Can Andy Slavitt keep politics out of ‘United States of Care’?

Posted by on Wednesday, Feb 7, 2018

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

United States of Care, Accessed February 7, 2018

The mission of United States of Care is to ensure that every single American has access to quality, affordable health care regardless of health status, social need, or income.

A new non-partisan non-profit, we are building and mobilizing a movement to achieve long-lasting solutions that make health care better for everyone. United States of Care will help make it happen by working with Americans from across the country, policymakers, physicians and other clinicians, caregivers, and business, civic, and religious leaders.

We must change the conversation and create a new narrative that puts health care over politics by redefining the goal in human, not political terms, and supporting a positive, practical, and lasting approach.

United States of Care’s principles are:

* Affordable Source of Care: Every American should have an affordable regular source of care for themselves and their families

* Protection from Financial Devastation: All Americans should be protected from financial devastation because of illness or injury

* Political and Economic Viability: Policies to achieve these aims must be fiscally responsible and win the political support needed to ensure long-term stability

Board of Directors

Andy Slavitt, Former acting Administrator of the Centers for Medicare and Medicaid Services

Steve Beshear, Former Governor of Kentucky (Democrat)

Kristie Canegallo, Former Deputy White House Chief of Staff to President Obama

Jim Douglas, Former Governor of Vermont (Republican)

Dave Durenberger, Former United States Senator from Minnesota (Republican)

William Frist, M.D., Former United States Senate Majority Leader from Tennessee (Republican)

Rhonda Medows, M.D., Executive Vice President, Providence St. Joseph Health

For the 52 members of the Founder’s Council, use this link:

United States of Care

“The mission of United States of Care is to ensure that every single American has access to quality, affordable health care regardless of health status, social need, or income.” That can be accomplished by enacting a well designed single payer national health program. In contrast, building on our current dysfunctional system will always fall short.

In establishing this organization, Andy Slavitt says that we must put “health care over politics.” Yet the several politicians involved are either Republicans (majority) or conservative neo-liberal Democrats (minority). The 52 members of the Founder’s Council (link to list above) include many strong supporters of the Affordable Care Act. There are many representatives of the health care industry. There are many outspoken opponents to single payer reform, aka Medicare for all. Yet there is not one individual who has taken a prominent stance in favor of single payer, even though a majority of Americans do support Medicare for All.

This organization that professes to place itself above politics is already smothered in anti-single payer politics and is doomed to fail. Sad.

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Single payer at play in Germany’s talks to build a coalition government

Posted by on Tuesday, Feb 6, 2018

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Parties enter final round of talks to build new German coalition government

Deutsche Welle, February 4, 2018

More than four months after holding general elections, Germany remains in political limbo without a new government.

Negotiations between the CDU/CSU (Christian Democrats and Christian Social Union) and the SPD (Social Democratic Party) have entered what many hope could be the final round, with a number of issues still unsettled between the parties.

The parties managed to reach agreement on energy and agriculture issues as well as on the divisive issue of refugee family reunifications, but there’s still no consensus, especially over healthcare reforms. The conservative CDU/CSU bloc have squarely rejected SPD calls for introducing sweeping changes to Germany health insurance system which would see the country’s universal multi-payer health care system replaced by a national single-payer model.

“We’ll have to negotiate very, very intensively on these issues today and I think agreements are possible but they still haven’t been reached,” (SPD leader Martin) Schulz told reporters.…


Germany’s divided SPD: the ultimate grand coalition decider

Deutsche Welle, February 4, 2018

After German reunification in 1990, the Social Democratic Party (SPD) boasted nearly a million members. These days, that figure is just over 440,000. But the members that remain are set to play a crucial role in the future of the center-left party.

The Christian Democrats (CDU), the Christian Social Union (CSU) and the SPD have set a Sunday deadline for concluding coalition talks, though party leaders have agreed to a two-day grace period in the event they have yet to overcome key differences.

But without the consent of SPD party members, Germany will not be governed by a so-called grand coalition. Once talks have concluded, a copy of the coalition treaty will be sent to each of them for review. When going over the document, the key issue will be: Does the proposed government agenda bear the stamp of the Social Democrats in a clearly perceptible manner, or were the SPD’s negotiators shortchanged by their conservative counterparts?

As was the case four years ago, it’s the SPD that has the last word when it comes to signing a coalition treaty with Chancellor Angela Merkel’s CDU and their Bavarian sister party, the CSU.

In contrast to negotiations to form Germany’s previous government in 2013, which 76 percent of the SPD’s members approved, dissenting voices in the party have the opportunity to derail the current grand coalition at an early stage. Many Social Democrats already feel that some of their key demands are being overlooked.…


Germany’s grand coalition talks enter second period of extra-time

Deutsche Welle, February 6, 2018

German officials remained positive on Tuesday morning that Chancellor Angela Merkel’s conservative bloc and the Social Democrats (SPD) would strike a deal to forge a new coalition government by the evening.

As she headed into the final round of talks, Merkel called on all sides to make the necessary concessions and strike a deal that would end months of political limbo.
“Each of us will still have to make painful compromises,” the chancellor said. “I am prepared to do that if we can be sure in the end that the advantages outweigh the disadvantages,” she added.

SPD leader Martin Schulz also said today’s decisive stalks were “about nothing less than building stable, lasting government in one of the largest industrialized countries in the world.”

However, the sides still remain divided on several issues, most notably labor and healthcare policy.

The CDU and its Bavarian sister party, the Christian Social Union (CSU), continue to reject any sweeping changes to Germany’s health insurance system. The SPD, meanwhile, wants to see Germany’s two-tier health system reformed with a new system that closes the care gap between citizens with private and statutory insurance.

The CDU’s Klöckner said her party wanted to see welcome changes to Germany’s healthcare model but warned that a “one-size-fits-all” system would be too expensive.…

Germany has a multi-payer system for health care composed of competing, not-for-profit, nongovernmental health insurance funds (“sickness funds”) in the compulsory statutory health insurance (SHI) system, and those with higher incomes can choose private health insurance (PHI). PHI is especially attractive for young people with good incomes, as insurers may offer them contracts with more extensive ranges of services and lower premiums. Thus Germany has a two-tiered system with a “care gap between citizens with private and statutory insurance.”

Four months after their election, talks may finally conclude today on formation of a coalition government. One of the major issues still to be decided is whether or not the parties will agree to close the gap in their two-tiered system by replacing it with a national single payer model. Although the conservative opposition has not yet yielded, the success in forming a coalition government may be at stake. We may know the results later today.

The issue for us is that more egalitarian European systems, such as that in Germany, may still be inequitable if people are allowed to buy up out of the compulsory system. The fact that single payer has become a major negotiating issue in Germany shows that their citizens understand that as well. Although the divide is between center-left and conservative politicians, just as in the United States, is that where the people are? Or would they prefer that the politicians move past the polarization and adopt a fully egalitarian system?

(As of Feb. 6, 9:00 PM, Central European Time, there are no further media reports on the progress of the negotiations.)

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Who will be next year’s high health care spenders?

Posted by on Monday, Feb 5, 2018

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Consistently High Turnover in the Group of Top Health Care Spenders

By William C. Johnson, Ph.D.; Niall Brennan, M.P.P.; Sally Rodriguez, M.P.H. & John Hargraves, M.P.P.; Health Care Cost Institute
NEJM Catalyst, February 1, 2018

The concentration of most U.S. health care spending in a small proportion of individuals is well documented. The notion that high health care spending only affects a small portion of people in a given year is particularly relevant to the ongoing policy debate about how to make health insurance affordable for all, while accommodating people with complex health care needs and accompanying higher costs.

To better understand the patterns of spending for higher-risk enrollees, the Health Care Cost Institute studied the distribution of health care spending among commercially insured individuals and how their spending changed over time. Specifically, we analyzed the annual health care spending of more than 9 million individuals under the age of 65 in each pair of years from 2008 to 2015. Because people may change insurers over time, within each pair of years we limited our sample to people with continuous enrollment and prescription drug coverage for the full 2 years. We found that top spenders (the top 5%) account for a growing share of health care spending, and there is consistent and substantial turnover among these top spenders.

Taken together, we interpret these findings as evidence that as costs continue to rise, health insurance will play an increasingly important role in easing the financial burden of increased health care spending. For this reason, less comprehensive plans may be risky, even for consumers with low health care spending in previous years. These findings provide a timely reminder of the inherent uncertainty in health care spending in light of proposals to create significant changes in individual and group insurance markets, such as altering consumer protections created by the Affordable Care Act.

Large Degree of Turnover from Year to Year among Top Spenders

Simply put, three out of five top spenders in any given year were not top spenders in the prior year. In 2015, only 39% of the top 5% of spenders were in the top 5% of spenders in 2014. Moreover, this trend was consistent in each year from 2009 to 2015. These new top spenders came from all portions of the spending distribution. For example, in each year studied, almost 15% of top spenders were in the bottom 50% of spenders or had no spending in the previous year.

People who are new to the top 5% of spenders endure dramatic changes in their health care spending within a short period of time. The median newly top spender saw their total health care spending rise almost 800% from $4,528 in 2014 to $35,523 in 2015. While insurance plans insulated them from most of this spending increase, median out-of-pocket spending for this group also rose nearly 400% from $1,048 in 2014 to $4,067. These year-to-year changes in out-of-pocket spending are particularly jarring considering the Federal Reserve Board’s 2016 Survey of Household Economics and Decision, which reported that 44% of respondents could not afford a $400 emergency expense.…

This report quantifies a well-known, important fact about health care spending. Consistently, year after year, three-fifths of the top 5 percent of health care spenders are new arrivals, with a median health care spending rise of 800 percent from the previous year. The population with high health care costs is unstable, year after year.

Those opposed to universal, comprehensive health care tell us that we should buy only the insurance that we need. Yet 3 percent of those under 65 without high health care costs will have health care spending the following year in the top 5 percent. It is almost impossible to know who most of those individuals are.

The authors state, “These findings provide a timely reminder of the inherent uncertainty in health care spending in light of proposals to create significant changes in individual and group insurance markets, such as altering consumer protections created by the Affordable Care Act.” Further, “These year-to-year changes in out-of-pocket spending are particularly jarring considering the Federal Reserve Board’s 2016 Survey of Household Economics and Decision, which reported that 44% of respondents could not afford a $400 emergency expense.”

The obvious conclusion is that everyone needs comprehensive insurance, including the young and healthy, because of the unpredictability of high health care costs. Even more important than financial security, a well designed single payer national health program would ensure that everyone would have health security as well.

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MedPAC: Repeal MIPS and replace it with VVP, whatever that is

Posted by on Friday, Feb 2, 2018

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

MedPAC’s Repeal And Replace MIPs Campaign Will Not End Well

By Kip Sullivan
The Health Care Blog, January 28, 2018

“This is tough. I don’t know how to proceed…. Lord help the staff who must bring all this together.”

That was how Dr. Francis Crosson, chairman of the Medicare Payment Advisory Commission (MedPAC), reacted to the commission’s baffling discussion at its January 11 meeting moments before it voted 14-2 to replace the Merit-based Incentive Payment System (MIPS) with something called the “voluntary value program” (VVP). MedPAC’s staff must now summarize the January 11 discussion and prepare a report for inclusion in MedPAC’s March 2018 report to Congress.

MIPS is a pay-for-performance (P4P) scheme imposed on the traditional fee-for-service Medicare program by an act of Congress known as MACRA. MIPS requires that CMS measure performance on cost and quality at the level of the individual doctor, something MedPAC recently acknowledged can’t be done after spending 13 years claiming it could be done.

The portion of the commission’s January 11 discussion that focused on the repeal of MIPS was not hard to understand. The commissioners agreed that MIPS cannot work for multiple reasons, the most important being that the pools of patients treated by individual doctors are too small to permit accurate measurement of cost and quality. “MIPS will not succeed in helping beneficiaries choose clinicians, helping clinicians … improve value, or helping the Medicare program to reward clinicians based on value,” explained MedPAC staffer Kate Bloniarz.

It was the commissioners’ discussion about what to replace MIPS with that will be very difficult to summarize. That’s because the discussion consisted largely of expressions of doubt about the VVP, which is essentially a proposal that all doctors who treat Medicare patients either join a “group” (aka ACO) or lose 2 percent of their Medicare payments. The discussion, which followed a vague opening presentation by two MedPAC staff members, consisted of numerous questions posed to the staff that neither the staff nor Dr. Crosson could answer. Because so many issues remained unresolved, ten of the 16 commissioners (one was absent) expressed reservations about voting for the VVP. How does the staff or anyone else summarize a discussion like that? How does the staff explain why the commission voted to recommend the VVP to Congress when a majority of commissioners have multiple concerns about it?

The two questions that got the most discussion were: Will functioning ACOs (as opposed to Potemkin village ACOs that have no internal cohesion) be available for all doctors to join, and; won’t CMS’s crude method of measuring “performance” punish doctors who treat poorer and sicker patients? These and other issues were raised not only at the January 11, 2018 meeting, but at five previous meetings in 2017. That these questions were still unanswered after six meetings is compelling evidence Dr. Crosson and the staff cannot answer them and never will.

Chronology of MedPAC’s latest lead balloon

MACRA (Medicare Access and CHIP Reauthorization Act), which authorized MIPS, was signed by President Obama in April 2015. Although the fatal defects in MIPS were obvious the day Obama signed MACRA, MedPAC waited nearly two years to begin a discussion about whether MIPS could work. Instead of sounding the alarm immediately, MedPAC wasted the rest of 2015 discussing some vague principles that should guide CMS in developing the “alternative payment model” (APM) portion of MACRA.

I have no idea how to explain the delay between April 2015, when Obama signed MACRA, and January 2017 when MedPAC finally started talking about repealing MIPS. I do know what caused the failure to act between January 2017 and January 2018: That was Dr. Crosson’s and the staff’s insistence that MedPAC should propose a replacement for MIPS at the same time they recommended its repeal. This insistence manifested the staff’s near-religious devotion to P4P despite a large body of evidence indicating P4P does not work at any level – at the individual physician level, the clinic or hospital level, or even at the level of large pools of providers.

Because of this devotion, staff and Dr. Crosson could not bear the thought of repealing MIPS and thereby leaving 80 percent of the doctors and nurses who treat Medicare patients unmolested by P4P. (Eighty percent appears to be the commission’s latest estimate of the percent of Medicare “clinicians” who will not be in ACOs or other entities that qualify as “advanced alternative payment models” [APMs] under MACRA by 2019, the first year MIPS penalties and rewards kick in.) It was this blind insistence on forcing some form of P4P upon that 80 percent that caused the staff to link repeal with replacement right from the start of the repeal discussion in January 2017.

The staff presented its replacement proposal – what they would eventually call the “voluntary value program” (VVP) – at the January 2017 and March 2017 meetings. At both meetings, and at four subsequent meetings (October, November, and December 2017 and January 2018), commissioners peppered the staff with questions about the VVP – to no avail. Dr. Crosson and the staff resolutely refused to add any details to the vague VVP proposal first presented in January 2017. For example, all the staff would say about the “groups” that doctors would have to join in order not to lose 2 percent of their payments is that they must be “sufficiently large to have statistically detectable performance on population-based measures” such as use of “low-value” services and “healthy days at home.” That was their story, and they stuck to it. The skeleton-like proposal the commission voted on at the January 11, 2018 meeting was identical to the skeleton-like proposal they first heard in January 2017.

(The excerpts are truncated here. If you are interested in reading the process which resulted in the decision to replace MIPS with the nebulous VVP then click the link for the rest of the article. – DMc)

Lessons from another “repeal and replace” campaign

All sentient readers will recall the sad ending of another “repeal and replace” campaign. It had a sad ending because it was driven by ideology, not evidence. MedPAC appears hellbent on repeating the same mistake Republicans made in declaring their intention to “repeal and replace” the Affordable Care Act. MedPAC linked repeal of MIPS with its replacement before they had time to research the replacement. MedPAC might as well have said, “We will replace MIPS with something terrific!”…


Principles for a Framework for Alternative Payment Models

By Sam Nussbaum, M.D.; Mark McClellan, M.D., Ph.D.; Grischa Metlay, Ph.D.
JAMA, January 29, 2018

The way physicians, hospitals, and other health care professionals are paid influences patient care because payment methods affect business models that clinicians and health care facilities use to prioritize investments, establish infrastructure, and design care processes. Fee-for-service medicine and its volume-based financial incentives can lead to overuse of low-value services and suboptimal care. A consensus is emerging among patients, health care professionals, payers, and purchasers that transitioning to alternative payment models (APMs) that better incentivize value for patients is essential for improving the quality and affordability of health care.

In 2014, the CMS published a system for classifying APMs.1 In the interim, the Health Care Payment Learning and Action Network (LAN), a public-private partnership driving multistakeholder consensus and coordinated action to accelerate the transition to APMs, built on, expanded, and refined the original system.

This Viewpoint reviews major themes in the framework principles as revised by LAN, illustrating how they are applied in the LAN classification scheme, and the LAN national goals for payment reform.

The Updated APM Framework

Category 1: Fee for service; no link to quality and value

Category 2: Fee for service; link to quality and value

1. Foundational payments for infrastructure and operations (eg, care coordination fees and payments for health care information technology investments)

2. Pay for reporting (eg, bonuses for reporting data or penalties for not reporting data)

3. Pay for performance (eg, bonuses for quality performance)

Category 3: APMs built on fee-for-service architecture

1. APMs with shared savings (eg, shared savings with up-side risk only)

2. APMs with shared savings and down-side risk (eg, episode-based payments for procedures and comprehensive payments with up-side and down-side risks)

Category 4: Population-based payment

1. Condition-specific population-based payment (eg, per-member per-month payments, payments for specialty services such as oncology or mental health)

2. Comprehensive population-based payment (eg, global budgets or full/percentage of premium payments)

3. Integrated finance and delivery system (eg, global budgets or full/percentage of premium payments in integrated systems)

The updated APM Framework rests on 8 principles, which can be summarized as follows:

1. Changing clinicians’ and health care facilities’ financial incentives is not sufficient to achieve person-centered care, so it will be essential to empower patients to be partners in health care transformation.b

2. Reformed payment mechanisms will only be as successful as the delivery system capabilities and innovations they support.b

3. The goal for payment reform is to transition health care payments from fee for service to APMs. While category 2C APMs can be the payment model for some clinicians and health care facilities, most national spending should continue moving into categories 3 and 4.b

4. Value-based incentives should ideally reach care teams who deliver care.

5. Payment models that do not take quality into account are not considered APMs in the APM Framework and do not count as progress toward payment reform.

6. Value-based incentives should be intense enough to motivate clinicians and health care facilities to invest in and adopt new approaches to care delivery without subjecting them to financial and clinical risk they cannot manage.b

7. Alternative payment models will be classified according to the dominant form of payment when using more than 1 type of payment.

8. Centers of excellence, accountable care organizations, and patient-centered medical homes are examples rather than categories in the APM Framework because they are delivery systems that can be applied to and supported by a variety of payment models.

Patient Protections

Payment reform is not an end; it is a means to supporting better, more coordinated care for patients. Accordingly, APMs must help make patients better health care consumers and mitigate perverse incentives that reward low-quality patient care.

Protections for Health Care Professionals

Reformed payment mechanisms that hold health care professionals increasingly accountable for cost and quality performance and that allow more flexibility in care delivery are central to any efforts to transform care delivery.

Value-Based Goals for Payment Reform

The value of an APM should be assessed not only by its design elements but also by how well it promotes person-centered care.

APM Framework and Progress Tracking

As the nation approaches 30% of payments in value-based arrangements, the LAN APM Framework could provide a useful platform for helping to accelerate progress on payment reform by outlining principles for APM design, differentiating APMs based on potential value, and offering a tool to consistently measure progress toward national goals.…

Much of the history of health policy in the United States involves the application of policy concepts based on ideology rather than solid policy science. Policies are dreamed up and then executed broadly on a wish about what would happen rather than reliable predictions of what really will happen. The SGR, MACRA, MIPS, APM, and now VVP is a saga of such dreams in the policy community forced to meet reality.

SGR (sustainable growth rate) was a tool to slow the growth in health care spending. When implemented it was perceived to be too austere and thus annual adjustments were postponed until the cumulative deficit proved to be so great that SGR had to be abandoned. It was replaced by MACRA (Medicare Access and CHIP Reauthorization Act) which established MIPS (Merit-based Incentive Payment System) and APM (Alternative Payment Model).

MIPS has proven to be a dud, and thus MedPAC (Medicare Payment Advisory Commission) has recommended that it be abandoned and replaced with VVP (Voluntary Value Program). Kip Sullivan, who had previously warned us about MIPS (as did I), now explains why we should be concerned about VVP (and I emphatically concur). His full article available at The Health Care Blog website should be read to understand what a farce this is.

Recognizing the deficiencies in MIPS, many in the policy community have recommended that incentives be established to move everyone past MIPS into the Alternative Payment Models (APMs). But what are they? JAMA has just published the updated framework for APMs as established by LAN (Health Care Payment Learning and Action Network). Read the framework itself and the eight principles on which it rests. Then sit back and think about how this framework would define the future of our entire health care delivery system, putting the eight principles to work. In their dreams based on ideology, our policy community has come up with Comprehensive Revision of American Physician Payment Principles (CRAPPP).

Come on. We have solid policy evidence that a well designed single payer system would achieve their goals (and ours) of a high performance health care system that takes care of all of us and is affordable for each of us. Let’s cut out the CRAPPP and do it right.

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NYT Letter: Astute advice for Buffett, Bezos and Dimon

Posted by on Thursday, Feb 1, 2018

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Letter: The 3 Giants’ Health Plan

By Elizabeth R. Rosenthal, M.D.
The New York Times, January 31, 2018

To the Editor:

Re: “3 Giants Form Health Alliance, Rocking Insurers” (front page, Jan. 31):

Before spending lots of time, effort and money developing a new health care “product,” Warren E. Buffett of Berkshire Hathaway, Jeff Bezos of Amazon and Jamie Dimon of JPMorgan Chase should realize that using a market approach to health care has failed miserably in this country.

They should go with Mr. Buffett’s earlier assessment. He suggested that despite “limited knowledge,” he thought that single payer is probably the best system, adding: “We are such a rich country. In a sense, we can afford to do it.”

Instead of reinventing the wheel, they should consult a group of experts who understand the needs of patients and populations and who have for many years studied the public policies that can best fulfill these needs. Physicians for a National Health Program, on whose board I sit, would be glad to oblige.

Dr. Elizabeth Rosenthal is a dermatologist. She resides in Larchmont, N.Y.…

It is great news that these icons of the business world – Buffett, Bezos and Dimon – recognize that there are serious problems with our health care system and that they want to do something about it. But looking for technological advances to build on and tweak our current system will leave in place most of the flawed policies that result in very high costs with only mediocre performance.

There is no doubt that they could make some improvements within a customized system designed to serve their own employees, even if also extended to employees of other larger corporations. But most individuals outside of their companies would still be exposed to our highly dysfunctional system, so the net social good would be very limited.

On the other hand, if they advocated for a well designed single payer system, it would bring to their own businesses the efficiencies which would achieve their goal of cost containment while at the same time improving the allocation of our resources within the entire health care delivery system – serving well not only their companies but all of us. Further, it is likely that it would be much less expensive for them to advocate for a single payer system than to spend large sums in trying to leverage their own internal systems with expensive technological innovations – innovations that frequently fall far short of their idealistic goals.

These gentlemen have a chance to make a difference. Before they pull all stops, they should take a very careful look at a better system that would serve all of us quite well. Elizabeth Rosenthal’s astute, concise advice should be considered and pursued.

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P4P should incite the policy community

Posted by on Wednesday, Jan 31, 2018

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Pay for performance: a dangerous health policy fad that won’t die

By Kip Sullivan and Stephen Soumerai
STAT, January 30, 2018

Pay for performance, the catchall term for policies that purport to pay doctors and hospitals based on quality and cost measures, has been taking a bashing.

Last November, University of Pittsburgh and Harvard researchers published a major study in Annals of Internal Medicine showing that a Medicare pay-for-performance program did not improve quality or reduce cost and, to make matters worse, it actually penalized doctors for caring for the poorest and sickest patients because their “quality scores” suffered. In December, Ankur Gupta and colleagues reported that a Medicare program that rewards and punishes hospitals based on arbitrary limits on the number of hospital admissions of heart failure patients may have increased death rates. On New Year’s Day, the New York Times reported that penalties for “inappropriate care” concocted by Veterans Affairs induced an Oregon hospital to deny acute medical care to its sickest patients, including an 81-year-old “malnourished and dehydrated” vet with skin ulcers and broken ribs.

And just three weeks ago, the Medicare Payment Advisory Commission recommended that Congress repeal a Medicare pay-for-performance program, imposed by Congress in 2015, because the program is costly and ineffective.

This bad news comes on top of a decade of less-publicized research indicting policies intended to reward and penalize doctors based on measures — most of them inaccurate — of their cost and quality. That research demonstrates that penalties against doctors:

  • Do not improve the health of patients
  • Harm sicker and poorer patients
  • Encourage doctors and hospitals to avoid or “fire” sicker patients who drag down quality scores due to factors outside physicians’ control
  • Cause some doctors to stop using lifesaving treatments if they don’t result in bonuses
  • Create interruptions in needed medical care
  • Reduce job satisfaction and undermine altruism and professionalism among doctors
  • Cause doctors to game quality measures. For example, a Medicare program that punished hospitals for hospital-acquired infections actually induced some hospitals to characterize infections acquired after admission as “present upon admission” or to simply not report the infection rather than reduce actual infection rates.

Subjecting doctors and hospitals to carrots and sticks hasn’t worked for several reasons. The most fundamental one: Clinician skill is not the only factor that determines the quality of care. Consider one widely used performance measure: the percent of patients diagnosed with high blood pressure whose blood pressure is brought under control. Doctors who treat older, sicker, and poorer patients with high blood pressure will inevitably score worse on this so-called quality measure than doctors who treat healthier and higher-income patients.

This divergence between actual and measured skill will happen — regardless of economic incentives — because of factors outside physicians’ control. These include patients’ health, genes, income, ability and willingness to exercise, access to health insurance, and stressors at home and work. In other words, this “performance” measure is not a measure of quality but a mishmash of many factors, only one of which might be physician skill.

The use of such crude performance measures creates several destructive side effects, most notably harm to patients. This harm is inflicted in two ways. First, doctors who treat a disproportionate share of sicker and poorer patients are the most likely to be hit with penalties and therefore end up with reduced resources with which to treat their patients. Second, the certainty that sicker and poorer patients drag down doctors’ scores causes some doctors to avoid treating these patients, causing serious preventable illness and additional medical costs.

Performance-based pay may improve the sales of products like dishwashers and computer products. But it is irrelevant to the complexities and professionalism of good doctoring and other human services like education. The research on pay for performance in health care is now conclusive: It’s time to terminate these harmful bonus-and-penalty schemes.

Kip Sullivan, J.D., is a member of the Health Care for All Minnesota Policy Advisory Committee and the legislative strategy committee of the Minnesota Chapter of Physicians for a National Health Program. Stephen Soumerai, Sc.D., is professor of population medicine and founding and former director of the Division of Health Policy and Insurance Research at Harvard Medical School, where he teaches research methods.…


Performance-based financing in low-income and middle-income countries: isn’t it time for a rethink?

By Elisabeth Paul, Valéry Ridde, et al
BMJ Global Health, January 13, 2018


This paper questions the view that performance-based financing (PBF) in the health sector is an effective, efficient and equitable approach to improving the performance of health systems in low-income and middle-income countries (LMICs). PBF was conceived as an open approach adapted to specific country needs, having the potential to foster system-wide reforms. However, as with many strategies and tools, there is a gap between what was planned and what is actually implemented. This paper argues that PBF as it is currently implemented in many contexts does not satisfy the promises. First, since the start of PBF implementation in LMICs, concerns have been raised on the basis of empirical evidence from different settings and disciplines that indicated the risks, cost and perverse effects. However, PBF implementation was rushed despite insufficient evidence of its effectiveness. Second, there is a lack of domestic ownership of PBF. Considering the amounts of time and money it now absorbs, and the lack of evidence of effectiveness and efficiency, PBF can be characterised as a donor fad. Third, by presenting itself as a comprehensive approach that makes it possible to address all aspects of the health system in any context, PBF monopolises attention and focuses policy dialogue on the short-term results of PBF programmes while diverting attention and resources from broader processes of change and necessary reforms. Too little care is given to system-wide and long-term effects, so that PBF can actually damage health services and systems.…

We are living through the generation of health policy research. By applying health policy science we should be able to improve the quality of health care while controlling costs. But what we are seeing instead is the widespread implementation of schemes without adequate evidence of their effectiveness. P4P – pay for performance – is one such scheme.

We now have overwhelming evidence that P4P does not work as intended. It does not improve performance, supposedly by giving rewards for (largely flawed) measures of performance, but, in fact, it can create perverse incentives that impair outcomes, as Kip Sullivan and Stephen Soumerai explain.

Furthermore, Elisabeth Paul, Valéry Ridde and their colleagues show us that the widespread acceptance and implementation of this concept throughout the world “can actually damage health services and systems.”

Right now we are swamped with policy concepts that are being adopted on a wholesale basis without adequate evidence of either effectiveness or safety – an approach that is antithetical to the health sciences. Just a couple of examples of these schemes include ACOs, MIPS, APMs, and now VVP (to be covered soon in another Quote of the Day).

How have we been doing with this applied health policy that lacks scientific support? Costs continue to be outrageous while we have compromised access through the financial barriers of underinsurance; we have reduced choice through limited provider networks, and we have left tens of millions uninsured.

In sharp contrast are the proven policies inherent in a well designed single payer system. Our immediate attention should be redirected to enacting and implementing those policies instead. Once we have an efficient financing infrastructure in place we will have a much better foundation on which to use the tools of health policy science to improve efficiency and outcomes.

Instead of wasting our time with a parked cart on a fallow field, we should be nurturing the horse and sowing the field. In health policy, P4P and the other schemes have shown us that we are wasting our time with a horseless cart. Our pathetic results should be no surprise.

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What will Amazon, Berkshire Hathaway and JPMorgan Chase do for health care?

Posted by on Tuesday, Jan 30, 2018

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Amazon, Berkshire Hathaway and JPMorgan Chase & Co. to partner on U.S. employee healthcare; Goal is to improve U.S. employee satisfaction while reducing overall costs

Business Wire, January 30, 2018

SEATTLE & OMAHA, Neb. & NEW YORK–(BUSINESS WIRE)–Amazon (NASDAQ: AMZN), Berkshire Hathaway (NYSE: BRK.A, BRK.B) and JPMorgan Chase & Co. (NYSE: JPM) announced today that they are partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs. The three companies, which bring their scale and complementary expertise to this long-term effort, will pursue this objective through an independent company that is free from profit-making incentives and constraints. The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.

Tackling the enormous challenges of healthcare and harnessing its full benefits are among the greatest issues facing society today. By bringing together three of the world’s leading organizations into this new and innovative construct, the group hopes to draw on its combined capabilities and resources to take a fresh approach to these critical matters.

“The ballooning costs of healthcare act as a hungry tapeworm on the American economy. Our group does not come to this problem with answers. But we also do not accept it as inevitable. Rather, we share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes,” said Berkshire Hathaway Chairman and CEO, Warren Buffett.

“The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” said Jeff Bezos, Amazon founder and CEO. “Hard as it might be, reducing healthcare’s burden on the economy while improving outcomes for employees and their families would be worth the effort. Success is going to require talented experts, a beginner’s mind, and a long-term orientation.”

“Our people want transparency, knowledge and control when it comes to managing their healthcare,” said Jamie Dimon, Chairman and CEO of JPMorgan Chase. “The three of our companies have extraordinary resources, and our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans,” he added.

The effort announced today is in its early planning stages, with the initial formation of the company jointly spearheaded by Todd Combs, an investment officer of Berkshire Hathaway; Marvelle Sullivan Berchtold, a Managing Director of JPMorgan Chase; and Beth Galetti, a Senior Vice President at Amazon. The longer-term management team, headquarters location and key operational details will be communicated in due course.…

The headline in this morning’s online edition of The New York Times: “Amazon, Berkshire Hathaway and JPMorgan Team Up to Disrupt Health Care.” Disruption? Above is reproduced the actual full statement from Business Wire (A Berkshire Hathaway Company). So what is their message?

For decades the business community has struggled with trying to provide health benefits for their employees, but costs have continued to rise well in excess of inflation in spite of policies put in place to slow the growth in costs – policies that have displeased employees such as high deductibles and other cost sharing and narrow provider networks that limit choice in health care, not to mention passing some of the premium increases on to the employees.

In this communication, Warren Buffett, Jeff Bezos and Jamie Dimon acknowledge the need to ensure employee satisfaction and the need to control health care costs. They have now decided to join forces to use their brilliance and expertise to finally solve this problem for the benefit of their own employees. As successful businessmen they have decided that the best approach would be to establish a not-for-profit independent company looking for solutions in technology that will “provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.”

Warren Buffett says, “Our group does not come to this problem with answers.”

Jeff Bezos says, “The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty… Success is going to require talented experts, a beginner’s mind…”

Jamie Dimon says, “Our people want transparency, knowledge and control when it comes to managing their healthcare.”

The release states, “The longer-term management team, headquarters location and key operational details will be communicated in due course.”

So they do not have a plan, but they plan to have a plan.

They intend to start with talented experts, but they appear to be looking in the technology world when they need to turn to the health policy arena since mere technological gimmicks are not going to have a significant impact on the problems that concern them.

The obvious caveat when they turn to the policy community is that they have to sort out those who propose policies proven to be capable of achieving their goals from those who propose policies based predominantly on anti-government, pro-market ideology. We already have the latter, and it is what has brought us to our knees. Several other nations have the former which has provided them with comprehensive care for everyone at an average of half of what we spend per capita on health care.

Warren Buffett already knows this. He recently said, “With my limited knowledge, I think that (single payer) probably is the best system. We are such a rich country. In a sense, we can afford to do it.”

An independent health benefit company serving their employees, even if including the employees of a large conglomeration of other companies, could not adapt most of the beneficial features of a well designed single payer model. Most of the policy defects that result in the dysfunction of our health care financing would remain in place. As smart businessmen, the last thing they should want is to invest considerable effort and resources into a venture that proves pretty much for naught.

Rather than setting up yet another technology-based company wouldn’t it be better to begin with a group of experts who understand the health needs of patients and the community at large and the public policies that would deliver on those needs? But leave out those who place markets first such as the insurers, pharmaceutical executives, for-profit corporate executives and the like.

Maybe Buffett, Bezos and Dimon should simply arrange a visit with us at Physicians for a National Health Program. Not only are we physicians, we are also policy people who support policy for the people, not for the rent seekers.

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Medicare’s out-of-pocket costs eroding Social Security payments

Posted by on Monday, Jan 29, 2018

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Medicare Beneficiaries’ Out-of-Pocket Health Care Spending as a Share of Income Now and Projections for the Future

By Juliette Cubanski, Tricia Neuman and Karen E. Smith
Kaiser Family Foundation, January 2018

From the Executive Summary

Medicare helps pay for the health care needs of 59 million people, including adults ages 65 and over and younger adults with permanent disabilities. Even so, many people on Medicare incur relatively high out-of- pocket costs for their health care, including premiums, deductibles, cost sharing for Medicare-covered services, as well as spending on services not covered by Medicare, such as long-term services and supports and dental care. The financial burden of health care can be especially large for some beneficiaries, particularly those with modest incomes and significant medical needs.

Key Findings

* In 2013, Medicare beneficiaries’ average out-of-pocket health care spending was 41 percent of average per capita Social Security income; the share increased with age and was higher for women than men, especially among people ages 85 and over.

* Medicare beneficiaries’ average out-of-pocket health care spending is projected to rise as a share of average per capita Social Security income, from 41 percent in 2013 to 50 percent in 2030.

* Half of beneficiaries in traditional Medicare spent at least 14 percent of their per capita total income on out-of-pocket health care costs in 2013. The spending burden was higher for people ages 85 and over, in poor health, and with modest incomes.

* More than one-third (36 percent) of beneficiaries in traditional Medicare, and half of those with incomes below $20,000, spent at least 20 percent of their per capita total income on out-of-pocket health care costs in 2013. By 2030, more than 4 in 10 (42 percent) traditional Medicare beneficiaries are projected to spend at least 20 percent of their total income on health-related out-of-pocket costs.

From the Policy Implications

This analysis shows that out-of-pocket health care costs are a substantial and growing burden for many people with Medicare, consistent with other recent research. We found that out-of-pocket health care spending represented a sizable share (41 percent) of Medicare beneficiaries’ per capita Social Security income, on average, in 2013, and is expected to consume half of Social Security income in 2030. Some beneficiaries face greater average out-of-pocket spending as a share of average per capita Social Security income than others, including older women and beneficiaries ages 85 and over. For other beneficiaries, average out-of-pocket health care spending represents a relatively lower share of their average per capita Social Security income, likely due in part to coverage from Medicaid and the Part D Low-Income Subsidy program, which reduces the spending burden, including black beneficiaries and those under age 65. Using a different measure of the out-of- pocket spending burden based on per capita total income, we found that half of beneficiaries in traditional Medicare spent at least 14 percent of their total income on out-of-pocket health care costs in 2013, while more than one-third of beneficiaries spent at least 20 percent. By 2030, more than 4 in 10 traditional Medicare beneficiaries are projected to spend at least 20 percent of their total income on out-of-pocket health care costs.

Our results suggest that efforts to strengthen and improve the protections offered by Medicare, Medicaid, and Social Security may be needed to ensure greater retirement security for future generations of older Americans.…


Three ways to cut — and improve — Medicare

By Ed Weisbart
STAT, January 17, 2018

The Republicans are right. We should cut Medicare. And I know how: Keep Medicare’s funding for actual health care but eliminate bureaucratic waste, profits, and the expensive and preposterous ban on negotiating drug prices. In other words, get rid of Part C and Part D and absorb the extra features into traditional Medicare.

Medicare Advantage plans continue to grow in popularity, now attracting 31 percent of all Medicare beneficiaries. People make this choice because most Advantage plans offer reductions in copays and deductibles, along with enhanced benefits like membership in gym clubs or including a Medicare Part D pharmacy benefit. We could embed these modest features into traditional Medicare and still reap substantial savings for the national budget.

The arithmetic is easy, the benefits are clear, and the money is there. Take the profit motive out of Medicare to save billions. It’s just a matter of political will.

Ed Weisbart, M.D., is a family physician and chair of the Missouri chapter of Physicians for a National Health Program.…

Social Security and Medicare are intended to provide financial security for the elderly and individuals with major disabilities. Yet average out-of-pocket expenses for Medicare will soon consume half of the average per capita Social Security payments. That’s not much security.

Many individuals do have other income sources to help pay the out-of-pocket expenses of Medicare, but, even there, over 40 percent are expected to spend at least 20 percent of their total income on health-related out-of-pocket costs.

Once again it is obvious that out-of-pocket expenses for Medicare beneficiaries are too high, especially for those heavily dependent on Social Security.

The solution is simple. Expand Medicare benefits to include those covered by Medigap, retiree plans, the Part C Medicare Advantage plans, and the Part D drug coverage, while cutting back on Medicare premiums, deductibles and coinsurance. We could pay for this expansion with the administrative savings and other efficiencies gained through enactment of a single payer Medicare for all program. Let’s do it.

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Cacophony on drug pricing

Posted by on Friday, Jan 26, 2018

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Among those who want to lower drug prices, there’s cacophony, not consensus

By Erin Mershon
STAT, January 26, 2018

Of all his campaign promises, President Trump’s vow to bring down drug prices was perhaps the most popular.

An assortment of interest groups spoke out loudly and passionately on the need for action, from hospitals to doctors to insurers to generic drug makers to patients themselves.

Instead, congressional efforts to lower drug prices are at a total standstill. In interviews with STAT, lobbyists, lawmakers, and congressional staffers, Republicans and Democrats alike, said the most powerful health industry players conspicuously disagree about exactly how to move forward. Every group pushes its own priorities and strategies — a cacophony that makes it unlikely that crushing drug prices will change any time soon.

The disarray was on full display at a recent congressional hearing, when representatives from nearly every major trade group with any stake in the country’s drug prices — AMA, AHIP, and AHA included — spent almost an hour and a half testifying without more than a cursory discussion of how Congress could fix the problem. When they finally did talk solutions, outside of buzzy phrases like “increase transparency,” almost none of their answers matched.

So why can’t the broader health care industry agree on how to make drugs more affordable? Here are five factors.

1. Health care lobbyists are stuck playing defense.

2. Congress isn’t jumping to act.

3. Each industry has very different priorities, even when they do agree.

4. All the major players have a stake in the status quo.

5. There’s no silver bullet.…


Pharma gets a seat at the table at private dinner with Trump at Davos

By Rebecca Robbins
STAT, January 25, 2018

The leaders of drug makers Novartis and Bayer joined President Trump on Thursday evening at a private dinner in Davos, the snowy Swiss resort that’s playing host this week to a gathering of elites from around the globe.

Vas Narasimhan, who officially becomes CEO of Novartis (NVS) next week, and Bayer (BAYN) CEO Werner Baumann were among the 15 European business executives invited to the event. The White House’s goal for the evening: to encourage the companies to make investments in the U.S. and to encourage others to join them, National Economic Council Director Gary Cohn told reporters earlier this week.

Trump is the first sitting president in two decades to attend the annual four-day meeting of the World Economic Forum, which draws a who’s-who list of politicians, one-percenters, and pharmaceutical royalty. Trump is scheduled Friday to deliver a speech, in which he’s expected to tout the tax cuts introduced by the new tax law and make the case for trade policies more favorable to U.S. interests.

A year ago, then-President-elect Trump famously declared that drug companies are “getting away with murder” when it comes to pricing their drugs, but the administration has yet to take any significant policy steps to drive prices down.…

Virtually everyone agrees that drug costs are too high, but the private sector’s response has been to attempt to reshuffle the drug money wherein each stakeholder is trying to get a larger share, while collectively they are doing nothing of significance to control our global drug costs. When the private sector is out of control, it is time for the government to step in.

During his campaign, Donald Trump promised repeatedly that he would bring down drug prices. But after a year in office, he has done nothing, until now. And what is he doing? He is attending the World Economic Forum in Davos, Switzerland. That is a meeting about power players moving money around, not about social policy to benefit the people. He hosted a private dinner that included leaders in the pharmaceutical industry – an industry that he said was “getting away with murder.” That certainly is not an environment wherein discussions would take place on strategies to lower the cost of drugs for the benefit of patients.

In her article, STAT Correspondent Erin Mershon lists five reasons why the broader health care industry is unable to reach agreement on making drugs more affordable. A common thread is that each sector of the broader industry is primarily concerned about its own priorities and strategies, and that has resulted in cacophony without progress.

But Mershon’s fifth point – that there is no silver bullet – is an observation that might be expected with a story background exemplified by the meeting in Davos. Instead of looking for silver bullets that the billionaires can share, we should be looking for solutions to the drug cost problems that patients face.

Ah, but there is a golden bullet that would work – a well designed single payer national health program with bulk purchasing and prices negotiated by our own public stewards.

Let’s just hope that when President Trump returns home he doesn’t continue his discussions with the industry stakeholders over dinner at Mar-a-Lago. That’s not the environment we need right now. People are dying for lack of affordability of drugs that reduce suffering and save lives.

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Medicaid ensures earlier access and more timely management for urgent surgical conditions

Posted by on Thursday, Jan 25, 2018

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Association of the Affordable Care Act Medicaid Expansion With Access to and Quality of Care for Surgical Conditions

By Andrew P. Loehrer, M.D., M.P.H.; David C. Chang, Ph.D., M.P.H., M.B.A.; John W. Scott, M.D., M.P.H.; Matthew M. Hutter, M.D., M.P.H.; Virendra I. Patel, M.D., M.P.H.; Jeffrey E. Lee, M.D.; Benjamin D. Sommers, M.D., Ph.D.
JAMA Surgery, January 24, 2018

Key Points

Question: How was Medicaid expansion under the Patient Protection and Affordable Care Act associated with patient presentation with and management of common surgical conditions?

Findings: In this study of patients with 1 of 5 common surgical conditions, Medicaid expansion was associated with a 7.5–percentage point increase in insurance coverage at the time of hospital admission. The policy was also associated with patients obtaining care earlier in their disease course and with an increased probability of receiving optimal care for those conditions.

Meaning: The Patient Protection and Affordable Care Act’s Medicaid expansion was associated with increased coverage of patients, earlier presentation with common diagnoses, and improved surgical care.

From the Introduction

Uninsured and underinsured patients are significantly more likely to delay care and present with more complicated disease for conditions including appendicitis, cholecystitis, diverticulitis, aortic aneurysms, and lower extremity peripheral artery disease (PAD). Insurance status is also associated with decreased probability of receiving optimal care for such diagnoses, including a lower likelihood of minimally invasive surgery, a lower likelihood of receiving immediate cholecystectomy for acute cholecystitis, and a higher likelihood of amputation for vascular disease. The acute onset or deterioration of these diagnoses provides an ideal setting for studying short-term changes in presentation and management after population-wide insurance coverage expansion. As more individuals gain insurance coverage, one might also expect a greater probability of patients presenting earlier and with less severe disease at the time of diagnosis and in turn receiving more timely and less morbid management.…


How Medicaid Fails The Poor

By Avik Roy

There are many problems with Obamacare. But the law’s cruelest feature is what it will do to low-income Americans who are already struggling. Study after study shows that patients on Medicaid do no better, and often do worse, than those with no insurance at all.…

Some conservatives have suggested that Medicaid provides such little benefit that patients might do better with no insurance at all (Avik Roy, above). This totally ignores the fact that Medicaid removes financial barriers to health care and thus improves access. The benefit of having affordable access to care is demonstrated in the study by Andrew Loehrer, et al.

The authors showed that Medicaid expansion under the Affordable Care Act resulted in more individuals being covered by the program, and that individuals with one of five major, urgent surgical conditions presented earlier in the course of their illness thus enabling management at a stage with less complexity and more favorable outcomes.

We already know that the uninsured frequently delay obtaining care and end up worse off for it. This also applies to the underinsured – people with deductibles and other cost-sharing that create a reluctance to seek care as expeditiously as they should. One of the great advantages of Medicaid is that there is usually no cost sharing and thus no hesitation because of concerns about out-of-pocket costs (though, unfortunately, several conservative governors are trying to change that now).

The lesson here is not that Medicaid is a better program – it has too many other deficiencies – but rather that requiring payment as a condition of receiving care may result in worse outcomes. A well designed single payer system has measures to contain health care spending that are much more patient-friendly than out-of-pocket cost sharing.

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