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Leading the Change Maximizing Payment Models Melinda S. Hancock, FHFMA, CPA Partner DHG Healthcare 2014-15 Chair Elect, HFMA HFMA Lead #LikeAGirl November.

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Presentation on theme: "Leading the Change Maximizing Payment Models Melinda S. Hancock, FHFMA, CPA Partner DHG Healthcare 2014-15 Chair Elect, HFMA HFMA Lead #LikeAGirl November."— Presentation transcript:

1 Leading the Change Maximizing Payment Models Melinda S. Hancock, FHFMA, CPA Partner DHG Healthcare Chair Elect, HFMA HFMA Lead #LikeAGirl November 14, 2014

2 "If your actions inspire others to dream more, learn more, do more, and become more, you are a leader.” – John Quincy Adams

3 ACA Gains through 2019 Source:CBO and Joint Committee on Taxation, 2010 Projection Amounts in Billions

4 Industry Tipping Point 4 Revenue Time How do local market conditions impact timing considerations? Can market-changing events create an urgent paradigm shift? What is my step-change business model risk? Do I have the financial tools to adequately analyze relevant states?

5 Payment Model & Increasing Risk Acceptance 5 Hierarchy of Risk and Payment Models

6 Alignment of Strategy and Metrics Questions to Ask How many metrics am I tracking? How many metrics are duplicated? Do they have the same numerator and denominator? Source? Are they aligned with our results and strategic goals? What contracts are coming up for renewal that should have new metrics or should be at risk (mgd care, medical directorships, PMAs, etc.) What are we focused on?

7 Reform Timeline

8 Value Based Purchasing

9 VBP Shifting of Domain Weights FY 2013FY 2014FY 2015FY 2016 Core Measures Patient ExperienceEfficiency (MSPB) Outcomes

10 New NQS Based Domains for FY HCAHPS = 25% Safety = 20% MSPB = 25% Clinical Care - Process = 5% Clinical Care - Outcomes = 25%

11 VBP – FY13 Domain Weights Performance Period: July 1, 2011 – March 31, 2012 Reimbursement Period: October 1, 2012 – September 30, 2013 Core Measures = 70%

12 VBP – FY14 Domain Weights Performance Period: April 1, 2012 – December 31, 2012 Reimbursement Period: October 1, 2013 – September 30, 2014 Core Measures = 45%Outcomes = 25%

13 VBP – FY15 Domain Weights Performance Period: January 1, 2013 – December 31, 2013 Reimbursement Period: October 1, 2014 – September 30, 2015 HCAHPS = 30% Outcomes = 30% MSPB = 20% One Measure!! Core Measures = 20%

14 VBP – FY16 Domain Weights Performance Period: January 1, 2014 – December 31, 2014 Reimbursement Period: October 1, 2015 – September 30, 2016 HCAHPS = 25% Outcomes = 40% MSPB = 25% Core Measures = 10%

15 15 HCAHPS = 25% Safety = 20% MSPB = 25% Clinical Care - Process = 5% Clinical Care - Outcomes = 25% VBP – FY16 Domain Weights Performance Period: January 1, 2014 – December 31, 2014 Reimbursement Period: October 1, 2015 – September 30, 2016

16 Value Based Purchasing Outcomes = Income Mandatory Pay for Performance Program –3,500 hospitals are included in this program across the country Reimbursement Determine Two Ways: –Achievement  How we compare to National Top Decile (350 Hospitals) –Improvement  How we measure against ourselves  Did we do better than a previously measured baseline period

17 Value Based Purchasing Percent of Medicare Reimbursement at Risk FY 2013 – 1.00% FY 2014 – 1.25% FY 2015 – 1.50% FY 2016 – 1.75% FY 2017 – 2.00% FY 2018 – 2.00% FY 2019 – 2.00% FY 20xx – refers to the Federal Fiscal Year (Oct. 1 – Sep. 30) when DRG payments will be affected

18 VBP FY 2016 – New Measures Patient Experience –No Change – Same HCAHPS Measures Core Measures –5 Dropped; 1 New Outcomes –3 New Measures Efficiency –No Change

19 VBP – FY 2016 – Patient Experience HCAHPS –Hospital Consumer Assessment of Healthcare Providers Survey –An engagement survey CMS has mandated each hospital give to every discharged inpatient –Consists of 27 questions that lead to the 8 categories assessed for VBP –Patients score each question on scale of 4 –For answers to count, patients must give hospitals a score of 4 or “Always”

20 VBP FY 2016 – Patient Experience Communication with Nurses Communication with Doctors Responsiveness of Hospital Staff Pain Management Communication about Medicines Cleanliness and Quietness of Hospital Discharge Information Overall Rating of Hospital

21 VBP FY 2015 – Core Measures AMI-7a AMI-8a HF-1 PN-3b PN-6 SCIP-Inf-1 SCIP-Inf-2 SCIP-Inf-3 SCIP-Inf-4 SCIP-Inf-9 SCIP-Card-2 SCIP-VTE-2

22 VBP FY 2016 – Core Measures AMI-7a PN-6 SCIP-Inf-2 SCIP-Inf-3 SCIP-Inf-9 SCIP-Card-2 SCIP-VTE-2 IMM-2 Note: IMM-2 Performance Period is only 6 MONTHS (Two 3 Month Periods)January 1, 2014 – March 31, 2014 AND October 1, 2014 – December 31, 2014

23 VBP FY 2016 – Core Measures Measure IDBenchmark AMI-7a100% IMM % PN-6100% SCIP-Inf-2100% SCIP-Inf-3100% SCIP-Inf-9100% SCIP-Card-2100% SCIP-VTE-2100%

24 VBP FY 2016 – Core Measures AMI-7a PN-6 SCIP-Inf-2 SCIP-Inf-3 SCIP-Inf-9 SCIP-Card-2 SCIP-VTE-2 IMM-2

25 VBP FY 2017 – Clinical Care: Process AMI-7a IMM-2 PC-01 PC-01 = Elective Delivery Prior to 39 Completed Weeks Gestation

26 VBP FY 2015 – Outcomes 30 Day Mortality – AMI 30 Day Mortality – HF 30 Day Mortality – PN AHRQ – PSI-90 CLABSI

27 VBP FY 2016 – Outcomes 30 Day Mortality – AMI 30 Day Mortality – HF 30 Day Mortality – PN AHRQ – PSI-90 CLABSI CAUTI SSI – Colon SSI – Abdominal Hysterectomy

28 VBP FY 2016 – Outcomes Measure IDBenchmark CAUTI0.000 CLABSI0.000 Surgical Site Infection Colon0.000 Abdominal Hysterectomy 0.000

29 VBP FY 2016 – Outcomes Outcomes 30 Day Mortality – AMI 30 Day Mortality – HF 30 Day Mortality – PN AHRQ – PSI-90 CLABSI CAUTI SSI-Colon SSI-Abdominal Hyster.

30 VBP FY 2017 – Clinical Care and Safety Clinical Care- Outcomes 30 Day Mortality – AMI 30 Day Mortality – HF 30 Day Mortality – PN AHRQ – PSI-90 CLABSI CAUTI SSI-Colon SSI-Abdominal Hyster. Safety MRSA C. Diff

31 Reform Timeline

32 Outcomes – 30 Day Mortality Currently in 3 Performance Periods –FY 2016 ended June 30, 2014 –FY 2019 began July 1, Day Mortality Measures –Assess deaths: AMI, HF, and PN that occur within 30 days after admission; which, depending on the length of stay, may occur post- discharge….

33 CMS 30 Day Risk-Standardized Mortality Rate Calculation Facility Predicted Deaths Facility Expected Deaths X Measure (AMI, HF, PN) National Crude Rate =

34 VBP FY Efficiency Medicare Spend Per Beneficiary (MSPB) Captures total Medicare Spending Per Beneficiary relative to a hospital stay, bundling hospital sources (Part A) with post acute care (Part B) –Bundles the cost of care delivered to a beneficiary for an episode across the continuum of care:  3 Days Prior  Hospital Inpatient Stay  30 Days post Discharge

35 VBP: MSPB Sample US

36 VBP: MSPB 36

37 PROPOSED MSPB Measures 37 Additional Efficiency Measures proposed to be added Risk Adjusted similarly to MSPB Proposed to facilitate alignment with the Physician Value Based Payment Modifier program Includes Part A and B and 3 days prior to admission and 30 days post discharge MedicalSurgical Kidney/Urinary Tract Infection Hip replacement/revision CellulitisKnee replacement/revision Gastrointestinal hemorrhage Lumbar spine fusion/refusion SOURCE: May 1, 2014 Federal Register

38 System was penalized $376,003 in FY’15 VBP Program Must acknowledge the amount UNEARNED Of the programs dollars made available: –System did not capitalize on $6,187,541

39

40

41 Drilldown on Outcomes… Variation within the Domain: Maxed out on AMI Mortality and then got a 0 on CLABSI

42 Opportunities – VBP: Outcomes 42 Top 50 th = Δ1 Patient Top 10 th = Δ3 Patient Top 50 th = Δ1 PatientTop 50 th = Δ8 Patients Top 10 th = Δ11 PatientsTop 10 th = Δ3 Patient

43 VBP – CMS Proposed Future Measures FY 2018 Program (Performance Period: CY 2016) –Patient Experience: Care Transition FY 2019 Program (Performance Period: CY 2017) –Surgical Complication: Total Hip and Total Knee Arthroplasty

44 FY 19 New Measure Added THA/TKA for 30 month performance period. –January 1, 2015-June 30, 2017 –Baseline of July 1, 2010-June 30, 2013 Risk standardized measure for complications after Total Hips and Knees surgeries for up to 90 days post surgery –One of eight complications: AMI, pneumonia, sepsis, SSI, PE, death, mechanical complication or periprosthetic joint infection/wound infection. –Each has a defined time frame –Each is a ‘Yes’ or ‘No –Risk adjusted for patient age, sex and comorbidities 44 SOURCE: August 2014 Proposed Rules Federal Register

45 Readmission Reduction Program

46 Reform Timeline

47 Readmission Reduction Program 9% of Current and Future Medicare Reimbursement at Risk –3% penalty of Medicare Reimbursement at risk each program year –Measured Populations 30 days from DISCHARGE AMI, HF, PN, COPD, THA & TKA August 2014: CABG Added to FY 2017 Performance Periods: 3 Year Rolling Program –FY’15: July 1, 2010 – June 30, 2013 – 3% –FY’16: July 1, 2011 – June 30, 2014 – 3% –FY’17: July 1, 2012 – June 30, 2015 – 3% –FY’18: July 1, 2013 – June 30, 2016 – 3% –FY’19: July 1, 2014 – June 30, 2017 – 3% Currently participating in 3 performance periods simultaneously

48 How are Readmissions Measured? Scoring Index based at 1.0 Calculate Excess Readmission Ratio Excess Readmission Ratio > 1 = BAD Excess Readmission Ratio < 1 = GOOD Facility Predicted Value Facility Expected Value

49 Wisconsin RRP By Facility: FY 13- FY 15

50 Hospital Acquired Conditions

51 Reform Timeline

52 Hospital Acquired Conditions (1% at Risk*) 12 Hospital Acquired Conditions Identified –Divided in to 2 Domains If a hospital is in the BOTTOM QUARTILE (worst performing 25% in the country), it will be penalized a FULL 1% of Medicare Reimbursement Penalties will begin FY’15 (beginning October 1, 2014) *1% After DSH, Uncompensated Care, and IME

53 Penalties & Your DRG Payment

54 Hospital Acquired Conditions: FY’15 First Domain: PSIs Performance Period: 7/1/11-6/30/13 Second Domain: CDC Performance Period: CY 2012 & 2013 Pressure Ulcer RateCLABSI Foreign Object Left in BodyCAUTI Iatrogenic Pneumothorax Rate Postoperative Physiologic and Metabolic Derangement Rate Postoperative Pulmonary Embolism and Deep Vein Thrombosis Rate Accidental Puncture and Laceration Rate

55 HAC Domain Weightings: FY’15 CLABSI: 32.5% CAUTI: 32.5% Pressure Ulcer Rate: 8.33% Foreign Object Left In Body: 8.33% DOMAIN 1: 35% DOMAIN 2: 65%

56 Hospital Acquired Conditions: FY 2016 First Domain: PSIs 25% Second Domain: CDC 75% Pressure Ulcer RateCLABSI Foreign Object Left in BodyCAUTI Iatrogenic Pneumothorax RateSSI Following Colon Surgery (FY 2016) Postoperative Physiologic and Metabolic Derangement Rate SSI Following Abdominal Hysterectomy (FY 2016) Postoperative Pulmonary Embolism and Deep Vein Thrombosis Rate Accidental Puncture and Laceration Rate

57 HAC Domain Weightings: FY’16 57 CLABSI: 32.5% CAUTI: 32.5% Pressure Ulcer Rate: 5.83% SSI: 32.5% DOMAIN 1: 25% DOMAIN 2: 75%

58 Hospital Acquired Conditions: FY 2017 First Domain: PSIsSecond Domain: CDC Pressure Ulcer RateCLABSI Foreign Object Left in BodyCAUTI Iatrogenic Pneumothorax RateSSI Following Colon Surgery (FY 2016) Postoperative Physiologic and Metabolic Derangement Rate SSI Following Abdominal Hysterectomy (FY 2016) Postoperative Pulmonary Embolism and Deep Vein Thrombosis Rate Methicillin-Resistant Staphylococcus Aureus (MRSA) Bacteremia (FY 2017) Accidental Puncture and Laceration Rate Clostridium Difficile (FY 2017)

59 Dollars At Risk

60 VBP FY 2016 – Sample Current $$ at Risk

61 VBP – Sample Total Current $$ at Risk

62 All Reform – Sample Total Current $$ at Risk

63 VBP – CMS Proposed Future Measures FY 2018 Program (Performance Period: CY 2016) –Patient Experience: Care Transition FY 2019 Program (Performance Period: CY 2017) –Surgical Complication: Total Hip and Total Knee Arthroplasty

64 FY 19 New Measure Added THA/TKA for 30 month performance period. –January 1, 2015-June 30, 2017 –Baseline of July 1, 2010-June 30, 2013 Risk standardized measure for complications after Total Hips and Knees surgeries for up to 90 days post surgery –One of eight complications: AMI, pneumonia, sepsis, SSI, PE, death, mechanical complication or periprosthetic joint infection/wound infection. –Each has a defined time frame –Each is a ‘Yes’ or ‘No –Risk adjusted for patient age, sex and comorbidities 64 SOURCE: August 2014 Proposed Rules Federal Register

65 Bundled Payments

66 Description of Models Models 2 and 3 are the most popular by far- retrospective vs prospective models that include the post acute care components

67 67 Bundled Payments Model 1 and 4 Model 1 is Retrospective and is all DRGs Model 4 is Prospective

68 68 Bundled Payments Model 2 Model 2 is Retrospective For days

69 69 Bundled Payments Model 3 Model 3 is Retrospective For days

70 70 The Episodes CMS created 48 Episodes, each with up to 15 individual MS-DRG codes We categorized Episodes into 9 Service Lines; illustrative purposes only Model 2, 3, or 4 applicants may select 1-48 Episodes for testing ves/bundled-payments/

71 Advantages of Participation Improved quality of care for patients –Reduced complications, readmissions, and cost Improved ability to work with hospitals, physicians, nursing homes, home health, rehab centers, and other providers to improve overall care quality and service Potential competitive advantage within market with physicians and post-acute care Opportunity to receive payment aligned with these goals and based on outcomes 71

72 72 MEDICARE: Cohort 1 COMMERCIAL as of July 2014 Where are the Bundled Payments?

73 Early Results of BPCI Cohort 2 Tremendous increase in the number of applications in the most recent open enrollment in April 2014: Nearly Triple! Models 2,3,4 were open for enrollment Currently in the Phase 1 period which is the non risk, decision making period. Phase 2 is when the Episode Initiator starts to accept risk

74 Changes In the Cohort 2 Timeline: 7/31/14 EventOriginal DateRevised Date* Historical Claims & Target Pricing Late Summer 2014 November 2014 Go/No Go Decision to Participate November 1, 2014January 11, 2015 Go Live with RiskJanuary 1, 2015April 1, 2015 Other significant changes:  ADDITION OF EPISODES: You can now add episodes in July 2015 and October 2015: only 1 episode is required for April 1, Phase 1 ends in October 2015  B-CARE: B-CARE quality data wont be collected until Spring 2015  Option for Delayed Reconciliation: Will offer a 4 quarter timeline for reconciliation. * Revised again in October 2014

75 75 Readiness: Risk Capability What are your data analytics and capabilities and ability to operationalize your quality data What is the maturity of your physician network and post acute care network? What do you know about each? What don’t you know? How are you doing on the VBP and RRP that are building blocks for this? How are you going to manage the gain sharing What quality metrics are you tracking and need to improve that can be built into this program What internal cost sharing could you roll out with this?

76 Strategic Planning: How does it all tie in? 76

77 MD Home Health SNF IRF Outpt. Rehab Readmission Home $3,207 $10,12 9 $8,965$ = $22,927 x98% $22,468 DRG Inpatient and PACS Fee for Service Model $22,468 Bundled Episodic Model DRG 470 Total Joint Replacement w/out CC Model 2 Note: any CMI aggregate charges lower than $22,468 can be shared with providers via gain sharing model Episodic period for model 2: 3 days prior to admission to 90 days post discharge from hospital

78 Gain Sharing Model 78 Shared Reward ($$)

79 Bundled Payment Episode Pricing and Gain Sharing 79 Target Price $13,647 Historical Cost Per Episode $12,500 Actual FFS Cost during Performance Period $13,400 Settlement (Per Case) $247 BPLN Episode Definitions Risk Adjustment Environment of Care - Hospital (40%) $99 Physicians (35%) $86 Update factor For illustration: 3% inflation/yr Discount = 3% Environment of Care - Post-acute (25%) $62 Quality Metrics

80 BPCI Multiple Bonus Payments: Physicians 2 opportunities for Physicians to be awarded Bonuses 1.Internal Cost Savings Pool 2.Bundled Payment Savings Pool Both have required Quality Metrics and Cost Savings to be met Cost Savings MUST be directly attributed to Quality Improvement and Care Redesign 80

81 Outpatient Bundling…coming soon? In February 2014, CMMI issued a Request for Information on a new bundled payment program to expand to outpatient. Focus is Specialty Physicians and on (1)Procedures and (2) complex chronic care Highlighted colonoscopy, cataract surgery, & radiation therapy for procedural options. Regarding the chronic care, “CMS is considering development of a model that would incentivize specialists to more efficiently manage the care provided to beneficiaries with complex or chronic medical conditions over the period of time that corresponds to the specialty practitioner’s long term involvement with managing the beneficiary’s care.” Was seeking responses until March 13

82 Outpatient Bundling Referred to by CMS as: “Comprehensive Ambulatory Payment Classification (APC)” Finalized in the CY 2014 OPPS/ASC Final Rule Affect payments to 4,000 hospitals and 5,300 ASC’s Delayed implementation to January 1, 2015 instead of the traditional outpatient October 1 implementation date –Extra time allowed the Agency, hospitals, and physicians more time to evaluate and comment on the policy

83 Outpatient Bundling – Comprehensive APC’s Single Medicare payment rather than individual APC payments throughout the episode 25 Bundled Outpatient Procedures Proposed Payment could include all hospital services reported on the claim covered under Medicare Part B for up to a proposed 6 Month Period –Few exceptions resulting in a single beneficiary copayment per claim

84 Outpatient Bundling – Proposed Procedures

85 Thank you! Contact Information: Melinda Hancock (804)

86 Affinity Groups Current –Large System CFO Council –Large System Revenue Cycle Council –Strategic CFO Council Being Formed –CMMI Bundled for Care Improvement Council –Payer Focused Affinity Group 86 Newly Formed and Actively Meeting –Health Care Economics Professional Council –Physician Group Practice Executive Council –Strategy Executive Council –Academic Medical Center CFO Council

87 Master Level Seminars Chicago, IL | Dec. 8-10, 2014 –Beyond Big Data: Developing a Business Intelligence and Analytics PracticeBeyond Big Data: Developing a Business Intelligence and Analytics Practice –Population Health Management and the Next Generation of Clinical IntegrationPopulation Health Management and the Next Generation of Clinical Integration Washington, DC | Feb , 2015 –Population Health Management and the Next Generation of Clinical IntegrationPopulation Health Management and the Next Generation of Clinical Integration –Transparency, Metrics, and Communication: Proven Practices for Revenue Cycle StrategiesTransparency, Metrics, and Communication: Proven Practices for Revenue Cycle Strategies Seattle, WA | March 25-27, 2015 –Beyond Big Data: Developing a Business Intelligence and Analytics PracticeBeyond Big Data: Developing a Business Intelligence and Analytics Practice –Transparency, Metrics, and Communication: Proven Practices for Revenue Cycle StrategiesTransparency, Metrics, and Communication: Proven Practices for Revenue Cycle Strategies 87

88 Improve the Billing and Payment Experience for Patients 88 hfma.org/dollars

89 89 Price Transparency Task Force

90 Enhance Price Transparency 90 Clarifies basic definitions that are often misused Sets forth guiding principles Establishes roles for payers, providers, others Reflects consensus of key stakeholders hfma.org/dollars

91 Demystify Price Information for Consumers 91 Describes how to request price estimates, step by step Clarifies what estimates may or may not include Explains in-network and out-of-network care Defines key terms Available for posting on your website at no charge Hardcopies available for purchase in bulk at a nominal price through AHA’s online store hfma.org/transparency ahaonlinestore.org

92 Best Practices Address Key Issues 92

93 Achieve Recognition as an Adopter of Best Practices Recognition demonstrates commitment to best practices in patient financial communications Based on HFMA review of an application and supporting documentation All provider organizations may apply Recognition valid for two years Adopters may use the phrase “Supporter of the Patient Financial Communications Best Practices” in their marketing materials 93

94 Leading the Change from Volume to Value 94 Defining and delivering value Key organizational capabilities for building value Organizational road maps hfma.org/valueproject

95 New Report Extends Value Resources to Reflect Industry Realignment Acquisition and Affiliation Strategies Acquisition and Affiliation Strategies Current State & Future Directions of Value Value In Health Care HMFA’s Value Project Four Key Capabilities for Value Building Value- Driving Capabilities HMFA’s Value Project Defining & Delivering Value Defining and Delivering Value HMFA’s Value Project Organizational Road Maps for Value-Driven Health Care The Value Journey: Organizational Road Maps for Value Driven Health Care HMFA’s Value Project hfma.org/valueproject

96 96 Career Strategies HFMA Resources “Choose a job you love, and you will never have to work a day in your life.” Confucius

97 Take Advantage of HFMA Resources 97

98 98 Leadership… Your personal plan…what does it really mean? “Leadership has nothing to do with titles; it has everything to do with, “Do you inspire other people? Do they want to follow you? Do they want to be with you?” -Tom Atchison, author of Followership: A Practical Guide to Aligning Leaders and Followers

99 Be an Exceptional Leader Well cultivated self awareness Compelling vision A real way with people Masterful execution 99

100 Be “Great by Choice” ers are extremely disciplined –They use empirical data and continually plan for the “what if” The take the 20 Mile March –Performance markers and self imposed constraints Fire bullets instead of cannonballs. –Only shoot cannon balls after testing. Show great financial constraint Zoom out – then zoom in.

101 “You cannot lead without knowing the needs of your people—what drives them, what makes them do what they do; then you can give them opportunities to succeed based on their own psychology of success.” Kerry Gillespie, FHFMA, vice president, operations, Community Health System, Inc., Brentwood, TN, and a member of HFMA’s Tennessee Chapter 101 Develop Your Leaders…

102 Everyone Is a Leader…. Everyone in this room is a leader. I’m asking each of you to renew your commitment to leading our industry forward, to ensuring its long term viability and quality. Together, we CAN improve health care. Together, we can and we must Mentor young professionals as we have been mentored, Rise above the uncertainty and frustration of today, and Work in partnership with our colleagues throughout the industry to lead the change. Kari Cornicelli HFMA National Chair 2014/

103 New Skills for A Leader 103 Convening collaborative efforts Making decisions on behalf of your organization Commitment to move the alliance forward Confidence that the alliance will "get to its destination"

104 Trend Toward Collaboration Across Traditional Boundaries 1.A common pain (a shared problem) 2.A convener of stature (an influential leader) 3.Representatives of substance with authority to make decisions 4.Leaders committed to move the alliance forward 5.A clearly defined purpose 6.Established rules 7.Confidence that the alliance will "get to its destination" 8.A shared pool of reliable information Key Elements Required for Successful Collaboration Source: Mike Leavitt and Rich McKeown. Finding Allies, Building Alliances: 8 Elements That Bring…and Keep People Together

105 Leading Change- Summary 105


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