Orthopedics

Feature Article 

Patient Perceptions of Reimbursement for Arthroscopic Meniscectomy and Anterior Cruciate Ligament Reconstruction

Kelechi R. Okoroha, MD; Robert A. Keller, MD; Nathan E. Marshall, MD; Jonathan R. Lynch, MD; John-Michael Guest, BS; Terrance Lock, MD; Brian Rill, MD

Abstract

Historically, patient perceptions of surgeon reimbursement have been exaggerated compared with actual reimbursement. There is limited information about patient perceptions of physician reimbursement for arthroscopic meniscectomy and anterior cruciate ligament (ACL) reconstruction. This study evaluated patient perceptions of physician reimbursement for these procedures and compared perceptions of health care reform between urban and suburban clinics. Surveys were given to 231 consecutive patients, and patients were asked how much they believed a surgeon should be reimbursed for arthroscopic meniscectomy and ACL reconstruction as well as their perception of actual Medicare reimbursement to physicians. Patients were then informed of the actual reimbursement rates and asked additional questions about health care reform. Survey responses were compared in an urban setting vs a suburban setting. On average, patients reported that surgeons should receive $8096 for meniscectomy and $11,794 for ACL reconstruction. Patients estimated that Medicare paid physicians $5442 for meniscectomy and $6667 for ACL reconstruction. In addition, 65% of patients believed that reimbursement for meniscectomy was too low, and 57% of patients believed that reimbursement for ACL reconstruction was too low. Fewer than 2% of patients believed that surgeon salaries should be cut, and 75% believed that orthopedic surgeons should be paid more for subspecialty training. No differences were found in patients' perceptions of reimbursement or health care reform between urban and suburban settings. Patients perceived that the values of meniscectomy and ACL reconstruction were substantially higher than current Medicare reimbursement values and that surgeon salaries should not be cut. [Orthopedics. 2016; 39(5):e904–e910.]

Abstract

Historically, patient perceptions of surgeon reimbursement have been exaggerated compared with actual reimbursement. There is limited information about patient perceptions of physician reimbursement for arthroscopic meniscectomy and anterior cruciate ligament (ACL) reconstruction. This study evaluated patient perceptions of physician reimbursement for these procedures and compared perceptions of health care reform between urban and suburban clinics. Surveys were given to 231 consecutive patients, and patients were asked how much they believed a surgeon should be reimbursed for arthroscopic meniscectomy and ACL reconstruction as well as their perception of actual Medicare reimbursement to physicians. Patients were then informed of the actual reimbursement rates and asked additional questions about health care reform. Survey responses were compared in an urban setting vs a suburban setting. On average, patients reported that surgeons should receive $8096 for meniscectomy and $11,794 for ACL reconstruction. Patients estimated that Medicare paid physicians $5442 for meniscectomy and $6667 for ACL reconstruction. In addition, 65% of patients believed that reimbursement for meniscectomy was too low, and 57% of patients believed that reimbursement for ACL reconstruction was too low. Fewer than 2% of patients believed that surgeon salaries should be cut, and 75% believed that orthopedic surgeons should be paid more for subspecialty training. No differences were found in patients' perceptions of reimbursement or health care reform between urban and suburban settings. Patients perceived that the values of meniscectomy and ACL reconstruction were substantially higher than current Medicare reimbursement values and that surgeon salaries should not be cut. [Orthopedics. 2016; 39(5):e904–e910.]

The cost of health care and the topic of health care reform have received increasing political and public scrutiny and debate. Medicare has continued to make cuts to surgeon reimbursement and has been the benchmark by which all other insurance companies set physician reimbursement schedules.1–4 Because of these cuts and medical inflation, many orthopedic surgeons have contemplated opting out of Medicare.3,4 In 2009, American Orthopedic Association members were polled on current health care reform topics, and 71% of respondents stated that without Medicare reimbursement reform, a substantial number of orthopedic surgeons will opt out of the Medicare program in the coming years, leaving many patients with limited access to musculoskeletal care.4 Current physician fee schedules used by Medicare do not accurately assess physician cost to practice or patients' perceived value of the procedures.3–9 These physician fee schedules use relative value units, which are often adopted by private insurance companies and become the standard reimbursement value.3

It is unclear whether patients have an accurate impression of Medicare reimbursement to physicians. Previous studies of patient perceptions of surgeon reimbursement showed a large discrepancy between patient perceptions and actual reimbursement values.5–7,10–13 Foran et al6 and Tucker et al13 found that patients estimated physician reimbursement for total knee arthroplasty and total hip arthroplasty at approximately 3 to 9 times the actual reimbursement. Patients also overestimated reimbursement for common hand procedures, such as open reduction and internal fixation of distal radius fracture and carpal tunnel release, by a factor of approximately 4.11 Patients also greatly overestimated reimbursement for total shoulder replacement and rotator cuff repair.7

Although patient perceptions of physician reimbursement appear to be largely exaggerated in multiple areas of orthopedics, there is no current information on patient perceptions of reimbursement for arthroscopic knee surgery. Because arthroscopic knee surgery is the most common orthopedic procedure, the perceptions of patients regarding reimbursement for this procedure are important.14 The current study evaluated patient perceptions of physician reimbursement for arthroscopic meniscectomy and anterior cruciate ligament (ACL) reconstruction. Further goals of the study were to determine the value that patients placed on each procedure and to compare patient perceptions of reimbursement based on geographic factors. The authors' hypothesis was that patient perceptions of physician reimbursement for arthroscopic meniscectomy and ACL reconstruction would be greatly exaggerated compared with actual reimbursement and that these assumptions would differ in patients in an urban clinic compared with patients in a suburban clinic.

Materials and Methods

Participants

After approval was obtained from the institutional review board, patients from 2 separate sports medicine clinic locations were voluntarily enrolled to complete the anonymous survey. One clinic site was located in a suburban area, and the other site was located in a downtown urban center. All patients who completed the survey responded anonymously via an electronic device in the waiting room before evaluation by the physician. A nonphysician asked patients if they wished to take the survey. Patients were informed that the survey contained no identifying information and was completely confidential. Patients were included in the study if they were scheduled for an orthopedic sports medicine clinic visit. Those younger than 18 years were excluded.

Surveys were given to 231 consecutive patients over a 3-month period between April 2015 and June 2015. The survey asked respondents to provide basic demographic information, including age, sex, income level, type of health insurance, and level of education. Respondents were also asked about previous knee surgeries. Participants were asked to give their opinion of current health care regulations, including whether physicians are overpaid, whether physician salaries should be cut, and whether salaries should be linked to outcomes, as well as the best way to lower the costs of health care. Respondents were then asked the following questions about reimbursement:

  1. What do you think is a reasonable fee that an orthopedic surgeon should receive to perform a meniscectomy? (A knee scope surgery with removal of a torn meniscus [cartilage])

  2. How much do you estimate that Medicare actually pays an orthopedic surgeon for performing a meniscectomy? (A knee scope with removal of a torn meniscus [cartilage])

  3. What do you think is a reasonable fee that an orthopedic surgeon should receive to perform an ACL (anterior cruciate ligament) reconstruction surgery?

  4. How much do you estimate that Medicare actually pays an orthopedic surgeon for performing an ACL reconstruction surgery?

Respondents were then asked what they would be willing to pay out of pocket for each of the surgeries. As an internal control, patients were asked about reimbursement for surgeons performing appendectomy and coronary artery bypass graft procedures. After patients completed the first page of the survey, they proceeded to the second page. Programming did not allow review of the first page. The second page of the survey then told respondents, “Current Medicare insurance reimbursement to a physician is: Knee scope/meniscus surgery (meniscectomy)-$576.00” and “Current insurance reimbursement to a physician is: ACL reconstruction-$1013.00.” They were then asked to categorize each amount as “very low,” “somewhat low,” “about right,” “somewhat high,” or “very high.” Then they were asked what they believed the reimbursement should be. Finally, respondents were asked whether subspecialty training of their physician was important to them and whether physicians should receive additional pay for subspecialization. If they answered yes, then they were asked how much extra the physician should be paid for this additional training.

Data Collection

Survey responses were collected electronically and entered into a database. No specific confidential health information was collected, and all surveys were recorded anonymously.

Statistical Analysis

Before final analysis, surveys were evaluated, and responses were omitted that differed from the average by more than 3 standard deviations. All analyses were performed with R 3.2.1 software (R core team, 2012; R Foundation for Statistical Computing, Vienna, Austria). Categorical variables were tested with chi-square tests. Continuous variables for comparison between urban and suburban locations were tested with Mann-Whitney U nonparametric 2-group comparison. To test perceptions of reimbursement vs actual reimbursement, 1-sample Wilcoxon tests were performed. Finally, analysis of data stratified by household income, education level, and history of knee surgery was done with Kruskal-Wallis testing.

Results

A total of 231 patients (53% women, 47% men), 127 in an urban clinic and 104 in a suburban clinic, completed the survey. Nine patients declined to participate. Mean age of the respondents was 55.5 years (range, 18–87 years). Of patients who completed the survey, 33 percent (n=77) reported previous knee surgery. The suburban clinic had a significantly greater number of respondents who were women, were older, and had a history of meniscectomy/total knee arthroplasty. Patient demographics with statistical comparisons between clinic locations, including age, sex, previous knee surgeries, education level, income, and insurance type, are shown in the Figure.


Patient demographics, including age (A), sex (B), previous knee surgeries (C), education level (D), income (E), and insurance type (F). P value indicates the difference between clinic locations (*P<.05). Abbreviations: ACL, anterior cruciate ligament; BD, bachelor degree; GD, graduate degree; HMO, health maintenance organization; HSG, high school graduate; PPO, preferred provider organization; TKA, total knee arthroplasty.

Figure:

Patient demographics, including age (A), sex (B), previous knee surgeries (C), education level (D), income (E), and insurance type (F). P value indicates the difference between clinic locations (*P<.05). Abbreviations: ACL, anterior cruciate ligament; BD, bachelor degree; GD, graduate degree; HMO, health maintenance organization; HSG, high school graduate; PPO, preferred provider organization; TKA, total knee arthroplasty.

On average, patients perceived that a reasonable fee for meniscectomy would be $8096, approximately 14 times as much as is actually reimbursed ($576, P<.01). They perceived that a reasonable fee for ACL reconstruction would be $11,794, approximately 11 times as much as is actually reimbursed ($1013, P<.01). Patients estimated that Medicare paid physicians $5442 for meniscectomy and $6667 for ACL reconstruction. Patients were willing to pay $2286 out of pocket for meniscectomy and $3517 out of pocket for ACL reconstruction (Table 1).


Surgical Reimbursements Stratified by Clinic Typea

Table 1:

Surgical Reimbursements Stratified by Clinic Type

To reference these values compared with other surgical procedures, patients were asked what they believed was an appropriate fee for coronary artery bypass graft and appendectomy procedures. Patients also overestimated Medicare reimbursement for these general surgery procedures; responses are shown in Table 1.

After they were informed of the actual reimbursement for the procedures, 65% of patients believed that reimbursement for meniscectomy was too low (somewhat low, 36%; very low, 29%). On average, these patients believed that a more appropriate value for reimbursement would be $2719. In addition, 57% of patients believed that reimbursement for ACL reconstruction was too low (somewhat low, 30%; very low, 27%). On average, these patients believed that a more appropriate value would be $4885 (Table 1). No significant differences were found when patient responses were compared between the urban and suburban clinic locations.

When asked whether surgeons are overpaid, 87% of patients answered no and 88% did not think that surgeons' salaries should be cut. In addition, 61% of patients also did not think that surgeon salaries should be linked to outcomes. When asked how health care costs should be decreased, most patients stated that reimbursement to drug and device companies should be decreased (79%), with 12% believing that hospital reimbursement should be cut and 2% stating that surgeon reimbursement should be decreased. Finally, when asked whether orthopedic subspecialization is important, 82% of patients stated that it is, with 75% stating that orthopedic surgeons should receive extra compensation for the additional training. On average, these patients believed that $1478 per procedure is an appropriate amount of additional compensation (Table 2).


Health Care Reform Perceptions by Geographic Clinic Locationa

Table 2:

Health Care Reform Perceptions by Geographic Clinic Location

Responses were stratified based on the demographic categories described. Responses were also compared between the different categories in each stratified group with analysis of variance. No significant differences were found in responses between categories in any of the stratified groups (Tables 35).


Reimbursement Responses Stratified by Income Levela

Table 3:

Reimbursement Responses Stratified by Income Level


Reimbursement Responses Stratified by Highest Level of Education Attaineda

Table 4:

Reimbursement Responses Stratified by Highest Level of Education Attained


Reimbursement Responses Stratified by History of Knee Surgerya

Table 5:

Reimbursement Responses Stratified by History of Knee Surgery

Discussion

As health care costs continue to rise and health care policies continue to change, physician reimbursement will continue to be an important area of concern to health professionals, policy makers, and patients. Many patients assume that with the increase in health care spending in the United States each year, surgeon reimbursement also rises. On the contrary, when adjusted for inflation, since 1992 (the year that the resource-based relative value system was implemented), reimbursement for orthopedic surgical procedures has decreased by 28% (range, −62% to 13%).3 Several studies showed that patients consistently overestimate the amount of physician Medicare reimbursement, and as Medicare reimbursement continues to decline, this gap will likely continue to increase.5–7,10–13 The study findings expand on previous knowledge and provide data to support the idea that patients place a higher value than what is reimbursed on the most commonly and sixth most commonly performed procedures in orthopedic surgery, arthroscopic meniscectomy and ACL reconstruction.15

Studies of reimbursement for total hip arthroplasty and total knee arthroplasty suggested that patients overestimate physician reimbursement by as much as 9 times the actual reimbursement.6,13 Those surveyed in the current study estimated the value of meniscectomy and ACL reconstruction at approximately 14 and 11 times the actual reimbursement, respectively. Even after they were informed of the actual reimbursement, patients still believed that actual reimbursement should be at least 5 times the current value. Previous studies did not ask patients about their willingness to pay for procedures out of pocket. Patients in the current study were willing to pay out of pocket approximately 4 times the Medicare reimbursement for meniscectomy and approximately 11 times the reimbursement for ACL reconstruction, demonstrating how undervalued these procedures are.

Although the authors hypothesized that perceptions would differ between patients in urban and suburban settings, no significant differences were found when responses were stratified by clinic location. When patient responses were stratified by household income, level of education, and history of knee surgery, no significant differences in responses were found. Regardless of income level, level of education, history of knee surgery, or clinic location (urban vs suburban), patients in the current study universally overestimated physician reimbursement.

With the structure of health care continuously changing, it is important to take into account patients' views on reform. Ross and Lauritsen16 surveyed patients about physicians' pay and found that 70% of patients believed that physicians are overpaid. In contrast, the current study found that 87% of patients did not believe that physicians are overpaid and 88% believed that physician salaries should not be cut. Rather, when asked how to solve current health care problems, most patients believed that reimbursement to drug and device companies should be decreased. When evaluating patient perceptions of reimbursement in shoulder surgery, Nagda et al7 found that 90% of patients believed that surgeons with subspecialty training should receive additional payment. This finding is in agreement with the current study, in which 75% of survey respondents believed that surgeons with subspecialty training should receive additional payment. Completing postresidency training is associated with financial risk. Gaskin et al17 evaluated the financial impact of subspecialty fellowship training and found that it takes the average surgeon 13 years to recoup the loss of income associated with completing an extra year of sports medicine fellowship training. The current findings suggest that patients believe that the extra financial burden assumed by surgeons to increase clinical skill should result in compensation at a higher level.

Limitations

This study had several important limitations. The survey was performed in the waiting room of an orthopedic sports medicine office. This could result in potential bias in the data collected because a patient who had a good relationship with a physician might be more likely to state that surgeons should be paid more and vice versa. In an attempt to control for this factor, patients were told that no identifying data would be obtained, and the survey was uploaded and erased from the screen immediately after completion. The authors believed that certainty about confidentiality would result in less bias. The authors could not control for patient understanding of current medical costs, which may have led to differences in reimbursement estimates. However, most of the patients were relatively well educated, with 66% attending at least some college. Finally, only 18% of the patient population actually had insurance through Medicare or Medicaid. Although this represents a minority of the authors' patients, the data are still relevant to the general population because most private and public insurers base their payments on Medicare fee schedules and regulations.3 Therefore, regardless of the insurance carrier, most reimbursement to physicians generated from this patient sample was influenced by Medicare reimbursement values.

Conclusion

Patients perceived that the values of meniscectomy and ACL reconstruction were substantially higher than current Medicare reimbursement. Most patients believed that current reimbursement is too low, and on average, patients would be willing to pay more out of pocket than the amount that is currently reimbursed.

References

  1. Reforming Medicare's Physician Payment System: Hearing Before the Subcommittee on Health of the Committee on Ways and Means U.S. House of Representatives. 110th Cong. 2nd Sess (2008).
  2. Iglehart JK. Medicare's declining payments to physicians. N Engl J Med. 2002; 346(24):1924–1930. doi:10.1056/NEJMhpr020324 [CrossRef]
  3. Hariri S, Bozic KJ, Lavernia C, Prestipino A, Rubash HE. Medicare physician reimbursement: past, present, and future. J Bone Joint Surg Am. 2007; 89(11):2536–2546. doi:10.2106/JBJS.F.00697 [CrossRef]
  4. Bozic KJ, Cramer B, Albert TJ. Medicare and the orthopaedic surgeon: challenges in providing, financing, and accessing musculoskeletal care for the elderly. J Bone Joint Surg Am. 2010; 92(6):1568–1574. doi:10.2106/JBJS.I.01189 [CrossRef]
  5. Badlani N, Foran JR, Phillips FM, et al. Patient perceptions of physician reimbursement for spine surgery. Spine (Phila Pa 1976). 2013; 38(15):1288–1293. doi:10.1097/BRS.0b013e318291b752 [CrossRef]
  6. Foran JR, Sheth NP, Ward SR, et al. Patient perception of physician reimbursement in elective total hip and knee arthroplasty. J Arthroplasty. 2012; 27(5):703–709. doi:10.1016/j.arth.2011.10.007 [CrossRef]
  7. Nagda S, Wiesel B, Abboud J, et al. Patient perception of physician reimbursement in elective shoulder surgery. J Shoulder Elbow Surg. 2015; 24(1):106–110. doi:10.1016/j.jse.2014.06.034 [CrossRef]
  8. Wilbur RH. “Resource-based” practice expense: how we got where we are today. Ann Thorac Surg. 1997; 63(6):1821–1823.
  9. Hariri S, Bozic KJ, O'Connor MI, Rubash HE. Medicare part B: physician participation options. J Bone Joint Surg Am. 2008; 90(10):2282–2291. doi:10.2106/JBJS.H.00562 [CrossRef]
  10. Brooks F, Paringe V, Tonge A, Lewis J, Mohanty K. Patient estimates of healthcare costs in trauma and orthopaedics. Eur J Orthop Surg Traumatol. 2013; 23(6):639–642. doi:10.1007/s00590-012-1052-6 [CrossRef]
  11. Fowler JR, Buterbaugh GA. Patient perception of physician reimbursement for common hand surgical procedures. Orthopedics. 2013; 36(9):e1149–e1154. doi:10.3928/01477447-20130821-16 [CrossRef]
  12. Maratt JD, Gagnier JJ, Gombera MM, Reske SE, Hallstrom BR, Urquhart AG. Patients' perceptions of the costs of total hip and knee arthroplasty. Am J Orthop (Belle Mead NJ). 2015; 44(5):E135–E141.
  13. Tucker JA, Scott CC, Thomas CS, O'Connor MI. Patient perception of Medicare reimbursement to orthopedic surgeons for THA and TKA. J Arthroplasty. 2013; 28(suppl 8):144–147. doi:10.1016/j.arth.2013.05.037 [CrossRef]
  14. Rutkow IM. Surgical operations in the United States: then (1983) and now (1994). Arch Surg. 1997; 132(9):983–990. doi:10.1001/archsurg.1997.01430330049007 [CrossRef]
  15. Garrett WE Jr, Swiontkowski MF, Weinstein JN, et al. American Board of Orthopaedic Surgery practice of the orthopaedic surgeon: Part-II. Certification examination case mix. J Bone Joint Surg Am. 2006; 88(3):660–667. doi:10.2106/JBJS.E.01208 [CrossRef]
  16. Ross CE, Lauritsen J. Public opinion about doctors' pay. Am J Public Health. 1985; 75(6):668–670. doi:10.2105/AJPH.75.6.668 [CrossRef]
  17. Gaskill T, Cook C, Nunley J, Mather RC. The financial impact of orthopaedic fellowship training. J Bone Joint Surg Am. 2009; 91(7):1814–1821. doi:10.2106/JBJS.H.01139 [CrossRef]

Surgical Reimbursements Stratified by Clinic Typea

OperationReasonable FeeMedicare ReimbursementPbOut of PocketWhat Reimbursement Should Be

EstimatedActual
Meniscectomy total$8096$5442$576<.001c$2286$2719
  Urban$9238$5641<.001c$2653$3457
  Suburban$6635$5183<.010c$1803$1883
P between locations.296
Anterior cruciate ligament reconstruction total$11,794$6667$1013<.001c$3517$4885
  Urban$12,126$6794<.001c$4102$5937
  Suburban$11,366$6503<.001c$2764$3689
P between locations.998
Coronary artery bypass graft total$28,596$18,192$2250<.001c
  Urban$28,963$17,136<.001c
  Suburban$28,133$19,539<.001c
P between locations.856
Appendectomy total$10,353$6733$660<.001c
  Urban$11,274$7985<.001c
  Suburban$9187$5134<.001c
P between locations.389

Health Care Reform Perceptions by Geographic Clinic Locationa

PerceptionOverallClinic SitePb

UrbanSuburban
Are physicians overpaid?
  No87%86%89%.56
  Yes13%14%11%
Should physicians' salaries be cut?
  No88%87%88%.99
  Yes12%13%12%
Should salaries be linked to outcomes?
  No61%60%62%.90
  Yes39%40%38%
What is the best way to lower health care costs?
  Decrease drug and device manufacturer reimbursement79%76%82%.65
  Decrease hospital reimbursement12%14%11%
  Decrease physician reimbursement2%2%1%
  Other7%8%6%
Is it important that your surgeon has subspecialized training?
  No18%19%16%.73
  Yes82%81%84%
Do you think a surgeon with specialized training should receive additional payment?
  No25%27%22%.46
  Yes75%73%78%
What is a reasonable additional payment a surgeon with specialized training should receive?$1478$1722$1205.83

Reimbursement Responses Stratified by Income Levela

Reimbursement QuestionOverallIncomePb

<$25,000$25,000 to <$75,000$75,000 to <$150,000>$150,000
Meniscectomy
  Reasonable fee$8096$9583$6593$9522$8548.76
  Estimated reimbursement$5442$7548$4034$7380$3404.47
  Willing to pay out of pocket$2286$2967$1515$2649$3325.21
Anterior cruciate ligament reconstruction
  Reasonable fee$11,794$9453$10,203$14443$14,246.66
  Estimated reimbursement$6667$7750$5518$8423$5500.76
  Willing to pay out of pocket$3517$3337$2495$4735$4435.08

Reimbursement Responses Stratified by Highest Level of Education Attaineda

Reimbursement QuestionOverallEducation LevelPb

High School Graduate or LessSome CollegeBachelor DegreeGraduate Degree
Meniscectomy
  Reasonable fee$8096$6419$7910$8244$14,191.94
  Estimated reimbursement$5442$5338$5137$4138$8760.78
  Willing to pay out of pocket$2286$1578$2376$1580$4943.50
Anterior cruciate ligament reconstruction
  Reasonable fee$11,794$8427$12,285$12,590$19,973.72
  Estimated reimbursement$6667$5097$7412$5935$9586.41
  Willing to pay out of pocket$3517$2146$3632$2075$9035.15

Reimbursement Responses Stratified by History of Knee Surgerya

Reimbursement QuestionOverallHistory of Knee SurgeryPb

No SurgerySurgery
Meniscectomy
  Reasonable fee$8096$7888$8476.97
  Estimated reimbursement$5442$4938$6364.38
  Willing to pay out of pocket$2286$1666$3427.55
Anterior cruciate ligament reconstruction
  Reasonable fee$11,794$12,345$10,780.30
  Estimated reimbursement$6667$6565$6854.82
  Willing to pay out of pocket$3517$2552$5319.88
Authors

The authors are from the Department of Orthopaedic Surgery, Henry Ford Hospital, Detroit, Michigan.

The authors have no relevant financial relationships to disclose.

Correspondence should be addressed to: Kelechi R. Okoroha, MD, Department of Orthopaedic Surgery, Henry Ford Hospital, 2799 W Grad Blvd (CFP-6), Detroit, MI 48202 ( krokoroha@gmail.com).

Received: January 15, 2016
Accepted: April 11, 2016
Posted Online: July 01, 2016

10.3928/01477447-20160623-03

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