commercial systems now in place, many of which are hard to use and do not allow doctors and patients to share medical information across systems. “We could be getting much more if we could take the time to do a little more planning and to set more standards,” said Marc Probst, chief information officer for Intermountain Healthcare, a large health system in Salt Lake City that developed its own electronic records system and is cited by RAND as an example of how the technology can help improve care and reduce costs.


The RAND researchers pointed to a number of other reasons the expected savings had not materialized. The rate of adoption has been slow, they said, and electronic records do not address the fact that doctors and hospitals reap the benefits of high volumes of care.


Many experts say the available systems seem to be aimed more at increasing billing by providers than at improving care or saving money. Federal regulators are investigating whether electronic records make it easier for hospitals and doctors to bill for services they did not provide and whether Medicare and other federal agencies are adequately monitoring the use of electronic records.


Technology “is only a tool,” said Dr. David Blumenthal, who helped oversee the federal push for the adoption of electronic records under President Obama and is now president of the Commonwealth Fund, a nonprofit health group. “Like any tool, it can be used well or poorly.” While there is strong evidence that electronic records can contribute to better care and more efficiency, Dr. Blumenthal said, the systems in place do not always work in ways that help achieve those benefits.


Federal officials say they are drafting new rules to address many of the concerns about the current systems.


This article has been revised to reflect the following correction:

Correction: January 10, 2013

An earlier version of this article misstated the location of the physician practice that is suing Allscripts. It is located in Panama City, Fla., not Panama, Fla.



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