Honesty is a Virtue

Tenet Healthcare, Cheating, Apple, Theranos, OpenSea, Guinea, and Genius

Tenet Healthcare

We talked about the ways Tenet contributed to the shuttering of Hahnemann hospital in Philadelphia, but did you know they’re also currently involved in the longest nurses’ strike in Massachusetts history? Over six months ago, nurses at St Vincent’s Hospital in Worcester threatened to strike over staffing shortages - not more pay, their complaint was the hospital was understaffed and patient care was suffering. In response, Tenet hired scabs to fill their roles, which the nurses’ union estimates cost $100 million dollars, and spent millions more on police to manage the striking workers outside the facility:

The city has billed Tenet Healthcare more than $3 million for police details outside St. Vincent Hospital since the nurses' strike began in March.

That's an average of over $18,000 per day, according to financial records provided by the city Tuesday.

Recently the two sides nearly came to an agreement on terms, but Tenet refused to give striking nurses their jobs back if they returned:

The parties had agreed on staffing measures, but Tenet rejected the union’s return-to-work agreement that placed all the striking nurses back in their former positions, according to Pellegrino. She said Tenet would have displaced the nurses to other areas of the hospital, which she called a “form of revenge.”

And, Tenet filed to end unemployment benefits for the strikers, who may now have to pay the state back money they’ve already received:

Pellegrino explained that nurses have been able to collect unemployment so long as the hospital is open and providing services. But the hospital cut back on some services and beds at the beginning of August, prompting the DUA review.

Pellegrino said the move was “just another wrench to throw into the mix to scare nurses and coerce them to get them to cross the picket line.”

All this because the nurses’ union asked the hospital to hire more staff because it was concerned about patient care. The perverse incentives that drive a for-profit hospital chain to spend over a hundred million dollars attempting to break a union strike rather than hiring more staff to care for patients are one of the countless reasons our country’s health system is hopelessly broken.

Cheating

In 2012, researchers published a study on cheating. They claimed that when people signed an honesty declaration before filling out a form, they were less likely to lie on the form. The research has been widely cited and used by governments and private companies to attempt to alter behavior. There’s one problem - the data was faked:

Years later, [Dan Ariely] and his coauthors found that follow-up experiments did not show the same reduction in dishonest behavior. But more recently, a group of outside sleuths scrutinized the original paper’s underlying data and stumbled upon a bigger problem: One of its main experiments was faked “beyond any shadow of a doubt,” three academics wrote in a post on their blog, Data Colada, on Tuesday.

Good job, Data Colada. Ariely has made a career off his work, and it turns out the story behind the study had serious red flags:

But it’s still unclear who made up the data or why — and four of the five authors said they played no part in collecting the data for the test in question.

That leaves Ariely, who confirmed that he alone was in touch with the insurance company that ran the test with its customers and provided him with the data. But he insisted that he was innocent, implying it was the company that was responsible. “I can see why it is tempting to think that I had something to do with creating the data in a fraudulent way,” he told BuzzFeed News. “I can see why it would be tempting to jump to that conclusion, but I didn’t.”

I mean, okay? Apparently an insurance company ran the honesty oath experiment and then provided data to Ariely - and only him! - which he published with his coauthors, who were not concerned with validating the data.

Ariely has been doing this for awhile, it seems:

And this is not the first time questions have been raised about Ariely’s research in particular. In a famous 2008 study, he claimed that prompting people to recall the Ten Commandments before a test cuts down on cheating, but an outside team later failed to replicate the effect. An editor’s note was added to a 2004 study of his last month when other researchers raised concerns about statistical discrepancies, and Ariely did not have the original data to cross-check against. And in 2010, Ariely told NPR that dentists often disagree on whether X-rays show a cavity, citing Delta Dental insurance as his source. He later walked back that claim when the company said it could not have shared that information with him because it did not collect it.

Uhh! Can we stop giving this guy a platform perhaps? Anyhow, it turns out the author of a book called The (Honest) Truth About Dishonesty may be more of a subject matter expert on the topic than we thought.

Apple

Last year, Apple got into a dustup with Epic Games about the fees it charges developers on its app store. The judge in the case issued a ruling last week that is truly a big deal:

In short, iOS apps must be allowed to direct users to payment options beyond those offered by Apple. The injunction is scheduled to take effect in 90 days — on December 9th — unless it is enjoined by a higher court.

Apple called the ruling a win, because the judge didn’t say their App Store was a violation of antitrust law, and Epic said it was disappointed in the ruling because it doesn’t allow for other in-app payment methods - users would still have to go through additional steps to pay outside of the Apple ecosystem. So, according to both companies, no one really won, but it is the first crack in Apple’s monopoly over payments on the App Store. Epic is also suing Google for the same practices. The goal of these lawsuits - for Epic, and for consumers more broadly - is to allow app developers to offer alternate payment methods for buying things that aren’t subject to the high fees charged by Apple and Google - between 15 and 30% of revenues.

Theranos

The trial of Elizabeth Holmes started two weeks ago, and if you’re interested in how it’s going, and what new evidence has come to light, I recommend the excellent podcasts The Dropout and Bad Blood: The Final Chapter. In this week’s installment of Bad Blood, John Carreyrou tackles the subject of Silicon Valley “puffery” aka lying or embellishing a start up’s technology to get investor money. Literally the “fake it till you make it” doctrine. Holmes still has some defenders, for whatever reason, though none as high profile as Tim Draper:

Draper, who has also invested in Tesla and Twitch, said in an email he hopes she’s cleared of any wrongdoing and allowed to be more productive for society as an inventor.

“I still believe her to be a visionary and potentially a great scientist who can improve our world,” he said in an email in August.

Draper has argued that if Theranos had simply called their blood test device a “beta” and let users know they’d be fixing and improving results over time, it’d have been a wild success. Carreyrou points out that there’s already a way to do this, it’s called a clinical trial. Theranos refused to submit any of its tests or products for clinical trials at any point in its existence, instead testing its unreliable technology on patients without their knowledge.

This gets to a core belief of mine, and one that I write about quite often - many things that are not “tech” problems are treated as tech problems by venture-funded companies, and this attitude can lead to negative real world consequences. Uber thought it could solve the taxi problem with a tech platform, its workers and the safety of its customers were an afterthought. Same with AirBnB, who believed that if they built a website to let people run illegal flophouses, the rest would sort itself out. Taxis and hotels are solved problems - the industries are regulated to protect drivers, passengers, and hotel guests. Theranos saw the FDA as an unnecessary impediment to what they perhaps really believed would be world-changing technology. Really, the way to prove your medical device works is to submit it to clinical trials and peer review, an extremely common process done by thousands of companies a year. Ironically, Theranos might have been able to figure out how to get its devices working if it sought outside counsel.

This is a lot of words to say - tech companies need to stop trying to solve non-tech problems in tech ways. Puffery may be okay if you’re building an app to, I don’t know, let people post pictures of their pets. Once your tech has real world impact, you should think very carefully before you decide to break the rules, even if you think you’re the smartest person in the room.

OpenSea

OpenSea says it is the “first and largest marketplace for NFTs”. We have talked about NFTs and they continue to remain popular and lucrative for people who know which ones to buy and when. A couple of days ago someone tweeted this:

The person referenced in the tweet, Nate Chastain, was until very recently OpenSea’s head of product. Yesterday, OpenSea made this blog post which references (a person who is likely) Chastain’s alleged actions:

Yesterday we learned that one of our employees purchased items that they knew were set to display on our front page before they appeared there publicly.

This is incredibly disappointing.

I can imagine! Also, probably disappointing for OpenSea’s customers, who have been front run by one of their executives. OpenSea has implemented policies barring its employees from doing this sort of thing in the future. It’s not a great look for an NFT marketplace, but it’s not like when FanDuel and DraftKings employees were winning millions on each other’s daily fantasy games, right? One of the reasons people like NFTs and DeFi and crypto gambling is there aren’t very many rules. But exchanges like OpenSea are necessary for any of the gambling, or art investing? or whatever to be possible, and the companies behind them will have to deal with employees who think they can anonymously take advantage of insider knowledge.

Cryptocurrency enthusiasts often run up against the realities of financial regulation, so it seems only fitting crypto art enthusiasts are becoming acquainted with the sleazy world of art auctions.

Guinea

If you are a military leader in a small African country and you are thinking of doing a coup, one option you have is to do the coup on your day off training with American special forces:

American Green Berets were training local forces in the West African nation of Guinea last weekend when their charges peeled away for a mission not listed in any military training manual: They mounted a coup.

Oops! The Pentagon is embarrassed. World leaders are condemning it, et cetera, but also the guy they overthrew sounds pretty bad?

But this week, people celebrated on the street as the one-time political exile and democratic activist Alpha Condé was ousted in a military coup. Their charge: Guinea had become a mining powerhouse on his watch but their lives had barely changed. To cap it all, he had tried to extend his rule for a third term.

Anyhow, without getting into the geopolitical implications, it is pretty great that the Guinean military invited the Americans in to train them, and then snuck out of the training camp to go overthrow their leader. Imagine waking up and your bosses back at SOCOM or wherever are frantically texting you. You’ve got 11 missed calls from “SecDef”. None of your trainees show up for morning PT. I am sure it was quite a moment at that camp in Guinea.

Genius

I couldn’t not write about this article, which discusses the recent sale of Genius aka Rap Genius, because there are lines like this in it:

They said their site wasn’t “just crowdsourced…it was homiesourced…then we decided we wanted it to be ballersourced.”

and this:

One of them got fired for writing that the manifesto left behind by incel spree murderer Elliot Rodger was “beautifully written” and that he guessed that Rodger’s sister was “smokin hot.”

Yikes. So the founders were a bunch of white Ivy League bros who decided to create a site to annotate rap songs (originally) and then tried to expand to other areas. I confess that I have visited their site - typically to look up song lyrics - and was somewhat sympathetic to them when they got into a fight with Google. However, this did not occur to me:

From a media point of view, Genius was offensive for its initial underlying claim: that it was okay to take anyone’s content for zero compensation, so long as it “added transformative value” by tacking on a comment box where people could say it sucked. The collective output of a generation of rappers could be rightfully lifted by these clowns because, before you could “annotate the world,” you apparently had to make a copy of it. (The music industry’s lawyers eventually convinced Genius to license all the lyrics they’d taken, but only five years after the site launched.)

This is a good point! The lyrics to those songs do belong to the artists, and Genius allowing anyone to visit their site and mark them up is, at best, not very respectful to the creators.

Anyhow, after it was done with hip-hop, Genius wanted to take on the news:

News Genius was going “to debunk the myth of scientific journalism…No one is going to be able to imagine a text online without annotations anymore.” They also foresaw a day when the site’s algorithmic evaluation of your Genius annotations — their “Genius IQ” — would be so widely accepted that it “could impact your grades in primary school and your ability to get a job in a certain field.”

Ohhhh boy. We’ve talked a lot about racism in algorithms, and rating someone’s IQ - already a charged word - based on their comments on news articles is pure lunacy.

Genius isn’t going away - they’ll be run by a company that specializes in buying distressed digital brands - but here’s hoping their revised business model doesn’t include crowdsourced phrenology or content theft. They’ve fired the entire content team and half of marketing:

“We are restructuring the way in which original content is produced at Genius and as part of that some very talented individuals on the content and production teams were let go,” MediaLab said in a statement.

The sale price of $80 million is less than Genius raised in venture capital, so its investors will not receive a full return on their investment. Most of the stock options issued to employees are now worthless.

Short Cons

NY Times - “TonerNews.com, a website devoted to writing about printing supplies, called Mr. Michaels “the California toner pirate godfather” in a post on Sunday. Mr. Michaels’s lawyer scoffed at the moniker.

Media Matters - “Wealthy right-wing propagandists like Carlson, his prime-time colleagues Sean Hannity and Laura Ingraham, and the litany of other notables who have touted ivermectin as a COVID-19 treatment each play an essential role in this scheme, even if there’s no reason to think they directly profit from it.

Quartz - “The study is among the first to link the FBI’s post-9/11 emphasis on counterterrorism to a corresponding rise in white-collar crime.

Protocol - “The SEC announced Tuesday that it's charging App Annie, the mobile app data provider, with securities fraud, accusing the company of "engaging in deceptive practices" and misrepresenting the origins of its data.

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