BuSINESS
SATURDAY, SEPTEMBER 7, 2019:: LATIMES.COM/BUSINESS
C
DOW26,797.46▲69.31 S&P5002,978.71 2.71▲ NASDAQ8,103.07 13.75▼ GOLD$1,506.20 9.20▼ OIL$56.52 0.22▲ EURO$1.1028▼▼.0008 U.S. T-NOTE(10-yr.)1.55% 0.Economists and re-
searchers long have blamed
the high cost of healthcare in
Northern California on the
giant medical systems that
have gobbled up hospitals
and physician practices —
most notably Sutter Health,
a nonprofit chain with 24
hospitals, 34 surgery centers
and 5,000 physicians across
the region.
Now, those arguments
will have their day in court: A
long-awaited class-action
lawsuit against Sutter is set
to open Sept. 23 in San Fran-
cisco County Superior
Court.
The hospital giant, with
$13 billion in operating reve-
nue in 2018, stands accused
of violating California’s an-
titrust laws by leveraging its
market power to drive out
competition and overcharge
patients. Healthcare costs
in Northern California,
where Sutter is dominant,
are 20% to 30% higher than
in Southern California, even
after adjusting for cost of liv-
ing, according to a 2018 study
from the Nicholas C. Petris
Center at UC Berkeley cited
in the complaint.
The case was initiated in
2014 by self-funded employ-
ers and union trusts that
pay for worker healthcare. It
since has been joined with a
similar case brought last
year by California Atty. Gen.
Xavier Becerra. The plain-
tiffs seek as much as $
million in damages for over-
payments that they attrib-
ute to Sutter; under Califor-
nia’s antitrust law, the award
can be tripled, leaving Sutter
liable for as much as $2.7 bil-
lion.
The case is being fol-
lowed closely by industry
leaders and academics alike.
“This case could be huge.
It could be existential,” said
Glenn Melnick, a healthcareMedical
giant’s
antitrust
trial
nears
Northern California-
based Sutter Health
is accused of raising
prices by driving out
competition.
By Jenny Gold[SeeSutter,C5]$1.61 billion last year.
Perhaps more than any
other start-up, WeWork,
which provides shared work-
spaces for businesses as well
as individuals, has come to
symbolize the brash invest-
ment style of SoftBank and
its $100-billion Vision Fund,
known for making huge bets
on promising but unproven
companies, and spurring
others in the industry to fol-
low suit to compete. The suc-
cess or failure of WeWork’s
initial public offering is likely
to be read as a statement on
the overall standing of Soft-
Bank, the judgment of its
executives and its ability to
raise cash for future ven-
tures.
SoftBank’s big bet may
already be turning sour as
WeWork mulls over an IPO
that would peg its worth at
less than half the $47-billion
valuation it had when Soft-
Bank invested earlier this
year. New York-based We-
Work is now said to be con-
sidering a market debut at
just $20 billion to $30 billion,As WeWork contem-
plates listing on the public
markets at a far lower valua-
tion than previously ex-
pected, its biggest backer —
Japan’s SoftBank Group
Corp. — is bracing for a po-
tentially staggering loss, a
stark reminder of the risks of
an investing strategy that
inflated start-up valuations
across Silicon Valley.
SoftBank has a roughly
29% stake in We Co., We-
Work’s parent, one executive
said in an analyst call
Wednesday, after the com-
pany plowed $10.65 billion
into the start-up. The Tokyo
conglomerate’s massive
stake is a vote of confidence
in the unprofitable com-
pany, which lost aboutSoftBank’s bet on
WeWork looks
iffy ahead of IPO
With a roughly 29%
stake, Japanese firm
braces for potentially
huge loss if debut fails.
By Sarah McBride
and Giles Turner[SeeWe Wo r k , C4]WASHINGTON — U.S.
employers added a modest
130,000 jobs in August, a sign
that hiring has slowed but
remains durable in the face
of global economic weak-
ness and President Trump’s
trade war with China.
The unemployment rate
remained at 3.7% for a third
straight month, the Labor
Department said Friday,
near the lowest level in five
decades. And more Ameri-
cans entered the workforce,
a positive development that
increased the proportion of
adults who are either work-
ing or seeking work to its
highest level since February.
August’s job gain was
boosted by the temporary
hiring of 25,000 government
workers for the 2020 census.
Excluding all government
hiring, the economy gained
just 96,000 jobs in August,
U.S. job growth slow but steady
Unemployment holds
at 3.7% even as more
people join the
workforce. Average
pay outpaces inflation.
associated press
WITH THEunemployment rate so low, companies are having a harder time find-
ing qualified workers. Above is a job fair last month in Atlanta.Bob AndresAssociated Press[SeeJobs, C5]Delta Air Lines began using facial recogni-
tion technology at Los Angeles International
Airport on Friday, installing cameras to identify
passengers at one boarding gate, with plans to
add more.
The move by the Atlanta-based carrier
comes as a coalition of progressive groups, in-
cluding Greenpeace, MoveOn and the Elec-
tronic Privacy Information Center, called for a
federal ban on the use of facial recognition tech-
nology by law enforcement agencies.
Critics of the technology say that the images
collected by the cameras can be stored and used
to violate the privacy of innocent people, and
that the technology is more likely to misidentify
women and people of color than white men.
Fight for the Future, a nonprofit group op-
posed to online censorship and a member of the
coalition, said the group is opposed to the use of
facial recognition for airlines.
“There is no real oversight for how a private
corporation can use our biometric information
once they’ve collected it,” said Evan Greer, depu-
ty director of Fight for the Future. “We’ve already
seen high-profile data breaches where airport
facial recognition databases were hacked and
exposed.”
Over the last 12 months,
TRAVELERS PREPAREfor a Paris-bound flight Friday at LAX, where Delta has added facial recognition cameras at one gate.
Photographs byRobert GauthierLos Angeles TimesIncreasingly familiar sight:
Facial recognition at LAX
Delta installs tech at one gate and plans to add more, raising privacy fears
DELTA SAYSfacial recognition cameras can save about nine minutes per flight. Critics
worry that the images collected could be used to violate the privacy of innocent people.By Hugo Martin
[SeeDelta,C4]