Start-Up Investors Grow Wary of Tech Ventures After Facebook’s I.P.O.

SAN FRANCISCO — Call it the Facebook effect. Until recently, investors had been all too eager to pour millions into any Web start-up with rapid growth, regardless of whether it made money or even had plans to do so down the road. But after Facebook’s rocky initial public offering and flameouts at Zynga and Groupon, venture capitalists are entering a picky phase.

Jennifer S. Altman for The New York Times

In Manhattan, workers at Omgpop, which offers an app that allows users to draw on a cellphone or iPad. It is owned by Zynga.

Investors predict that Zulily, a flash deal site for mothers, will have a hard time justifying its recent $1 billion valuation.

“Earlier, entrepreneurs didn’t need a real monetization strategy,” said Brian O’Malley, an early investor at Battery Ventures. “They could punt on revenue indefinitely because their investment dollars were their revenue. They could fund their start-ups with funding versus customers.”

No longer favored are e-commerce start-ups, which face logistical hurdles and require a lot of money. The celebrated shift to smartphones, once welcomed with an outpouring of investments, is now making some investors nervous as monetization proves harder for mobile devices than it did for the Web.

Investors have also grown weary of start-ups and applications that rely entirely on Facebook, Twitter and LinkedIn for customers, now that those companies are focused on their own bottom lines. And Silicon Valley is discovering that while it may be easier than ever to start a company, it is harder than ever to build an enduring business.

Younger start-ups are beginning to feel the pinch. CB Insights, a research firm, analyzed 4,056 initial, or seed, investments made in tech start-ups in the United States since 2009. It found that more than 1,000 start-ups that attracted seed financing from angel investors — wealthy investors who put in money from their own pockets — will find themselves orphaned this year when venture capitalists reject their requests for more money. As a result, $1 billion in angel investments will evaporate.

That carnage hardly compares to the bursting of the dot-com bubble in 2000, when $3 trillion was lost on the Nasdaq, but it is enough to give Internet investors and entrepreneurs pause.

CB Insights predicts that Internet start-ups will be the hardest hit, because they have attracted more seed money than enterprise and hardware companies but will most likely have a harder time securing follow-up investments.

Part of the problem is simple math. Angel investors seed businesses with small sums, often less than $1.5 million. But to grow a business, entrepreneurs eventually have to solicit financing from the venture capitalists who invest on behalf of endowments, pension funds, foundations and the like. And while the number of angels eager to write checks has increased, the number of active venture capitalists has decreased.

But investors say it is not just the bottleneck that is to blame. The realities of building an enduring business are starting to sink in. “It has never been easier to start a company, and never harder to build one,” said David Lee, a venture capitalist at SV Angel, an early-stage investment firm.

David O. Sacks, a Silicon Valley executive who sold Yammer to Microsoft for $1.2 billion last year, summed up the challenges in a bearish note on Facebook last August.

“I think Silicon Valley as we know it may be coming to an end,” Mr. Sacks wrote. “To create a successful new company,” he said, entrepreneurs have to find an idea that “has escaped the attention of the major Internet companies, which are better run than before.” To attract follow-up money, new companies now have to prove themselves for less than $5 million.

On top of that, they must be “protectable from the onslaught of those big companies once they figure out what you’re on to,” Mr. Sacks said. “How many ideas like that are left?”

Mr. Sacks’s comments were widely debated within Silicon Valley. One of his most vocal critics was Marc Andreessen, the co-founder of Netscape and of Andreessen-Horowitz, a venture capital firm, who said on Facebook that the opportunities for start-ups were “unending.”

But start-ups are finding that their supply of capital is not. “The valuations got ahead of themselves,” said Rich Wong, a venture investor at Accel Partners. “Where people only paid attention to multiple quarters, now they are looking more than a year ahead for projected results.”

Mr. Wong said e-commerce companies in particular were drawing closer scrutiny. Investors who took note of Amazon’s $1.2 billion acquisition of Zappos and its $540 million purchase of Quidsi, the owner of Diapers.com, poured millions into e-commerce sites, only to discover that they are difficult to run.

Gilt Groupe, a flash deal site for fashion, raised some $220 million in capital but is still not profitable. Last year, the company was forced to cut staff. It is scaling back on smaller brands like Gilt Taste and Park & Bond, and it has put Jetsetter, its popular online travel site, up for sale. Fab.com, a daily deal site for design, raised money at a lower valuation than it had planned because of Facebook’s troubled I.P.O. Investors also predict that Zulily, a flash deal site for mothers, will have a hard time justifying its recent $1 billion valuation.

ShoeDazzle, Kim Kardashian’s shoe site, raised $66 million and Lot18, a flash deal site for wine, raised $45 million from investors impressed with their user growth. Both companies were forced to make staff cuts last year.

This article has been revised to reflect the following correction:

Correction: January 14, 2013

An earlier version of this article misstated the amount of investor financing raised by BranchOut, a start-up. It has raised $49 million, not $85 million.

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IHT Rendezvous: 2012: The Year of Extreme Weather

The weather reports are in. 2012 was the hottest and the most extreme year on record in many places.

While parts of China are enduring the harshest winter in 30 years, the Antarctic is warming at an alarming rate. In Australia, out of control bushfires are partially the result of record-breaking weather (new colors were added to weather forecast maps, to account for the new kind of heat). In the United States, where Hurricane Sandy devastated parts of New Jersey and New York and where extreme drought still lingers in the Midwest, the average temperature in 2012 was more than a whole degree Fahrenheit (or 5/9 of a degree Celsius) higher than average – shattering the record.

On Friday a long-term weather forecast for the United States was released, when the National Climate Assessment and Development Advisory Committee published a draft of the third Climate Assessment Report. Like last year’s weather, the assessment does not pull its punches.

“Climate change threatens human health and well-being in many ways, including impacts from increased extreme weather events, wildfire, decreased air quality, diseases transmitted by insects, food, and water, and threats to mental health,” write the authors as part of their key findings.

Experts from 13 federal agencies, including NASA, the State Department and the Department of Defense put together the report under the auspices of the United States Global Change Research Program.

While some predictions have been adjusted upward from previous reports, the difference in tone in this newest assessment is striking. The second assessment, published in 2009, predicted of thresholds that will be crossed, while the 2013 draft presents a reality in which some of the changes are already irreversible.

“As a result of past emissions of heat-trapping gases, some amount of additional climate change and related impacts is now unavoidable,” wrote the authors in the executive summary.

Adaptation to climate change is discussed in the new draft, which is open for public comment before it is officially released early in 2014. The authors write:

Planning and managing based on the climate of the last century means that tolerances of some infrastructure and species will be exceeded. For example, building codes and landscaping ordinances will likely need to be updated not only for energy efficiency, but also to conserve water supplies, protect against insects that spread disease, reduce susceptibility to heat stress, and improve protection against extreme events.

The authors predict that within the next several decades, temperatures will go up between 2 and 4 degrees Fahrenheit, roughly 1 and 2 degrees Celsius. The experts discuss a possible 10 degree Fahrenheit (or more than 5 degrees Celsius) warming by the end of the century, in the case that not enough is done to curb emissions. (The World Bank recently released a report of the dangers of a world warmed by 4 degrees Celsius).

Sea levels could rise up to four feet, or 1.2 meters, within the century, according to the experts.

Though official assessments, predictions and studies like these serve to reinforce what many already fear, they do not necessarily lead to policy change. Andrew Restuccia predicted in a Politico article that the new report would ultimately do little to change the embittered climate-change politics in that country. He wrote:

But don’t hold your breath for serious action on climate change in Congress. Republicans and some moderate Democrats remain opposed to measures to address climate change. The Obama administration, meanwhile, is moving forward with its own efforts on climate change, including beefed-up fuel economy standards and greenhouse gas regulations for new power plants.

Sometimes official assessment reports provide substance for those who question man-made climate change.

My colleague Andrew C. Revkin recently reported on how a revision by Britain’s Weather and Climate Agency on short-term global temperature forecast became fodder for climate change deniers. The fact that the government agency had revised its numbers downward allowed climate change skeptics to argue that the world was not significantly warming after all.

In December, Alec Rawls, a climate-change skeptic, made a name for himself by leaking an unpublished Assessment Report from the Intergovernmental Panel on Climate Change, one of the major global players in climate change assessment. Mr. Rawls tried to argue that the panel’s language on solar radiation was an admission that much of the warming trends were caused by the sun, not human activity.

As Andrew reported at time, his claims were mostly debunked.

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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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City Room: Cuomo Declares Public Health Emergency Over Flu Outbreak

With the nation in the grip of a severe influenza outbreak that has seen deaths reach epidemic levels, New York State declared a public health emergency on Saturday, making access to vaccines more easily available.

There have been nearly 20,000 cases of flu reported across the state so far this season, officials said. Last season, 4,400 positive laboratory tests were reported.

“We are experiencing the worst flu season since at least 2009, and influenza activity in New York State is widespread, with cases reported in all 57 counties and all five boroughs of New York City,” Gov. Andrew M. Cuomo said in a statement.

Under the order, pharmacists will be allowed to administer flu vaccinations to patients between 6 months and 18 years old, temporarily suspending a state law that prohibits pharmacists from administering immunizations to children.

While children and older people tend to be the most likely to become seriously ill from the flu, Mr. Cuomo urged all New Yorkers to get vaccinated.

On Friday, the Centers for Disease Control and Prevention in Atlanta said that deaths from the flu had reached epidemic levels, with at least 20 children having died nationwide. Officials cautioned that deaths from pneumonia and the flu typically reach epidemic levels for a week or two every year. The severity of the outbreak will be determined by how long the death toll remains high or if it climbs higher.

There was some evidence that caseloads may be peaking, federal officials said on Friday.

In New York City, public health officials announced on Thursday that flu-related illnesses had reached epidemic levels, and they joined the chorus of authorities urging people to get vaccinated.

“It’s a bad year,” the city’s health commissioner, Dr. Thomas A. Farley, told reporters on Thursday. “We’ve got lots of flu, it’s mainly type AH3N2, which tends to be a little more severe. So we’re seeing plenty of cases of flu and plenty of people sick with flu. Our message for any people who are listening to this is it’s still not too late to get your flu shot.”

There has been a spike in the number of people going to emergency rooms over the past two weeks with flulike symptoms – including fever, fatigue and coughing – Dr. Farley said.

Mayor Michael R. Bloomberg and Mr. Cuomo made a public display of getting shots this past week.

In a briefing with reporters on Friday, officials from the C.D.C. said that this year’s vaccine was effective in 62 percent of cases.

As officials have stepped up their efforts encouraging vaccinations, there have been scattered reports of shortages. But officials said plenty of the vaccine was available.

According to the C.D.C., makers of the flu vaccine produced about 135 million doses for this year. As of early this month, 128 million doses had been distributed. While that would not be enough for every American, only 37 percent of the population get a flu shot each year.

Federal health officials said they would be happy if that number rose to 50 percent, which would mean that there would be more than enough vaccine for anyone who wanted to be immunized.

Two other diseases – norovirus and whooping cough – are also widespread this winter and are contributing to the number of people getting sick.

The flu can resemble a cold, though the symptoms come on more rapidly and are more severe.

A version of this article appeared in print on 01/13/2013, on page A21 of the NewYork edition with the headline: New York Declares Health Emergency.

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City Room: Cuomo Declares Public Health Emergency Over Flu Outbreak

With the nation in the grip of a severe influenza outbreak that has seen deaths reach epidemic levels, New York State declared a public health emergency on Saturday, making access to vaccines more easily available.

There have been nearly 20,000 cases of flu reported across the state so far this season, officials said. Last season, 4,400 positive laboratory tests were reported.

“We are experiencing the worst flu season since at least 2009, and influenza activity in New York State is widespread, with cases reported in all 57 counties and all five boroughs of New York City,” Gov. Andrew M. Cuomo said in a statement.

Under the order, pharmacists will be allowed to administer flu vaccinations to patients between 6 months and 18 years old, temporarily suspending a state law that prohibits pharmacists from administering immunizations to children.

While children and older people tend to be the most likely to become seriously ill from the flu, Mr. Cuomo urged all New Yorkers to get vaccinated.

On Friday, the Centers for Disease Control and Prevention in Atlanta said that deaths from the flu had reached epidemic levels, with at least 20 children having died nationwide. Officials cautioned that deaths from pneumonia and the flu typically reach epidemic levels for a week or two every year. The severity of the outbreak will be determined by how long the death toll remains high or if it climbs higher.

There was some evidence that caseloads may be peaking, federal officials said on Friday.

In New York City, public health officials announced on Thursday that flu-related illnesses had reached epidemic levels, and they joined the chorus of authorities urging people to get vaccinated.

“It’s a bad year,” the city’s health commissioner, Dr. Thomas A. Farley, told reporters on Thursday. “We’ve got lots of flu, it’s mainly type AH3N2, which tends to be a little more severe. So we’re seeing plenty of cases of flu and plenty of people sick with flu. Our message for any people who are listening to this is it’s still not too late to get your flu shot.”

There has been a spike in the number of people going to emergency rooms over the past two weeks with flulike symptoms – including fever, fatigue and coughing – Dr. Farley said.

Mayor Michael R. Bloomberg and Mr. Cuomo made a public display of getting shots this past week.

In a briefing with reporters on Friday, officials from the C.D.C. said that this year’s vaccine was effective in 62 percent of cases.

As officials have stepped up their efforts encouraging vaccinations, there have been scattered reports of shortages. But officials said plenty of the vaccine was available.

According to the C.D.C., makers of the flu vaccine produced about 135 million doses for this year. As of early this month, 128 million doses had been distributed. While that would not be enough for every American, only 37 percent of the population get a flu shot each year.

Federal health officials said they would be happy if that number rose to 50 percent, which would mean that there would be more than enough vaccine for anyone who wanted to be immunized.

Two other diseases – norovirus and whooping cough – are also widespread this winter and are contributing to the number of people getting sick.

The flu can resemble a cold, though the symptoms come on more rapidly and are more severe.

A version of this article appeared in print on 01/13/2013, on page A21 of the NewYork edition with the headline: New York Declares Health Emergency.

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India Ink: Woman Raped by Seven Men in Punjab, India, Police Say

NEW DELHI — Police said Sunday that a  29-year-old woman had been raped by a bus driver, a bus conductor and five other men in the north Indian state of Punjab, in an incident that recalls the recent attack in Delhi that has caused widespread outrage.

The woman boarded a bus on Friday bound for Gurdaspur, to visit her in-laws, the police chief of Gurdaspur, Raj Jit Singh, said in a telephone interview. When she got off the bus, the driver offered her a ride on his motorcycle, perhaps to her in-laws village, the police said. Instead, he took her to a nearby village where he and six other men, including the bus conductor, raped her repeatedly through the night.

The next morning, the driver dropped her at her in-laws home, where the woman told her family members of the incident, and then reported it to the police, Mr. Singh said.

Six men, including the bus driver and conductor, have been arrested, he said. All of the men are their twenties.

Gurmesh Singh, the deputy superintendent of police for the  region, said it was unclear how or why the bus driver persuaded the woman to go with him on his motorcycle. She was in a state of distress during the bus ride, Mr. Singh said, and originally refused to get off of the bus when it reached its final destination.

The Press Trust of India reported that the bus driver did not stop at her stop when requested.

The gang-rape of a woman on a moving bus in New Delhi on Dec. 16, and her subsequent death from injuries sustained during the rape, has sparked widespread protests and calls for increased policing and tougher laws against sexual assault in India.

The case against five of the men arrested in that rape is being heard this month in a special fast-track court created just for incidents of sexual assault.

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Aaron Swartz, Internet Activist, Dies at 26

Michael Francis McElroy for The New York Times

Aaron Swartz in 2009.

Aaron Swartz, a wizardly programmer who as a teenager helped develop code that delivered ever-changing Web content to users and later became a steadfast crusader to make that information freely available, was found dead on Friday in his New York apartment.

He was 26.

 An uncle, Michael Wolf, said that Mr. Swartz had apparently hanged himself, and that Mr. Swartz’s girlfriend had discovered the body.

At 14, Mr. Swartz helped create RSS, the nearly ubiquitous tool that allows users to subscribe to online information. He later became an Internet folk hero, pushing to make many Web files free and open to the public. But in July 2011, he was indicted on federal charges of gaining illegal access to JSTOR, a subscription-only service for distributing scientific and literary journals, and downloading 4.8 million articles and documents, nearly the entire library.

Charges in the case, including wire fraud and computer fraud, were pending at the time of Mr. Swartz’s death, carrying potential penalties of up to 35 years in prison and $1 million in fines.

“Aaron built surprising new things that changed the flow of information around the world,” said Susan Crawford, a professor at the Cardozo School of Law in New York who served in the Obama administration as a technology adviser. She called Mr. Swartz “a complicated prodigy” and said “graybeards approached him with awe.”

Mr. Wolf said he would remember his nephew as a young man who “looked at the world, and had a certain logic in his brain, and the world didn’t necessarily fit in with that logic, and that was sometimes difficult.”

The Tech, a newspaper of the Massachusetts Institute of Technology, reported Mr. Swartz’s death early Saturday.

Mr. Swartz led an often itinerant life that included dropping out of Stanford, forming companies and organizations, and becoming a fellow at Harvard University’s Edmond J. Safra Center for Ethics.

He formed a company that merged with Reddit, the popular news and information site. He also co-founded Demand Progress, a group that promotes online campaigns on social justice issues — including a successful effort, with other groups, to oppose a Hollywood-backed Internet piracy bill.

But he also found trouble when he took part in efforts to release information to the public that he felt should be freely available. In 2008, he took on PACER, or Public Access to Court Electronic Records, the repository for federal judicial documents.

The database charges 10Ö cents a page for documents; activists like Carl Malamud, the founder of 2public.resource.org,1 have long argued that such documents should be free because they are produced at public expense. Joining Mr. Malamud’s efforts to make the documents public by posting legally obtained files to the Internet for free access, Mr. Swartz wrote an elegant little program to download 20 million pages of documents from free library accounts, or roughly 20 percent of the enormous database.

 The government abruptly shut down the free library program, and Mr. Malamud feared that legal trouble might follow even though he felt they had violated no laws. As he recalled in a newspaper account of the events, “I immediately saw the potential for overreaction by the courts.” He recalled telling Mr. Swartz: “You need to talk to a lawyer. I need to talk to a lawyer.”

 Mr. Swartz recalled in a 2009 interview, “I had this vision of the feds crashing down the door, taking everything away.” He said he locked the deadbolt on his door, lay down on the bed for a while and then called his mother.

 

When an article about his Pacer exploit was published in The New York Times, Mr. Swartz responded in a blog postin a typically puckish manner, announcing the story in the form of a personal ad: “Attention attractive people: Are you looking for someone respectable enough that they’ve been personally vetted by The New York Times, but has enough of a bad-boy streak that the vetting was because they ‘liberated’ millions of dollars of government documents? If so, look no further than page A14 of today’s New York Times.

The federal government investigated but decided not to prosecute.

In 2011, however, Mr. Swartz went beyond that, according to a federal indictment. In an effort to provide free public access to JSTOR, he broke into computer networks at M.I.T. by means that included gaining entry to a utility closet on campus and leaving a laptop that signed into the university network under a false account, federal officials said.

Ravi Somaiya contributed reporting.

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‘Bodega Clinicas’ Draw Interest of Health Officials

HUNTINGTON PARK, Calif. — The “bodega clinicas” that line the bustling commercial streets of immigrant neighborhoods around Los Angeles are wedged between money order kiosks and pawnshops. These storefront offices, staffed with Spanish-speaking medical providers, treat ailments for cash: a doctor’s visit is $20 to $40; a cardiology exam is $120; and at one bustling clinic, a colonoscopy is advertised on an erasable board for $700.

County health officials describe the clinics as a parallel health care system, serving a vast number of uninsured Latino residents. Yet they say they have little understanding of who owns and operates them, how they are regulated and what quality of medical care they provide. Few of these low-rent corner clinics accept private insurance or participate in Medicaid managed care plans.

“Someone has to figure out if there’s a basic level of competence,” said Dr. Patrick Dowling, the chairman of the family medicine department at the David Geffen School of Medicine at the University of California, Los Angeles.

Not that researchers have not tried. Dr. Dowling, for one, has canvassed the clinics for years to document physician shortages as part of his research for the state. What he and others found was that the owners were reluctant to answer questions. Indeed, multiple attempts in recent weeks to interview owners and employees at a half-dozen of the clinics in Southern California proved fruitless.

What is certain, however, is that despite their name, many of these clinics are actually private doctor’s offices, not licensed clinics, which are required to report regularly to federal and state oversight bodies.

It is a distinction that deeply concerns Kimberly Wyard, the chief executive of the Northeast Valley Health Corporation, a nonprofit group that runs 13 accredited health clinics for low-income Southern Californians. “They are off the radar screen,” said Ms. Wyard of the bodega clinicas, “and it’s unclear what they’re doing.”

But with deadlines set by the federal Affordable Care Act quickly approaching, health officials in Los Angeles are vexed over whether to embrace the clinics and bring them — selectively and gingerly — into the network of tightly regulated public and nonprofit health centers that are driven more by mission than by profit to serve the uninsured.

Health officials see in the clinics an opportunity to fill persistent and profound gaps in the county’s strained safety net, including a chronic shortage of primary care physicians. By January 2014, up to two million uninsured Angelenos will need to enroll in Medicaid or buy insurance and find primary care.

And the clinics, public health officials point out, are already well established in the county’s poorest neighborhoods, where they are meeting the needs of Spanish-speaking residents. The clinics also could continue to serve a market that the Affordable Care Act does not touch: illegal immigrants who are prohibited from getting health insurance under the law.

Dr. Mark Ghaly, the deputy director of community health for the Los Angeles County Department of Health Services, said bodega clinicas — a term he seems to have coined — that agree to some scrutiny could be a good way of addressing the physician shortage in those neighborhoods.

“Where are we going to find those providers?” he said. “One logical place to consider looking is these clinics.”

Los Angeles is not the only city with a sizable Latino population where the clinics have become a part of the streetscape. Health care providers in Phoenix and Miami say there are clinics in many Latino neighborhoods.

But their presence in parts of the Los Angeles area can be striking, with dozens in certain areas. Visits to more than two dozen clinics in South Los Angeles and the San Fernando Valley found Latino women in brightly colored scrubs handing out cards and coupons that promised a range of services like pregnancy tests and endoscopies. Others advertised evening and weekend hours, and some were open around the clock.

Such all-hours access and upfront pricing are critical, Latino health experts say, to a population that often works around the clock for low wages.

Also important, officials say, is that new immigrants from Mexico and Central America are more accustomed to corner clinics, which are common in their home countries, than to the sprawling medical complexes or large community health centers found in the United States. And they can get the kind of medical treatments — including injections of hypertension drugs, intravenous vitamins and liberally dispensed antibiotics — that are frowned upon in traditional American medicine.

The waiting rooms at the clinics reflected the everyday maladies of peoples’ lives: a glassy-eyed child resting listlessly on his mother’s lap, a fit-looking young woman waiting with a bag of ice on her wrist, a pensive middle-aged man in work boots staring straight ahead.

For many ordinary complaints, the medical care at these clinics may be suitable, county health officials and medical experts say. But they say problems arise when an illness exceeds the boundaries of a physician’s skills or the patient’s ability to pay cash.

Dr. Raul Joaquin Bendana, who has been practicing general medicine in South Los Angeles for more than 20 years, said the clinics would refer patients to him when, for example, they had uncontrolled diabetes. “They refer to me because they don’t know how to handle the situation,” he said.

The clinic physicians by and large appear to have current medical licenses, a sample showed, but experts say they are unlikely to be board certified or have admitting privileges at area hospitals. That can mean that some clinics try to treat patients who face serious illness.

Olivia Cardenas, 40, a restaurant worker who lives in Woodland Hills, Calif., got a free Pap smear at a clinic that advertises “especialistas,” including in gynecology. The test came back abnormal, and the doctor told Ms. Cardenas that she had cervical cancer. “Come back in a week with $5,000 in cash, and I’ll operate on you,” Ms. Cardenas said the doctor told her. “Otherwise you could die.”

She declined to pay the $5,000. Instead, a family friend helped her apply for Medicaid, and she went to a hospital. The diagnosis, it turned out, was correct.

Health care experts say the clinics’ medical practices would come under greater scrutiny if they were brought closer into the fold.

But being connected would mean the clinics’ cash-only business model would need to change. Dr. Dowling said the lure of newly insured patients in 2014 might draw them in. “To the extent there are payments available,” he said, “the legitimate ones might step up to the plate.”

This article was produced in collaboration with Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.

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‘Bodega Clinicas’ Draw Interest of Health Officials

HUNTINGTON PARK, Calif. — The “bodega clinicas” that line the bustling commercial streets of immigrant neighborhoods around Los Angeles are wedged between money order kiosks and pawnshops. These storefront offices, staffed with Spanish-speaking medical providers, treat ailments for cash: a doctor’s visit is $20 to $40; a cardiology exam is $120; and at one bustling clinic, a colonoscopy is advertised on an erasable board for $700.

County health officials describe the clinics as a parallel health care system, serving a vast number of uninsured Latino residents. Yet they say they have little understanding of who owns and operates them, how they are regulated and what quality of medical care they provide. Few of these low-rent corner clinics accept private insurance or participate in Medicaid managed care plans.

“Someone has to figure out if there’s a basic level of competence,” said Dr. Patrick Dowling, the chairman of the family medicine department at the David Geffen School of Medicine at the University of California, Los Angeles.

Not that researchers have not tried. Dr. Dowling, for one, has canvassed the clinics for years to document physician shortages as part of his research for the state. What he and others found was that the owners were reluctant to answer questions. Indeed, multiple attempts in recent weeks to interview owners and employees at a half-dozen of the clinics in Southern California proved fruitless.

What is certain, however, is that despite their name, many of these clinics are actually private doctor’s offices, not licensed clinics, which are required to report regularly to federal and state oversight bodies.

It is a distinction that deeply concerns Kimberly Wyard, the chief executive of the Northeast Valley Health Corporation, a nonprofit group that runs 13 accredited health clinics for low-income Southern Californians. “They are off the radar screen,” said Ms. Wyard of the bodega clinicas, “and it’s unclear what they’re doing.”

But with deadlines set by the federal Affordable Care Act quickly approaching, health officials in Los Angeles are vexed over whether to embrace the clinics and bring them — selectively and gingerly — into the network of tightly regulated public and nonprofit health centers that are driven more by mission than by profit to serve the uninsured.

Health officials see in the clinics an opportunity to fill persistent and profound gaps in the county’s strained safety net, including a chronic shortage of primary care physicians. By January 2014, up to two million uninsured Angelenos will need to enroll in Medicaid or buy insurance and find primary care.

And the clinics, public health officials point out, are already well established in the county’s poorest neighborhoods, where they are meeting the needs of Spanish-speaking residents. The clinics also could continue to serve a market that the Affordable Care Act does not touch: illegal immigrants who are prohibited from getting health insurance under the law.

Dr. Mark Ghaly, the deputy director of community health for the Los Angeles County Department of Health Services, said bodega clinicas — a term he seems to have coined — that agree to some scrutiny could be a good way of addressing the physician shortage in those neighborhoods.

“Where are we going to find those providers?” he said. “One logical place to consider looking is these clinics.”

Los Angeles is not the only city with a sizable Latino population where the clinics have become a part of the streetscape. Health care providers in Phoenix and Miami say there are clinics in many Latino neighborhoods.

But their presence in parts of the Los Angeles area can be striking, with dozens in certain areas. Visits to more than two dozen clinics in South Los Angeles and the San Fernando Valley found Latino women in brightly colored scrubs handing out cards and coupons that promised a range of services like pregnancy tests and endoscopies. Others advertised evening and weekend hours, and some were open around the clock.

Such all-hours access and upfront pricing are critical, Latino health experts say, to a population that often works around the clock for low wages.

Also important, officials say, is that new immigrants from Mexico and Central America are more accustomed to corner clinics, which are common in their home countries, than to the sprawling medical complexes or large community health centers found in the United States. And they can get the kind of medical treatments — including injections of hypertension drugs, intravenous vitamins and liberally dispensed antibiotics — that are frowned upon in traditional American medicine.

The waiting rooms at the clinics reflected the everyday maladies of peoples’ lives: a glassy-eyed child resting listlessly on his mother’s lap, a fit-looking young woman waiting with a bag of ice on her wrist, a pensive middle-aged man in work boots staring straight ahead.

For many ordinary complaints, the medical care at these clinics may be suitable, county health officials and medical experts say. But they say problems arise when an illness exceeds the boundaries of a physician’s skills or the patient’s ability to pay cash.

Dr. Raul Joaquin Bendana, who has been practicing general medicine in South Los Angeles for more than 20 years, said the clinics would refer patients to him when, for example, they had uncontrolled diabetes. “They refer to me because they don’t know how to handle the situation,” he said.

The clinic physicians by and large appear to have current medical licenses, a sample showed, but experts say they are unlikely to be board certified or have admitting privileges at area hospitals. That can mean that some clinics try to treat patients who face serious illness.

Olivia Cardenas, 40, a restaurant worker who lives in Woodland Hills, Calif., got a free Pap smear at a clinic that advertises “especialistas,” including in gynecology. The test came back abnormal, and the doctor told Ms. Cardenas that she had cervical cancer. “Come back in a week with $5,000 in cash, and I’ll operate on you,” Ms. Cardenas said the doctor told her. “Otherwise you could die.”

She declined to pay the $5,000. Instead, a family friend helped her apply for Medicaid, and she went to a hospital. The diagnosis, it turned out, was correct.

Health care experts say the clinics’ medical practices would come under greater scrutiny if they were brought closer into the fold.

But being connected would mean the clinics’ cash-only business model would need to change. Dr. Dowling said the lure of newly insured patients in 2014 might draw them in. “To the extent there are payments available,” he said, “the legitimate ones might step up to the plate.”

This article was produced in collaboration with Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.

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Aaron Swartz, Internet Activist, Dies at 26

Michael Francis McElroy for The New York Times

Aaron Swartz in 2009.

Aaron Swartz, a wizardly programmer who as a teenager helped to develop code that delivered ever-changing Web content to users and later became a steadfast crusader to make that information freely available, was found dead on Friday in his New York apartment, an apparent suicide.

 An uncle, Michael Wolf, said that Mr. Swartz had apparently hanged himself, and that Mr. Swartz’s girlfriend had discovered the body.

At 14, Mr. Swartz helped create RSS, the nearly ubiquitous software that allows users to subscribe to online information. Later, he became even more of an Internet folk hero, pushing to make many Web files free and open to the public. But in July 2011, he was indicted on federal charges of gaining illegal access to JSTOR, a subscription-only service for distributing scientific and literary journals, and downloading 4.8 million articles and documents, nearly the entire library.

Charges in the case, including wire fraud and computer fraud, were pending at the time of Mr. Swartz’s death, carrying potential penalties of up to 35 years in prison and $1 million in fines.

“Aaron built surprising new things that changed the flow of information around the world,” said Susan Crawford, a professor at Cardozo School of Law in New York who served in the Obama administration as a technology adviser. She called Mr. Swartz “a complicated prodigy,” and said “graybeards approached him with awe.”

 

Mr. Wolf, his uncle, said that he would remember Mr. Swartz as a young man who “looked at the world, and had a certain logic in his brain, and the world didn’t necessarily fit in with that logic, and that was sometimes difficult.”

The Tech, a newspaper of the Massachusetts Institute of Technology, reported Mr. Swartz’s death early Saturday.

Mr. Swartz led an often itinerant life that included dropping out of Stanford, forming companies and organizations, and becoming a fellow at Harvard University’s Edmond J. Safra Center for Ethics.

Mr. Swartz formed a company that merged with Reddit, the popular news and information site. He also co-founded Demand Progress, a group that promotes online campaigns on social justice issues — including a successful effort, with other groups, to oppose a Hollywood-backed Internet piracy bill known as SOPA, the Stop Piracy Act.

But he also found trouble when he took part in efforts to release information to the public that he felt should be freely available. In 2008, he took on Pacer — or Public Access to Court Electronic Records, the repository for federal judicial documents. The database charges 10 cents a page for documents; activists like Carl Malamud, the founder of public.resource.org, have long argued that such documents should be free since they are produced at public expense. Joining Mr. Malamud’s efforts to make the documents public by posting legally obtained files to the Internet for free access, he wrote an elegant little program to download 20 million pages of documents from free library accounts, or roughly 20 percent of the enormous database.

The government abruptly shut down the free library program, and Mr. Malamud feared that legal trouble might follow, even though he felt they had violated no laws. As he recalled in a newspaper account of the events, “I immediately saw the potential for overreaction by the courts.” He recalled telling Mr. Swartz, “You need to talk to a lawyer. I need to talk to a lawyer.”

Mr. Swartz recalled, “I had this vision of the feds crashing down the door, taking everything away.” He said he locked the deadbolt on his door, lay down on the bed for a while, and then called his mother.

When an article about his Pacer exploit was published in The New York Times, Mr. Swartz responded in a blog post in a typically puckish manner, announcing the story in the form of a personal ad: “Attention attractive people: Are you looking for someone respectable enough that they’ve been personally vetted by The New York Times, but has enough of a bad-boy streak that the vetting was because they ‘liberated’ millions of dollars of government documents? If so, look no further than page A14 of today’s New York Times.” In the Pacer exploit, the federal government investigated but decided not to prosecute.

In 2011, however, Mr. Swartz went beyond that, according to a federal indictment. In an effort to provide free public access to JSTOR, he broke into computer networks at the Massachusetts Institute of Technology by means that included breaking into a utility closet on campus and leaving a laptop that signed into the university computer network under a false account, federal officials said.

Mr. Swartz returned the hard drives with 4.8 million documents, and JSTOR declined to pursue the case. But United States attorney Carmen M. Ortiz pressed on, saying that “Stealing is stealing, whether you use a computer command or a crowbar, and whether you take documents, data or dollars.”

Ravi Somaiya contributed reporting.

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