Rising sports programming costs could have consumers crying foul

The new owners of the Dodgers are expected to get $6-billion-plus for the TV rights to their team's games.

That may be a big win for the home team, but consumers won't be doing high-fives once they see their pay-TV bills.

The average household already spends about $90 a month for cable or satellite TV, and nearly half of that amount pays for the sports channels packaged into most services. Massive deals for marquee sports franchises like the Dodgers and Lakers are driving those costs even higher. Over the next three years, monthly cable and satellite bills are expected to rise an average of nearly 40%, to $125, according to the market research company NPD Group.

So far, people seem willing to pay. But the escalating costs are triggering worries that, at some point, consumers will begin ditching their cable and satellite subscriptions.

"We've got runaway sports rights, runaway sports salaries and what is essentially a high tax on a lot of households that don't have a lot of interest in sports," said John Malone, the cable industry pioneer and chairman of Liberty Media. "The consumer is really getting squeezed, as is the cable operator."

A key concern is that the higher bills driven by sports are being shouldered by subscribers whether they watch sports or not. National and local sports networks typically require cable and satellite companies to make their channels available to all customers.

"I pay $98 a month for cable and half of that is for sports?" said Vincent Castellanos, 51, a fashion stylist who lives in Los Feliz. "I've never once gone to a single sports channel. I wasn't even aware I was paying for it. I want my money back. Who do I call?"

Cable TV and satellite providers have long paid a premium for national sports channels such as ESPN. Now they are increasingly paying higher fees to the regional sports networks that carry local football, basketball, baseball, hockey and soccer games.

For many years, Los Angeles had just two regional sports networks — Fox Sports West and Prime Ticket, both owned by News Corp. They shared rights to the Dodgers, Angels, Lakers, Clippers and Kings.

Then Time Warner Cable entered the fray, followed by Pac-12 Networks — the Pac-12 Conference's sports service, which includes one channel devoted to USC and UCLA and another channel that focuses on the entire conference.

Time Warner Cable agreed to pay more than $3 billion last year for a long-term deal to take the Lakers rights away from Fox Sports West and launch its own sports channels. Now Fox Sports is preparing to spend at least $6 billion to keep the Dodgers on Prime Ticket. The Dodger and Laker deals could end up adding more than $10 a month to existing pay-TV bills in the region, according to industry analysts.

The competition has spawned turf wars for sports rights among big media companies both nationally and locally. NBC and CBS have launched their own national sports networks to compete with ESPN. Fox is expected to follow suit next year.

"There are not new pro and college games being created," said Dan York, an executive vice president of satellite broadcaster DirecTV. "You are getting the same product being reshuffled into smaller slices at higher prices. That's not a model consumers can continue to support."

Cox Cable executive Bob Wilson estimated that sports account for more than 50% of the bill for the provider's Southern California subscribers even though just 15% to 20% are regular watchers. "That relationship is getting way out of whack," he said.

For the sports leagues and teams, this is found money. When an investors group led by Chicago-based Guggenheim Partners paid $2.15 billion to buy the Dodgers from Frank McCourt last spring, many sports business analysts thought the buyers had wildly overpaid.

Guggenheim was betting that either Fox Sports or Time Warner Cable would spend big for the team. That gambit will probably pay off, as Fox Sports is trying to wrap up a deal this week to keep the team on its Prime Ticket channel, according to people close to the situation.

Under the current contract expiring at the end of next season, Fox's Prime Ticket will pay $39 million for the 2013 TV rights to the Dodgers. In 2014, that price tag would more than double — and continue to escalate for the next two decades. A Fox Sports spokesman declined to comment.

Sports costs are also rising because this programming is considered "DVR proof" — consumed live by viewers, and thus more valuable to advertisers and networks. Increasingly, consumers are opting to record other types of shows to watch later, and then fast-forwarding through the commercials.

"Sports are foolproof when it comes to ratings," said Charles Bergmann, associate director of Mindshare, a prominent advertising buying firm. "Sports fans can't wait to watch a game; they want to know the outcome. And that's not traditionally the case with most prime-time shows."

As a result, cable and broadcast channels that specialize in sports are able to command higher subscriber fees from pay-TV distributors. Walt Disney Co.'s ESPN gets more than $5 a month for each subscriber, from the systems that carry it, according to the media consulting firm SNL Kagan. Time Warner Cable is getting almost $4 a month per subscriber for SportsNet. Prime Ticket and Fox Sports West, which carries the Angels, together cost about $5 per subscriber, per month.

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Student scores may be used in LAUSD teacher ratings

After months of tense negotiations, leaders of the Los Angeles Unified School District and its teachers union have tentatively agreed to use student test scores to evaluate instructors for the first time, officials announced Friday.

Under the breakthrough agreement, the nation's second-largest school district would join Chicago and a growing number of other cities in using test scores as one measure of how much teachers help their students progress academically in a year.

Alarm over low student performance, especially in impoverished and minority communities, has prompted the Obama administration and others to press school districts nationwide to craft better ways to identify struggling teachers for improvement.

The Los Angeles pact proposes to do that using a unique mix of individual and schoolwide testing data — including state standardized test scores, high school exit exams and district assessments, along with rates of attendance, graduation and suspensions.

But the tentative agreement leaves unanswered the most controversial question: how much to count student test scores in measuring teacher effectiveness. The school district and the union agreed only that the test scores would not be "sole, primary or controlling factors" in a teacher's final evaluation.

"It is crystal clear that what we're doing is historic and very positive," said L.A. Supt. John Deasy, who has fought to use student test scores in teacher performance reviews since taking the district's helm nearly two years ago. "This will help develop the skills of the teaching profession and hold us accountable for student achievement."

Members of United Teachers Los Angeles, however, still need to ratify the agreement. Many teachers have long opposed using test scores in their evaluations, saying test scores are unreliable measures of teacher ability.

The union characterized the agreement as a "limited" response to a Dec. 4 court-ordered deadline to show that test scores are being used in evaluations and said negotiations were continuing for future academic years. The deadline was imposed by Los Angeles County Superior Court Judge James C. Chalfant, who ruled this year that state law requires L.A. Unified to use test scores in teacher performance reviews.

In a statement, the teachers union also emphasized that the agreement rejected the use of the district's method of measuring student academic progress for individual instructors. That measure, called Academic Growth Over Time, uses a mathematical formula to estimate how much a teacher helps students' performance, based on state test scores and controlling for such outside factors as income and race. Under the agreement, however, schoolwide scores using this method, also known as a value-added system, will be used.

For individual teachers, the agreement proposes to use raw state standardized test score data. Warren Fletcher, teachers union president, said that data give teachers more useful information about student performance on specific skills.

Critics of using test scores in teacher reviews praised Los Angeles' proposed new system, saying it uses a wide array of data to determine a teacher's effect on student learning.

Deasy said he will be developing guidelines for administrators on how to use the mix of data in teacher reviews and has said in the past that test scores should not count for more than 25% of the final rating.

"This is a complex agreement and possibly the most sophisticated evaluation agreement that I have seen," said Diane Ravitch, an educational historian and vocal critic of the use of test scores in teacher evaluations. "It assures that test scores will not be overused, will not be assigned an arbitrary and inappropriate weight, will not be the sole or primary determinant of a teacher's evaluation."

Teacher Brent Smiley at Lawrence Middle School in Chatsworth said: "I will vote yes. I have no doubt that my union leaders negotiated the best they could, given the adverse set of circumstances they faced."

Labor-relations expert Charles Kerchner called the agreement "a shotgun wedding," but added, "I think it's unabashed good news."

He said it's notable that value-added measures and test scores have been accepted in some form by the teachers union.

"UTLA has moved beyond a strategy of just saying no to a strategy of trying to craft a useful agreement," said Kerchner, a professor at Claremont Graduate University.

The district is currently developing a new evaluation system that uses Academic Growth Over Time — along with a more rigorous classroom observation process, student and parent feedback and a teacher's contributions to the school community. The new observations were tested last year on a voluntary basis with about 450 teachers and 320 administrators; this year, every principal and one volunteer teacher at each of the district's 1,200 schools are expected to be trained.

The teachers union has filed an unfair labor charge against the district, arguing that the system is being unilaterally imposed without required negotiations.

Some teachers who have participated in the new observation process say it offers more specific guidance on how they can improve. Other educators — teachers and administrators alike — complain that it is too time-consuming.

The tentative agreement, acknowledging the extra time the new evaluations would take, would extend the time between evaluations from two to as long as five years for teachers with 10 or more years of experience.

Bill Lucia of EdVoice, the Sacramento-based educational advocacy group that brought the lawsuit, said he was "cautiously optimistic."

But he expressed dismay that the union did not reach agreement a few weeks earlier, which he said would have given L.A. Unified a shot at a $40-million federal grant. The district applied for the Race to the Top grant without the required teacher union support and was eliminated from the competition this week.

Negotiations over the tentative pact, however, nearly fell apart. Earlier this week, the union pulled away from the deal on the table, L.A. Unified officials said. And the district discussed holding a Monday emergency school-board meeting to craft a formal response to the court order in anticipation that no deal would be reached. The options included adopting an evaluation system without the union's consent.

Some members of the Board of Education, who also will need to approve the pact, praised the agreement for taking student growth and achievement into account but gauging this growth through multiple measures. Steve Zimmer said that, just as important, this milestone was achieved through negotiation.

School board President Monica Garcia praised the tentative deal as "absolutely, by all accounts, better than what we have today."

teresa.watanabe@latimes.com

howard.blume@latimes.com

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Katy Perry, Carly Rae Jepsen get Billboard honors

NEW YORK (AP) — Billboard named Katy Perry its woman of the year, but the pop star thought her year was 2011.

"I felt like my year was last year ... I thought my moment had passed," Perry said in an interview with Jon Stewart at Billboard's Women in Music event Friday in New York City.

Perry released "Teenage Dream" in 2010, and the double platinum album sparked five No. 1 hits on the Billboard Hot 100 chart that spilled over to 2011. She tied the record Michael Jackson set with "Thriller" for most hits from a single album.

She re-released the album this year, which launched two more hits and a top-grossing 3-D film.

Perry thanked her fans, who stood outside of Capitale hoping to catch a glimpse of her.

"I don't really like to call myself a role model for my fans, but I hope I'm an inspiration, especially for young women," she said when she accepted the honor.

Perry also thanked her mom at the event, which honored women who work in the music industry.

In like fashion, newcomer Carly Rae Jepsen also thanked her mom — and stepmom — when accepting the rising star honor. The "Call Me Maybe" singer said she's happy and surprised by her success.

"It was sort of the key to unlocking the rest of the world for me and was something that none of us were expecting," she said, in an interview, of her viral hit.

British singer Cher Lloyd performed Perry's "E.T." at the luncheon, which also featured a performance from rising country singer Hunter Hayes.

Perry, who wore a fitted pink dress, joked about recording a follow-up to "Teenage Dream."

"Have you heard it? I haven't," the smiling singer said on the red carpet.

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Follow Mesfin Fekadu on Twitter at http://twitter.com/MusicMesfin

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Doctors Who Work for Hospitals Face a New Bottom Line

For decades, doctors in picturesque Boise, Idaho, were part of a tight-knit community, freely referring patients to the specialists or hospitals of their choice and exchanging information about the latest medical treatments.

Joshua Roper for The New York Times

St. Luke's Health System dominates the market in Boise, Idaho, and critics say patients are paying more.

Chad Case for The New York Times

Dr. Julie A. Foote, an endocrinologist in Boise, questions whether patients are getting cost-effective care as a result of consolidation in the medical field.

But that began to change a few years ago, when the city’s largest hospital, St. Luke’s Health System, began rapidly buying physician practices all over town, from general practitioners to cardiologists to orthopedic surgeons.

Today, Boise is a medical battleground.

A little over half of the 1,400 doctors in southwestern Idaho are employed by St. Luke’s or its smaller competitor, St. Alphonsus Regional Medical Center.

Many of the independent doctors complain that both hospitals, but especially St. Luke’s, have too much power over every aspect of the medical pipeline, dictating which tests and procedures to perform, how much to charge and which patients to admit.

In interviews, they said their referrals from doctors now employed by St. Luke’s had dropped sharply, while patients, in many cases, were paying more there for the same level of treatment.

Boise’s experience reflects a growing national trend toward consolidation. Across the country, doctors who sold their practices and signed on as employees have similar criticisms. In lawsuits and interviews, they describe growing pressure to meet the financial goals of their new employers — often by performing unnecessary tests and procedures or by admitting patients who do not need a hospital stay.

In Boise, just a few weeks ago, even the hospitals were at war. St. Alphonsus went to court seeking an injunction to stop St. Luke’s from buying another physician practice group, arguing that the hospital’s dominance in the market was enabling it to drive up prices and to demand exclusive or preferential agreements with insurers. The price of a colonoscopy has quadrupled in some instances, and in other cases St. Luke’s charges nearly three times as much for laboratory work as nearby facilities, according to the St. Alphonsus complaint.

Federal and state officials have also joined the fray. In one of a handful of similar cases, the Federal Trade Commission and the Idaho attorney general are investigating whether St. Luke’s has become too powerful in Boise, using its newfound leverage to stifle competition.

Dr. David C. Pate, chief executive of St. Luke’s, denied the assertions by St. Alphonsus that the hospital’s acquisitions had limited patient choice or always resulted in higher prices. In some cases, Dr. Pate said, services that had been underpriced were raised to reflect market value. St. Luke’s, he argued, is simply embracing the new model of health care, which he predicted would lead over the long term to lower overall costs as fewer unnecessary tests and procedures were performed.

Regulators expressed some skepticism about the results, for patients, of rapid consolidation, although the trend is still too new to know for sure. “We’re seeing a lot more consolidation than we did 10 years ago,” said Jeffrey Perry, an assistant director in the F.T.C.’s Bureau of Competition. “Historically, what we’ve seen with the consolidation in the health care industry is that prices go up, but quality does not improve.”

A Drive to Consolidate

An array of new economic realities, from reduced Medicare reimbursements to higher technology costs, is driving consolidation in health care and transforming the practice of medicine in Boise and other communities large and small. In one manifestation of the trend, hospitals, private equity firms and even health insurance companies are acquiring physician practices at a rapid rate.

Today, about 39 percent of doctors nationwide are independent, down from 57 percent in 2000, according to estimates by Accenture, a consulting firm.

Many policy experts praise the shift away from independent practices as a way of making health care less fragmented and expensive. Systems that employ doctors, modeled after well-known organizations like Kaiser Permanente, are better able to coordinate patient care and to find ways to deliver improved services at lower costs, these advocates say. Indeed, consolidation is encouraged by some aspects of the Obama administration’s health care law.

“If you’re going to be paid for value, for performance, you’ve got to perform together,” said Dr. Ricardo Martinez, chief medical officer for North Highland, an Atlanta-based consultant that works with hospitals.

The recent trend is reminiscent of the consolidation that swept the industry in the 1990s in response to the creation of health maintenance organizations, or H.M.O.’s — but there is one major difference. Then, hospitals had difficulty managing the practices, contending that doctors did not work as hard when they were employees as they had as private operators. Now, hospitals are writing contracts more in their own favor.

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Santa Monica hospital ousts top execs, most of its board

Saint John's Health Center abruptly ousted its top two executives and most of its governing board as the Santa Monica hospital tries to grapple with years of losses and increasing competition from bigger rivals.

Sisters of Charity of Leavenworth Health System, a Catholic nonprofit that owns Saint John's and 10 other hospitals in the U.S., dismissed hospital CEO Lou Lazatin, the chief operating officer and 15 members of the hospital's 17-person board, effective Thursday.

Mike Wall, former head of Northridge Hospital Medical Center, was named interim president and chief executive at Saint John's. He replaces Lazatin, who had been the hospital's CEO since 2005.

Los Angeles billionaire Patrick Soon-Shiong, who has committed $100 million to the hospital in recent years to make it a national leader in medical research and patient care, said he was shocked and disturbed by the sudden changes. He said that Lazatin was fired and escorted out of the building Thursday and that hospital board members were then fired by email.

Michael Slubowski, chief executive of Denver-based SCL Health System, called Lazatin's departure a "confidential" matter and declined to comment in any detail.

"We thank Lou for her service," he said. "We are setting off on a new strategic direction that we think is in the best interests of the community and the hospital."

Lazatin could not be reached for comment.

The 266-bed hospital has been losing money in recent years, according to filings with state regulators. It reported a loss of $21.9 million for 2010 and $12.8 million for 2011, records show. Patient revenue last year was $891.3 million, down 8% from a year earlier.

Amid those financial difficulties, Soon-Shiong has been a major benefactor. He said he learned of the changes Thursday while meeting with Saint John's doctors, nurses and other staff members about his plans to build an institute for genomic pathology there next year. He also had plans to begin construction on a sports science center to accompany the existing Chan Soon-Shiong Center for Life Sciences.

Soon-Shiong said those expansion plans are now on hold.

"I will be evaluating our options over the next two months and having discussions with other partners in the city," he said. "I was very disappointed and aghast that the board was not, to my knowledge, consulted and that people who have dedicated their lives to helping others were treated in this way. I am really not sure of the motivations of this new leadership team."

Slubowski said he had a "pleasant conversation" with Soon-Shiong about the management changes and assured him the board of the hospital foundation would not be affected.

Hospitals are wrestling with major changes in reimbursement under the federal Affordable Care Act that reward medical providers that keep patients healthy and curb spending. In response, hospitals have been merging with one another and acquiring large physician groups.

Saint John's is the only California hospital run by SCL Health System, whose other 10 hospitals are in Colorado, Montana and Kansas.

Steve Valentine, president of Camden Group, an El Segundo healthcare consulting firm, said Saint John's faces intense competition from big-name institutions such as the UCLA Health System and Cedars-Sinai Medical Center. He said it might make sense for Saint John's to be acquired by a bigger Catholic hospital chain or to partner with another health system.

Slubowski said it's a priority to improve the hospital's finances and it will be looking to partner with area healthcare providers in order to better compete.

"At this point we are not selling the hospital to anyone," Slubowski said. "Our goal and hope is to remain a Catholic institution."

The Santa Monica hospital was founded in 1942. It sustained major damage during the 1994 Northridge earthquake and was rebuilt over time.

chad.terhune@latimes.com

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Retail sales rise a weak 1.6% in November

Despite robust sales on Black Friday, the nation's retailers reported weak sales in November, raising concerns about whether merchants can make up enough ground in the coming weeks of the crucial holiday season.

Hit hard by Superstorm Sandy and its aftermath, major retailers such as Macy's Inc., Kohl's Corp. and Target Corp. reported sales declines. Luxury retailers saw troubles as well. Tiffany & Co. said Thursday that its third-quarter profit plunged 30%, and department store chain Nordstrom Inc. saw sales drop 1.1% in November.

At the Target store in West Hollywood, some shoppers said that despite improvements in the economy, they had learned to rein in Christmas spending over the last few years and had no plans to change.

"Lots of people are getting hugs," said Brooke Seguin, 31, of Los Feliz, who recently spent $40 on a knife set and two necklaces for herself and friends. "I'm going to make some gifts this year."

Quiz: Do you know your premium jeans?

The theater producer said there was no longer pressure among friends to give everyone presents that cost a certain amount. Therefore she planned to spend "way below" what was once her typical holiday budget of $1,000.

Although Black Friday set records for sales and shopper traffic, analysts said that doesn't necessarily guarantee a great holiday season, when retailers can rake in as much as 40% of their annual sales. There were signs that shoppers who splurged over the Thanksgiving weekend went for the best bargains, industry watchers said, and now may be done with their Christmas spending.

"A lot of retailers are using Sandy as a very convenient excuse to dismiss their poor sales performance. Not all these retailers have all their stores situated in just the Northeast," said Britt Beemer, a retail expert at America's Research Group. "A lot of retailers are going to have to admit that Black Friday, as incredible as it was," favored merchants offering enormous discounts.

Thursday's tally of 17 retailers showed that major chains posted a 1.6% increase in retail sales in November compared with the same month a year earlier, according to Thomson Reuters. That was below analyst expectations of a 3.3% rise.

There was a broad mix of stores among the month's top performers. Discount retailer Costco Wholesale Corp. reported a 6% jump in sales. Limited Brands Inc., the parent company of Victoria's Secret and Bath & Body Works, said sales rose 5%. And Gap Inc., which has been showing signs of a turnaround, posted a 3% gain.

Other retailers posted weak results. Kohl's saw sales decline 5.6%. Struggling teen clothier Wet Seal Inc., which recently went through a board shake-up after more than a year of falling sales, reported that its sales slipped 5.4%.

Macy's, which reported a 0.7% decline, blamed Sandy for its poor performance. The retailer had previously said it was forced to close about 200 of its stores during and after the storm.

"We were not able to overcome the weak start to the month," Chief Executive Terry J. Lundgren said in a statement, adding that Macy's remained "on track to deliver a very strong sales performance in the fourth quarter."

Tiffany, which does not report monthly sales figures, said Thursday that its third-quarter revenue rose 4%. However, its profit dropped nearly 30% because of high material costs and greater-than-expected taxes. Shares of the jewelry company fell $3.93, or 6.2%, to $59.80.

Results in the Thomson Reuters survey are based on sales at stores open at least a year, known as same-store sales. These are considered an important measure of a retailer's health because they exclude the effect of store openings and closings.

Some industry watchers were optimistic about the remaining holiday season, pointing to rising home prices and a rallying stock market as reasons that shoppers would open their wallets in the coming weeks. The Conference Board reported this week that consumer confidence jumped to its highest level in almost five years.

"We had a month that was not typical given Sandy and how it impacted quite an extreme part of our country," said Matthew Rahn, a principal in the retail practice at A.T. Kearney. "But overall, given what we saw over the holiday weekend, it's going to be quite a positive holiday season this year."

Analysts also noted that the November results failed to show the effect of Cyber Monday, the first workday after Thanksgiving weekend, when online merchants offer a variety of bargains and saw record sales.

Robust sales on Cyber Monday will give December a boost instead, said Michael Niemira, chief economist at the International Council of Shopping Centers. He also said purchases made through layaway, which is available at many retailers this holiday season, will be included in the December tally.

Retailers may get a boost from shoppers like Early Cursell, 35, who said she is ready to splurge this Christmas because her husband, who works as a security guard, has been getting a lot of overtime lately. Browsing at the West Hollywood Target, the homemaker said she planned to spend $2,000, double last year's budget, on gifts for her children and extended family.

"I'm just feeling more confident about our finances," said Cursell, a Los Angeles resident. "With four kids — you want to get them nice things for the holidays."

shan.li@latimes.com

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Adkins explains Confederate flag earpiece

NEW YORK (AP) — Trace Adkins wore an earpiece decorated like the Confederate flag when he performed for the Rockefeller Center Christmas Tree Lighting but says he meant no offense by it.

Adkins appeared with the earpiece on a nationally televised special for the lighting on Wednesday. Some regard the flag as a racist symbol and criticized Adkins in Twitter postings.

But in a statement released Thursday, the Louisiana native called himself a proud American who objects to any oppression and says the flag represents his Southern heritage.

He noted he's a descendant of Confederate soldiers and says he did not intend offense by wearing it.

Adkins — on a USO tour in Japan — also called for the preservation of America's battlefields and an "honest conversation about the country's history."

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Online:

http://www.traceadkins.com

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Medicare Is Faulted in Electronic Medical Records Conversion

The conversion to electronic medical records — a critical piece of the Obama administration’s plan for health care reform — is “vulnerable” to fraud and abuse because of the failure of Medicare officials to develop appropriate safeguards, according to a sharply critical report to be issued Thursday by federal investigators.

Mike Spencer/Wilmington Star-News, via Associated Press

Celeste Stephens, a nurse, leads a session on electronic records at New Hanover Regional Medical Center in Wilmington, N.C.

Centers for Medicare and Medicaid Services

Marilyn Tavenner, acting administrator for Medicare.

The use of electronic medical records has been central to the aim of overhauling health care in America. Advocates contend that electronic records systems will improve patient care and lower costs through better coordination of medical services, and the Obama administration is spending billions of dollars to encourage doctors and hospitals to switch to electronic records to track patient care.

But the report says Medicare, which is charged with managing the incentive program that encourages the adoption of electronic records, has failed to put in place adequate safeguards to ensure that information being provided by hospitals and doctors about their electronic records systems is accurate. To qualify for the incentive payments, doctors and hospitals must demonstrate that the systems lead to better patient care, meeting a so-called meaningful use standard by, for example, checking for harmful drug interactions.

Medicare “faces obstacles” in overseeing the electronic records incentive program “that leave the program vulnerable to paying incentives to professionals and hospitals that do not fully meet the meaningful use requirements,” the investigators concluded. The report was prepared by the Office of Inspector General for the Department of Health and Human Services, which oversees Medicare.

The investigators contrasted the looser management of the incentive program with the agency’s pledge to more closely monitor Medicare payments of medical claims. Medicare officials have indicated that the agency intends to move away from a “pay and chase” model, in which it tried to get back any money it has paid in error, to one in which it focuses on trying to avoid making unjustified payments in the first place.

Late Wednesday, a Medicare spokesman said in a statement: “Protecting taxpayer dollars is our top priority and we have implemented aggressive procedures to hold providers accountable. Making a false claim is a serious offense with serious consequences and we believe the overwhelming majority of doctors and hospitals take seriously their responsibility to honestly report their performance.”

The government’s investment in electronic records was authorized under the broader stimulus package passed in 2009. Medicare expects to spend nearly $7 billion over five years as a way of inducing doctors and hospitals to adopt and use electronic records. So far, the report said, the agency has paid 74, 317 health professionals and 1,333 hospitals. By attesting that they meet the criteria established under the program, a doctor can receive as much as $44,000 for adopting electronic records, while a hospital could be paid as much as $2 million in the first year of its adoption. The inspector general’s report follows earlier concerns among regulators and others over whether doctors and hospitals are using electronic records inappropriately to charge more for services, as reported by The New York Times last September, and is likely to fuel the debate over the government’s efforts to promote electronic records. Critics say the push for electronic records may be resulting in higher Medicare spending with little in the way of improvement in patients’ health. Thursday’s report did not address patient care.

Even those within the industry say the speed with which systems are being developed and adopted by hospitals and doctors has led to a lack of clarity over how the records should be used and concerns about their overall accuracy.

“We’ve gone from the horse and buggy to the Model T, and we don’t know the rules of the road. Now we’ve had a big car pileup,” said Lynne Thomas Gordon, the chief executive of the American Health Information Management Association, a trade group in Chicago. The association, which contends more study is needed to determine whether hospitals and doctors actually are abusing electronic records to increase their payments, says it supports more clarity.

Although there is little disagreement over the potential benefits of electronic records in reducing duplicative tests and avoiding medical errors, critics increasingly argue that the federal government has not devoted enough time or resources to making certain the money it is investing is being well spent.

House Republicans echoed these concerns in early October in a letter to Kathleen Sebelius, secretary of health and human services. Citing the Times article, they called for suspending the incentive program until concerns about standardization had been resolved. “The top House policy makers on health care are concerned that H.H.S. is squandering taxpayer dollars by asking little of providers in return for incentive payments,” said a statement issued at the same time by the Republicans, who are likely to seize on the latest inspector general report as further evidence of lax oversight. Republicans have said they will continue to monitor the program.

In her letter in response, which has not been made public, Ms. Sebelius dismissed the idea of suspending the incentive program, arguing that it “would be profoundly unfair to the hospitals and eligible professionals that have invested billions of dollars and devoted countless hours of work to purchase and install systems and educate staff.” She said Medicare was trying to determine whether electronic records had been used in any fraudulent billing but she insisted that the current efforts to certify the systems and address the concerns raised by the Republicans and others were adequate.

This article has been revised to reflect the following correction:

Correction: November 30, 2012

An article on Thursday about a federal report critical of Medicare’s performance in assuring accuracy as doctors and hospitals switch to electronic medical records misstated, in some copies, the timing of a statement from a Medicare spokesman in response to the report. The statement was released late Wednesday, not late Thursday.

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Electricity rates to rise for Southern California Edison customers

SACRAMENTO — Almost 5 million Southern California Edison Co. customers in hundreds of cities and communities across the southern, central and coastal parts of the state will be hit with higher electric bills early next year and bigger hikes in each of the following two years.

The decision, which Edison says will add an average of $7 a month to residential bills for the first year, covers Edison's costs to provide service, which amounts to about half a ratepayer's bill. Other costs for buying fuel and contracting for power deliveries fluctuate and are passed directly to consumers.

The California Public Utilities Commission unanimously approved new rates, retroactive to the beginning of this year, on Thursday as part of an every-three-years process of reviewing finances at the heavily regulated utility.

The 5% increase for 2012 — providing the Rosemead company with $5.7 billion in revenue — is less than the 16.6% the company had sought. Rates, however, are estimated to rise an additional 6.3% for 2013 and 5.9% in 2014 under the PUC order.

"This decision ensures that SCE is able to invest in smart energy systems, renewables and safety and reliability, while its ratepayers are protected," PUC Commissioner Timothy Alan Simon said.

Edison provides electricity to 13 million people, including most of Los Angeles and Orange counties as well as much of Central California and the Inland Empire. Not included are residents of Los Angeles who get their power from the municipally owned Department of Water and Power.

Edison, the decision notes, has faced "two significant challenges to operations" in the last year: a December 2011 wind storm that damaged the grid, and the extended shutdown of two nuclear power reactors at the San Onofre Nuclear Generating Station in San Diego County.

Edison in a statement called the commission's action "constructive" because the decision helps it finance needed upgrades in its system.

Consumer groups said they were pleased that commissioners granted Edison, a unit of Edison International, less than what the company sought from the PUC.

"We definitely got a substantial amount shaved off, but it's still more than we think Edison really needs," said Mindy Spatt, a spokeswoman for the Utility Reform Network, which advocates for ratepayers at the state's three big investor-owned electric companies.

Business groups also complained that the jump in Edison's already steep electric rates could make it harder for them to keep operating profitably.

"California manufacturers already pay 50% higher electricity rates than the national average," said Gino Di Caro, a spokesman for the California Manufacturers & Technology Assn. "Obviously, energy costs are one of the primary budgetary items for any manufacturing operation, and this is all the more reason for California to find ways to offset these costs."

marc.lifsher@latimes.com

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Iran blogger's death in prison sets off blame game

BEIRUT — The mysterious death of a dissident blogger while in Iranian police custody this month has generated a rare torrent of criticism from officials apparently embarrassed by a case that has drawn international condemnation and again shined a spotlight on the nation's poor human rights record.

Iranian authorities have echoed calls from such human rights groups as Amnesty International for a thorough investigation of the death of Sattar Beheshti, 35, who died Nov. 3 under still-hazy circumstances after being arrested by Iran's cyber police, according to various accounts.

The case has sparked an unusually public and vitriolic bout of blame-dispensing among various powerful factions in the Islamic Republic.

The late blogger — a working-class high-school dropout virtually unknown to the dissident community until his death became a cause celebre — frequently assailed the lack of freedom in Iran. An online photograph said to be of Beheshti shows a man with a shaved head and a slender chain around his neck, wearing a dark T-shirt.

The few details of the case that have emerged offer a glimpse of the largely hidden world of Iranian bloggers and Web activists working in near-anonymity, though clearly on the radar of the nation's diligent cyber police.

On Monday, Mehdi Davatgari, a parliament member, charged that the cyber police — known as FATA — had held the blogger illegally overnight without a court order. He called for the "resignation or dismissal of the cyber police chief," reported Press TV, the government's English-language broadcast service.

Also this week, the public prosecutor's office said the most likely cause of Beheshti's death was "shock," either from psychological pressure while under interrogation or from beatings received while in custody. Those findings seemed to contradict an earlier assessment by Tehran's chief coroner, Ahmad Shojaei, that Beheshti probably died of natural causes, possibly a heart attack, even though his family reportedly said Beheshti had no history of heart problems.

The coroner, in comments to the semiofficial Mehr News Agency, acknowledged signs of bruising on five parts of the dead man's body — from his hands to his feet — indicating that Beheshti had been beaten. But he said that the blogger suffered no broken bones and that the physical evidence did not indicate any brutality that could have been fatal.

Toxicology and other tests are pending.

The case has provided fuel for the bitter political rivalry between loyalists to President Mahmoud Ahmadinejad and hard-line critics of the two-term president, who is to step down next year because of term limits.

"Officials are blaming each other and want to shrug off responsibility to others," said journalist Farshad Ghorbanpour, who says he spent eight months in jail for his writings on Iranian opposition websites and news outlets abroad.

Presidential surrogates have hinted that responsibility lies with Iran's judiciary, whose chief is an Ahmadinejad adversary appointed by Iran's supreme leader, Ayatollah Ali Khamenei. The judiciary has nominal responsibility for the nation's detention system.

"The death of a worker writing a blog is very agonizing for me and, as a writer, I feel ashamed of myself," wrote editor Mohammad Reza Naghavifard in an editorial in Khorshid, a daily newspaper that supports Ahmadinejad. "It is more than a shame."

But Ahmadinejad's rivals have suggested that the fault lies with the cyber police and the internal security apparatus, which fall under the president's purview.

Ali Motahari, a conservative Iranian lawmaker and political rival of Ahmadinejad, recently voiced his outrage and warned against meddling.

"Sometimes we as supporters think that it is all right to do all sorts of things to preserve the system," Motahari told Etemad, a widely read daily considered to be anti-Ahmadinejad. "We are following up.... We will not budge, and we will not permit this case to be covered up."

Human rights organizations have long accused Iran of jailing dissidents, suppressing free speech and not thoroughly investigating deaths that occur in custody.

According to Amnesty International, authorities have acknowledged that at least three detainees at the Kahrizak prison, where Beheshti was reportedly held for a period, died as a result of torture or other ill treatment after their arrests in the tumultuous aftermath of the nation's disputed 2009 presidential election.

Many details of the blogger's case — including where he died — remain opaque.

What is known is that Iranian cyber police arrested Beheshti at his home Oct. 30 and accused him of "actions against national security on social networks and Facebook," according to a summary by Reporters Without Borders, the Paris-based freedom-of-information advocacy group.

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