Insurance Industry Report Faults High Fees for Out-of-Network Care

Michael Nagle for The New York Times

Angel Gonzalez, 36, faced huge bills after emergency gallbladder surgery, despite having good insurance coverage. “I was on the hook for more than I made in a year.”

Just over a year ago, Angel Gonzalez, 36, awoke with searing chest pain at 2 a.m. A friend drove him to the closest emergency room.

Though he was living on $18,000 a year as a graduate student, Mr. Gonzalez had good insurance and the hospital, St. Charles in Port Jefferson, N.Y., was in his network. But the surgeon who came in to remove Mr. Gonzalez’s gallbladder that Sunday night was not.

He billed Mr. Gonzalez $30,000, and an assistant billed an additional $30,000. Mr. Gonzalez’s policy covered out-of-network providers, but at a rate it considered appropriate: $2,000. “I was on the hook for more than I made in a year,” Mr. Gonzalez said.

A health insurance industry report to be released on Friday highlights the exorbitant fees charged by some doctors to out-of-network patients like Mr. Gonzalez. The report, by America’s Health Insurance Plans, or AHIP, contrasts some of the highest bills charged by non-network providers in 30 states with Medicare rates for the same services. Some of the charges, the insurers assert, are 30, 40 or nearly 100 times greater than Medicare rates.

Insurers hope to spotlight a vexing problem that they say the Affordable Care Act does little to address. “When you’re out of network, it’s a blank check,” said Karen Ignagni, president and chief executive of AHIP. “The consumer is vulnerable to ‘anything goes.’ ”

“Unless we deal with cost, we won’t have affordability,” she added. “And unless we have affordability, we won’t have people participating” under the Affordable Care Act.

Among the fees on the report’s list are a $6,205 outpatient office visit to a doctor in Massachusetts for which Medicare would have paid $152; a $12,000 bill for examining a tissue specimen in New York for which Medicare would have paid $128; and a $48,983 surgeon’s fee for a total hip replacement in New Jersey that Medicare would have reimbursed at $1,543. Many of the highest billers were in New York, Texas, Florida and New Jersey.

Elisabeth R. Benjamin, co-founder of the Health Care for All New York coalition, who is often at odds with the insurance industry, said that “is one area we totally agree on.” She continued, “Out-of-network billing is just out of control.”

Even when out-of-network fees are compared with average commercial insurance reimbursements, which are usually greater than Medicare, she said, “It’s pretty outrageous.”

Doctors say the report is skewed because it focuses on a few dozen cases of overcharging that are not representative of their billing. In response to the insurers’ report, the American Medical Association noted on Thursday that a recent analysis found that doctors’ services account for just 16 percent of health care costs.

“There are outliers in every profession, in every business,” said Dr. Andrew Y. Kleinman, a plastic surgeon who is vice president of the Medical Society of the State of New York.

Dr. Kleinman also noted that insurers had effectively shifted the costs of out-of-network care onto patients by changing reimbursement formulas. Instead of the rates commercial insurers usually pay doctors, insurers increasingly are basing their out-of-network payments on Medicare rates, usually far lower.

A growing number of high-end, flexible health plans offer policies that cover outside providers at, for example, 140 percent of Medicare. “They’re selling you an insurance product you can’t use,” Dr. Kleinman said. “You’re buying an insurance policy where the out-of-network benefit is worthless.”

The industry’s own report suggests that using Medicare rates as a benchmark will lead to patients’ picking up much more of the cost for out-of-network care, whether they carefully select a specialist or, as in the case of Mr. Gonzalez and many others, have no choice in the matter.

Had Mr. Gonzalez been 65 or older, Medicare would have paid only $958 for the surgery. The average commercial price is $12,292, according to FAIR Health, an independent nonprofit group that tracks information on health care costs.

But Mr. Gonzalez’s health plan, United Healthcare, determined the fee should be $1,273, of which the company paid $838. Mr. Gonzalez filed appeals, which were rejected. He then contacted Community Health Advocates at the Community Service Society of New York for help, and the group’s caseworkers negotiated with the surgeon on his behalf.

After months of wrangling, the surgeon agreed to accept a significantly reduced payment: $340.

Consumer advocates and health insurance executives are calling for greater transparency in health care pricing, including upfront disclosure of prices of medical procedures and services.

“The health care industry can give you an estimate, just like any other industry,” said Carrie H. Colla, an assistant professor at the Dartmouth Institute for Health Policy and Clinical Practice, noting that the Dartmouth-Hitchcock Medical Center has a patient price estimator online.  

“It’s just not current practice right now,” Dr. Colla said. “Sometimes a doctor won’t even know. The patient really has to push for it.”

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Fireworks Explosion on Chinese Highway Kills 26

BEIJING (AP) — A truck carrying fireworks ahead of Chinese New Year celebrations exploded and destroyed part of an elevated highway Friday in central China, killing at least 26 people as it sent vehicles plummeting 30 meters (about 100 feet) to the ground, state media said.

The huge blast destroyed an 80-meter (80-yard) stretch of highway outside the city of Sanmenxia in Henan province, and was powerful enough to shatter windows of a nearby truck stop.

Emergency crews closed the highway at the accident site, said China National Radio, which reported the death toll of 26. The Xinhua News Agency reported four deaths but said search and rescue efforts were continuing. At least 15 people were injured and sent to nearby hospitals, the Henan Commercial Newspaper reported.

Photos posted on the popular news site Sina.com by Chinese netizens showed a stretch of elevated highway gone, with a truck perched precariously at the broken edge. Other photos showed wrecked trucks below and blackened chunks of scattered debris, including collapsed sections of highway, wrecked trucks and cargo containers.

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BSkyB to offer sports channels online for daily fee

LONDON (Reuters) – BSkyB will offer its popular sports channels online for a daily fee, seeking new customers to offset slowing growth at its core pay-TV service amid sluggish consumer spending.

Sky, Britain’s dominant pay-TV group which provides fixed-line telephony, TV and broadband to 10.7 million households, has adapted its strategy during the economic downturn after years of chasing new subscribers to its core TV offering.

The group added 25,000 subscribers to its pay-TV service in the three months to the end of December, well down on the more than 100,000 users it used to routinely add each quarter.

In response, it has focused on selling more products such as high definition TV and broadband to existing customers, and moving online to reach those not willing to sign up to a monthly contract. The approach has enabled the group to consistently post strong financial results and pay higher dividends.

“Although we expect the consumer environment in 2013 to remain challenging, we have a strong set of plans for the year ahead,” Chief Executive Jeremy Darroch said on Thursday.

Darroch said the group would offer its sports channels, which show everything from Premier League soccer to Formula One motor racing and cricket, on its new online service called Now TV in the next few months.

Viewers, who do not need to sign up to a contract, will be able to pay 9.99 pounds to watch all six Sky Sports channels for 24 hours. It has already shown movies via the online offering to 25,000 customers since its launch last year.

The new internet drive will help BSkyB compete with existing online services such as Lovefilm and with BT Vision, which has won the right to show its own sports content, but it is also having to bet that its existing customers will not downgrade to the cheaper online offering to save money.

CUSTOMER LOYALTY

The group’s performance in the first half of the year showed that, despite the pressures on consumer spending, customer loyalty had remained relatively solid, with subscribers spending on average 568 pounds a year, up 24 pounds on the year before.

“Net additions were slightly below our estimates reflecting the tough consumer environment,” analysts at Numis said. “(But) encouragingly, take up of new products continues to increase, driving customer satisfaction and loyalty.”

Those customers taking all three main services – TV, broadband and telephony – accounted for 33 percent of the user base, up 4 percentage points year on year.

The rise in customers helped the group to post first-half operating profit up 8 percent to 647 million pounds ($ 1 billion) against a forecast of 632 million pounds. Cost control helped the group pay an interim dividend up 20 percent to 11 pence.

“We believe the BSkyB investment case has evolved over the past year or so, with the challenging consumer environment making the addition of new households to the (pay-TV) service more difficult,” Numis said.

“The group has rightly prioritized the increased penetration of multiple products, notably HD and broadband, which drive average revenue per user and reduce churn over the medium/long term. We are supportive of investment in products such as Now TV which offer an attractive risk/return in our view.”

Shares in BSkyB were up 1 percent to 819 pence in mid-morning trade, following a 21 percent rise in the last 12 months, and valuing the group at 13.2 billion pounds.

(Reporting by Kate Holton; Editing by Rhys Jones and Mark Potter)

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SUPER BOWL WATCH: Beyonce, avocados, practice

NEW ORLEANS (AP) — Around Super Bowl XLVII and its host city with journalists from The Associated Press bringing the flavor and details of everything surrounding the game:

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GRIDIRON TO LEMONADE STAND

Donald Driver didn't waste much time finding a new job.

The Green Bay Packers all-time leading receiver announced his retirement Thursday morning, then helped kids from Junior Achievement sell lemonade at a pop-up stand in the Super Bowl media center.

Not only did Driver help behind the counter, he loaded up four carrying cases and he and his three new friends set out to find customers. Their cases were empty when they returned.

"All the money they've raised will stay here in New Orleans," Driver said. "What they're starting to do is learn how to run their own business, become entrepreneurs by themselves.

"I'm just here to raise as much money so maybe they can open up their own lemonade stand the next couple of years.

— Nancy Armour — http://twitter.com/nrarmour

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JUDGE FOR YOURSELF: BEYONCE

Wondering about Beyonce and her response inauguration lip syncing flap?

Judge for yourself — here's her full rendition of the national anthem during a press conference Thursday: http://www.youtube.com/watch?v=8p2MTKCLNsY

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QUICKQUOTE: JERSEYS AND DRUGS

Authorities say buying a cheap imitation NFL jersey may be more harmful than you think.

Kevin Abar, assistant special agent in charge of Homeland Security Investigations in New Mexico, said there's evidence that Mexican drug cartels are getting involved in the counterfeit NFL black market trade because they can make quick money.

"A lot of folks may think that there's nothing wrong with buying a knockoff Denver Broncos jersey, but in reality, the money is being used to fund the drug war in Mexico," Abar said.

— Michael Kunzelman — http://twitter.com/Kunzelman75

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STAT OF THE DAY: 158M AVOCADOS

AP Food Editor J.M. Hirsch has the stat of the day today: Americans are expected to consume 158 million avocados around the Super Bowl.

That's 79 million pounds of green goodness — up from 8 million pounds at the turn of the century.

So has the guacamole improved that much? Not really, it's just outstanding marketing and other factors.

— J.M. Hirsch — http://twitter.com/JM_Hirsch

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YUP, WE HEARD YOU, BEYONCE

Beyonce belted out the national anthem — for real — and America clearly heard.

Shortly after the singer's press conference on Thursday where she admitted singing to a backup track during President Barack Obama's inauguration, "National Anthem" became a trending topic in the United States on Twitter.

Millions of fans clearly approved of her impromptu performance, now reassured that her pipes are still fine.

— Oskar Garcia — http://twitter.com/oskargarcia .

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NO TAPE NEEDED

Beyonce's version of the national anthem was worth the wait.

The superstar singer, roundly criticized for lip syncing "The Star-Spangled Banner" at the inauguration 10 days ago, walked into Thursday's news conference for the Super Bowl halftime show and asked the ballroom filled with several hundred people to stand. She then belted out a spine-tingling version of the anthem, leaving no doubts about the power of her voice. Many in the room applauded when she finished.

"Thank you guys so much. Any questions?" Beyonce said, drawing laughs.

Beyonce admitted she sang along with a pre-recorded track at the inauguration, saying she hadn't had time to rehearse with the orchestra. This was too big of an occasion to have it be anything less than perfect, she said.

"I did not feel comfortable taking a risk," she said. "This was about the president and the inauguration and I wanted to make my country proud."

She did promise to sing live Sunday, however.

"I am well-rehearsed," she said. "This was what I was born to do."

That was about all Beyonce was willing to spill, though. She wouldn't say what she'll be singing, though she did say it was "not easy" to choose a few songs from her many hits.

"All of my songs are like my children," she said.

As for that rumored Destiny's Child reunion, Beyonce wouldn't confirm it.

She didn't deny it, though, either.

"I can't really give you any details," she said. "I'm sorry."

— Nancy Armour — http://twitter.com/nrarmour

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TURF WARS

The Baltimore Ravens don't like the artificial turf at Tulane's baseball field.

So they've moved to the Saints' facility instead.

The San Francisco 49ers were already training at the Saints' complex in nearby Metairie.

The AFC champions were forced to practice in the outfield of the baseball facility Wednesday because Tulane has broken ground on a new football stadium. Coach John Harbaugh, star linebacker Ray Lewis and several other players said it was "hard on the legs."

After the Ravens approached the league about practicing on grass, the NFL arranged for them to follow the 49ers at the Saints training fields.

— Barry Wilner

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10 ADS TO WATCH

If you're a fan of Super Bowl ads, here are 10 to look out for during Sunday's game. With more than 111 million people expected to tune in, it's advertising's biggest showcase.

1. Samsung Mobile's 2-minute ad with "Knocked Up" actors Paul Rudd and Seth Rogen, directed by Jon Favreau ("Iron Man"). The company has not released details about the ad's plot other than to say that it shows Rogen and Rudd on a "quest to become the next big thing." Teaser here: http://www.youtube.com/watch?v=pzfAdmAtYIY

2. Best Buy's 30-second ad in the first quarter stars Amy Poehler, star of NBC's "Parks and Recreation," asking a Best Buy employee "lots of questions." Teaser: http://www.youtube.com/watch?v=PcmW8HCuLo8

3. Kraft enlists Tracy Morgan from NBC's "30 Rock" to introduce its new Mio Fit water enhancing drops in a 30-second ad during the third quarter. Teaser: http://www.youtube.com/user/makeitmio?feature=watch

4. Hyundai Motor Group's Kia invents a fanciful way that babies are made, blasting in from a baby planet in its "Space babies" ad for the 2014 Sorento crossover. Link: http://www.youtube.com/user/KiaMotorsAmerica?feature=watch

5. First-time advertiser Paramount Farms is touting its Wonderful Pistachios brand of nuts in a 30-second ad with Korean pop sensation Psy. The campaign: http://getcrackin.com/

6. First-time advertiser Axe shows a woman in the ocean getting rescued by a sexy lifeguard, but going for an astronaut instead. It promotes Axe's new cologne "Apollo" and its contest to send someone on the first suborbital space tour in 2014. Link: http://www.youtube.com/watch?v=QGoU3VH7He4

7. Audi's 60-second ad in the first quarter, with an ending voted on by viewers, shows a boy gaining confidence from driving his father's Audi to the prom, kissing the prom queen and getting decked by the prom king. Link: http://www.youtube.com/watch?v=ANhmS6QLd5Q

8. PepsiCo's Frito-Lay's Doritos "Crash the Super Bowl" ads are back for the seventh straight year. Two 30-second commercials made by consumers will make it on the air. Fans voted for one winner and Doritos chose the other.

9. Ford Motor Co. enlisted late-night talk show host Jimmy Fallon to choose road trip stories submitted by Twitter with the hashtag (hash)steerthescript to base its Super Bowl commercial for Lincoln. The ad features rapper Joseph "Rev Run" Simmons, Wil Wheaton, who acted in the iconic science-fiction series "Star Trek: The Next Generation."

10. The Milk Processor Education Program, known as MilkPep and popular for its "Got Milk?" print ads, is featuring actor and professional wrestler Dwayne "The Rock" Johnson in a 30-second ad in the second quarter that is directed by Peter Berg ("Friday Night Lights.")

— Mae Anderson

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BEYONCE, BUT WHO ELSE?

There's lots of hype for Beyonce's halftime performance at the Super Bowl, but she's far from the only A-list act in New Orleans this week.

The NFL has announced Jennifer Hudson is planning to sing "America the Beautiful" before the game with the chorus from Sandy Hook Elementary School in Newtown, Conn.

Just add her to the already packed list. It also includes:

— Justin Timberlake, in his first major musical performance in four years (hosting Saturday Night Live doesn't count — he hasn't been an official musical guest on the show since 2006).

— Stevie Wonder

— CeeLo Green with his old hip-hop clique, Goodie Mob.

—Rascal Flatts with Journey.

And then there's the parties. Lil Wayne is throwing a bash. Jay-Z will host another event the night before his wife, Beyonce, takes stage. Jamie Foxx and Santigold are also performing, while DJs including Diplo and Questlove from The Roots are spinning.

Not that it's ever difficult, but it's extra easy to find a party in New Orleans the next few days.

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— Stacey Plaisance

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PUTTING POLITICS ASIDE FOR NEW ORLEANS

Long working on opposite sides of the American political spectrum, James Carville and Mary Matalin are pulling in the same direction when it comes to promoting their adopted home of New Orleans as a Super Bowl host.

Carville, a longtime Democratic strategist, and Matalin, a Republican pundit, are the co-chairs of the Super Bowl host committee. They're also married.

They've been making the rounds together from one event to the next in the convention center, which houses both the NFL Experience theme park and work stations for several thousand international media.

Carville is from Louisiana and the couple married in New Orleans. Then in 2008, they decided to move here from Washington, D.C. Now living in a stately home just two blocks off of historic St. Charles Avenue, they've been among the biggest boosters of the Big Easy's recovery from Hurricane Katrina, lending their support to a variety of community projects with goals ranging from restoration of fragile coastal wetlands to education and economic development.

The pair agree that while organizing a Super Bowl doesn't cost as much as a presidential campaign, it's just as hard because it's a multiyear project with a lot of moving parts.

Carville says he's always been a sports fan so the transition was natural for him. Matalin says one obvious goal is to get New Orleans back in the regular rotation as a Super Bowl host, but the larger goal is to help the city's future by demonstrating how successfully it can host one of the biggest single events in the sports world. While New Orleans is hosting its 10th Super Bowl, the NFL championship has not been played there since 2002.

Says Carville: "If it goes the way we hope it does, it'll go beyond economic impact. It'll go beyond who won the game. It think there's something significant that's coming to a point here in the city."

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— Brett Martel — http://twitter.com/brettmartel

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ZOO VS ZOO

File this in the quirky Super Bowl wager department: Zoos in Baltimore and San Francisco are gambling with the homes of two ravens and a rhino.

Leaders of The Maryland Zoo and The San Francisco Zoological Gardens have wagered naming rights to their respective exhibits with ties to their hometown football teams.

The zoo in Baltimore is home to official Ravens mascots, Rise and Conquer. If 49ers win, it will rename the ravens' enclosure the "San Francisco 49ers exhibit."

If the Ravens win, the San Francisco zoo has agreed to re-name the enclosure of its black rhino "Boone," who is named after the 49ers offensive tackle Alex Boone, in honor of the Ravens.

The new name would last one month, starting Feb. 11.

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CATCHING THE COUNTERFEITERS

Shop wisely when looking for those Super Bowl souvenirs.

Federal officials have seized more than 163,000 counterfeit items worth more than $13.6 million over the last five months as part of Operation Red Zone, John Morton, director of U.S. Immigrations and Customs Enforcement, said. That's a "significant" increase from last year, when about $5 million worth of merchandise was seized.

"Everything from hats to jerseys to Nike shoes. My personal favorite is this counterfeit Super Bowl ring from Super Bowl XLIV," Morton said, holding up a massive gold ring. "It's actually quite heavy and a better counterfeit than most. Just goes to show you the lengths people will go in this business."

Equally troubling are websites selling counterfeit merchandise, some so sophisticated they include anti-virus logos and the seal of the Better Business Bureau — making them almost impossible to tell them apart from legitimate vendors.

Morton said federal officials have already seized domain names of 313 web sites, almost all of which originated overseas.

"Imagine what's going on when you're putting your credit card through this site. Really think about that," Morton said. "The site is being run by overseas criminals in Asia.... You can imagine what the result is, and sadly many, many of these sites come with malware and other unfortunate ornaments on the Christmas tree."

The easiest way to make sure fans are buying legitimate merchandise is to buy from an official vendor, Morton said. Each team has one, as does the NFL.

But the best way fans can prevent being scammed is to use common sense, Morton said. Look closely at items, and there will be signs they're fakes. If there are extra words in a website address — com.us — or misspellings, that's almost always a dead giveaway.

"We're not letting up," Morton said. "We'll have teams out the next couple of days looking for counterfeit and scam artists."

— Nancy Armour — http://twitter.com/nrarmour

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RENO: THE KAEPERNICK EFFECT

Casinos in the Biggest Little City in the World are expecting a bump in Super Bowl betting this year thanks to 49ers quarterback Colin Kaepernick, maybe enough to help Nevada set a record in wagering on the game.

Kaepernick played college football at Nevada, just down the street from casinos in Reno.

Now, most of those casinos are offering an especially large number of proposition bets on the quarterback.

Kaep-mania has run so rampant in Reno that sporting goods stores can't keep stocked in jerseys. More than 7,000 fans set what Nevada officials said was a world record when they all simultaneously kissed their arms "Kaepernicking style" during a break in last week's basketball game against San Diego State.

A Kaepernick viewing party is planned during Sunday's game at the student union.

— Scott Sonner

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NO MORE TALKING

The players can focus on football now — they're officially done talking to the media.

Ravens safety Ed Reed was the last guy at the podium on Thursday. After he finished talking with reporters, he scooped up a blue placard with his name on it.

"I'm going to give it to my mother," he said.

He said he's very glad that his interviews are done for the week.

Players had three hourlong sessions during the week, and Reed had another press availability on Monday.

The coaches for the 49ers and Ravens will speak with reporters again on Friday morning.

— Paul Newberry — http://twitter.com/pnewberry1963

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BROTHERLY ADVICE: BROOK LOPEZ

Baltimore Ravens coach John Harbaugh and San Francisco 49ers coach Jim Harbaugh are hardly the only high-profile siblings who've squared off in their arena of expertise. The AP is asking some others who can relate how they'd handle going against a family member in the Super Bowl.

Brooklyn Nets center Brook Lopez said after scoring 21 points in a loss to the Miami Heat on Wednesday night that it's a combination of joy and competitiveness.

"I know they're just going to treat it as a game. That's how I treat it whenever I play Robin," Brook Lopez said. "I know they will enjoy it as well. But if I have any experience playing against Robin growing up, I know it's going to be competitive. I know they're going to want to beat each other."

Brook's brother, Robin, plays for the New Orleans Hornets.

— Brian Mahoney — http://twitter.com/briancmahoney

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SORRY, MOM

The way Jack Harbaugh tells the story, Jackie Harbaugh was so shocked by her eldest son's decision to choose coaching over a career in law or politics, she fell face-first into a dish of mashed potatoes.

See, Jackie Harbaugh loves political science and politics. And as a political science major at Bowling Green with a high grade-point, John Harbaugh seemed headed for law school.

"Jackie was so excited about it," Jack Harbaugh said.

But both of the Harbaugh boys had been bitten by the coaching bug early. The practice fields at Iowa and Michigan were their playground, and they knew more about coaching before they got out of grade school than some veteran assistants.

"He came home one day and we're sitting around the table and we're having dinner. Jackie says, 'John, what law school will it be?' John said, 'Mom, I think I want to try coaching,' Jack Harbaugh said. "To which Jackie went facedown into the mashed potatoes. She said, 'What? Coaching? You've got to reconsider!'"

That's not exactly what happened, Jackie Harbaugh said.

"May I tell the truth? There were no mashed potatoes," she said. "When he came home and talked about (coaching) and I saw that look in his eyes, my feeling was, you have to do what you want to do. If you want to try this and see where it takes you, that would be great."

Seems like he made the right choice. After making the playoffs in each of his first four seasons, John Harbaugh has the Baltimore Ravens in the Super Bowl on Sunday, where they'll face his brother Jim's San Francisco 49ers.

— Nancy Armour — http://twitter.com/nrarmour

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EATING RIGHT

How about some home cookin' in the Big Easy — as in 150 plates of it to feed a football team? That's what Ravens wide receiver Jacoby Jones' mother, Emily, presented the Baltimore players for dinner this week at the team hotel to kick off Super Bowl prep New Orleans-style.

"Gumbo, jambalaya, potato salad, bread pudding, macaroni, the whole nine yards. She made 150 plates," Jones said. "All they kept saying is she put her foot in it. I love it."

That's a real compliment around here.

Now, Jones might give his mother a break.

"I'm going to let her be. I might buy me some crawfish or something."

And he knows all the best spots in New Orleans to get it.

— Janie McCauley — http://twitter.com/janieMcCAP

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EDITOR'S NOTE — "Super Bowl Watch" shows you the Super Bowl and the events surrounding the game through the eyes of Associated Press journalists across New Orleans and around the world. Follow them on Twitter where available with the handles listed after each item.

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DealBook: Doubt Is Cast on Firms Hired to Help Banks

Federal authorities are scrutinizing the private consultants hired by banks to clean up financial misdeeds like money laundering and foreclosure abuses, taking aim at a conflict-riddled, billion-dollar industry.

The well-connected consultants operate with scant supervision and produce mixed results, according to government documents and interviews with prosecutors and regulators. In one case, the consulting firms enabled the wrongdoing. The deficiencies, officials say, can leave consumers vulnerable and allow tainted money to flow through the financial system.

“How can you be independent if you’re hired by the entity you’re reviewing?” said Senator Jack Reed, Democrat of Rhode Island, who sits on the Senate Banking Committee.

The pitfalls were exposed last month when federal regulators halted a broad effort to help millions of homeowners in foreclosure. The regulators reached an $8.5 billion settlement with banks, scuttling a flawed foreclosure review run by eight consulting firms. In the end, borrowers hurt by shoddy practices are likely to receive less money than they deserve, regulators say.

On Thursday, Senator Elizabeth Warren, Democrat of Massachusetts, and Representative Elijah Cummings, Democrat of Maryland, announced that they would open an investigation into the foreclosure review, seeking “additional information about the scope of the harms found.”

Critics concede that regulators have little choice but to farm out certain responsibilities. The government does not have the resources to ensure that banks behave. The consultants, with a deep bench of expertise, regularly provide additional oversight and help fix abuses. The less palatable alternative, regulators say, is for banks to police themselves.

Still, consultants like Deloitte & Touche and Promontory Financial Group can add to regulators’ headaches, the government documents and interviews indicate. Some banks that work with consultants continue to run afoul of the law. At other times, consultants underestimate the extent of the misdeeds or facilitate them, preventing regulators from holding institutions accountable.

Now, regulators and lawmakers are rethinking their relationship with the consultants. Officials at the Federal Reserve, which oversees many large banks, are questioning the prudence of relying on consultants so heavily, said two people with direct knowledge of the matter.

When the Office of the Comptroller of the Currency penalized JPMorgan Chase last month for breakdowns in money-laundering controls, it imposed stricter requirements, ordering the bank to hire a consultant with “specialized experience” in money laundering and to ensure that the firm “not be subject to any conflict of interest.” In a separate action against the bank related to a $6 billion trading loss last year, the agency opted not to mandate an outside consultant at all.

While the comptroller’s office will continue requiring consultants in certain cases, some agency officials are worried about the quality of the work, as well as the consultants’ independence, according to three government officials briefed on the matter.

Since the financial crisis, regulators have increasingly relied on consultants. The comptroller’s office ordered banks to hire consultants in more than 130 enforcement actions since 2008, or nearly 15 percent of the cases.

It can be a lucrative business. In 2011, regulators mandated that 14 banks employ consultants to determine whether homeowners were wrongfully evicted. Over 14 months, the consultants collected about $2 billion in fees, according to regulators and bank officials.

Those fees amounted to more than half of what homeowners will receive under the $8.5 billion settlement that ended the review. As part of the deal, officials will disburse $3.3 billion to 3.8 million borrowers in foreclosure.

According to consultants and regulators, the broad review was plagued with inefficiencies. For example, Promontory initially instructed employees to calculate lawyers’ fees for each loan, to assess if borrowers were overcharged. Later, it scrapped the original procedure, only to reverse the policy again two weeks later, according to two reviewers who worked for Promontory.

“From Day 1, Promontory strove to conduct its review work as thoroughly and independently as possible,” a spokesman for the firm, Christopher Winans, said in a statement. “Our overarching concern at all times was to serve the best interests of borrowers.”

Some lawmakers question whether a consultant’s regulatory connections helped it secure contracts. PricewaterhouseCoopers, which has a stable of former Securities and Exchange Commission officials, won much of the foreclosure review work, signing deals with four banks, including Citigroup. Promontory — the firm examining loans for Wells Fargo, Bank of America and PNC — was founded in 2000 by the former head of the comptroller’s office, Eugene A. Ludwig.

When the contracts were initially awarded, some housing advocates complained that consulting firms could not objectively evaluate banks with which they had pre-existing business relationships. The comptroller’s office said it vetted the firms to spot such potential conflicts, and argued that the process provided swifter relief for homeowners than if the government had hired the companies directly through a lengthy contracting process.

But concerns persisted. Deloitte, which won the contract to review JPMorgan’s loans, had previously audited Washington Mutual and Bear Stearns, two firms JPMorgan scooped up during the financial crisis. In May, the comptroller’s office replaced Allonhill, the consultant for Aurora Bank, after the firm disclosed that it had already reviewed some “of the same pool of loans” as part of an earlier contract.

“It’s clear from the foreclosure settlement that oversight over consultants was inadequate and the review process was deeply flawed,” said Representative Carolyn B. Maloney, Democrat of New York, who recently pressed regulators to detail how consultants were paid. People close to the review say consultants relied on a process that the comptroller’s office designed in 2011, under previous leadership.

“This was a very complex process,” said a spokesman for the comptroller. “Throughout the process, regulators provided continuous oversight, guidance and were available to discuss issues.” The agency also performs spot checks on the consultants.

Still, the foreclosure review highlighted broader concerns about the role consultants play.

Since the financial crisis, the comptroller’s office has issued nearly 20 enforcement actions against banks that had already hired consultants to help iron out problems, according to government documents. While consultants cannot be expected to remedy every last issue at the banks, the actions raise questions about the efficacy of their work.

When HSBC, the British bank, was sanctioned in 2003 over porous money-laundering controls, the bank turned to Deloitte to review its compliance, an official briefed on the matter said. Deloitte also worked for HSBC from 2006 to 2008, the person said, building a system to monitor money flows more effectively. But the bank ran into trouble in 2010 over similar issues, as highlighted in a recent scathing report by the Senate’s Permanent Subcommittee on Investigations.

As part of a regulatory order, HSBC again hired Deloitte, this time to assess the number of times the bank failed to report suspicious transactions. Deloitte, three officials said, generously bundled hundreds of missed transfers into a single report. That helped save the bank from some government fines.

Despite the undercounting, HSBC still paid a record $1.9 billion last year to settle accusations that it enabled drug cartels to move money through its American subsidiaries.

In a statement, a spokesman for the firm said, “Deloitte fully stands behind the quality and integrity of its work on behalf of regulatory authorities.”

Deloitte has also been suspected of helping institutions cloak illicit transfers of money to rogue nations around the globe. In August, New York’s top banking regulator, Benjamin M. Lawsky, accused Deloitte of helping the British bank Standard Chartered flout American sanctions.

The consulting firm was hired to flag suspicious transfers routed through Standard Chartered’s New York branches. Instead, it instructed bankers on how to escape regulatory scrutiny, according to state court documents.

Deloitte turned over “highly confidential information” from which the bank gleaned insight into “regulators’ concerns and strategies,” the court documents said. The firm later doctored its report to regulators, Mr. Lawsky said, deliberately removing some illegal transfers on behalf of Iranian clients. In an e-mail, a Deloitte partner admitted that a report on the transactions was a “watered-down version.”

The authorities never took legal action against Deloitte, and federal officials noted in a separate settlement agreement that Standard Chartered employees withheld critical information from the consulting firm.

Despite these concerns, regulators are turning to a familiar source to help Standard Chartered. As part of a $327 million settlement last year, the bank is required to hire “an independent consultant.”

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Well: Waiting for Alzheimer's to Begin

My gray matter might be waning. Then again, it might not be. But I swear that I can feel memories — as I’m making them — slide off a neuron and into a tangle of plaque. I steel myself for those moments to come when I won’t remember what just went into my head.

I’m not losing track of my car keys, which is pretty standard in aging minds. Nor have I ever forgotten to turn off the oven after use, common in menopausal women. I can always find my car in the parking lot, although lots of “normal” folk can’t.

Rather, I suddenly can’t remember the name of someone with whom I’ve worked for years. I cover by saying “sir” or “madam” like the Southerner I am, even though I live in Vermont and grown people here don’t use such terms. Better to think I’m quirky than losing my faculties. Sometimes I’ll send myself an e-mail to-do reminder and then, seconds later, find myself thrilled to see a new entry pop into my inbox. Oops, it’s from me. Worse yet, a massage therapist kicked me out of her practice for missing three appointments. I didn’t recall making any of them. There must another Nancy.

Am I losing track of me?

Equally worrisome are the memories increasingly coming to the fore. Magically, these random recollections manage to circumnavigate my imagined build-up of beta-amyloid en route to delivering vivid images of my father’s first steps down his path of forgetting. He was the same age I am now, which is 46.

“How old are you?” I recall him asking me back then. Some years later, he began calling me every Dec. 28 to say, “Happy birthday,” instead of on the correct date, Dec. 27. The 28th had been his grandmother’s birthday.

The chasms were small at first. Explainable. Dismissible. When he crossed the street without looking both ways, we chalked it up to his well-cultivated, absent-minded professor persona. But the chasms grew into sinkholes, and eventually quicksand. When we took him to get new pants one day, he kept trying on the same ones he wore to the store.

“I like these slacks,” he’d say, over and over again, as he repeatedly pulled his pair up and down.

My dad died of Alzheimer’s last April at age 73 — the same age at which his father succumbed to the same disease. My dad ended up choosing neurology as his profession after witnessing the very beginning of his own dad’s forgetting.

Decades later, grandfather’s atrophied brain found its way into a jar on my father’s office desk. Was it meant to be an ever-present reminder of Alzheimer’s effect? Or was it a crystal ball sent to warn of genetic fate? My father the doctor never said, nor did he ever mention, that it was his father’s gray matter floating in that pool of formaldehyde.

Using the jarred brain as a teaching tool, my dad showed my 8-year-old self the difference between frontal and temporal lobes. He also pointed out how brains with Alzheimer’s disease become smaller, and how wide grooves develop in the cerebral cortex. But only after his death — and my mother’s confession about whose brain occupied that jar — did I figure out that my father was quite literally demonstrating how this disease runs through our heads.

Has my forgetting begun?

I called my dad’s neurologist. To find out if I was in the earliest stages of Alzheimer’s, he would have to look for proteins in my blood or spinal fluid and employ expensive neuroimaging tests. If he found any indication of onset, the only option would be experimental trials.

But documented confirmation of a diseased brain would break my still hopeful heart. I’d walk around with the scarlet letter “A” etched on the inside of my forehead — obstructing how I view every situation instead of the intermittent clouding I currently experience.

“You’re still grieving your father,” the doctor said at the end of our call. “Sadness and depression affect the memory, too. Let’s wait and see.”

It certainly didn’t help matters that two people at my father’s funeral made some insensitive remarks.

“Nancy, you must be scared to death.”

“Is it hard knowing the same thing probably will happen to you?”

Maybe the real question is what to do when the forgetting begins. My dad started taking 70 supplements a day in hopes of saving his mind. He begged me to kill him if he wound up like his father. He retired from his practice and spent all day in a chair doing puzzles. He stopped making new memories in an all-out effort to preserve the ones he already had.

Maybe his approach wasn’t the answer.

Just before his death — his brain a fraction of its former self — my father managed to offer up a final lesson. I was visiting him in the memory-care center when he got a strange look on his face. I figured it was gas. But then his eyes lit up and a big grin overtook him, and he looked right at me and said, “Funny how things turn out.”

An unforgettable moment?

I can only hope.

---

Nancy Stearns Bercaw is a writer in Vermont. Her book, “Brain in a Jar: A Daughter’s Journey Through Her Father’s Memory,” will be published in April 2013 by Broadstone.

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World Briefing | Asia: Factory Owners Arrested in Bangladesh

The Bangladeshi police have arrested two owners of a factory that caught fire last week, resulting in the deaths of seven workers, in the latest blaze to strike the country’s garment export industry. Late Tuesday night, the police arrested Sharif Ahmed, chairman of Smart Export Garments, and his colleague, M. D. Zakir Ahmed. The Smart Export factory was manufacturing clothing for several European clothing brands.

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RIM rebrands as BlackBerry; launches nifty new devices

NEW YORK (Reuters) – Research In Motion Ltd on Wednesday unveiled the long-delayed line of smartphones it hopes will put it on the comeback trail, but it disappointed investors by saying U.S. sales of its all-new BlackBerry 10 devices will not start until March, sending its share price tumbling 12 percent.

Chief Executive Thorsten Heins also announced that RIM was abandoning the name it has used since its inception in 1985 to take the name of its signature product, signaling his hopes for a fresh start for the company that pioneered on-your-hip email.

“From this point forward, RIM becomes BlackBerry,” Heins said at the New York launch. “It is one brand; it is one promise.”

RIM, which is already starting to call itself BlackBerry, had initially planned to launch the new BlackBerry 10 devices a year ago. But it pushed the release date back twice as it struggled to perfect a new operating system.

Ahead of Wednesday’s announcements, analysts had said that any launch after February would be a black mark for the Canada-based company.

“The biggest disappointment was the delay in the U.S., that it will take so long before the devices get going there,” said Eric Jackson, founder and managing Partner at Ironfire Capital LLC in New York.

Heins said the delays reflected the need for U.S. carrier testing, although carrier AT&T Inc offered few clues on what that meant. Instead, the carrier merely stated it was enthusiastic about the devices and would announce availability, pricing and other information at a later date.

“Carriers in all other parts of the world get their devices through the testing process significantly faster than the U.S. carriers do,” said John Jackson, an analyst at IDC, adding that the U.S. process can often take “weeks” longer.

Nevertheless investors were extremely disappointed with the delay and RIM shares on the Nasdaq ended the day 12 percent lower at $ 13.78. Its Toronto-listed shares fell by almost the same margin to close at C$ 13.86.

RIM launched its first BlackBerry back in 1999 as a way for busy executives to stay in touch with their clients and their offices, and the company quickly cornered the market for secure corporate and government emails.

But its star faded as competition rose and the BlackBerry is now a far-behind also-ran in the race for market share, with a 3.4 percent global showing in the fourth quarter – down from 20 percent three years before. Its North American market share is even smaller – a mere 2 percent in the fourth quarter.

RIM shares have tumbled along with the company’s market share and the stock is down 90 percent since its 2008 peak. Despite the pullback on Wednesday, RIM‘s share price has more than doubled over the last four months, reflecting the growing buzz about its new devices.

TOUCH COMPETITION

The new BlackBerry 10 phones will compete with Apple’s iPhone and devices using Google’s Android technology, both of which have soared above the BlackBerry in a competitive market.

The BlackBerry 10 devices boast fast browsers, new features, smart cameras and – unlike previous BlackBerry models – enter the market primed with a large application library, including services such as Skype and the popular game Angry Birds.

The BlackBerry Z10 touchscreen device, in black or white, will be the first to hit the market, with a country-by-country rollout that starts in Britain on Thursday.

A Q10 model, equipped with a small “qwerty” keyboard that RIM made into its trademark, will launch globally in April.

“I’m still confident that a lot of the subscriber base are going to want the upgrade to BlackBerry 10. It’s a very strong improvement over what they currently have. This is not going to cause mass defections from iOS and Android, but it doesn’t have to be a success for RIM. You’ve got to start somewhere,” said Jackson of Ironfire, which owns shares in RIM.

The Z10 device won a lukewarm review from The Wall Street Journal’s tech blogger Walt Mossberg, who complained of a shortage of apps.

On the other hand, David Pogue, who writes for The New York Times, apologized for describing BlackBerry as doomed in the past. The Z10 touchscreen device was “lovely, fast and efficient, bristling with fresh, useful ideas,” he said.

While technology analysts conceded that RIM has done quite a remarkable job on many of the features of BlackBerry 10 and on the array of its app selection for a new platform, many argue it will be a very tough slog for RIM to regain its crown.

“I don’t think that RIM will return to its glory days,” said Charles Golvin, analyst at Forrester Research. “Success for them looks like staunching the bleeding and clawing back a percentage or point or two of market share.”

Announcements about pricing so far have been in line with expectations. U.S. carrier Verizon Wireless said the phone would cost $ 199 for a two-year contract, while Canada’s Rogers Communications is quoting C$ 149 ($ 150) for certain three-year plans.

GLITZY LAUNCH

RIM picked a range of venues for its global launch parties, including Dubai’s $ 650-a-night Armani Hotel, which occupies six floors of the Burj Khalifa, the world’s tallest tower.

The New York event took place in a sprawling basketball facility on the Lower East Side of Manhattan, just north of the Manhattan Bridge. The BlackBerry has been “Re-designed. Re-engineered. Re-invented,” RIM said.

RIM, which is splurging on a Super Bowl ad to promote its new phones, also introduced Grammy-winning singer-songwriter Alicia Keys as its global creative director.

“I was in a long-term relationship with BlackBerry and then I started to notice some new, kind of hotter, attractive, sexier phones at the gym, and I kind of broke up with you for something that had a little more bling,” Keys said at the New York launch.

“But I always missed the way you organized my life and the way you were there for me at my job, and so I started to have two phones – I was kind of playing the field. But then … you added a lot more features … and now, we’re exclusively dating again, and I’m very happy,” she said.

($ 1=$ 1.0029 Canadian)

(Writing by Janet Guttsman; editing by Frank McGurty, Lisa Von Ahn, Peter Galloway, G Crosse)

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Brees wants to bury bounty probe, help New Orleans

NEW ORLEANS (AP) — Drew Brees wore gray sneakers to his first full day of Super Bowl-related appearances — a wise move for an ambassador of a city who had to walk briskly from end to end of a sprawling convention center to make all of his scheduled stops.

Not only was the Saints' star quarterback a man on the move, but also ready to move on from the bitterness of the bounty scandal, which may have undermined his team's chances of playing for a title on its home field.

"We're professionals and we've moved past that in the sense that there's nothing that can be done other than, 'Let's move on and let's find a way to be better next year inspite of it,'" Brees said. "It would be easy to sit here and be angry, but it is what it is."

Coming off a 13-3 campaign in 2011 and a narrow loss to San Francisco in that season's playoffs, the Saints went into the offseason figuring they would be contenders again this season.

Then came the NFL's probe of the Saints' cash-for-hits program and numerous sanctions, the most severe of which was the full-season suspension of coach Sean Payton. New Orleans went 7-9 and missed the playoffs for the first time since 2008, and now the team practicing at the Saints' suburban training center is the NFC champion 49ers.

Throughout the community, displeasure with NFL commissioner Roger Goodell's handling of the matter has been on display for months, from T-shirts reading "Free Payton" (he is now reinstated) to signs in bars and eateries showing Goodell's photo and reading: "Do not serve this man."

During the season, Brees offered his own criticism of what he thought was a faulty investigation and overly heavy-handed disciplinary process. But when the topic came up Wednesday, Brees said it was time to "put this thing to bed."

"We've said what needed to be said," Brees said. "Sean's back, all the pieces are in place, and now it's time for us to put ourselves in a position to make a run."

Brees has been one of New Orleans' most prominent public faces and leading promoters since he arrived in the Big Easy in 2006, when much of the area was still in a state of devastation from Hurricane Katrina's August 2005 landfall. Now his team is the official host of the Super Bowl, and Brees is once again stepping up to highlight his adopted hometown's resurgence as it hosts the Super Bowl for the first time since 2002 — also the first time since Katrina.

He also sought to stamp out the notion that there is some kind of undercurrent of tension between his club, its fans and all of the high-ranking NFL executives in town for the league's biggest single event.

"I know the city is going to be a great host regardless," Brees said. "The city wants to put their best foot forward, they want everybody to have a great experience. I don't like the fact that we've got the NFC team practicing in our facility, but we're going to be gracious hosts and hope that it pays us back in the future."

Brees' stops Wednesday included a talk with area high school kids about the importance of managing one's money. He even revealed that he graduated Purdue with an unpaid $2,000 mobile phone bill, and later regretted it when it damaged his credit score and pushed up the interest rate he had to pay on the first house he bought in San Diego, shortly after being drafted by the Chargers in 2001.

Later, he hosted a news conference in which his foundation donated $1 million to businesses teaming up with charities in the metro area. He also made several radio appearances and lent his support to an event hosted by former Saints special teams standout Steve Gleason, who has the debilitating and incurable neuro-muscular disease ALS.

As an organization, the Saints' approach has mirrored that of their quarterback. Owner Tom Benson spoke at an NFL event promoting the importance of children doing more physical activity on Wednesday. He has invited Goodell to the team party in New Orleans' City Park on Thursday night, and he will attend Goodell's main media event Friday and has even invited the commissioner to watch the game from his suite in the Superdome.

"We're making this the best Super Bowl ever and what that means is we're going to get another Super Bowl to come back in a few years," said Benson with a nod to the city's intent to bid on the 2018 Super Bowl. "We've rolled out the red carpet for everybody."

Frank Supovitz, the NFL's vice president for events, called the Saints "outstanding hosts."

"We've been working on the Super Bowl together with the Saints the last three years. ... The level of partnership has never wavered for a moment," he said. "The NFL and Super Bowl have had a long and deep relationship with the city and with the team and one of the pleasures of my career has been working with the team on the reopening of the dome (after Katrina). We've been very, very close partners with the city and the team and I don't expect that to change."

Dennis Lauscha, who serves as the president of both the Saints and NBA's Hornets — which Benson bought last spring — scoffed at the idea that any animosity lingered between the Saints and the league.

"What we're absolutely concerned about is making sure we put on the best possible show and make a great bid on the next one. We want to put our best foot forward," Lauscha said. "No question we wanted to be the first team to host and play on our own field in the same year. We had an unbelievable experience down in Miami when we won the Super Bowl and we kept on saying how great it would be if we could do that back in New Orleans for our fans, so there is a bit of disappointment in that, but look, we're looking forward to next year and winning the Super Bowl in New York."

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Law Schools’ Applications Fall as Costs Rise and Jobs Are Cut

Law school applications are headed for a 30-year low, reflecting increased concern over soaring tuition, crushing student debt and diminishing prospects of lucrative employment upon graduation.

As of this month, there were 30,000 applicants to law schools for the fall, a 20 percent decrease from the same time last year and a 38 percent decline from 2010, according to the Law School Admission Council. Of some 200 law schools nationwide, only 4 have seen increases in applications this year. In 2004 there were 100,000 applicants to law schools; this year there are likely to be 54,000.

Such startling numbers have plunged law school administrations into soul-searching debate about the future of legal education and the profession over all.

“We are going through a revolution in law with a time bomb on our admissions books,” said William D. Henderson, a professor of law at Indiana University, who has written extensively on the issue. “Thirty years ago if you were looking to get on the escalator to upward mobility, you went to business or law school. Today, the law school escalator is broken.”

Responding to the new environment, schools are planning cutbacks and accepting students they would not have admitted before.

A few schools, like the Vermont Law School, have started layoffs and buyouts of professors. Others, like at the University of Illinois, have offered across-the-board tuition discounts to keep up enrollments. Brian Leiter of the University of Chicago Law School, who runs a blog on the topic, said he expected as many as 10 schools to close over the coming decade, and half to three-quarters of all schools to reduce class size, faculty and staff.

After the normal dropout of some applicants, the number of those matriculating in the fall will be about 38,000, the lowest since 1977, when there were two dozen fewer law schools, according to Brian Z. Tamanaha of Washington University Law School, the author of “Failing Law Schools.”

The drop in applications is widely viewed as directly linked to perceptions of the declining job market. Many of the reasons that law jobs are disappearing are similar to those for disruptions in other knowledge-based professions, namely the growth of the Internet. Research is faster and easier, requiring fewer lawyers, and is being outsourced to less expensive locales, including West Virginia and overseas.

In addition, legal forms are now available online and require training well below a lawyer’s to fill them out.

In recent years there has also been publicity about the debt load and declining job prospects for law graduates, especially of schools that do not generally provide employees to elite firms in major cities. Last spring, the American Bar Association released a study showing that within nine months of graduation in 2011, only 55 percent of those who finished law school found full-time jobs that required passage of the bar exam.

“Students are doing the math,” said Michelle J. Anderson, dean of the City University of New York School of Law. “Most law schools are too expensive, the debt coming out is too high and the prospect of attaining a six-figure-income job is limited.”

Mr. Tamanaha of Washington University said the rise in tuition and debt was central to the decrease in applications. In 2001, he said, the average tuition for private law school was $23,000; in 2012 it was $40,500 (for public law schools the figures were $8,500 and $23,600). He said that 90 percent of law students finance their education by taking on debt. And among private law school graduates, the average debt in 2001 was $70,000; in 2011 it was $125,000.

“We have been sharply increasing tuition during a low-inflation period,” he said of law schools collectively, noting that a year at a New York City law school can run to more than $80,000 including lodging and food. “And we have been maximizing our revenue. There is no other way to describe it. We will continue to need lawyers, but we need to bring the price down.”

Some argue that the drop is an indictment of the legal training itself — a failure to keep up with the profession’s needs.

“We have a significant mismatch between demand and supply,” said Gillian K. Hadfield, professor of law and economics at the University of Southern California. “It’s not a problem of producing too many lawyers. Actually, we have an exploding demand for both ordinary folk lawyers and big corporate ones.”

She said that, given the structure of the legal profession, it was hard to make a living dealing with matters like mortgage and divorce, and that big corporations were dissatisfied with what they see as the overly academic training at elite law schools.

The drop in law school applications is unlike what is happening in almost any other graduate or professional training, except perhaps to veterinarians. Medical school applications have been rising steadily for the past decade.

Debra W. Stewart, president of the Council of Graduate Schools, said applicants to master of business degrees were steady — a 0.8 percent increase among Americans in 2011 after a decade of substantial growth. But growth in foreign student applications — 13 percent over the same period — made up the difference, something from which law schools cannot benefit, since foreigners have less interest in American legal training.

In the legal academy, there has been discussion about how to make training less costly and more relevant, with special emphasis on the last year of law school. A number of schools, including elite ones like Stanford, have increased their attention to clinics, where students get hands-on training. Northeastern Law School in Boston, which has long emphasized in-the-field training, has had one of the smallest decreases in its applicant pool this year, according to Jeremy R. Paul, the new dean.

There is also discussion about permitting students to take the bar after only two years rather than three, a decision that would have to be made by the highest officials of a state court system. In New York, the proposal is under active consideration largely because of a desire to reduce student debt.

Some, including Professor Hadfield of the University of Southern California, have called for one- or two-year training programs to create nonlawyer specialists for many tasks currently done by lawyers. Whether or not such changes occur, for now the decline is creating what many see as a cultural shift.

“In the ’80s and ’90s, a liberal arts graduate who didn’t know what to do went to law school,” Professor Henderson of Indiana said. “Now you get $120,000 in debt and a default plan of last resort whose value is just too speculative. Students are voting with their feet. There are going to be massive layoffs in law schools this fall. We won’t have the bodies we need to meet the payroll.”

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