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Inflective vs. Reflexive Health Insurance Innovation

Shahid N. Shah
January 16, 2017

Inflective vs. Reflexive Health Insurance Innovation

Presented at January 2017 Health Insurance Innovation Summit. Video is available at https://www.youtube.com/watch?v=4vKR_4ddXic

Shahid N. Shah

January 16, 2017
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  1. Inflective vs. Reflexive Innovation
    in the Health Insurance Industry
    By Shahid N. Shah
    Entrepreneur-in-Residence, AHIP Innovation Lab
    Chairman, Netspective Communications

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  2. @ShahidNShah
    2
    www.netspective.com
    Who is Shahid?
    • Technology Strategist and Entrepreneur in
    Residence (EiR) for AHIP’s Innovation Lab
    • Chairman of the Board of Netspective
    Communications, Publisher at Netspective Media
    and serial entrepreneur.
    • Angel investor, board member, in several digital
    health and Internet startups.
    • 25 years of software engineering and multi-site
    healthcare system deployment experience in
    Fortune 50 and public sector (Fed 100 winner).
    • 15 years of healthcare IT and medical devices
    experience (blog at http://healthcareguy.com)
    • 15 years of technology management experience
    (government, non-profit, commercial)
    Engineer, strategist, entrepreneur,
    investor, author, and journalist

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  3. 3
    www.netspective.com
    There will be no disruption
    of the healthcare “industry”.
    But small portions can be impacted.
    Positively.

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  4. @ShahidNShah
    4
    www.netspective.com
    Why is disruption in healthcare so hard?
    This is $1 Trillion and the
    Healthcare Market is three
    times this size
    This is $1 Billion

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  5. “What's not going to change
    in the next 10 years?”
    Jeff Bezos

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  6. What's not going to change in healthcare?
    Do no harm, safety
    first, and reliability
    effect on standard of
    care
    Statutory cruft &
    regulatory burdens
    increase over time
    Government as
    dominant purchaser
    Outcomes based
    payments
    intermediation &
    pricing pressure
    Eminence & consensus
    driven decisions as
    collaboration increases
    Increased use of
    alternate sites of care

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  7. @ShahidNShah
    7
    www.netspective.com
    Inflective vs. Reflexive Innovation
    “we need uberization of
    healthcare”
    “we need to disrupt healthcare”
    “how would elimination of co-pays
    increase utilization?”
    “how can improving provider affinity
    increase member satisfaction?”
    “we need to buy more digital
    health tools”
    “how can we pay non-clinicians to
    handle more patient-facing tasks?”

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  8. 8
    www.netspective.com
    http://www.stripes.com/va-nurse-practitioners-nationwide-no-longer-need-physician-supervision-1.445862

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  9. 9
    www.netspective.com
    Source: Optum
    “Member Centricity” vs. “Provider
    Affinity” for consumer engagement
    Which one is driving demand for innovation versus
    responding to existing supply?
    Each member population requires different engagement
    techniques at various times. But is engagement with plan
    more important than intermediated engagement with
    provider?
    Picking the wrong channel creates confusion and reduces
    engagement.
    But, how important is all this compared to provider affinity
    associated with choices members make?

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  10. @ShahidNShah
    10
    www.netspective.com
    What’s an innovators job?
    Solution
    Miner?
    Installer? Integrator?
    Enabler? Optimizer? ?

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  11. An innovator’s primary job is to define
    desired outcomes tied to inflection points
    Focus on your “needs” not vendor or supplier “solutions”

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  12. “If I had an hour to solve a
    problem, I’d spend 55 minutes
    thinking about the problem and 5
    minutes thinking about solutions.”
    “Stay away from negative people. They
    have a problem for every solution.”
    Albert Einstein

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  13. Shahid’s “how to be an inflective innovator” formula
    IL =
    SQ
    Kc
    + Spj
    + C2 + (a)Ti
    2 + Rpfu
    + Ewo

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  14. How leaders can use the formula to influence
    demand though inflective innovation
    IL → Inflective innovation leadership score = (target a large number greater than 1)
    • Kc
    → inquisitive knowledge of outcomes led by curiosity about why things are the way they are +
    • Spj
    → visionary outcomes strategy informed by problems to be solved and jobs to be done +
    • C2 → communication & coordination of desired and expected outcomes +
    • (a)Ti
    2 → application of actionable transformative technology fully integrated into complex workflows +
    • Rpfu
    → understanding performance, financial, and utilization risk (shared, one-sided, two-sided)
    • Ewo
    → execution through workforce optimization
    • SQ → status quo is a constant, the size of which depends upon your organization. It means do no harm,
    focus on patient safety, reliability, intermediation, & maintain eminence and consensus based decision
    making
    IL =
    SQ
    Kc
    + Spj
    + C2 + (a)Ti
    2 + Rpfu
    + Ewo

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  15. @ShahidNShah
    15
    www.netspective.com
    Innovators define desired outcomes
    Understand management
    objectives based on desired
    outcomes
    Consider using Objectives
    and Key Results (OKRs)
    framework for defining
    outcomes
    Understand problems to be
    solved (PTBSs)
    For each PTBS, understand
    Jobs to be Done (JTBDs)
    and journey mapping (JM)
    Figure out how to model
    the PTBSs and JTBDs in
    simple spreadsheets or real
    simulations
    Eliminate as many JTBDs as
    possible through policy or
    process redesign
    For JTBDs remaining which
    cannot be removed
    (regulatory, statutory,
    business model, etc.) list
    remaining PTBSs
    Find or create solutions,
    based on remaining PTBSs,
    JTBDs, and JMs
    Test your hypotheses
    against the models and
    simulations and keep
    what’s evidence driven
    These are your “stated
    needs” (which you’ll use to
    influence demand)

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  16. @ShahidNShah
    16
    www.netspective.com
    Health Behaviors Clinical Care
    Social & Economic Factors
    Physical Environment
    30% 20%
    40%
    10%
    Access to Care
    Quality of Care
    Education
    Employment
    Income
    Family/Social Support
    Community Safety
    Air & Water Quality
    Housing & Transit
    Source: RWJF/UWPHI.
    Genetics
    Diet & Exercise
    Tobacco Use
    Alcohol & Drug Use
    Sexual Activity
    Sleep
    Inflective innovation outcomes drivers

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  17. @ShahidNShah
    17
    www.netspective.com
    Vector 2:
    Evidence-Based
    Decisions
    Vector 3:
    B2C Health
    Improvement
    Programs
    Vector 1:
    Next Generation
    Primary Care
    Self-tracking/testing:
    Wearables/Hardware
    Personalized
    Medicine/Genomics
    Health Information
    Care Navigation
    Disease Management
    Peer
    Networks
    Health Coaching
    Decision-Making Tools
    Care Access
    Remote
    Patient
    Monitoring
    Patient
    Engagement
    Health Behaviors
    30%
    Wellness Programs
    Source: RWJF/UWPHI.
    Genetics
    Diet & Exercise
    Tobacco Use
    Alcohol & Drug Use
    Sexual Activity
    Sleep
    Family support & self-
    help patient groups
    Health behaviors inflection points

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  18. @ShahidNShah
    18
    www.netspective.com
    Vector 5:
    Analytics and Clinical
    Decision Support
    Vector 2:
    Next Generation
    Primary Care
    Vector 3:
    Value-Based Care
    Vector 4:
    Operational Efficiency
    Vector 1:
    Disease-Specific Care
    Pathways
    Care
    Coordination
    Patient
    Engagement
    Big Data
    Personalized
    Medicine
    Medication
    Management
    Clinical Care
    20%
    Access to Care
    Quality of Care
    Nanotechnology
    Source: RWJF/UWPHI.
    Knowledge
    Sharing
    Clinical care inflection points
    Practice Management,
    EMRs, Pharmacy
    Management
    Transparency
    Tech-enabled
    services
    Retail Clinics,
    DPC
    House Calls

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  19. @ShahidNShah
    19
    www.netspective.com
    Advance Directives
    Programs/Services
    Next Gen Benefits
    Social Services
    Access/Management
    Vector 1:
    Equilibrating
    Healthcare Expense
    Vector 2:
    Community-Based
    Health Initiatives
    Vector 3:
    Aging & End-of-Life
    Programs
    Social & Economic Factors
    40%
    Education
    Employment
    Income
    Family/Social Support
    Community Safety
    House Calls
    Hospice Programs
    Virtual Medicine
    Incentive Programs
    Wellness Programs
    Source: RWJF/UWPHI.
    Early ID and prevention
    programs
    Social & economic factors inflection points

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  20. @ShahidNShah
    20
    www.netspective.com
    GPS-enabled
    sensors
    Physical Environment
    10%
    Air & Water Quality
    Housing & Transit
    Vector 1:
    Targeted Monitoring
    and Rapid Response
    Vector 2:
    Community-Based
    Health Initiatives
    Vector 3:
    Affordable Living and
    Access
    Food , Housing, and
    Transportation
    Access
    Next Generation
    Public Transport
    Environmental
    Response
    Mechanisms
    Continuous
    Monitoring
    Source: RWJF/UWPHI.
    Built Environment
    Design
    Broadband
    connectivity
    Physical environment inflection points

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  21. Who’s tackling the real challenges?
    Real innovators don’t speculate

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  22. @ShahidNShah
    22
    www.netspective.com
    Some existential challenges
    How can we understand
    real costs for more
    modern life tables?
    How do we increase
    transparency of costs
    across the supply chain?
    How do we combat
    information asymmetry?
    How can we be
    accountable for long-term
    care when beneficiaries
    move freely between
    insurers?
    How do we take long
    term risks in a low interest
    rates environment which
    has reduced investment
    income?

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  23. @ShahidNShah
    23
    www.netspective.com
    Some intermediation challenges
    How can patients
    become strategic
    partners in their own
    well being?
    How do we encourage
    members to take more
    responsibility for care
    without increasing out
    of pocket expenses?
    How can we empower
    employers to engage
    more with their
    employees’ health?
    How do we empower
    providers without
    getting in the way of
    care?
    How do we increase
    collaboration across
    narrow networks and
    treat providers as
    partners not suppliers?

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  24. @ShahidNShah
    24
    www.netspective.com
    Some performance challenges
    How do we use
    behavioral economics
    to increase affinity
    with care providers?
    How do we define
    performance
    outcomes in value
    driven care contracts?
    How do we manage
    pharmacy costs
    without global
    negotiated rates?
    How do we catch
    fraud, waste, and
    abuse in real-time vs.
    retrospectively?
    How do we get more
    participants in the
    health ecosystem to
    take on more risk?

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  25. @ShahidNShah
    25
    www.netspective.com
    Life tables aren’t granular enough

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  26. 26
    www.netspective.com
    Intermediation continues to grow
    Payers, employers, public sector not incentivized to change long term
    behaviors (new incoming administration indicates decentralization from
    Federal to State, potentially impacting incentives)

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  27. 27
    www.netspective.com
    Intermediation continues to grow
    Intermediation is growing, not shrinking, and continues inefficient
    marketplaces between beneficiaries and funders (incoming administration
    wants more power in hands of doctors/patients and less with government)

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  28. 28
    www.netspective.com
    http://jamanetwork.com/journals/jama/fullarticle/2594716
    No one funding entity or insurer has beneficiary long enough to be
    accountable for long-term care

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  29. Is inflective innovation possible?
    Why innovation at health insurers is harder than it looks

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  30. @ShahidNShah
    31
    www.netspective.com
    ACA inflection points
    What’s easy to talk about
    That the repeal of the
    Affordable Care Act (ACA) will
    be disruptive
    Why it’s hard to deliver
    Adapting to the ACA’s
    healthcare reform agenda
    (which is not likely to change)
    while continuing to focus on
    internal priorities of demand
    generation and cost
    containment

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  31. @ShahidNShah
    32
    www.netspective.com
    Member growth inflection points
    What’s easy to talk about
    ACA repeal or replacement is
    going to affect new patients
    entrants into the insurance
    market
    Why it’s hard to deliver
    Attracting the right kinds of
    ‘profitable’ patients in a
    rapidly changing and complex
    market will be difficult; when
    cost is more transparent and
    easier to compare, smarter
    buyers will force changes
    faster than payers can
    accommodate

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  32. @ShahidNShah
    33
    www.netspective.com
    Product inflection points
    What’s easy to talk about
    Aging populations and
    demographic changes are
    expanding the insurance
    market
    Why it’s hard to deliver
    It’s unclear where money for
    the new entrants in the
    market will come from so new
    products need to be created
    more rapidly and with more
    market data than ever before

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  33. @ShahidNShah
    34
    www.netspective.com
    Cost reduction inflection points
    What’s easy to talk about
    Cost containment is necessary
    Why it’s hard to deliver
    • Removing manual processes
    in favor of automation
    requires migration to cloud,
    focusing on integration, and
    providing more self-service
    applications
    • telemedicine, analytics,
    increased regulations,
    simplifying claims processing
    are all causing priority
    conflicts

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  34. @ShahidNShah
    35
    www.netspective.com
    Provider collaboration inflection points
    What’s easy to talk about
    Increased provider
    communications and
    engagement is necessary
    Why it’s hard to deliver
    How to connect with
    providers that have more
    complex relationships with
    their health systems and are
    seeking alternative care
    models requires next
    generation thinking and
    technologies

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  35. @ShahidNShah
    36
    www.netspective.com
    New payment models inflection points
    What’s easy to talk about
    • Need to participate in
    alternative and often value-
    based care models
    • Need to be more patient
    centric
    Why it’s hard to deliver
    • Most technology and
    processes are built around fee
    for service (FFS) delivery,
    providers are incented for
    various kinds of FFS and new
    ‘accountable tech’ is required
    for models such as ACOs
    • Patient-centricity is not easy
    to define or execute

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  36. Inflective innovation opportunities
    Advice for consultants and service providers

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  37. @ShahidNShah
    38
    www.netspective.com
    Digital strategy can achieve initiatives
    Subject areas source:
    Microstrategy (emphasis mine)
    Start Here
    Move
    here soon

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  38. @ShahidNShah
    39
    www.netspective.com
    Opportunities in Data Comprehension
    What does
    it mean?
    How do I
    use it?
    •Must be continuously
    recomputed
    •Difficult today, easier tomorrow
    •Super-personalized
    •Prospective
    •Predictive
    Bio IT and
    Genomics
    Secondary
    Aggregation
    •Can be collected infrequently
    •Personalized
    •Prospective
    •Potentially predictive
    •Digital
    •Family history is easier
    Phenotypics
    Primary Data
    Collection
    •Continuously collected
    •Mostly Retrospective
    •Useful for population health
    •Part digital, mostly analog
    •Family History is hard
    Admin
    Data
    Collection
    •Business focused data
    •Retrospective
    •Built on fee for service models
    •Inward looking and not focused
    on clinical benefits
    Biosensors
    Social Interactions

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  39. @ShahidNShah
    40
    www.netspective.com
    Opportunities in Accountable Tech
    Cost per patient per
    procedure / treatment
    going up but without
    ability to explain why
    Cost for same
    procedure / treatment
    plan highly variable
    across localities
    Unable to compare
    drug efficacy across
    patient populations
    Unable to compare
    health treatment
    effectiveness across
    patients
    Variability in fees and
    treatments promotes
    fraud
    Lack of visibility of
    entire patient record
    causes medical errors

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  40. @ShahidNShah
    41
    www.netspective.com
    Opportunities in new approaches to care
    General
    Wellness
    Specific
    Prevention
    Self Service
    Physiologics
    Self Service
    Monitoring
    Self Service
    Diagnostics
    Care Team
    Monitoring
    Care Team
    Diagnostics
    Healthcare
    Professional
    Monitoring
    Healthcare
    Professional
    Diagnostics
    Hospital
    Monitoring
    Hospital
    Diagnostics

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  41. 42
    @ShahidNShah @HealthcareGuys www.netspective.com
    Intermediation continues to grow
    Innovation is determined by intermediation … what statutory or
    regulatory modifications will really drive changes?

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  42. @ShahidNShah
    @HealthcareGuys www.netspective.com 43
    How will the ecosystem pay for an innovation?
    Direct Payment
    • Your best option
    • Very few truly disruptive
    technologies can be
    directly paid for by patients
    or providers within the USA
    • Limited adoption of
    ‘traditional’ pay for service
    reimbursement for next
    generation technology
    Direct Reimbursement
    • Second best option
    • Improvements in
    technology are outpacing
    payer adoption
    • Reimbursement will come
    but its time consuming and
    difficult
    Indirect Reimbursement
    • Emerging option
    • Payer requirements for
    improved quality and
    efficiency are creating
    indirect incentives to adopt
    innovative solutions
    • Solutions targeting new
    value-based
    reimbursement incentives
    are highly useful to medical
    providers

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  43. @ShahidNShah
    44
    @HealthcareGuys www.netspective.com
    Where does your innovation fit?
    Therapies
    Therapeutic
    Tools
    Diagnostic
    Tools
    Patient
    Administration
    Patient
    Education
    Target the right market so you understand the regulatory impacts
    Most Regulation
    Least Regulation
    Be aware of regulations, don’t fear them, don’t speculate about them,
    use them as a competitive advantage
    Proteomics
    Genomics
    Biochemical
    Behavioral
    Phenotypics
    Admin
    Economics
    Data types

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  44. @ShahidNShah
    45
    @HealthcareGuys www.netspective.com
    What kinds of users are you targeting?
    Go narrow and deep not wide and shallow
    • Obesity Management
    • Wellness Management
    • Assessment – HRA
    • Stratification
    • Dietary
    • Physical Activity
    • Physician Coordination
    • Social Network
    • Behavior Modification
    • Education
    • Health Promotions
    • Healthy Lifestyle Choices
    • Health Risk Assessment
    • Diabetes
    • COPD
    • CHF
    • Stratification & Enrollment
    • Disease Management
    • Care Coordination
    • MD Pay-for-Performance
    • Patient Coaching
    • Physicians Office
    • Hospital
    • Other sites
    • Pharmacology
    • Catastrophic Case
    Management
    • Utilization Management
    • Care Coordination
    • Co-morbidities
    Prevention – less regulated Management – more regulated
    26% of Population
    4% of Costs
    35% of Population
    22% of Costs
    35% of Population
    37% of Costs
    4% of Population
    36% of Costs

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  45. @ShahidNShah
    46
    @HealthcareGuys www.netspective.com
    What problem will you be solving?
    Improve
    medical
    science?
    Improve access
    to care?
    Reduce costs?
    Improve
    therapies?
    Improve
    diagnostics?
    Improve drug
    design?
    Improve drug
    delivery?
    Create better
    payment
    models?
    Focus on jobs that always need to be done, not what you want to build

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  46. @ShahidNShah
    47
    @HealthcareGuys www.netspective.com
    How to identify the best opportunities
    Circumstance
    • The specific
    problems a
    customer
    cares about
    • The way they
    assess
    solutions
    Context
    • Find a way to
    be with the
    customer
    when they
    encounter a
    problem and
    • Watch how
    they try to
    solve it
    Constraints
    • Develop an
    innovative
    means around
    a barrier
    constraining
    consumption
    Compensating
    behaviors
    • Determining
    whether a job
    is important
    enough to
    consider
    targeting
    • One clear sign
    is a customer
    spending
    money trying
    to solve a
    problem
    Criteria
    • Customers
    look at jobs
    through
    functional,
    emotional,
    and social
    lenses
    From “Jobs to be Done” to the “Five Cs of Opportunity Identification”
    Source: http://blogs.hbr.org/anthony/2012/10/the_five_cs_of_opportunity_identi.html

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  47. Thank You
    Visit
    http://www.netspective.com
    http://www.healthcareguy.com
    E-mail [email protected]
    Follow @ShahidNShah @HealthcareGuys @Netspective
    Call 202-713-5409

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  48. @ShahidNShah
    53
    www.netspective.com
    Introduction to OKR, PTBSs & JTBDs

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  49. @ShahidNShah
    54
    www.netspective.com
    What insurers care about (PTBSs)
    • Innovation

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  50. @ShahidNShah
    55
    www.netspective.com
    How they’re related (JTBDs)
    • Provider affinity
    • Payer / Provider
    collaboration
    • Physician / Provider
    engagement

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