In this episode of Elevate Care, host Liz Cunningham sits down with Patrick Hemstreet, Senior Director of Strategy at AMN Healthcare, to tackle the pressing issue of the physician shortage crisis. Together, they explore the evolving role of locum tenens in healthcare staffing, the impact of workforce technology and VMS systems, and how advancements in AI and automation are reshaping the industry. From the challenges of credentialing to the opportunities for younger physicians, this episode dives deep into the strategies and innovations needed to address the growing demand for healthcare professionals.
In this episode of Elevate Care, host Liz Cunningham sits down with Patrick Hemstreet, Senior Director of Strategy at AMN Healthcare, to tackle the pressing issue of the physician shortage crisis. Together, they explore the evolving role of locum tenens in healthcare staffing, the impact of workforce technology and VMS systems, and how advancements in AI and automation are reshaping the industry. From the challenges of credentialing to the opportunities for younger physicians, this episode dives deep into the strategies and innovations needed to address the growing demand for healthcare professionals.
Chapters
Resources
Choosing a Flexible Workforce Technology for Your Organization
Revolutionize Your Locums Staffing with ShiftWise Flex
About Patrick Hemstreet
Patrick Hemstreet is a distinguished healthcare executive with over 20 years of leadership experience, currently serving as Senior Director of Strategy at AMN Healthcare, a leader in innovative talent solutions for healthcare organizations.
Patrick is known for his technology expertise. Patrick has driven innovations around cutting-edge solutions, including AI applications, Vendor Management Systems (VMS), and workforce optimization platforms. He leads multiple market intelligence programs at AMN. Patrick has held various positions as a healthcare executive including Chief Strategy Officer and President. Patrick was involved in the envisioning and building of early gen healthcare SaaS platforms that provided telehealth, EHR, and billing throughput functionalities. Patrick holds an MBA from Texas Tech University, multiple healthcare certifications (including the certification in intraoperative neurophysiologic monitoring), and is a published sci-fi author and former U.S. Navy member.
AMN Healthcare Podcasts (00:00.098)
Welcome, everyone, to Elevate Care. I'm your host, Liz Cunningham. And today, I'm joined by Patrick Hemstreet, Senior Director of Strategy here at AMN Health Care. Patrick joins us with 30 years of experience in the health care industry. He's got some great knowledge around SaaS solutions and how we can solve niche health care problems. So I'm really excited today to talk to Patrick about physician shortages and the impact of VMS and workforce technology in the locum tenant space. So welcome, Patrick.
Liz. I appreciate it. Going to enjoy speaking with you all today.
Thanks. Well, let's just jump right into it. Why don't you start with giving our audience just an overview of what's been going on with the general physician shortage crisis and the overall timeline of how things have been changing these past couple of years.
It's been sort of a mantra in medical circles. We're looking at a shortfall of 86,000 physicians by 2036. This is expected to impact specialty care more acutely than the generalized disciplines. What is further exasperated in that environment is that a recent study by Kaufman Hall has demonstrated that physician subsidy, physician full-time equivalent subsidy, has risen to its highest level ever, exceeding 300,000 per physician.
This is a perfect storm where you have a supply shortage and it's not that cheap of a problem to solve. So you've got these two elements that are really driving a bit of a of a critical nature to this. This is maybe a problem that is very acute but maybe doesn't have such an easy solution.
AMN Healthcare Podcasts (01:29.654)
And you know, what are the main drivers contributing into that that shortage right now?
So if you look at physician staffing as a ratio to a sick population, have a population of patients, and if you have doctors to treat those patients, we have an aging population that of course has more chronic conditions. We also are seeing a lot of burnout, which is indicative of the overwork. You have more patients than any one doctor can treat. Another interesting statistic that folks aren't really maybe homing in on that is unexpected is younger people are getting sicker.
And so that chronic disease that you see in older populations is now occurring in the younger population. So you have a larger expanding population of ill patients that need to be treated and simply not enough physicians to treat those patients.
Do you have any specific thoughts in terms of how this has translated into locum tenants? So I'm just spitting out a couple of numbers right now. If you think about contingent labor in the travel space, travel nursing has continued to be a retracted market. I think it's down 35 % year over year. Allied's down about 10 to 15%. Locums is actually up 10 % and projected to be up 15 % next year. How are you thinking about
these physicians shortest trends. might sound obvious, but how it's translating into locums and the opposite of the retraction and nurse and ally.
AMN Healthcare Podcasts (02:55.34)
So as you know, with physicians...
Physicians are the revenue centers of any healthcare operation. They're critical, they're the football players on the football team. And so everything must proceed with the requisite amount of physicians. Locum tenants is growing simply because those shortfalls, those acute shortfalls can be plugged, those holes can be plugged with locum tenants physicians. However, there is a strategy that is emerging that is a more long-term strategy where you would have a mix of FTE physicians, FTE advanced practice providers, and
locum tenants becomes a long-term strategy, an ongoing strategy. So expect that that demand to increase not only for those acute shortfalls, but for a long-term staffing strategy, which includes locum tenants along with your core staff.
And do you think locum tenants is becoming more popular on the physician side or is the growth in the market just equating to more of a shortage? Like are you seeing the physician behavior actually change? I mean I know a lot of my friends that when they got off their residency programs that I would say, oh I work at AMN Healthcare, come do locums. They're like, what is that? Do you think it's becoming more commonplace as a flexible type of solution that physicians are interested in?
So there is data to suggest that, and you're absolutely right, traditionally we would look at locums and that's kind of a late career. You're winding down your career, you maybe want to work one or two times a month and you don't want to do full-time physician work, these latter career physicians. However, what we're seeing is interest in these newly minted specialists and physicians at a med school that are expressing interest in locum tenants right out of the gate. It is a new phenomenon. We do think that that could be a benefit to the supply, but it's still kind of early yet.
AMN Healthcare Podcasts (04:37.424)
it's maybe a generational change, but the idea of a work-life balance and local attendance maybe appears attractive to these newer physicians.
That's interesting. Any other kind of market dynamics that you would want to call out that's impacting what we're seeing right now with the shortage and the increase in locums?
What I would say is with the increase in sites of care shift from say, inpatient to outpatient, hospital outpatient departments, ambulatory surgery centers, those are more physician specific environments. You know, have less of a demand for say, nurses in those environments and obviously every environment in healthcare demands a physician attending. And so as you attempt to branch out and have these geographic spread of these different treatment areas,
You simply need more physicians, you more specialists.
Right. And I know you're saying, you know, hey, those are more physician dominated, but are you using physician as an overarching term or is there any underlying trends with, you know, the APP space or CRNA?
AMN Healthcare Podcasts (05:33.484)
I do believe that there are underlying trends with APPs that will be referred to physician assistants, nurse practitioners, CRNAs being primary. The goal now with these increased subsidies is to try to tweak your workforce, your core workforce to optimize APP use versus physician use. And I think one of the things that will start to be considered is
putting locum tenons into that equation, not necessarily thinking of it from an FTE or core staff perspective, but can I use locum tenons in this equation and not necessarily have to balance out my physician workforce and APP workforce?
Right, right. Makes sense. I think what is interesting about these different complexities is we're hearing, OK, locum tenens utilization is coming up. But the mix of what that is and the settings and the complexity of it maybe feels different than the traditional locum tenens 5, 10 years ago, where it was like hospitalists and ER docs picking up shifts at an acute care center. Now we're talking about multiple settings, lots of different mixes between modalities, between APP and physician.
So, let's talk about how hospitals are thinking about managing this type of workforce in the locum tenant space. And specifically, I want to talk about workforce technologies and VMS technologies. a stat that I saw that I thought was interesting was looking at adoptions of, quote, unquote, platform plays in the workforce management space. And I think the adoption in the nursing space was like 40 to 50 % of health systems have a platform play for their nurses.
allied about 35 per DMs maybe in the 30s. Locom tenants is still 6 % really utilizing a technology. is that going to change? How do we think about that differently?
AMN Healthcare Podcasts (07:16.726)
It is changing, and so if you extend that to even include the overarching definition of MSP, the numbers for nursing and allied are higher, and locums is, I think, 10%. However, that number is rising by the minute. And so when you look at technologies, and the most simplistic, or the easiest answer is the VMS system, which we would call a type of multi-supplier tier, vendor neutral MSP, that practice is gaining steam, and that MSP capture in the market is growing by the minute.
The idea that you can manage your locums in one single platform, reduce administrative costs, have finer data points, forego the horseshoes and hand grenades of locum staffing and get specific and drill down on details is becoming increasingly attractive. And we're seeing a spike in maturity in that in the market.
So, but why do you think, just to push on that a little bit, why is that different today than five, six years ago when we really were pushing VMS and locum tenants? Like why would the adoption be different now or why is the need different now?
Because of the stats we mentioned about the subsidy increase and the shortage. mean, it's much more expensive now to maintain physician FTE subsidy. so those kinds of pinpointing data accuracy to be specific is going to be much more, I mean, it's a mission critical maneuver. You have to be specific. You've got to have that data. You've got to apply it.
Well, and that's why health systems maybe need the solution. But let's talk about, I know you and I love to nerd out all the time on our technology background, and we love talking about the tech. how has technology changed to support this changing environment from a locum tenant space, and specifically in the VMS space? What are the must haves that health systems need to say, this is why I need a VMS? Why is it important for locums?
AMN Healthcare Podcasts (09:05.068)
I think for low, I mean, if you let's boil it down to the basic, the one, most basic is obviously, and this is an obvious, this is an easy target, manual processes versus automated processes. mean, you're about
That's table stakes for a VMS, right? Regardless, right?
But predictive analytics, spend analytics, things like that, what we just talked about. It's not a game of horseshoes and hand grenades. It's a game of specific data-driven placements and deriving a physician and APP staff composition that consists of locum tenants and consists of physicians that is spot on and meets the exact criteria. You're not overestimating, you're not underestimating. Health systems tend to overestimate to be safe. It's wasteful, particularly in this environment. A VMS with the...
Proper analytics and placement vetting allows you to forgo that. And the other thing too, credentialing, placement efficiency. If you can have less error, more automated process in clearing and vetting the credentials of your physician before placements, you reduce the risk of that kind of bad placement or a failure to get through name clear or encumbrances on a physician's life.
It does feel like there's a lack of systems that help physician groups or central staffing offices plan for the locum's needs, right? So, I mean, I think about, you know, a lot of the locum's clients, you know, maybe they're doing their order management via email, right? And then they're working with their CVO, their credentialing office that works out of another platform. And then they have to go organize all the credentials and then go to the board to get the privileges for the physician. So, you know, it can take...
AMN Healthcare Podcasts (10:39.79)
90 to 120 days for a physician to actually be put on an order. So how can a technology help enable that process like you're talking about with, you know, credentialing, etc. What are some more specific locums pieces that you would call out?
Document management and clearing, the idea that you can have those initial clinical assessments and clearances automated and done in moments takes hours off of. Now the idea of being vetted, mean look, physician decision, credentialing a physician at your facility to practice is a big decision and you should never treat it lightly. Obviously this person will be treating patients and driving revenue, but some of those initial clearance exercises and credentialing would sometimes refer to as clinical assessment or license checks or things like
those can be automated in the technology and reduce hours and hours of man.
Well, and even prior to that, right, what I'm seeing in some of the tech for locums is around the name clear process, which is a very specific, very niche locums only thing. So for those listening that don't know what that is, before you present a candidate to a hospital, they go through what's called a name clear. And that's first of all, to see that they hadn't been presented at that hospital by another agency in a certain amount of time. But it also kind of creates a ticking clock of what I'll say ownership, right? So.
You clear someone, you have seven days to get them fully presented against that job. That is typically a very manual process and it slows down the hiring process and especially in an environment today where there's such a shortage of physicians. If you get a good physician on a job, you want to be able to hire them quickly and having a really manual, slow name clear process can get in the way of finding the best physician. So I think that's critical to your point. Credentialing we talked about. What about shift management? So something so interesting about locums is
AMN Healthcare Podcasts (12:26.004)
one assignment is never the same as another assignment. So you might have a physician that is gonna get a contract somewhere for three months, but they're still being scheduled within that three month time frame. How does a VMS now enable scheduling and assignment management?
So assignment management, the issue with physicians is that if we look at it from a standpoint from
you know, a clinician, a nurse or an allied versus a physician. It's a different animal when you schedule a physician. It's an encounter-based scheduling system. And so a lot of times the VMS may be able to participate in that, but that usually requires a different scheduling system to get that encounter-based or block-based, instance-based schedule down. Now in the case of hospitalists and maybe ER doctors and those folks that are on these shifts, you can kind of use the VMS's inheritance
scheduling system to get them into an eight-hour block, a nine-hour block. But by and large, particularly when you're dealing with specialists, it's an encounter base. They have four or five patients, different scheduling technology that would play well with a VMS in an API situation, but those kinds of physician workforce management technologies are going to be critical for optimizing this. like I said, it's a different animal than what you deal with with nurses.
Right, well, and interesting you brought up assessments, right, or kind of visit-based. One of the things that I know isn't, you know, the shiny objects to talk about is the billing codes and the rate side of locum tenants. And, you know, I think that you could look at lot of VMS's workforce platforms out there and say, yeah, they can all do order management. That's fine. You can enter an order. We can get candidates. It doesn't matter if it's a physician or allied, whatever, right? Where the rubber meets the road is actually when it comes to
AMN Healthcare Podcasts (14:10.606)
paying and billing for these clinicians. And I think something unique about our tech stack, but something that clients should be looking for in a partner is like, think about the complexities of all the different types of physicians in your organization. You probably have someone on a daily rate. You have someone doing 24 hour call. You have someone in radiology that is getting paid per read. You have people that are more doing telemedicine that are getting paid per visit or hours.
So the complexity of how you pay that workforce and how you bill for that workforce is something that I think is really critical that people should look at in VMSs. I don't know if you agree or would add anything to that.
completely agree. There's also the incidentals, Liz, which is often a challenge. know, a lot of the times these locums come with packages of their hotel, their travel, these types of things. And these are, you know, they're not petty expenses. They have to be accounted for and they have to be, you know, in order for retention. So there are challenges in that to manage the incidentals and those pay disparities. You know, each specialty generates a different type of income. There's a different code associated with a different RVU, all those different productivity measures that are judged against payment.
And you know, not every specialty is paid the same. There's absolutely a disparity.
Absolutely. Anything else you'd want to add about thinking about your workforce technology? Maybe even, what about some of our clients that already have a VMS in place and that they want to add locums? What does that look like? How do they think about either adding or adding a new solution? I think our goal would be an enterprise solution, but what are your thoughts on how locums becomes part of a broader contingent labor platform?
AMN Healthcare Podcasts (15:45.57)
I do believe that having it on a unified VMS platform.
all of your clinical segments and your provider segments is beneficial. if we get to, think adding to a core VMS platform that can manage allied nursing, non-clinical and provider equally as well, such as as our tech, where they, there isn't a fragmentation, you're not dealing with two decision centers, you're not standing up to management and you don't have different decision centers, maybe going crossways at each other. You know, the other thing too is, is, is I'm a firm believer in that.
You know tech is part of the solution having a nice piece of tech is great But you need to have the expertise and the wraparound the the staffing expertise the locum behind the the the tech the idea that you have a strategic partner with a tech platform that is all inclusive but behind that as a strategic partner like ammend and so to me that would be what I would advise on not just going for a New piece of tech that maybe has a lot of bells and whistles, but the whole
package, the wraparound, a strategic partner, and one that can handle all segments equally as well.
I mean, so what if I'm a client, I'm gonna give you a couple objections. You want to ready to manage through some objections? okay, I get it. I have a VMS in place for my travel nurses. I've got a hundred of them. So that makes sense. I only really need 10 locums. Like why do I need a tech for 10 locums?
AMN Healthcare Podcasts (16:58.67)
Let's do it.
AMN Healthcare Podcasts (17:08.706)
Well, keep in mind, those 10 locums can lead to an extreme expense in administrative cost. mean, why bother with the manual processes and the administrative costs that come with those 10 locums when you can roll them into this VMS, which is all-inclusive and
save yourself some administrative costs. It's a no-brainer. mean, every dollar saved in my mind is a victory. And so if you want to quantify, well, it's not, the savings aren't a lot because my volume is down. Hey, what if it's 30 tomorrow? And so with the way things are going, it probably will be 30 tomorrow. And so to me, being a businessman myself, if I have a chance to cut administrative costs and roll it into a neat platform that's going to manage, I'm going to do it for two seconds.
Physicians right well and two if you think about ten locums probably means 30 people in credentialing I think only about a third of physicians have the patience to actually finish with their credentialing give or take Okay, so when it's 30 then I'm talking about all right. Maybe I'm getting 10 Submissions per those 30 so now I'm talking about you know 300 so you really have to think about that net you need to cast to so do you have a supplier panel that you can easily manage You know a lot of our locums clients like I said are managing all those suppliers through email
So let's centralize that for you. Let's help you think about what are the right supplier panels. Maybe you've got a group of suppliers that are great at CRNAs and we focus them on that, but you've got some niche suppliers that are in the subspecialty spaces and really can nail any sort ology type solution that you need. So there's also that multiplier around the upstream funnel that I think a lot of our buyers don't actually see the amount of effort that's going into some of that.
Completely agree on the supplier point. mean, it's it's a having a system that manages all of your suppliers in one portal I mean, I can't imagine the the the nightmarish odiousness of managing suppliers through an email chain multiple email chains in a VMS can eliminate that issue right out of the gate
AMN Healthcare Podcasts (19:05.678)
It'll create more normalization on your rates, right? Like think about, you know, are you really looking at maximizing the cost if you're doing a lot of these negotiations out of email and you're not seeing that, okay, well Patrick got a $7,000 housing stipend, Liz only got $3,000. Where is Liz staying and why can't Patrick go stay there? Right, it's hard to see that. Yeah, I'm at the, you know, yeah, I'm at a She Bear and B &B and Patrick's at, you know, the Carlton.
Yeah.
Exactly. So it helps us kind of create some more normalization in there too from a rate perspective. So, you know, I think the takeaways from what the technologies look like right now are control, right? Data insights, that workforce automation. So to me, that's like, that's what all of our clients and health systems should be asking for and asking themselves, making sure they have the right tech and partner to do that. But if I'm thinking towards the future, how should I be thinking about
leveraging technology differently to address physician shortages. That is such a tongue tie word for me. Physician shortages. How should I be thinking about leveraging technology differently in the future or new things that might start to come up in the technology that I should be thinking about?
So in physician shortages, think it's.
AMN Healthcare Podcasts (20:21.644)
You have to, and I will stress this again for healthcare clients, you've got to get that staffing composition model down perfectly. And you need the technology to do that. The physician shortage is we're not suddenly going to have a windfall of physicians. So you've got to do more with less. And that's going to come from data. It's going to come from staffing models that are precise, that balance APP, locums, and FTE physicians. That can be done through a staffing platform or VMS. As far as I'm concerned, in this environment, winging it is no longer.
issue, overestimating and just running at the top end, use the utilization scale to play it safe is probably not an option. And so the idea of it being a convenience or an inflection, believe, Liz, is going to be a necessity in this environment. You're going to have to be on top of that. You're going to have to have precise staffing models. As we said before, health systems need their revenue centers. They need the folks that are actually treating patients. patients need their doctors. And these health care centers need to remain
and remain operational.
Right, absolutely. And where do you think technology could potentially disrupt the locum tenant space? So things we can think about are from the physician experience side. They're definitely not in this gig economy quite yet that we're seeing a lot of nurse and allied professionals in. We're not seeing as much self-service and adoption when it comes for job searches, things like that. what do you think will be a disruptor on the clinician, physician side of the house, I should say?
and what would be a disruptor on the workforce management side of the house with the clients.
AMN Healthcare Podcasts (21:55.736)
So clinician, physician would be, I think.
advancements in recruitment and automated placement. Because what you're talking about with a physician, like I said, supply is finite. know that. Getting the physician identified, cleared, and placed. And that's going to be things like agentic AI, not chat bots. think agentic AI will probably subsume that. But getting in touch with this talent, the passive searches, the active searches, identifying these physicians that are looking for locum tenants work.
and getting them into your pipeline, getting them cleared and getting them placed quickly, that will be a function of largely agentic AI and the ability to augment, not replace, but augment your human recruiter force. To me, that will be the biggest disruptor. And if that can occur, that will be a boon to supply for each staff company that can employ.
Great. Anything on the client side?
I think in that sense, mean, there's going to have to be a certain location cell themselves, right? Certain specialty cell themselves, but it would have to be an incentive program, incentive programs to get these physicians out. And any number of things, maybe CME benefit, travel benefit, certain bonus structures. The other thing too is if you do have that specific data point to outline your long-term workforce planning,
AMN Healthcare Podcasts (23:25.04)
you might be able to promise a longer or shorter time frame for a physician that's maybe, I'd like to spend two or three months here. I have my workforce composition model and you can do that. You can offer that, hey, want to go to, there's an opening in Miami Beach, how long do you think I can stay there? Well, you can stay here for six months. So that may be the way to go.
Absolutely. I think, you know, one of my last questions, we've talked a lot about precision. You keep using your horseshoe and hand grenade. And I think you're insulting my horseshoe skills. think I'm a very precise horse shoe. I don't know. don't know about that. But as we talk about like precision analytics and really helping our clients get ahead of what that workforce need looks like for locums, how should they actually start this journey? How do they think about this in conjunction with their broader technology ecosystem within their health systems?
The one would be...
I wouldn't add on an additional VMS like we've seen. think using your existing VMS and if your VMS cannot handle the physician workforce load, maybe consider switching that VMS. Educating your staff on the use of it and getting that, know, what we're seeing in the locum side in those decision centers is maybe bringing the decision centers between the contingent labor management in nursing and ally, which is very mature, and that contingent talent management technology and locums, which is not necessarily mature, bringing them together.
other and forming a unified decision center and having those two collaborate. Additionally, looking at your spend in your process, know, just take a look at your, at your workforce, your administrative pro, what's your spend, what's your head count. And if these were automated and you can do a quick calculation, I think you'll find that the math will be in your favor for leveraging technology in this, but get that, get those numbers and justify it and then use things that can be plugged into your existing tech stack or a VMS that
AMN Healthcare Podcasts (25:15.162)
is all inclusive to be your solution.
Well, and I would imagine that on the cost-saving side, from a locum tenants perspective, getting the investment in the technology, you can actually flip the conversation to be beyond SG &A savings. You can flip it to say, locums are revenue-generating.
revenue generating bodies, right? So hey, if I have two more locum tenant shifts filled a month, I can actually generate this much more revenue for the hospital. So you could also probably flip that conversation to not just be about the savings, but be about the incremental value.
You could and I think that when we go back to the workforce composition, know, is it is this
Is that particular segment better filled by an FTE or a locum or two locums? And so having that data, can I leverage locums in the place of replacing, know, Dr. Johnson retired, do I need to fill that with an FTE, which would be incredibly costly? Or can I put a couple locums in there and it would be more cost effective? We'd have quality physicians and we can flex with volume. And so that would be a good consideration.
AMN Healthcare Podcasts (26:17.982)
Absolutely. Patrick, anything else you'd want to add of just trends to be thinking about in this space for physician shortages or locum tenants in general? know it'll continue to be a growth space and to your point, the supplies aren't necessarily keeping up. So anything else you'd like to add?
No, I think I would just add that, you know.
Technology will be critical in this, particularly the advent of things like AI and securing supply. I do think that hospitals, when we didn't touch on, we're going to have to kind of figure out patient flow as these specialty care centers coalesce in urban centers. we have our locum tenants and our APPs and our core FTEs and APPs functioning in these urban centers. Specialty care will maybe
relegated to these large urban centers and leaving what we call the neurology, cardiology, nephrology deserts out in the rural areas. To maybe find a way to leverage locum tenon application of these rural underserved communities, it's a temporary assignment to maybe not have the burden on the patient be such to where they have to drive to the nearest major city to see a specialist, which is where it's going now. There may be an opportunity. It's a bigger problem to solve. There more logistics.
but leveraging locum tenants that are more interested in maybe going up to the mountains or to the wilderness for a couple of months and bringing that specialty care to the patients and not having them have to make a journey.
AMN Healthcare Podcasts (27:47.118)
Right, that would be great for the patients. Well, thank you so much, Patrick. I really enjoyed chatting with you about the trends in the physician shortages, specifically looking forward to see what happens in the technology, VMS, workforce technology space for locums. I think what will be interesting for me to watch is as that market grows, right, from that 6 % into those bigger numbers that Nurse and Allied has, we'll start to see the...
greater investments in the technology and the more innovation, right? So I'm excited to see what that looks like for the physician space and where that can bring a better experience for those physicians and the health systems. Great. Well, thank you, Patrick. And thank you to our listeners for joining us on Elevate Care. Thank you for joining us today on Elevate Care. If you found this episode valuable, please consider sharing it with a colleague and subscribing to our show on your favorite podcast platform.
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