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Types of crises experienced by health organisations

Authors:
  • Daniel K. Inouye Asia-Pacific Center for Security Studies

Abstract and Figures

Changes in modern society have resulted in an increasing need for organisations to protect themselves, their employees and their interests from diverse risks and threats that include terrorism, litigation and threats to personal safety and reputation. This study aimed to investigate the occurrence of such crises to inform organisational planning and preparedness and to update managers on the types of crises likely to confront them. Method: This study collected data from Chief Executive Officers or other key decision-makers from 2007 to 2008, on several categories of crisis types as experienced by five chiropractic practices, eight physiotherapy practices, five podiatry practices, five aged care facilities, six dental practices, 19 hospitals, 11 medical centres and 18 pharmacies. Results: Hospitals experienced significantly more crises than other organisations apart from chiropractic practices and pharmacies. Dental clinics were dispro-portionately crisis prone in some areas and podiatry was the least crisis prone. Overall, product recalls occurred three to ten times more than most other types. Conclusion: A large amount of variance in the number and type of crises experienced between different organisations was observed although specific types of crises were increasingly associated with diminished organisational size.
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Types of Crises Experienced by Health
Organisations
D V Canyon, A Adhikari, T Cordery, P Giguere-Simmonds, J Huang,
H Nguyen, M Watson and D Yang
RESEARCH
ARTICLE
Abstract
Introduction: Changes in modern society have resulted
in an increasing need for organisations to protect
themselves, their employees and their interests from
diverse risks and threats that include terrorism, litigation
and threats to personal safety and reputation. This
study aimed to investigate the occurrence of such crises
to inform organisational planning and preparedness
and to update managers on the types of crises likely to
confront them.
Method: This study collected data from Chief Executive
Ocers or other key decision-makers from 2007 to 2008,
on several categories of crisis types as experienced
by ve chiropractic practices, eight physiotherapy
practices, ve podiatry practices, ve aged care facilities,
six dental practices, 19 hospitals, 11 medical centres and
18 pharmacies.
Results: Hospitals experienced signicantly more
crises than other organisations apart from chiropractic
practices and pharmacies. Dental clinics were dispro-
portionately crisis prone in some areas and podiatry was
the least crisis prone. Overall, product recalls occurred
three to ten times more than most other types.
Conclusion: A large amount of variance in the number
and type of crises experienced between dierent
organisations was observed although specic types
of crises were increasingly associated with diminished
organisational size.
Abbreviations: CEO – Chief Executive Ocer;
IPI – Incidents Per Institution; SARS – Severe Acute
Respiratory Syndrome.
Key words: crisis types; hospital crises; allied health
crises.
D V Canyon1,2 A Adhikari2 T Cordery2
P Giguere-Simmonds2 J Huang2 H Nguyen2
M Watson2 D Yang2
Aliations:
1 Disaster Health and Crisis Management Unit, Anton Breini
Centre, James Cook University, Australia
2 School of Medicine and Pharmacology, University of Western
Australia
Correspondence:
deoncanyon@gmail.com
Introduction
Increasing complexity in our environment is expected
to produce more frequent and cumulative crises in
organisations. [1] Indeed, trends in human-caused crises
have increased exponentially over the course of the 20th
century resulting in hospitals and other health organisations
being challenged more frequently. [2] A crisis is dened here
as ‘any event or condition that threatens the survival of the
organisation’. [3] Health organisations quickly learn to deal
with such events eciently and humanely, [4] however,
preparation typically focuses on events that have been
experienced rather than on a sensible range of possibilities
that may include the unexpected. [5] As a result, health
organisations may implement a suboptimal allocation
of resources, leading to loss of life and a lack of public
condence in the wider healthcare system.
While hospitals and other health centres are perhaps geared
more highly for managing crises, aspects of major hospitals
in Australia and their surrounding regions such as their
strong culture, geographical isolation, large catchment
areas and the homogeneity of surrounding communities,
may render them susceptible to future crises that could
severely test and demoralise the system. The extent to which
our health organisations experience a broader set of social
58 Asia Pacic Journal of Health Management 2010; 5: 2
Types of Crises Experienced by Health Organisations
crises is unknown. Smaller health entities, such as medical
clinics, pharmacies and other allied health organisations
constitute an important part of the holistic approach to
crisis management, and encounter their own specic set
of challenges and threats to function. Since local health
providers are among the rst agencies to respond to any
wider public emergency, it is imperative that they are able
to maintain core functions and to lead, as well as support,
major health sectors when responding to widespread crises.
[6]
The level of crisis preparedness within and between
organisations varies from inadequate and reactive to
better-than-compliant and proactive. Some organisations
possess little or no crisis preparedness where there are no
emergency contingencies to deal with crises. Others exhibit
basic preparation for natural disasters, res, bomb threats,
epidemics, blackouts and the like. Others still are more
thoroughly prepared with infrastructure in place to face a
wide variety of threats to core business and technologies.
Few organisations are prepared to deal, both systematically
and systemically, with a wide range of potential crises. [5] This
variation in preparedness is undesirable and stems from the
fact that organisations typically employ an ad-hoc, reactive
approach to crisis management rather than enabling it by
making it integral and systemic. This is important because
crises are largely due to systemic deciencies and rarely
have a single cause. [7] In addition, the consequences of
many natural disasters are exacerbated by human activity or
poor preparation. [8] A lack of adequate crisis preparedness
may lead to infrastructure collapse, diminished function,
impaired outcomes for patients and lack of safety for sta
and patients.
Changes within the structure of Australian society have
resulted in an increasing need for companies to protect
themselves, their employees and their interests from
perceived threats. These threats are diverse, and include
terrorism, litigation and threats to personal safety and
reputation. This emphasises the need for developing and
implementing systemic strategies for crisis management
and control, but little insight has been obtained into the
types of crises that are commonly experienced in health
and allied health organisations. This study investigated the
types of crises experienced by hospitals, medical clinics,
pharmacies, physiotherapy practices, chiropractic practices,
podiatry practices, dental practices and nursing homes with
the aims of i) investigating the occurrence of such crises
to inform organisational planning and preparedness; ii)
updating managers on the types of crises likely to confront
them; and iii) creating baseline data upon which further
crisis management studies may rely.
Materials and method
A sample of potential organisations was randomly selected
from public directories of health services in Australia with
nal participants including ve chiropractic practices, eight
physiotherapy practices, ve podiatry practices, ve aged
care facilities, six dental practices, 19 hospitals, 11 medical
centres and 18 pharmacies. The survey was conducted from
mid-2007 until mid-2008 by telephone and face-to-face
interviews. An acceptable participation rate of 40% was
achieved and this limit was due to an inability to contact
prospective participants, time constraints, organisational
condentiality requirements regarding ongoing crises and
legal proceedings, and personal perceptions of the contact.
Interviewees were preferentially the Chief Executive Ocer
(CEO) or members of the organisation’s crisis management
team, if it existed. When they were unavailable, practice
managers or other decision-making executives were
interviewed. In the interests of standardisation, interviewers
followed strict protocol during the interview and
interviewees were assured anonymity. Ethics approval
H2522 was obtained from the Ethics Committee at James
Cook University.
A questionnaire based on elements in a Crisis Management
Audit developed by Professor Ian Mitro [5] was used to
collect data on the occurrence of various types of crises
that have been experienced in the last three years. This tool
was selected because it has been successfully used to audit
many of the Fortune 500 companies in the United States.
Crisis types included: product recalls, product/service
tampering, employee sabotage, res, explosions, chemical
spills, environmental disasters, signicant drop in revenues,
natural disasters, loss of condential/sensitive information,
major lawsuits, terrorist attacks, and damage to corporate
reputation. The data were analysed with SPSS for Windows
version 18 using One-way ANOVA variance and Duncan
post-hoc tests.
Results
In this study, 77 health organisations reported experiencing
a total of 588 crises over a three-year period (Fig. 1). A
Oneway ANOVA showed a statistically signicant dierence
in the mean values between health organisations (F=2.126,
p<0.05). The data were broken down into a sum per
institution per crisis type (Fig. 2). A Oneway ANOVA showed
a statistically signicant dierence in the mean values
between crisis types (F=3.050, p<0.01).
Asia Pacic Journal of Health Management 2010; 5: 2 59
Types of Crises Experienced by Health Organisations
Product recall incidents were the most common type of crisis
with 61% of all organisations experiencing them during a
three-year period. A Oneway ANOVA revealed a statistically
signicant dierence in the mean values for incidents of
this type across all health organisations (F=12.098, p<0.001)
(Table 1). Over 50% of chiropractic practices, hospitals
and clinics and all pharmacies organisations experienced
product recall.
Product tampering incidents were recorded for 23.4% of all
health organisations, but were fairly rare in most. However,
40% of chiropractic and 61% of pharmacy organisations
noted this crisis type. A Oneway ANOVA revealed a
statistically signicant dierence in the mean values for
incidents of this type across all health organisations (F=2.249,
p<0.05), however the Duncan’s post-hoc test revealed no
signicant dierences between organisations.
Employee sabotage incidents were recorded for 19.5% of all
health organisations. While fairly rare in most organisations,
31.6% of hospitals experienced this crisis type. A Oneway
ANOVA revealed no statistically signicant dierence in
the mean values for incidents of this type across all health
organisations (p>0.05).
Incidents involving res, explosions and chemical spills
were recorded for 20.8% of all health organisations and
were more of a concern for hospitals and dental clinics,
which experienced more of this crisis type. A Oneway
ANOVA revealed a statistically signicant dierence in the
Figure 1: Average total number of crises experienced over a three-year period by each institution within the dierent
health organisations. Columns with the same alphanumeric are not signicantly dierent.
Figure 2: Average number of crises in dierent crisis areas as experienced over a three-year period by each institution.
b
b
bab abbbab
a
ab
Recall
Tampering
Sabotage
Fire/Spill
Environmental
Financial Loss
Natural Disaster
Informational
Lawsuits
Terrorism
Reputation
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
AVERAGE CRISES PER INSTITUTION
c
abc
ab a
ab
bb
abc
Chiropractic
25.0
20.0
15.0
10.0
5.0
0
AVERAGE CRISES PER INSTITUTION
Physiotherapy
Podiatry
Aged Care
Hospital
Dentist
Medical Clinic
Pharmacy
60 Asia Pacic Journal of Health Management 2010; 5: 2
Types of Crises Experienced by Health Organisations
Table 1: Mean numbers of crisis incidents experienced by health organisations during a three-year period, and
percentages of organisations experiencing these types of crises.
* Means for each health organisation were signicantly dierent if they contained dierent subscripted letters as determined
by Duncan’s post-hoc test with alpha = 0.05.
Health
Organisation
Health and allied health organisations that have experienced the following crisis types
Product recall Product
tampering
Employee
sabotage
Chemical spill
or incendiary
Signicant
revenue drop
Natural disasters Loss of sensitive
information
Damage to
reputation
Mean±SE % Mean±SE % Mean±SE % Mean±SE % Mean±SE % Mean±SE % Mean±SE % Mean±SE %
Chiropractic 2.80±1.59ab 60.0 2.40±1.94 40.0 0.20±0.20 20.0 0.00±0.00 0.0 0.20±0.20 20.0 0.00±0.00 0.0 0.00±0.00 0.0 1.00±1.00 20.0
Physiotherapy 0.13±0.13a12.5 0.00±0.00 0.0 0.00±0.00 0.0 0.13±0.13 12.5 1.25±0.45 62.5 0.00±0.00 0.0 0.13±0.13 12.5 0.13±0.13 12.5
Podiatry 0.40±0.40ab 20.0 0.00±0.00 0.0 0.20±0.20 20.0 0.00±0.00 0.0 0.00±0.00 0.0 0.00±0.00 0.0 0.00±0.00 0.0 0.00±0.00 0.0
Aged Care 0.60±0.60ab 20.0 0.00±0.00 0.0 0.60±0.60 20.0 0.20±0.20 20.0 0.80±0.49 40.0 1.00±1.00 20.0 0.00±0.00 0.0 0.00±0.00 0.0
Hospital 3.58±0.87b63.2 0.79±0.54 15.8 0.95±0.55 31.6 1.58±0.58 47.4 0.68±0.41 15.8 0.21±0.16 10.5 0.58±0.40 10.5 1.05±0.41 42.1
Dental Clinic 0.67±0.42ab 33.3 0.17±0.17 16.7 0.83±0.83 16.7 0.33±0.21 33.3 0.17±0.17 16.7 0.00±0.00 0.0 2.00±1.63 33.3 0.17±0.17 16.5
Medical Centre 1.64±0.39ab 81.8 0.90±0.09 9.1 0.18±0.12 18.2 0.09±0.09 9.1 0.00±0.00 0.00 0.91±0.50 36.4 1.00±0.91 18.2 0.00±0.00 0.0
Pharmacy 8.00±0.75c100.0 2.50±0.77 61.1 0.22±0.13 16.7 0.17±0.12 11.1 0.28±0.16 16.7 0.83±0.57 22.2 0.28±0.14 22.2 0.11±0.08 11.1
Total 3.30±0.44 61.0 0.96±0.28 23.4 0.44±0.16 19.5 0.49±0.16 20.8 0.44±0.13 19.5 0.44±0.17 14.3 0.52±0.21 14.3 0.38±0.13 16.9
mean values for incidents of this type across all health
organisations (F=4.134, p<0.05), but Duncan’s post-hoc test
showed no signicant dierences between organisations.
Incidents involving environmental disasters were recorded
for 11.7% of all health organisations. Of note, 5.6% of
pharmacies (mean 0.11 [-0.12 - 0.35] ± 0.111 SE), 21.2% of
hospitals (0.53 [-0.16 - 1.21] ± 0.328 SE) and 36.4% of medical
clinics (1.18 [-0.81 - 3.17] ± 0.893 SE) experienced this crisis
type. A Oneway ANOVA revealed no statistically signicant
dierence in the mean values for incidents of this type across
all health organisations (p>0.05).
Incidents involving signicant revenue drops were recorded
for 19.5% of all health organisations. Of note, 62.5% of
physiotherapy and 40% of aged care institutions reported
crises in this area. A Oneway ANOVA revealed no statistically
signicant dierence in the mean values for incidents of this
type across all health organisations (p>0.05).
Incidents of natural disasters were recorded for 14.3%
of all health organisations and were relatively rare in all
organisations except aged care and medical clinics. A Oneway
ANOVA revealed no statistically signicant dierence in
the mean values for incidents of this type across all health
organisations (p>0.05).
Incidents involving the loss of condential or sensitive
information were recorded for 14.3% of all health
organisations and were relatively rare in all organisations
except medical clinics. A Oneway ANOVA revealed no
statistically signicant dierence in the mean values
for incidents of this type across all health organisations
(p>0.05).
Incidents involving major lawsuits were recorded for 15.6%
of all health organisations. This type of crisis was experienced
by one medical clinic (mean 0.09 [-0.11 -0.29] ± 0.091 SE)
and two pharmacies (mean 0.11 [-0.05 - 0.27] ± 0.076 SE),
but was noted by 31.2% of hospitals (mean 0.74 [0.02 - 1.45]
± 0.341 SE) and 50% of dental clinics (mean 1.33 [-0.73 -
3.40] ± 0.803 SE). A Oneway ANOVA revealed no statistically
signicant dierence in the mean values for incidents of this
type across all health organisations, however a trend was
indicated (p=0.054).
Only one incident involving a terrorist attack was recorded
for a dental clinic. A Oneway ANOVA revealed no statistically
signicant dierence in the mean values for incidents of this
type across all health organisations, however a trend was
indicated (p=0.098).
Asia Pacic Journal of Health Management 2010; 5: 2 61
Types of Crises Experienced by Health Organisations
Incidents involving damage to institutional reputation
were recorded for 16.9% of all health organisations and
were rare in all organisations except hospitals. A Oneway
ANOVA revealed no statistically signicant dierence in
the mean values for incidents of this type across all health
organisations, however a trend was indicated (p=0.080).
In summary, the number of actual crises experienced by
health organisations was fairly low, but for each crisis type,
certain organisations were clearly exposed to a higher level
of risk.
Discussion
When looking at the average total number of crises
experienced by each institution within the dierent health
organisations (Figure 1), it is apparent that there is a large
amount of variance in the number and type of crises
experienced between dierent organisations. Although
all organisations may experience crises of various types,
the organisational nature of the health system mandates
that dierent health organisations are likely to experience
dierent types of crises and dierent consequences.
Pharmacies were signicantly more prone to crises than all
other organisations apart from chiropractic practices and
hospitals, while podiatry was the least crisis prone. When the
average number of dierent types of crises per institution
were analysed (Figure 2), the model was signicant but there
were few signicant dierences between types. Product
recalls were a standout feature occurring three to ten times
more often than most other types. More useful information
arose when dierent health organisations were matched
with the crisis types.
Product recalls are a common feature in the press since
this crisis type may directly cause injury, illness or death.
Organisations that do not have the administrative capacity
to implement a recall may become insolvent overnight;
even a limited recall may destroy or severely disrupt a small
pharmacy or clinic’s operations as a commercial entity.
Pharmacies were signicantly more likely to experience a
product recall than other organisations with eight Incidents
Per Institution (IPI) over a three-year period. Product recalls
were also pronounced in chiropractic (2.8 IPI), hospital (3.58
IPI) and medical clinic (1.54 IPI) organisations (Table 1).
Indeed, the product-provision aspect of many health services
renders them vulnerable to this crisis type. Pharmacies are
more likely to have normal operations disproportionately
aected by major drug recalls from shelves or from the
public. [9]
Similarly, pharmacies (2.5 IPI) and chiropractic practices (2.4
IPI) were more likely to experience product, equipment, or
service tampering than other health organisations. There
are many concerns about pharmaceutical security including
supply chains, counterfeiting and terrorism [10,11] that are
supported by these ndings. Some medical sta have even
been convicted of product tampering for the purpose of
obtaining narcotics. [12] Each tampering incident, whether
true or hoax, receives widespread publicity, resulting
in ‘dozens of new crimes, much consumer anxiety and
challenges to companies struggling to sort the many false
alarms from true risks to the public’. [13] Limiting product
recalls due to suspect tampering, along with avoiding media
publicity, can assist in minimising these secondary crises.
The incidence of major crises involving employee sabotage
was fairly rare in all organisations, however hospitals and
dental clinics experienced around one incident every three
years. Security professionals believe detected incidents are
merely the ‘tip of the iceberg’ and that organisations must
take a humane approach to sta relations to limit this crisis
type. [14] Less obvious sabotage commonly assumes many
forms ranging from misuse of time, space, resources and
information. [15]
Hospitals were more likely to experience re, explosion
or chemical spill incidents than other organisations (1.58
IPI), however, a third of dental practices also experienced
this crisis type. This is likely to be a result of the size and
level of infrastructure in hospital sites. [16] Smaller health
organisations do not generally deal with radioactive
substances, generator fuel and incinerators on a daily basis
and so are less exposed to potentially hazardous incendiary
and chemical spill incidents.
Incidents due to environmental disasters were very low for
all organisations except medical clinics (1.18 IPI). In Australia,
general practice includes over 33,700 practitioners and is
the essence of the primary healthcare system. On a local
level, medical clinics are confronted with the initial stirrings
of most crises before hospitals become involved. During
the outbreak of Severe Acute Respiratory Syndrome (SARS)
in the period November 2002 – July 2003, 7.4% of general
practices in Hong Kong and 37.5% of those in Canada
ceased to operate. This caused a bottleneck in healthcare
demand resulting in a series of secondary crises including
struggles with added stang, resources, transport and
social discontent. [17]
The data show that physiotherapy practices (1.25 IPI) are the
only organisation to experience a considerable number of
nancial crises. This is inconsistent with the nding that the
public health system in Australia exists in a perpetual state
of nancial crisis, requiring continual support to maintain
62 Asia Pacic Journal of Health Management 2010; 5: 2
Types of Crises Experienced by Health Organisations
standards of care. [18] Organisations providing specic
and limited health services in particular, may be unable to
survive major tests of their infrastructure, nancial health
and logistical capabilities that a precipitous drop in revenue
would produce. This study terminated before the 2008-2009
global nancial crisis and so the eects of this economic
downturn were not part of the data set.
Natural disasters were rare for most organisations except
aged care (1.00 IPI) and medical clinics (0.91 IPI). Aged care
facilities were not left untouched by the severe Mackay
storms of 2008 and the Victorian bushres of 2009 since a
number of facilities were evacuated. The federal government
now requires aged care homes applying for funding to take
natural disaster planning into consideration to ensure the
protection of facilities and assets. [19]
Loss of condential information was relatively unimportant
for most organisations but was relevant for dental (2.00
IPI) and medical (1.00 IPI) clinics. As legal liability insurance
does not cover this crisis type, it can be dicult for small
to medium organisations to recover from the eects. In a
Queensland Government report, vulnerabilities relating
to internet security were, ‘public embarrassment, loss of
public condence, damage to reputation, loss of sensitive
information, nancial loss or litigation’. [20]
While litigation against medical practitioners appears
common, surveyed organisations reported that major
lawsuits were non-existent to rare except in dental clinics
(1.33 IPI). When one considers that dental clinics are usually
small compared to hospital surgical rooms, it may be
assumed that every incident of dental litigation is potentially
a major lawsuit that has the capacity to aect the viability
of the organisation. This makes a denitive comparison
between organisations dicult.
Only one terrorist incident was recorded and that was
also in a dental clinic. While the dierence between being
terrorised by a client and a terrorist act were not clear in
the questionnaire, the view was taken that current levels
of understanding establish a clear dierence between an
isolated threat and an organised campaign. A three-year
time period of data collection may not have been long
enough for this type of infrequent crisis since hospitals are
supposedly at ‘considerable risk for terrorism because of
their mission/purpose...’ [21]
Incidents involving damage to organisational reputation
were rare for all organisations except hospitals (1.05 IPI)
and chiropractic practices (1.00 IPI). Since hospitals have
bed shortages, this risk does not primarily refer to patient
preference. The recent push to introduce hospital report
cards will introduce accountability-based funding that,
in combination with patient preference, constitutes a
signicant looming crisis for unprepared hospitals.
When these crisis incidence results are compared with the
capability of these institutions to address these types of
crises, [22] there are several areas of disconnect (Table 2).
Table 2: Average organisation scores for capabilities that are specic to particular crisis types, where the percentages
indicate the number of organisations that experience the crisis and the cells are shaded to indicate a lack of capability,
some capability, and good capability.
Organisation Type
Crisis Type Chiropractic Physiotherapy Podiatry Aged Care Hospital Dentistr y Medical Pharmac y
Product recall 60% 13% 20% 20% 60% 33% 89% 100%
Product tampering 40% 16% 17% 9% 61%
Employee sabotage 20% 20% 20% 32% 17% 18% 17%
Chem/re hazards 13% 20% 47% 33% 9% 11%
Environmental disaster – 21% – 36% –
Drop in revenue 20% 63% – 40% 16% 17% – 17%
Natural disaster – 20% 11% – 36% 22%
Loss of IP/Info 13% 11% 33% 18% 22%
Major lawsuits – – – – 31% 50% – –
Terror attacks – – – – – 17% – –
Reputational damage 20% 13% – – 42% 17% – 11%
‘–’ indicates less than 10% of organisations experienced this type of crisis
Asia Pacic Journal of Health Management 2010; 5: 2 63
The results from this study are presented as percentages
of organisations that experienced a crisis type within a
three-year period while the capabilities of organisations in
terms of planning are portrayed by shading in each cell of
the table. Notably, allied health organisations show little
capabilities for the crises they already experience. However,
while there is a degree of congruity in health organisations,
several mismatches are clear. For instance, 32% of hospitals
experience employee sabotage, but they have little capacity
to address this. Likewise, 42% of hospitals experience
reputational crises and 89% of medical clinics experience
product recall crises but they each only have some capacity
in this area.
Conclusion
In conclusion, the types of crises experienced by health
organisations and their incidence are widely varied. In
Figure 1, pharmacies appeared the most crisis prone
by sheer volume, however, most of their crises related
to product recalls and tampering. By contrast, a greater
percentage of hospitals experienced more variety in crises.
Several alarming results emerged and they were: i) allied
health organisations are ill-prepared for crises they normally
experience; ii) dental clinics experience a disproportionate
number of crises instances for their size; and iii) there is a
considerable disconnect between what organisations
experience and what they plan for.
Competing Interests
The authors declare that they have no competing interests.
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Types of Crises Experienced by Health Organisations
64 Asia Pacic Journal of Health Management 2010; 5: 2
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