Select Committee on Health Third Report


  1. Having examined the pressure points at each stage of the patient journey we turn now to the wider structural issues which cut across all stages of the process: funding; the need for a whole systems approach; and the organization of health and social care structures.
  2. Funding issues

  3. As we have noted, the Department has allocated special funding to tackle the problem of delayed discharges. More recently it has announced radical proposals to introduce cross-charging of local authorities for delayed discharge, the so-called Swedish model. We turn now to consider the funding issues, though it is important to stress that these are integrally bound up with wider structural concerns.
  4. Special grants

  5. The allocation of extra resources through special grants is a well-established model within the Department. As our evidence indicated, there are both strengths and weaknesses in this approach. The ADSS surveyed its members on the use of non-recurrent money allocated to the NHS for joint planning to address winter pressures and to facilitate the introduction of intermediate care. The greatest frustrations identified in the survey concerned the non-recurrent nature of the funding, and the lack of transparency in the tracking of the money.[112]
  6. The ADSS welcomed the additional grant to support building capacity, particularly as it would enable the "fast-tracking of patients". However, they expressed concerns about the way in which the money had been distributed through a formula "that could appear to reward poor practices".[113] Mr Leadbetter told us that many directors of social services felt it was unfair that they were being penalised for investing extra resources in developing capacity. Rather than acting as rewards for those who had made the effort to tackle problems, extra resources went to those apparently performing least well. Commenting on the additional resources allocated to the NHS for intermediate care development, Mr Leadbetter also remarked that some of the money "appeared to have sticky sides. It seemed to go in different places", and many social services authorities could see no evidence of how it had been spent.[114]
  7. Whether special grants should be earmarked or ring-fenced was a matter on which views were divided. Mr Leadbetter for the ADSS suggested that the LGA would take the view "that the money should come to local government with few strings and we will spend it wisely". His own organisation, however, advocated a slightly different position to take account of their view that not all local authorities would give social services the priority required. In the view of the ADSS, "targeting some of the money on specific schemes with ring-fencing or hypothecating makes sure it goes to where it is needed".[115]
  8. The use of the Cash for Change resources appears to have been successful in enabling authorities to meet the target of a more than 20% reduction in delayed discharges since September 2001. However, we accept that funding activity in this way may not be sustainable or desirable in the longer term, and that the increase of funding to social services of 6% per annum in real terms over the next three years offers a positive opportunity for longer term planning.
  9. As with other specific grants, there are also concerns that the additional resources for 'building capacity' are time-limited, and do not fundamentally address funding deficits. Evidence from Wigan Council Social Services Department also underlined concerns over the conditions for the use of the 'cash for change' resources. They regarded as unhelpful the fact that the grant should not be used to substitute resources already in the system, to reduce existing budget deficits or to switch priorities: "It would penalise authorities who have maintained their investment in the personal social services to take into account growing demand and increased activity in the NHS."[116]
  10. Under-funding

  11. The under-funding of social care was a powerful and recurrent message throughout our evidence. The ADSS reported local authorities spending significantly above their standard spending assessment on social services. The data from ADSS surveys indicate an overspend of 210 million above the Government grant, and for older people alone an overspend of 42 million above locally set budgets.[117] The King's Fund highlighted the findings from their Care and Support Inquiry which emphasised the mismatch between funding for the NHS and for social services. The inability of social services to keep up with the rate of health service activity is reflected in part in delayed discharges. The King's Fund recommended that:
  12. "Funding for social care should be increased, at a rate at least equal to that agreed for the NHS. This would help to address a number of problems arising at the interface between health and social care (including delayed discharges). Our Care Inquiry report suggested that in cash terms, this rate of increase would amount to an extra 700 million in 2002-03."[118]

  13. The gap in growth between NHS and Personal Social Services expenditure may well be a pressure contributing to delayed discharges: an imbalance in resources will inevitably create pressure in one part of the system as it is relieved in another. The SPAIN group drew our attention to the differential between health and social care funding patterns, which in their view was likely to continue to grow:
  14. "Social care for older people, like the NHS, has suffered from long term under-funding. Like the NHS, it shows signs of major strain, with rationing on many fronts. But while substantial new investment is promised for the NHS, there has been no comparable review of social care funding."[119]

  15. Both the ADSS and the LGA made similar points, and again underlined the need to address "the proper fit between health funding and local authority funding for social care".[120] A survey of funding pressures on social services conducted by ADSS indicated that local authorities were spending significantly above their standard spending assessment on social services (an average of 8.9% for 2000-01 and 9.7% in 2001-02).[121] This, in turn, has an impact on other council departments which need to subsidise social services expenditure. ADSS concluded that social services funding had not kept pace with the increased demand for more intensive services for the most vulnerable, or with the increased volume of demand:
  16. "The gap between health care funding and social care funding continues to widen. This leads to a vicious circle in which delayed discharge pressure is passported from health to the social care sector, and then across this sector to the care market, where funding pressures affect capacity, which leads to the back-up on health pressures. Social care under-funding therefore directly contributes to health pressures."[122]

  17. Funding has been allocated to health and social services to address winter pressures, and more recently to increase the capacity necessary to tackle delayed discharges. While such additional resources have generally been welcomed, the difficulties of short-term funding were identified by many witnesses. The LGA, for example, pointed to the necessity of medium and long-term funding:
  18. "The funding shortage that faces personal social services is not caused by the need to support people for the few weeks after they leave hospital, but by the need to fund the preventative services that prevent people from needing hospital in the first place, or in providing them with services that allow them to have maximum independence and dignity in the years after they leave hospital."[123]

  19. According to the Government, following the 2002 Spending Review, "total personal social service resources (as allocated by central Government) are set to increase by on average 6 per cent per annum in real terms over the next three years 2003-04 to 2005-06".[124]
  20. During the course of our inquiry, the Government announced long-term funding growth for the NHS and for social care (providing five and three year settlements respectively). For the NHS there is to be an annual average increase of 7.5% above inflation in each year between 2003-04 and 2007-08. In the case of social services, the Budget delivers annual average growth in real terms of 6% from 2003-04 to 2005-06. This is a significant increase compared with the average increase of 3.3% in real terms that occurred between 2001-02 and 2003-04. We very much welcome the increase in funding to both health and social services, and the improved stability that it creates for planning in both areas. Monitoring will be required that analyses health and social care in an integrated manner and takes full account of the consequences of activity and expenditure in any given part of the system so that enhanced delivery of service is achieved.
  21. Incentives and penalties

  22. The Government has itself acknowledged the importance of the inter-relationship between health and social care funding in an attempt to build incentives into the system to help tackle the problem of delayed discharge. In evidence to us, The King's Fund recommended that less attention should be given to issues of organisational change, and more to the incentives that could be built into the system to support particular actions and practice.[125] The Wanless Report, published in April 2002, similarly recommended that the Government "should examine the merits of employing financial incentives such as those used in Sweden to help reduce the problems of bed-blocking".[126]
  23. We were surprised that, in his proposals set out in Delivering the NHS Plan, published the day after the Wanless Report, the Secretary of State for Health appeared to have already made a decision on the issue of financial incentives. He announced the Government's intention to legislate to introduce a system of cross-charging. This signals a new approach to tackling delayed discharges:
  24. "Much of the recent progress on reducing delayed hospital discharge - so called 'bed-blocking' - whilst welcome has been driven by top-down targeting of resources, central intervention and close monitoring of progress. But in the longer term this approach is not sustainable in a climate where the philosophy of devolution and earned autonomy is applied in local government services and in health services."[127]

  25. Delivering the NHS Plan went on to state that the new resources for social services announced in the Budget would include funding to cover the cost of dealing with delayed discharges, and expanding care at home to ensure people could leave hospital once their treatment was complete and it was safe for them to do so:
  26. "If councils reduce the number of blocked beds, they will have freedom to use these resources to invest in alternative social care services. If they cannot meet the agreed time limit they will be charged by the local hospital for the costs it incurs in keeping older people in hospital unnecessarily. In this way there will be far stronger incentives in the system to ensure that patients do not have to experience long delays in their discharge from hospital. There will be matching charges on NHS hospitals to make them responsible for the costs of emergency hospital readmissions, so as to ensure patients are not discharged prematurely."[128]

  27. We explored with our witnesses the likely response to such incentives and financial mechanisms. While there was some cautious support for the model, the predominant reaction was that the proposals constituted a blunt instrument that, rather than improving partnership, would be likely to reinforce a negative blame culture. We are especially concerned that the underlying assumptions behind the charging proposals is that most delays in the system are the fault of social services. As we have emphasised throughout this report, the causes of delay are complex and multi-factorial; it is far from clear that the issue can be resolved by such a crude solution.
  28. In the course of the inquiry, we visited the United States where we learnt about a similar system of penalty payments exerted by medical insurers on hospitals for days that patients spent in hospital beyond the average length of stay for a given procedure. We were left in no doubt that this system was very effective in reducing hospital stays; however, there are some important differences between the systems in the USA and the UK that would make us very cautious about the transferability of the model. As Mr Webster noted, an important difference is that in health maintenance organisations, the responsibility for managing the whole process of a person's care rests with one individual. That is rarely the case here, where the responsibility is split between different people at different points in the system.[129]
  29. Mr Leadbetter of the ADSS suggested that the cross-charging proposals afforded a perverse incentive, and that more needed to be done to introduce incentives and rewards in the right places. Dr Morgan similarly reported a lack of enthusiasm from the NHS Confederation:
  30. "We talk to our members. What they say is that it is right to have incentives and we need joint incentives between the two organisations, but the majority view we are getting back is that people do not believe it is an effective incentive and that in places which have worked hard to have good relationships it could bring contesting back rather than partnership 1/4 It could be counterproductive".[130]

  31. Mr Ransford for the LGA agreed with these comments and pointed out that the model "is based on a Scandinavian system with different governance, different charging regimes. We are equally committed to everyone else to ensure we get the right incentives in the system and trying out things which will make a difference, but we fear this will act as a very big perverse incentive."[131]
  32. Some witnesses questioned the purpose of imposing penalties on organisations that were already under considerable financial pressure. As Ms Whitworth also commented, while penalties might concentrate minds on discharging people more quickly, most organisations were already highly focused on such objectives. Moreover, expediting discharges of itself might simply displace the problem to friends and families: "My concern would be about who would pick up the pieces; that actually you would have to put in place proper systems to pick them up".[132]
  33. Many of our witnesses pointed to the importance of developing the right incentives, and putting in place rewards and not just penalties.[133] What is clear is that objectives, and the monitoring of their achievement, take little account of outcomes, other than in a very approximate way that measures activity and performance. Mr McClimont argued the case for "incentivising people to look at other options", and particularly to focus on payment by outcomes. This would have major implications for changing the way in which services are commissioned to focus more on outcomes.[134] In relation to rehabilitation and intermediate care services, for example, this would require outcome objectives for the individual patient, and a planned taper of services.
  34. Our experiences in examining medical insurers in the USA has demonstrated to us that financial penalty incentives can deliver rapid change in delayed discharge, albeit in a very different health culture. We believe there should be full consultation on any detailed proposals for cross-charging mechanisms to deal with delayed discharges. There are real risks that perverse incentives will be created that will undermine partnerships that have taken time to develop, and foster an unproductive culture of buck passing and mutual blame between health and social care. We agree that appropriate incentives have a role to play, but we would also urge the development of positive incentives that reward good practice, rather than any precipitate and over-zealous emphasis on penalties. We recommend that any new schemes should be subject to piloting.
  35. Whole systems approaches

  36. The need for 'whole systems approaches' (that address health, social care, housing and other vital elements holistically) to be adopted in tackling delayed discharges was a key theme voiced by our witnesses. It is apparent that, although the concept is widely accepted as necessary amongst commentators, and features in Government policy documents, such an approach can scarcely be said to characterise what is actually happening on the ground. As The King's Fund pointed out, a whole systems approach is essential "to prevent gaps, duplications and discontinuities between different parts of the system".[135] While the need for this strategy is widely recognised, it is also clear that the planning required can be hugely demanding, and especially so "when continual reorganisation of the NHS disrupts planning partnerships, and when those responsible for acute services decline to take part in the planning process".[136]
  37. The Audit Commission, as we have noted, told us that whole systems approaches were needed that simultaneously: reduced demand, by actively supporting people in the community; smoothed discharge, by streamlining procedures; re-balanced services, by putting in place alternatives to hospital; and co-ordinated care at both operational and strategic levels.[137] When these four dimensions are explored further, the complexity and scale of the task in hand becomes evident.
  38. Reducing demand for hospital beds necessitates the development of more preventative care and support to reduce the numbers coming into the hospital system; the provision of rapid response teams; better screening at A&E to prevent unnecessary admissions; and the proactive identification of vulnerable people in the community.[138]
  39. Re-engineering the system has direct implications both for staffing levels and for the appropriate skills mix needed to make good clinical decisions. As Professor Swift of the British Geriatric Society pointed out, if these decisions are wrong, "people are in the wrong place at the wrong time".[139] Making the right decisions is also contingent on assessment processes. While witnesses generally welcomed the development of the Single Assessment Process, it was acknowledged that this was still evolving and it would be some time before it was fully functioning. In the meantime the process remained "fraught with difficulties", not least because of the continuing problems of duplication, omission and different people undertaking different parts of the assessment without access to the parts undertaken by others.[140]
  40. The Audit Commission argued that the failure to provide a suitable mix of services, within the context of a whole system of care constituted a major cause of delayed discharge.[141] Evidence from a survey (unpublished at the time of our inquiry) by District Audit, the local provider arm of the Audit Commission, emphasised that much creative intermediate care service development was taking place, involving a hugely diverse range of schemes.[142] Ensuring that this diversity becomes part of the mainstream, and that it takes place within the context of the whole health and care system, will be an extremely challenging task. Merely setting up a range of new services will not, of itself, be sufficient. What is vital is that such innovation is located within an overall strategy based on partnership and the development of integrated provision.
  41. We encountered great difficulties in determining what was taking place on the ground, what was being achieved by new developments, and what else would be required to tackle the problems of delayed discharge. As the Audit Commission pointed out, one reason for this is that information systems are currently poor, "so it is not clear what level of resources are deployed or needed".[143]
  42. An important aspect of whole systems approaches is the capacity to identify how the different parts of the system interact, and the consequences of demands at various points in the system. Ms Tessa Harding, representing the SPAIN group, emphasised the importance of addressing the whole of the health care system, and argued that placing all the attention and resources on intermediate care prevented such a focus and was a short-sighted policy:
  43. "We need to be looking at primary care services, we need to be looking at the whole range of community health services on which older people rely a very great deal, and we need to be looking at social care as well as part of that whole spectrum. We need to look at the whole system."[144]

  44. The language of 'whole systems approaches' is in wide usage; however, there is a long way to go before the phrase provides an accurate description of what is taking place on the ground, other than in pockets of good practice. Developing whole systems approaches is a highly demanding task and will require a redistribution of services at both strategic and operational levels. Authorities require more help in assessing the balance of their local systems and determining where additional investment is needed. Without this focus there is a risk that vital parts of the system will remain under-developed, especially those concerned with prevention, where the impact on the system may take longer to become evident.
  45. The introduction of whole systems approaches will be undermined if there is insufficient staff and if the balance and skill mix of staff are inappropriate. As we have already indicated, capacity issues are not restricted to the residential and nursing home sector. Indeed, the UKHCA expressed some frustration at the way the debate had "been hijacked by the care home providers".[145] Mr McClimont, Chairman of the UKHCA, described to us the consequences of low fees paid to home care providers by local authority social services commissioners. He suggested that home care providers had been "forced into pay and conditions that very few of us like", and expressed his opinion that care staff should be paid at least 1 an hour more than is currently the case.[146] If this were to be funded, the total annual cost would be around 110 million. Recruitment and retention of staff are major problems in the care sector (both in home care services, and in residential support): there is intense competition for a limited pool of workers, and low pay rates are a major factor.
  46. The ADSS argued that workforce shortages were further aggravated by local health services being able to pay more and "aggressively recruiting from the nursing home market, with dramatic consequences on the sustainability of that market".[147] Dr Morgan, for the NHS Confederation, also underlined the importance of workforce under-capacity, describing staff supply as "the biggest issue facing health and social services".[148] Dr Morgan highlighted some imaginative schemes within Primary Care Trusts (PCTs) where attempts were being made to address the whole system requirements around nursing by creating a pool of nurses who "could both support what goes on in the NHS, look after what goes on in the community and find ways of providing some of the input into nursing homes". The ADSS emphasised that workforce development constituted a critical component of community care sustainability, and they too felt that a whole community approach needed to be adopted.
  47. We agree that workforce development needs to be tackled more creatively and in ways that address the whole system of health and care and do not intensify competition for staff between the various sectors. We recommend that further attention should be given to the development of a joint workforce plan and training strategy that brings together the NHS Training Confederation, and the new sector skills councils (the replacements for the former National Training Organisations for Health and Social Care). Some useful foundations have been established in the creation of regional training forums, but these need to be greatly expanded to address workforce development.

    Integrating Health and Social Care


  49. The NHS Plan proposed radical integration of the way the NHS works with social services. One of the issues we were keen to explore was whether closer structural integration of health and social care would address many of the issues that need to be resolved in developing 'whole systems approaches'. Witnesses accepted that the current structural divide of health and social care created many problems. Ms Harding emphasised the issues which arose for users of the services, particularly in respect of charging policies:
  50. "I think the problem which arises, certainly for the public, is knowing what is going to be charged for and what is not going to be charged for. That just creates an immense amount of confusion; people do not know which falls into which category, and they do not know, if they have a complaint, which complaints system they ought to use. From their point of view, it is a mystery and a nonsense really that we should have those two definitions."[149]

  51. One consequence of the requirement for payment for personal care is that people often refuse services, even when they meet the high eligibility criteria for receiving them, because they are unwilling or unable to meet the cost of charges. Ms Harding argued that the division between health and social care created a system that was not only very difficult for older people and their families to understand, but was also extremely complicated to administer.
  52. We also recognise, however, that structural integration alone will not solve the health and social care divide. As many of our witnesses also pointed out, there are differences of culture, and in a merger the distinctiveness of social care risks being overshadowed, as Ms Whitworth of Carers UK remarked:
  53. "in terms of traditions and practice, the distinction is there, and it is important to take it into account if you are thinking about merging. One of the concerns is that social care is so small alongside the NHS that many of the advantages and the things that have been learnt by people working in social care could easily be lost in a merger."[150]

  54. Moreover, the health and social care interface is not the only one that is of significance, and the wider boundary between local authority functions and the NHS (particularly in respect of housing) is also of importance.
  55. Other witnesses were less convinced that structural integration would help resolve the fragmentation of health and social care. Janice Robinson, for The King's Fund, pointed out that in Northern Ireland, where there was a form of organisational integration of health and social care, problems still existed:
  56. "[in Northern Ireland] we have all sorts of boundary problems there and we have the problem of the acute sector raiding the budgets for what they need. It is not a solution, it simply is not; it just creates other boundaries. We have the same tensions between the acute health service and the community health and social care services within the same organisation."[151]

  57. Mr Webster for the Audit Commission also expressed a scepticism about the value of structural change, arguing that there had been no lack of this in health and social care during the last 25 years. In fact, he thought it might be argued that there has been almost continual, and often distracting, restructuring.[152] Mr Bob Lewis, Director, Public Private Partnerships, Westminster Health Care (and a former Director of Social Services and President of ADSS) also commented on the situation in Northern Ireland which he has been involved in reviewing. He told us that he had come to the conclusion "that it is not the actual organisational structure that is the biggest problem, it is making sure that the money is in the right places".[153]
  58. Health and social care integration is obstructed by two issues. First is the different basis on which the services are provided, whereby one is free, and the other is means-tested; and second is the fragmentation of services within and between different organisations. These are related, but not identical issues. The co-ordination of services might be addressed through various approaches (including integration), but this would still leave the matter of charging for care to be resolved. Some of our witnesses were hopeful that the take-up of the partnership flexibilities, and the possible emergence of Care Trusts, would provide a means of improving co-ordination, and that closer integration would gradually evolve.[154] At the same time, others were concerned that the continuing changes, and the development of Primary Care Trusts, were causing further disruption to relations on the ground that were not conducive to closer working and partnership, and that in the short term things would get worse.
  59. Mr Ransford, for the LGA, told us that he believed it was absolutely essential to integrate efforts to produce a whole systems approach, and that Care Trusts might offer one means of doing this:
  60. "It brings in housing, it brings in education, it brings in transport, it brings in a healthier environment, a whole series of different things, which we must align and integrate to ensure that the citizen in our language gets the right deal. There is a whole series of ways of doing that. It seems to me that the flexibilities allowed for bringing local government and health budgets together used imaginatively can achieve exactly what we are looking for. If in a local arrangement, a Care Trust is seen as the best way of delivering that, that seems to me fine, but there are other alternatives."[155]

  61. Ms Platt emphasised that Care Trusts and pooled budgets offered creative ways of tackling the health and social care interface, but argued that there was a need to look beyond structures:
  62. "it is easy to pool a budget but the difficult thing is deciding what it is going to be spent on, what the strategy is for its use and how it is going to be allocated ... That is the case in all the partnership arrangements we have; that would be the case in Care Trusts too, looking at what the strategies are which are going to be developed through the delegated powers."[156]

  63. Ms Platt also told us that:
  64. "the Care Trusts are still voluntary arrangements as systems settle down. As people get used to new arrangements and see new organisations coming into being and see benefits, this is a journey we should like all local authorities to explore actively. They may decide that they can deliver the same sort of integrated outcome without organisational change and it would not be our wish to force organisational change if they could. The emphasis must be on a different outcome for the person and a single system of care, even if not a single structure of care but one system."[157]

  65. The evidence we have heard simply strengthens our view, stated in our predecessor Committee's inquiry into the relationship between health and social services in 1998, that the problems of collaboration between health and social services will not be properly resolved until there is an integrated health and social care system, whether this is within the NHS, within local government or within some, new separate organisation.[158] We recognise that the restructuring of the NHS with the creation of Primary Care Trusts including the representation of social services, the facility for local authorities to scrutinise health care provision and the option of Care Trusts, all add to the incentives for health and local authorities to work together, but they fall short of unifying the two agencies. We would be reluctant to see Care Trusts or other partnerships models imposed at this stage on local authorities, since this may damage constructive local relationships. However, for many years there has been insistent exhortation for these bodies to work together. Unless there is a rapid change and clear evidence that the challenges of delayed discharges are being effectively managed by joint working, it will be further proof that leads to the inescapable conclusion that radical structural reform is required.
  66. As in our predecessor Committee's previous study, we urge that there should be a full and widespread debate on the case for the integration of health and social care and their linkages with related services, such as housing. We recognise that structural change does not offer a panacea. However, without such integration, services tend to be fragmented and service users are faced with services that fail to address their needs comprehensively. We recommend that pilots are established to test ways of integrating health and social services, perhaps based on the lead commissioner model. This could have particular relevance to the whole systems approach to identifying and meeting the needs of older people.


112   Ev 179. Back

113   Ev 180. Back

114   Q615.  Back

115   Q619.  Back

116   Ev 290. Back

117   Ev 180. Back

118   Ev 55. Back

119   Ev 55-56. Back

120   Ev 176. Back

121   Ev 180. Back

122   Ev 180. Back

123   Ev 183. Back

124   Official Report, 26 June 2002, col. 977w. Back

125   Q240.  Back

126   Securing Our Future Health: Taking a Long Term View (The Wanless Report), para 6.45. The Wanless Report was commissioned by the Treasury, and offers an examination of future health trends and resources required over the next two decades to achieve the goals set out in the NHS Plan.  Back

127   Delivering the NHS Plan, Cm 5503, para 8.7.  Back

128   Delivering the NHS Plan, para 8.10.  Back

129   QQ297-99.  Back

130   QQ626-27. Back

131   Q627.  Back

132   Q275.  Back

133   See for example Dr Andrew Dearden's evidence for the BMA, Q369. Back

134   Q492.  Back

135   Ev 54. Back

136   Ev 54. Back

137   Ev 79-80. Back

138   Ev 80. Back

139   Q309.  Back

140   Q343.  Back

141   Ev 82. Back

142   Ev 82. Back

143   Ev 77. Back

144   Q228.  Back

145   Ev 145. Back

146   Q432.  Back

147   Ev 180. Back

148   Q575.  Back

149   Q241.  Back

150   Q245.  Back

151   Q235.  Back

152   Q375.  Back

153   Q481. Back

154   Section 31 of the Health Act 1999 removed the legal obstacles to joint working by creating new powers from April 2000 to allow partnerships to develop through the use of pooled budgets between health and local authorities, arrangements for lead commissioning and integrated provision in a 'one-stop package'. Back

155   Q548.  Back

156   Q107.  Back

157   Q118.  Back

158   The Relationship between Health and Social Services, First Report of the Health Committee (HC74, Session 1998-99). Back

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