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Old 3rd July 2008, 11:52     #1
Sp0nge
 
privatising ACC

what are people's opinion on the issue of privatising ACC?

(not in terms of Labour=good... national=bad, but just in terms of the issue itself.)

personally i fail to see how making a $10billion public asset (ACC) private can have any benefits for kiwis.

foreign insurance companies would love it though...
and then of course there's the risk of them going out of business and people ending up with no cover.

fuck it, national = evil
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Old 3rd July 2008, 12:03     #2
SpaceCowboy
Here be dragons
 
privatisation has always been a stupid idea imo.
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Old 3rd July 2008, 12:33     #3
crocos
 
Already been tried, failed miserably.

Shit idea IMO.
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Old 3rd July 2008, 12:36     #4
Fitz
 
ACC is a monopoly, they earn far greater than they pay out, hence why competition should reduce the levies paid by businesses or at the least provide lower levies to those companies with lower rates of workplace injury.
As it stands business A and B are in the same industry, business A has had no workplace injuries, business B has many, they both pay equal levies per employee performing the same function.

The benefit I can see is lower levies for those companies who maintain safe work environments, whether that is via training or other means. The less people injured the better imo, injuries cost the tax payer.
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Old 3rd July 2008, 12:39     #5
Toksin
 
Are they actually privatising ACC, or opening up the field to competition, ie so you can sign up with a private company for accident insurance instead of ACC?
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Old 3rd July 2008, 12:45     #6
Beccara
 
A friend of mine hurt her back at work, this large compan still for some reason doesnt use ACC, when i took her to A&E she filled out the acc paperwork whilst on morphine. This added a 2 week delay as ACC had to send the paperwork over to Care Advantage. She needed 6 weeks off work and physio etc, 4months later shes onl just reciving her 80% pay for the time she had off and is still awaiting the $400 in perscription fees she had to pay.

When she hurt her hand playing netball she had 1 day off and $80 of perscriptions, was paid by ACC in a little over a week.
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Old 3rd July 2008, 13:00     #7
blynk
 
Quote:
Originally Posted by Fitz
ACC is a monopoly, they earn far greater than they pay out, hence why competition should reduce the levies paid by businesses or at the least provide lower levies to those companies with lower rates of workplace injury.
As it stands business A and B are in the same industry, business A has had no workplace injuries, business B has many, they both pay equal levies per employee performing the same function.

The benefit I can see is lower levies for those companies who maintain safe work environments, whether that is via training or other means. The less people injured the better imo, injuries cost the tax payer.
Quote:
Originally Posted by Herald
The report also noted that average premiums in New Zealand were lower than Australia, despite New Zealand offering more extensive cover.
....
said the report mirrored independent research by PricewaterhouseCoopers that found Australian employers were charged 250 per cent more in levies as a proportion of wages.
We need more neutral sources of information to get the true stories.
You can't really believe exactly what Labour says or National says.
Sometimes listening to some of the minor parties are better.
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Old 3rd July 2008, 13:04     #8
MadMax
Stuff
 
Quote:
Originally Posted by Fitz
ACC is a monopoly, they earn far greater than they pay out, hence why competition should reduce the levies paid by businesses or at the least provide lower levies to those companies with lower rates of workplace injury.
As it stands business A and B are in the same industry, business A has had no workplace injuries, business B has many, they both pay equal levies per employee performing the same function.

The benefit I can see is lower levies for those companies who maintain safe work environments, whether that is via training or other means. The less people injured the better imo, injuries cost the tax payer.
i thought acc did yearly reviews of a company's safety practices etc (going through injury reports, staff safety training, employee interviews ...) and offered lower rates accordingly.
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Old 3rd July 2008, 15:57     #9
combatspoon
 
Quote:
Originally Posted by Toksin
Are they actually privatising ACC, or opening up the field to competition, ie so you can sign up with a private company for accident insurance instead of ACC?
Opening up the field to competition
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Old 3rd July 2008, 16:19     #10
Waldo
Pornstar
 
I thinks its a bad idea. Health care should never be a competition, we should always get the best care possible, if we are not happy with our service we need to change the service, I for one liked the service I received over the past 12 months from ACC...no complain of product happy to pay levy
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Last edited by Waldo : 3rd July 2008 at 16:23.
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Old 3rd July 2008, 16:43     #11
JP
 
Horrible idea. Just take a look at the fuckup that is America's health care system to see that privitisation doesn't help anything. American's pay more per capita than anyone else, and have a terrible system, unless you're wealthy (which is the point). There's a time and a place for private companies and the game they like to play. That place isn't one involving health care. I'd put water, police and a few other things in there too.

I don't get everyone's obsession with privitisation 'competition'. Especially given NZ's track record with privitsation. Competition leads to lower quality at lower cost. Which is great in some situations. But not this.

Last edited by JP : 3rd July 2008 at 16:46.
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Old 3rd July 2008, 16:58     #12
crocos
 
Quote:
Originally Posted by JP
There's a time and a place for private companies and the game they like to play. [...] I'd put water, police and a few other things in there too.
<insert reference to sci-fi movie set in Chicago>
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Old 3rd July 2008, 17:20     #13
ZoSo
 
Quote:
Originally Posted by combatspoon
Opening up the field to competition
That doesn't quite fit into labour lackeys "secret agenda" mantra, though man.

..and lol @ Sp0nge. Couldn't even let one answer in before he trashed his own 'geniunely interested' question
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Old 3rd July 2008, 18:32     #14
Epox
 
It happened last time National was in power or so someone told me couldn't remeber much but apparently most of the big insurance companies have some sort of ACC cover type stuff ready to go the moment National unfucks the rules.

Also on a side note that compusory third party insurance that's effective in other countries that they want to do here is not the same I do believe what that insurance covers is damage to the person but not property damage, I think that's right I can't remeber the memo too well.
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Old 3rd July 2008, 19:26     #15
Golden Teapot
Love, Actuary
 
Quote:
Originally Posted by crocos
Already been tried, failed miserably.

Shit idea IMO.
Surely you mean something like, succeeded spectacularly?

ACC was revolutionised by the need to compete. And, it's almost managed to keep it up all these years on.

Sure, private companies made lots of money. However, premiums went DOWN and care was IMPROVED. Why? The first one is due to competition. The second one is due to the fact that if you fix people fast then they go back to work quickly too.
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Old 3rd July 2008, 19:29     #16
Golden Teapot
Love, Actuary
 
Quote:
Originally Posted by Epox
Also on a side note that compusory third party insurance that's effective in other countries that they want to do here is not the same I do believe what that insurance covers is damage to the person but not property damage, I think that's right I can't remeber the memo too well.
ACC provides the bodily-injury component here. The money is collected through the car registration. Everyone pays the same amount no matter what each person's level of risk is - fundimentally this is not fair. So, this form of insurance is already compulsory.

What the government is intending is to require everyone to have insurance for the property damage piece too.
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Old 3rd July 2008, 19:33     #17
Golden Teapot
Love, Actuary
 
Quote:
Originally Posted by Waldo
I thinks its a bad idea.
It would be a very bad idea if ACC ran like a modern and efficient insurance company. I'll give them credit, they are trying e.g. they have a Silver Award under the Baldridge framework. However, they are subject to political interference and absurd attacks by the media. So, they're inefficient, and private insurers could do better.

A state insurer should be better. But, in the real-world this never works out.
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Old 3rd July 2008, 19:36     #18
AxioN
 
I think it was made explicitly clear when this aired the other night that it wasn't privatisation of ACC, but opening the industry up to competition.
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Old 3rd July 2008, 19:42     #19
Draco T Bastard
 
Quote:
Originally Posted by Fitz
As it stands business A and B are in the same industry, business A has had no workplace injuries, business B has many, they both pay equal levies per employee performing the same function.
Thank you for elucidating exactly how insurance works. We would never have known this without your vast knowledge.

/sarcasm

Lew here makes a good argument. Rebut his logic if you can.

NZ's ACC is the cheapest, most comprehensive and most efficient insurance cover in the entire world - why would we want to fuck with it?
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Old 3rd July 2008, 19:56     #20
Fitz
 
Just because it is good doesn't mean it can't be improved does it?
so fuck up
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Old 3rd July 2008, 20:00     #21
Golden Teapot
Love, Actuary
 
Quote:
Originally Posted by AxioN
I think it was made explicitly clear when this aired the other night that it wasn't privatisation of ACC, but opening the industry up to competition.
Sure, but the difference between the two is moot.
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Old 3rd July 2008, 20:27     #22
Draco T Bastard
 
Quote:
Originally Posted by Fitz
Just because it is good doesn't mean it can't be improved does it?
so fuck up
All privatised health care systems in the world cost more than the NZ one. Yes, ours could possibly be improved but the evidence is that introducing privatisation to it is only going to make it worse.
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Old 3rd July 2008, 20:28     #23
fidgit
Always itchy
 
Fitz, the very first thing that would happen if you offered different rates to different companies is that companies would try whatever they could to avoid reporting accidents or injuries. Why would they want to cost themselves more money if they can bully a staff member into lying that they cut their hand off over the weekend in the shed working on their boat, instead of at work on some dodgy piece of machinery with no safety guards.

Currently, ACC does not penalise anyone if someone injures themselves. They refer to themselves as a 'zero blame'. What you are suggesting is that ACC spend time to investigate the causeof each claim. This would increase their costs. Why do you want them forced to spend more money?

(nb. This doesn't mean a company is not investigated if someone gets fucked up at work - but that's the Department of Labours domain, and that won't be changing either way).

ACC already offer a discount on your levies, at 3 levels (iirc, it's about 2%, 4% and 8% but I can't remember exactly), based on a 2 yearly audit under the Workplace Safety Management Program. They have third party auditors come and look at things like what your doing to minimise hazards and control injuries, the training you're providing, and any 'extra' things you might be doing to help your staff out.

ACC also put a lot of effort into trying to make sure they never have to help people. They provide training to companies, and things like outlines for them to put Health and Safety programs into place. They've put a lot of effort into 'keeping fit and healthy' initiatives such as ActiveSmart. I don't expect any of their competitors to do any of these things with their shareholders money.
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Old 3rd July 2008, 21:06     #24
Sp0nge
 
Quote:
Originally Posted by fidgit
ACC also put a lot of effort into trying to make sure they never have to help people. They provide training to companies, and things like outlines for them to put Health and Safety programs into place. They've put a lot of effort into 'keeping fit and healthy' initiatives such as ActiveSmart. I don't expect any of their competitors to do any of these things with their shareholders money.
very good point you raise there^

ACC's focus is not just profits....
insurance companies are only in it for the money.

also, ACC covers everyone, from a baby to a granmother, those with an income and those without....
this can only work if the majority contribute to the same bucket.
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Old 3rd July 2008, 21:31     #25
Gentl e
 
Quote:
Originally Posted by AxioN
I think it was made explicitly clear when this aired the other night that it wasn't privatisation of ACC, but opening the industry up to competition.

Quote:
Originally Posted by Golden Teapot
Sure, but the difference between the two is moot.
I thought the wrist guard thing on the mountains was a pretty good idea, not quite so sure an insurance company would think it cost efficient
enough.
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Old 3rd July 2008, 21:32     #26
Delphinus
 
I know as a geek group we find this mentality hard to follow (myself included of course) but maybe its time to use the "If it aint broke, dont fix it".

I'm quite happy with ACC. I've had to use them in the past and very fast turnrounds and very easy to deal with..
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Old 4th July 2008, 00:06     #27
Word
 
Im happy with ACC they have helped family members and friends.

Selling it is dumb.

Making it private would mean its all about $$$$$. So then they will be some crooks trying to loophole and lawyer their way out.

Last edited by Word : 4th July 2008 at 00:08.
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Old 4th July 2008, 01:02     #28
Solvent
 
I don't currently have the motivation to engage properly in this debate, but I am curious whether many here have read much of the academic literature surrounding the privatisation of ACC?

Quote:
Originally Posted by Andrew Stritch, Bishop's University, Quebec
Other than conventional assertions about the inevitable superiority of the private sector over the public sector, the insurance industry's case for greater efficiency and lower costs cannot overcome two obstacles. The first is that ACC's administrative costs are recognised to be lower than in a multi-insurer environment largely because of the extra expenses associated with competition. Second, the move from pay-as-you-go (PAYG) to full funding, which is a prerequisite for privatisation, will impose substantial cost increases on the system and will be reflected in higher than necessary premiums for employers and individuals. Full funding is essential for private insurance companies, but is redundant for a government agency such as ACC where the legitimate use of public authority ensures that commitments to accident victims will be honoured. ACC can operate on a financially sound basis with lower costs and lower premiums than the private sector, thanks to PAYG. Industry scaremongering about "unfunded liabilities" is simply an inappropriate application of a private insurance concept to the public sector where it is irrelevant.

In sum, privatisation would result in a system characterised by higher costs and/or lower benefits, where workers are vulnerable to choices made by their employers, and employers are vulnerable to choices made by insurance companies. Cross-subsidies would not be eliminated; there is little evidence that safety would be improved; and the resulting system could be a lot less fair to certain segments of society such as non-earners, general taxpayers, small businesses and victims of occupational diseases. Whatever the alleged benefits of privatisation in other sectors of the New Zealand economy, in accident compensation the consequences would be overwhelmingly negative.
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Old 4th July 2008, 04:33     #29
Golden Teapot
Love, Actuary
 
Quote:
Originally Posted by fidgit
I don't expect any of their competitors to do any of these things with their shareholders money.
I expect private insurers would be doing exactly this. And, they would be aggressively acting to intervene to treat people as rapidly as possible. Why? Because exactly these types of behavior lead to higher profits.

Actually, there are more reasons to do this beyond profits. The vast majority of insurance companies (and other companies) have a social conscience. However, too few people here will believe this so I may as well simply observe that seeking profit leads to the behaviours some here attribute to the benevolence of the State.

It is also lost on most here that ACC do run themselves as if they were a private insurer; to the maximum extent they can do this. For example, they do charge premiums that aim to make a profit.

People who don't have accidents are profitable (obviously). Investing to reduce the number of claims is thus very definitely a good idea.

Case in point, the private sector experienced roughly half the claim rate that ACC experienced in the period immediately preceding the year the market was open to competition. This didn't happen by chance. Private insurers introduced modern employer safety programmes (that many here attribute to the State); amongst a great many other things.

Why? Because if preventable accidents are avoided then profits are bigger.

People who are treated and sent back to work as fast as humanely possible have cheaper claims overall. If surgery is needed a private insurer will make sure this happens fast. This means that it absolutely makes sense to send people to private hospitals, or to do whatever else is needed to make sure that medical treatment is administered very quickly. Paying someone 75% of their salary whilst they languish in misery at home waiting for straightforward surgery simply is not very smart; it takes the likes of a government department to not notice this is dumb.

Private insurers also compete on being able to get the premiums right. Many employers thus benefit from lower premiums. Under competition, insurers that don't invest to get this right end up with no customers ,or almost elusively bad customers; both are insolvency scenarios.

The benefits are the same (they're legislated), treatment comes faster (speed is somewhat optional and so profit motivation becomes important), and the premiums are lower (for most people). To be clear, this means private is cheaper and better.

Of course, I don't have to think too hard to imagine this. Since, this is exactly what happened last time. Some here will counter with "it shouldn't be", or "it won't be". And, if it's that twit on my ignore list there will be 200 pages of "evidence" supporting their position tabled (selected from for 10 million pages of facts showing the reverse). The straightforward fact is that "IT WAS BETTER".

The only question is whether private SHOULD be better? Well, it shouldn't be. A State monopoly run as well as a private insurer would be better. Unfortunately, ACC is not allowed to run like this.

ACC today is far better than it was in the late 1990s. There's no doubt about that. However, it's still not in the league of private insurers; not because they don't have the best people (there are great people there), this is all down to the reality of government trying to run this type of venture.

Politicians tamper with and ruin so many things. ACC is subject to the same inane acts of political interference as everything else.

Yes a no-blame 24/7 compulsory and comprehensive accident insurance scheme is a good idea. However, nothing is changing in this space, so we may as well ignore this aspect.

Well, that my opinion anyway.
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Old 4th July 2008, 04:41     #30
Golden Teapot
Love, Actuary
 
Quote:
Originally Posted by Solvent
I don't currently have the motivation to engage properly in this debate, but I am curious whether many here have read much of the academic literature surrounding the privatisation of ACC?
How about making sure your quoted academic took the time to have a look at what actually happened last time the market was open to competition?

This way, normal scientific method can be used to test the hypothesis being put forward. And, in this case, the work could then be relabeled and attributed to the fiction section of the library.
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Old 4th July 2008, 04:45     #31
Golden Teapot
Love, Actuary
 
Quote:
Originally Posted by Gentl e
I thought the wrist guard thing on the mountains was a pretty good idea, not quite so sure an insurance company would think it cost efficient
enough.
Claims from broken wrists are expensive. Most people who have two broken wrists can't work for ages. Whilst they can't work they'll be on a benefit of 75% of their salary. Lots of people snowboard and lots of people break their wrists doing this. So, the benefit cost is massive. Advertisements, and other forms of education, even free giveaways, are relatively speaking cheap, and are worth a bet they'll have a positive impact. So, an insurance company would be giving this a go too.
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Old 4th July 2008, 06:42     #32
sky_
 
Quote:
Originally Posted by Golden Teapot
Actually, there are more reasons to do this beyond profits. The vast majority of insurance companies (and other companies) have a social conscience. However, too few people here will believe this so I may as well simply observe that seeking profit leads to the behaviours some here attribute to the benevolence of the State.
Your posts are awesome.
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Old 4th July 2008, 09:27     #33
JP
 
Good argument GT. But you didn't really overcome any of the evidence and arguments supplied to the contrary. Still good to hear a decent argument from the other side of things.

Still. Doesn't really convince that this would be a good change.
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Old 4th July 2008, 11:10     #34
JP
 
Ok this ones a question. If it does open up to private insurers. Will this lead to the 'best' insurance candidates being cherry picked by the insurance companies. Leaving ACC with mostly high risk people? Basically crippling it, and making it a burden on the tax payer?
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Old 4th July 2008, 14:08     #35
Sp0nge
 
Quote:
Originally Posted by Golden Teapot
Because if preventable accidents are avoided then profits are bigger.
insurance company profits depend on them continually raising premiums, and limiting the number of claims they pay out...

the number of accidents is not as important to them as the number of claims.
...take car accidents as an example: many minor accidents never get reported because the Excess in the insurance policy always favours the insurance company...as does the no claim bonus etc...there are disincentives to making a claim.

how often do you see insurance companies advertise that you shouldnt drink and drive, or smoke etc??? do you think they really care? lol

they only care in terms of making more dollars. period....
and they are not going to spend as much as ACC on preventative education programmes.

of course we all know GT has a vested interest
after all, he works in insurance...
and it is the people who stand to gain from privatising ACC that will be pushing that bandwagon.
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Old 4th July 2008, 14:29     #36
JP
 
The more I think about this, the more it seems that really the only people with something significant to gain are insurance companies.

I mean who cares if ACC makes a profit? We own it. All we'd be doing is giving some of that profit to aussie owned companies to take the money off shore.

I think this will hurt National. And good. Not that I don't think they've got it in the bag. But you never know, more and more of this shit is going to come out. Though to be honest, I don't know if I can take another 3 years of retarded whining. Better to take the pain now and have labour back in next term and have people fuck up for a few years before they start whining again.
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Old 4th July 2008, 14:51     #37
blynk
 
Yeah, if anything was privatised, it would nice if they said only companies that have at least 50% NZ owned can apply. Of course that would narrow it down to ...... ACC
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Old 4th July 2008, 16:59     #38
Golden Teapot
Love, Actuary
 
Quote:
Originally Posted by JP
Ok this ones a question. If it does open up to private insurers. Will this lead to the 'best' insurance candidates being cherry picked by the insurance companies. Leaving ACC with mostly high risk people? Basically crippling it, and making it a burden on the tax payer?
Risky people, by your implicit definition, are those that need high premiums. So long as they are willing to pay these, and so long as you insure a few of them to even out experience over time then the customers are not risky from an insurance perspective.
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Old 4th July 2008, 17:05     #39
Golden Teapot
Love, Actuary
 
Quote:
Originally Posted by JP
The more I think about this, the more it seems that really the only people with something significant to gain are insurance companies.
Well you're half right. Last time this happened private insurance companies made a lot of money. They did this whilst lowering premiums and improving service to customers. How? They had far more efficient expense structures than ACC of the time.

Really, everyone benefited. And, this improvement has stuck to some extent since ACC does its best these days to run efficently. So, the expectation is that it will be tough to make money this time around.
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Old 4th July 2008, 17:11     #40
Golden Teapot
Love, Actuary
 
Quote:
Originally Posted by JP
I mean who cares if ACC makes a profit? We own it.
Looks at it like this, ACC might make $1 of profit on a premium of $100.

A private insurer might make $5 profit on an $90 premium whilst still delivering the same benefits to the customer, and taking better care of their staff, and taking better care of the community and doing better by the environement.

As a customer, which premium would you like to pay?
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