It's Good Friday, the start of a long weekend for many in Massachusetts and an excuse to give a nod to one of our favorite Bob Hoskins' roles: English gangster Harold Shand . Below you'll find updates on Bermuda's bribery allegations against Lahey Clinic and the Alere-Abbott marriage, which felt more like a divorce but is back on. Here's our report for Friday, April 14. Please note that financial markets were closed today. Happy Easter, and we will back on Monday. Good luck to everyone running the Marathon!
Chesto Means Business
Adding up the dollars: It can be surprisingly tough to find easy ways to save money in a $40 billion state budget.
But it can be done, if you look closely. Just ask state representative Lori Ehrlich, an accountant from Marblehead. Ehrlich wondered how much money could be gained if the Legislature wrote language that barred people who earn money in Massachusetts but don’t live here from claiming the Earned Income Tax Credit.
The answer, according to the state Department of Revenue: roughly $8 million to $10 million a year.
After 32 years as a CPA and tax preparer, Ehrlich says she was aware of this situation for a long time but was surprised to learn of its magnitude. So she filed a bill that would make nonresidents ineligible for the tax credit.
Her bill didn’t make it across the finish line last year, but the House leadership just included essentially the same language in its budget proposal that came out this week. The Senate will still need to agree, but this change could be hard to resist. No constituents will be affected, after all.
Given the state budget’s size, $10 million might not seem like a lot. But it’s roughly the same amount that Governor Charlie Baker’s administration wanted to save by proposing the elimination of weekend service on the MBTA commuter railroad. (The administration has since backed off, although some weekend cuts are still possible.)
As any good accountant knows, every dollar counts.
Lahey fights back:
Lahey clinic is asking a judge to toss a lawsuit accusing it of bribing government officials in Bermuda to gain business on the island.
Back in February , Bermuda charged in federal court that Lahey bribed Dr. Ewart Brown, a former Bermudian prime minister, to steer health care business to Lahey, including lucrative contracts to read MRI and CT scans. The suit alleges the bribes were called "consulting fees."
The Burlington-based hospital responded today, saying its business was legal and routine, and there is nothing unusual about hiring a consultant to navigate and gain business in new markets.
They're back on: After months of fighting, Alere and Abbot are merging after all.
Alere of Waltham makes medical devices sold to doctors and clinics. In February, Abbott, of Lake Bluff, Ill., sued Alere to prevent the merger, saying Alere had lost value since the deal was struck. In August, Alere filed a complaint saying Abbott was trying to undermine the merger.
But now the merger is back on -- but at a $500 million discount. Abbott will pay $5.3 billion for Alere, not the $5.8 billon originally agreed.
Retail sales off: Americans are spending less, even though they feel pretty good about the economy.
Retail sales -- which include stores, online retailers and restaurants -- fell0.2 percent in March, according to the Commerce Department. Sales for February declined 0.3 percent.
Still, even though they're tightening their grip on their wallet, consumers feel good about the economy, according to a report released yesterday.
Living gets less expensive : What Americans pay for goods and servicesfell in March.
The Consumer Price Index fell a seasonally adjusted 0.3 percent for March. The decline was the result of cheaper cars, clothes, and mobile services.
The index is a measure of inflation. Economists said not to read too much into this one month reading. According to Bloomberg: “One very soft month does not make a new trend, though, so we will be looking for a clear rebound in April,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics Ltd.
Modern day Ben Franklin: He may be the most important medical entrepreneur you've never heard of -- until now.
Meet Richard Rox Anderson. So far this year, he has had two companies based on his work sold: SevenOaks Biosystems and Zeltiq Aesthetics. SevenOaks' price was undisclosed, but Zeltiq, maker of CoolSculpting fat-reduction, went for $2.48 billion. He holds somewhere in the neighborhood of 60 patents.
More than just an entrepreneur, Anderson is focused on everyday concerns. A practicing physican, he wants to cure acne. Suicide is the second leading cause of death for teens, and he believes bad acne and its social impact is a contributing factor. SevenOaks aims to repair skin of badly wounded people.
Boston-based Follica, also based on his work, is working on stimulating hair growth, and will soon publish studies. I know at least some of us will be watching closely....
J.C. Penny: J.C. Penny is postponing shuttering 138 stores. The delay was attributed to a rise in store traffic, likely due to nostalgia and falling prices, after the decision to close the stores was announced.
Uber says gains outpaced losses in 2016
Embattled company opens up its books -- Bloomberg
Misfit Toys R Us:
Chain struggles while toy industry thrives -- Washington Post
Paper Chase meant nothing?:
Bay State law students flunk bar at historic rate -- Boston Business Journal
Apple is ripe for the road:
Tech company OK to test self-driving cars in Calif. -- Bloomberg
Company sells Tom Brady PJs
Under Armour's CEO made $73m doing biz with company -- Wall Street Journal
Not everyone bargain hunts: Almost everyone likes to brag about a deal. Heck, back in the day, Filene's Basement bags did the bragging for you.
Health care may be a different story. As reported in today's Globe, one reason is it's hard to know if you're getting a deal. A 2012 Massachusetts law requires health care cost transparency, but the state's comparison shopping tool is a mess.
The Center for Health Information and Analysis says a website to let consumers shop around should be ready by by September, allowing patients to compare costs of MRI's, mammograms, colonoscopies, and other services with wide-ranging costs.
State officials are upbeat about the website's prospects. But research suggests while people favor cost transparency, only a fraction ever comparison shop. A patient may not feel a deal is worth the travel. They may also not be comfortable having a procedure done at a different facility than the one recommended by their doctor.