Strategic Plan for a Small Medical Practice

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Executive Summary

Upon careful examination of the facts at hand, several recommendations for the small medical practice here being discussed do indeed develop. The first areas of study involve the external environment in which the small medical practice operates, especially as opposed to the internal environment, which is discussed elsewhere. Of particular and immediate concern is the changing population in the United States of America at this present time practically on the eve of the year 2014. The increasingly large and proportionally increasingly Hispanic population will present challenges from the external environment with which the small medical practice must deal. In addition, the Patient Protection and Affordable Care Act of 2010 comes more fully into its own power in the year 2014, and thus, the small medical practice must make itself equipped to handle a larger volume of patients as greater and ever greater numbers of potential patients find themselves with access to healthcare in ways that were not previously viable. That many of the previously uninsured are likely to be Hispanic, based on studies, is also of note when the discussion turns to areas of best preparing the small medical practice to go forward in its journey toward fulfilling its mission.

Mission, vision, values, and of course key stakeholders are also areas that need to be addressed in order to determine a small handful of executive recommendations proposed to the small medical practice which is here analyzed. In some ways, it makes the most sense, to begin with, the key stakeholders, as this can be considered an area that bridges the divide between the company’s external environment and its internal environment. These key stakeholders were one to list them in an orderly fashion, are: the owners of the small medical practice, the patients who use the small medical practice, the community in which the small medical practice is situated, the vendors of medical supplies that provide the small medical practice with the disposable and other tools with which to perform its duties, and the health insurance companies who are often the means through which the small medical company gets paid. The mission, vision, and values are equally important to the small medical practice’s internal environment, and all three of these areas could use tightening and serious revision to more fully reflect upon the current ways in which the small medical practice goes about its business. Thus the above suite of recommendations will be presented in detail below.


Truly, with any discussion of any topic whatsoever, it is necessary first of all, to begin with, the broadest possible precept upon which to base one’s argument, and this is equally applicable in the present case as elsewhere. Nevertheless, arguments themselves are primarily a human phenomenon, so far as it may be known at this time, and thus the discussion can henceforth be narrowed to only that of human affairs. No person can live a secure life without proper medical care, for of course illness may befall anyone at any time. Therefore, societies of all varieties have constructed various systems to help mitigate the risks involved simply in being human, from the simple advent of specialists in medicine, be it ancient or modern medicine, to the elaborate systems by which those in some nations in the current era receive socialized healthcare. Yet it becomes patent, upon examination, that nowhere has the state of healthcare become quite so byzantine in ornateness and complexity as in the United States of America, where the rather halfway measures of the Patient Protection and Affordable Care Act have now created a confusing labyrinth whereby potential patients must weigh the various options available to them from a variety of health insurance providers, be those providers part of the new system or the same providers available previously to those employed with jobs that provide benefits or to those who are elderly, indigent, or disabled such as Medicare, Medicaid, and state or local programs. This confusion echoes out not just to patients but also, it must be said, to medical practices as well, from large multi-hospital conglomerations of interest to small, nearly minuscule by comparison medical practices. In spite of the current and ongoing changes brought about by the changes to national healthcare, however, it can be seen that the Patient Protection and Affordable Care Act, despite the challenges it imposes by not being a single-payer system, does not alone pose the only threat to the ongoing health and financial wellbeing of small medical practices. Instead, it becomes necessary to weigh and compare the relative contribution of various factors to the livelihood of such small medical practices, and of one particular case study of a small medical practice in particular. In the instance of the small medical practice of which the author is a part, a thorough examination of both the external environment and the internal environment, which includes the key stakeholders and the value chain for the business, yields an understanding that going forward, the ideal recommendations are those that support the existing lines of work while at the same time also enhancing new potential streams of revenue from patients and insurance payments alike.

External Environment and Key Strategic Issues

External Environment

In order to consider the relevant portions of the issue of what tack the small medical practice in question, it is instructive to take the external and internal environments as two halves of a whole that is larger than the sum of its parts, and to do this, first, the external environment must be examined with an eye to key strategic issues. Turning to one matter, it is obvious that the external environment of this small medical practice is immersed in a larger ongoing transition facing the United States of America in the end of the year 2013 and going forward, in that the population of the United States of America continues to grow and grow, particularly with respect to minority groups such as those of Hispanic origin, who may eventually no longer even be a minority in the technical mathematical sense, though of course often minority status is best defined by means of components of entrenched disenfranchisement rather than in absolute numbers. Any small medical practice must be aware that the population which it serves may be changing and shifting in upcoming years. Murdock (2012) states this aspect of the external environment thus: “The Hispanic population has consistently grown in the United States for the past several decades” (p. 20), a summary with which Suro and Passel (2003) could hardly help but agree, given that they describe this exact issue at length. Taken together, this evidence supports the notion that the small medical practice is likely to face increasing numbers of patients of Hispanic origin in the upcoming years. However, to consider the population served without comparison to competitors in the field of medical practice would be sheer folly, as goes without saying.

Another vital component of the discussion of this small medical practice’s external environment is its competitors. Porter and Teisberg (2004) discuss the ways in which competition between small medical practices in recent years as patients begin to become more educated, thanks to the internet, and thus spend more time and effort seeking out second opinions and better medical care. To sum up the trouble with this, it is obvious to see that if patients feel so free to switch between doctors, small medical practices will have to strive especially hard to be appealing in every respect from the doctors and nurses to the receptionists and even the décor. Though perhaps it may seem rather strange to discuss such issues as the way in which the medical offices are decorated, it is also true that it is important to give patients an impression of comfort and modernity from the get-go. Thus it is obvious that the external environment in which this small medical practice finds itself competing can have a serious impact that leads even to suggestions of directions to take concerning the key strategic issues.

Key Strategic Issues

One of the obvious primary key strategic issues facing the small medical practice being discussed at present is the ways in which that small medical practice will adjust and adapt to the dramatic increase in the reach of the henceforth gradually implemented Patient Protection and Affordable Care Act scheduled to begin on the first of January, 2014. Predictions seem to be that the state of the act is such that it will create a dramatic increase in the number of insured patients in the United States of America at the beginning of next year. As Rak and Coffin (2012) so succinctly summarize the issue at hand, “The main goals of PPACA are to minimize the number of uninsured Americans and make healthcare available to everyone at an affordable price” (p. 317). Even small medical practices will be affected by this push to make healthcare available to all. Furthermore, a detailed reading of the text of the Patient Protection and Affordable Care Act itself yields a similar interpretation that many, many more people in the United States of America will wind up with the healthcare coverage that enables them to seek proper and even optional medical treatment than ever before (Affordable Care Act, 2010). Thus it would behoove any small medical practice to take into account the possible and indeed quite likely influx of greater numbers of patients than had previously been seen. The small medical practice discussed here must ensure that it is equipped to handle an increased volume while at the same time ensuring that it does not neglect another of its key strategic issues which must be addressed—namely, its relative lack of resources.

Even compared to the other medical practices in its locale that could be likewise considered small, the medical practice evaluated here struggles with a lack of resources. Whereas this may at first appear to be more of an internal issue than an external one, the fact is that the lack of resources would not be a problem were it not for the fact that other small practices locally have access to greater resources. Thus, the key strategic issue involved can be stated as a need to balance the possible increase in both the number of patients seeking care and the number of procedures, tests, and doctor or nurse hours requested by each patient with the knowledge that funds, space, and staff are not unlimited. Eventually, of course, it can be hoped that the growth and expansion of the practice will outpace the restrictions on serving patient needs and concerns, but at least for the short term, it is important to keep in mind at all times in this discussion that resources are limited. This assertion naturally gives rise to another facet of this analysis, which is the ways in which the external environment and the key strategic issues intersect and thus generate a fuller picture.

Connections Between the External Environment and the Key Strategic Issues

Some obvious connections can first be drawn between the nature of the changing external environment in which this small medical practice operates and the key strategic issues facing it in this day and age. For one, the relationship between the growing population and its Hispanic elements and the Patient Protection and Affordable Care Act of 2010 should be clear. Murdock (2012) explains the situation at length, beginning thus: “Hispanic families, mainly the children, are affected by being uninsured and how the Patient Protection and Affordable Health Care Act will affect them” (p. 19). The work goes on to explain that the above-average size of a Hispanic family in the United States of America, combined with a below-average income for this group of people, means that some Hispanic families, including children, will now be gaining access to low-cost health insurance for the first time. This shows that any small medical practice operating today must be aware that there may be an upcoming influx in the number of Hispanic children being seen at such clinics. One obvious angle to consider is the prevalence of Spanish-speaking staff members, and yet this need is perhaps overstated compared to the simple idea of having inter-culturally competent staff who avoid prejudice or stereotyping. Though it could be hoped that this is already the case, some staff members with less than ideal attitudes may already be entrenched in the business. Indeed, in some respects, the staff consists of not only employees but even key stakeholders in the organization.

Key Stakeholders and Their Relationships to the Organization


Before considering the role of the staff members in this small medical practice, it would behoove anyone analyzing this situation to look first at those who have the greatest share of both an interest in the medical practice and the onus of responsibility to ensure that it continues to run as well as possible. Yet in spite of this nigh obligation to continue reforming the business to evolve it in a direction that will prove both fruitful and productive, at times, owners can be resistant to creating change, often out of fear or uncertainty. Crosson et al. (2005) describe the role that owners can have in aiding or even hindering such change as introducing an electronic medical records system into the practice of a small medical clinic, explaining that, “The field researcher interviewed the physician owners of the practice, the office manager, the head nurse, a medical assistant, and a receptionist and asked each interviewee to describe a recent practice change” (p. 307) and subsequently unearthing a veritable plethora of forms of resistance to the proposed change. Such antipathy toward an open discussion of modifying or adapting a medical practice’s means of performing tasks is natural and to be expected. Indeed, it would be surprising if those who had the most stake in the continuing health of the organization did not harbor some trepidation over the matter of altering what had been done in the past with reasonable success. Yet to move forward, it is necessary that owners and other key stakeholders put aside their resistance in order to best serve those who, in one sense, are the most invested stakeholders; for, of course, those most invested will always be the patients who depend upon the small medical practice for their care.


The patients have every reason to consider themselves key stakeholders in any small medical practice, the one discussed here included, though of course oftentimes their only means of influencing decisions by those with more power in the practice can be “voting with their feet” by going elsewhere. In truth, it turns out that patients all too frequently consider cost as a primary criterion where their health is concerned, though this tendency can yet be mitigated when patients are faced with life-threatening diseases such as cancer. Yet ultimately, any small medical practice must be prepared to take into account the heavy emphasis that many patients may place on comparing costs between clinics and even between different health treatment options depending upon the degree of coverage afforded by their healthcare plans. Though Freidson’s (1961) analysis of patients’ views toward their medical treatment and prepaid healthcare plans are, it can be said, not terribly recent, indeed there is value to be gained from a thorough investigation of his findings. The results of such an endeavor are that the reader inevitably comes away with a sense of cost as a primary consideration to patients, whereas naturally, the viewpoint of those working at a small medical practice and dealing with patients can tend to be focused on providing more care and making more appointments “just in case,” rather than listening to patients when they say they are struggling with the financial components of continuing to receive treatment that may or may not be necessary. Thus, small medical practices would do well to ensure that their staff communicates effectively with patients concerning those patients’ actual needs rather than perceived needs according to the doctor or other staff. Similarly, Sackett (2002) conveys a certain vehement disdain for preventive medicine, stating that, “Preventive medicine displays all 3 elements of arrogance” (p. 363), and Berger (2002) also finds arrogance among physicians in general. Thus it can be seen that in the past, patients’ needs have indeed been neglected by the larger medical community in favor of either enhancing cash flow to practices or merely ceding control to overzealous physicians. In order for any small medical practice to continue to thrive in a day and age where the external environment is characterized by increasingly large degrees of freedom in patient choice, the internal environment must reflect this incontrovertible fact that patients, of course, can always take their business elsewhere. However, also not to be neglected is the notion that no patient lives in a vacuum; rather, each patient is part of a larger community in which that patient takes part.


The community in which a small medical practice finds itself immersed is no less important than either the patients or the owners as a key stakeholder. A sense of community can hold together a locale in which a small medical practice exists, ensuring that word of mouth transfers patients to the practice just as surely as would referrals or other means. Though many small medical practices, it can indisputably be said, gain from being in complexes of other small medical practices with varying and diverse specialties, it is also true that the competition is higher under such circumstances. Studies seem to have thus far neglected to investigate the relative health of small medical practices located in such complexes as compared to, for example, those placed in residential areas, yet this would be an interesting topic of research were anyone to undertake it. Of particular note, given the United States of America’s rather high degree of religiosity in comparison with other developed nations, would be whether proximity to a church, with its attendant tightly knit community, would be likely to increase business to a small medical practice. However, since such data is at this time unavailable, it will be a matter left to speculation that the common wisdom of orienting oneself toward medical complexes may, in fact, do more harm than good for a small medical practice. Regardless, a small practice exists not only in relation to its geographical community but also in relation to the larger medical community, including vendors.


Vendors provide the incontrovertibly indispensable role of ensuring small medical practices and large medical practices alike have access to medical supplies, and this is what causes them to be a key stakeholder in the business of the one particular small medical practice discussed here. Yet at times, it can even be said that far from vendors being at the service of doctors, nurses, and patients, instead, they help only themselves, often at a cost to those to whom they are meant to be helping. Koppel and Kreda (2009) prepare a rather scathing report of the ways in which vendors can commit acts so morally reprehensible that they come near unto virtually defrauding small and even large medical practices: “Health care information technology (HIT) vendors enjoy a contractual and legal structure that renders them virtually liability-free . . . This contractual and legal device shifts liability and remedial burdens to physicians, nurses, hospitals, and clinics . . . “ (p. 1276). It becomes apparent through such reports that a small medical practice must take action to create measures that help ensure that it is protected from the potential onslaught of liability suits should equipment malfunction lead to patient distress or even worse outcomes, such as injury or death. However, all of this must be done while still respecting the very real role that vendors have to play in determining the actions of a small medical practice. Yet vendors are far from the largest entities that have power over small medical practices.

Insurance Companies

The largest and most looming specter over the domain of small medical practices is indubitably that cast by the powerful sway exerted by insurance companies. Health insurance companies can be so vast that at times it seems that even the entirety of health economics revolves around them. Sloan and Hsieh (2012) detail the ways in which insurance companies play a role in health economics, rightly pointing out that such entities often have considerable power over determining the terms under which care is performed and treatment is given and received, particularly where small and relatively powerless medical practices are concerned. Therefore it is obvious that small medical practices are somewhat at the mercy of insurance companies, forced to accept the framework in which the largest serving companies in the local area operate. The only solution may be for smaller medical practices to band together and present a united front to defy the insurance companies’ overbearing presence, and yet this feat is quite unlikely to happen simply due to the economies of scale under which large insurance companies operate and to which small medical practices, even when joined together as a single force, are not privy. Though this phenomenon is part of the external environment in which in a small medical practice operates, it is of necessity to consider it as part of the internal environment here simply due to the fact that insurance companies are, in fact, stakeholders of the small medical practice in one sense. However, in spite of this stakeholder status, insurance companies can be seen as being less of a collaborative partner with the small medical practice and more of a dictator of terms. They are less of a full partner than a parent to the small medical practices—perhaps benevolent at times, but ultimately in control of what occurs under their auspices. With their ability to easily rubber-stamp or deny any claim, insurance companies will always hold power over small medical practices that those practices may naturally resent at times. In spite of this resistance, though, it is important that small medical practices keep in mind, to put it in colloquial terms, upon which side their bread is buttered. Insurance companies will always ultimately hold the power to dictate terms. However, with the relationship between insurance companies and small medical practices, as with other aspects, it is also important to take into account the value chain analysis.

Value Chain Analysis

Primary Resources

The primary resources to which this small medical practice has access mainly include the established clients and stream of revenue that comes from its family care and general practice aspects. This is as it should be for a small medical practice, as such services have already been proved time and again to be valuable, imitable, and sustainable. Burns (2002) describes primary resources as forming a key role in the value chain for healthcare services. This shows that in order to most fully evaluate the value chain for a small medical practice, primary resources ought to be the first area of consideration. Though such insights perhaps seem facile, it is, of course, necessary to include them in the details of any analysis rooted in the value chain, for the primary resources of a small medical center create most of its value. However, the primary resources available do lack one useful component, which is a rarity. This is where some of the areas in which the practice can be considered merely competent, rather than primary specialists, can help fill a niche.


The small medical practice under discussion here has also been venturing into the area of providing expert medical testimony to various law firms and insurance companies, which is a service for which there is an established viable market. Though this is a secondary, and not primary, stream of revenue, nevertheless, it is an important area in that it is relatively rare. Not all small medical practices provide such services in addition to the expected services involved in patient care. To move into this area of rarity was a wise move, and going forward, the decision should be sustained by any future leadership decisions that might arise, for it is key to the practice’s strategy. Thus this supplementary area helps to flesh out the outputs of the value chain for the small medical firm, though of course naturally it can only be considered an area of competence and not a true primary resource. Yet there is more still that both can be done and is being done, particularly when the discussion turns to capabilities, for recent developments have shed light on new ventures for the practice.


In the not too distant past, this small medical practice determined that it had the capability to deliver an additional service aside from its usual medical care and some amount of expert medical testimony. This additional service consisted of a few cosmetic medical procedures so that the practice could generate revenue on a relatively simple basis compared with the oftentimes Kafkaesque struggle of obtaining the approval of health insurance companies. The optional procedures introduced are Botox injections to reduce visible wrinkles, minor hair removal procedures such as electrolysis, and components of weight loss treatments. For these services, the beauty lies in the fact that few additional tools or additional rooms are required; the Botox injections, in particular, can be done even with the patient sitting up in a regular chair in an exam room, fully conscious, and require only the purchase of the additional needles and syringes needed besides the actual vials of botulinum toxin themselves. Though some additional training of staff was necessary at the time, in the end, this proved quite worthwhile as the additional revenue generated has been virtually hassle-free and the area is now well within the small medical practice’s capabilities and well on its way to even be considered an area of competence. The practice should continue to investigate potential areas of value such as other cosmetic medical procedures in the hopes that similar successes can be found by branching out deeper into the capabilities of the firm. Overall, the analysis of the value chain begins to suggest that a view of the philosophical components of this small medical practice might, in fact, be beneficial.

Directional Strategies


A careful analysis of the available material on this small medical practice’s mission reveals that the mission is worded too vaguely to provide much real use in determining what might be said to be a directional strategy for the small medical practice. To break down the mission statement into its components, one must first be aware that even a short mission statement can contain a great deal of depth. Yet in this particular case, it becomes evident rather quickly that the mission itself is of little use, describing, as it does, “ideal patient outcomes” and other similarly meaningless phrases that do not in and of themselves suggest any sort of strategy or direction for the small medical practice to take. However, such a judgment may be too harsh; mission statements, after all, are only mission statements, not goals and not anything so specific as a particular action to take in a particular time and place. The part to which one may take objection, though, lies in the notion that there is something unique about the mission statement, when in fact the ideas of conferring the best outcomes to patients are simply serving as a sort of orthodoxy that only keeps the small medical practice ever more mired in similarity to its competitors when in reality it could be moving so much further ahead into the unknown territory of offering its patients something truly unique while at the same time ensuring that doctors, nurses, receptionists, and other staff members have the pleasure of working in a location that prefers to diversify its services on a regular basis. Maintaining an interesting workplace helps improve employee turnover by minimizing it, as can be seen at a simple intuitive glance at the topic, and it is for this reason that the vision moving forward must be one of change.


The organization’s vision, like its mission, seems almost deliberately to have been written in such a manner that it is not possible to pin down the author on meaning any one particular thing at any one particular time. However, a more thorough and complete conception of the small medical practice’s vision can be garnered by observing the practice’s actions rather than its written statements of vision. There, it becomes obvious that the small medical practice does indeed believe in moving ahead in ways that are actually very suggestive of a strong vision, for, in the tough economic times that befell the United States of America in the so-called “Great Recession” that unfortunately created a tragedy of consumer uncertainty, as is well known, the practice began to branch out into new areas to accommodate the fact that a loss of income was likely under such external economic circumstances. Thus, in that case, though the vision stated was not exactly on target, the actual vision—that which lives in the hearts and minds of those key stakeholders who have the most power over the direction the small medical practice takes—led the practice to respond to what was essentially an external problem with an internal shift, and such a move can only be both applauded and lauded for its foresight and boldness in the face of what could have become a rather fearful time for all stakeholders involved in the community surrounding the small medical practice.


The values espoused by the small medical practice focus on the aspects that tie directly into the family practice issues but do not as much incorporate the portions of the practice’s business that relate to providing expert medical testimony and providing patients with cosmetic medical procedures for which payment comes out of pocket. Whereas it is true that it is easiest to construct values for components that more naturally tie into the health and wellbeing of patients, values that support the creation of other areas of work are possible as well. For instance, providing expert medical testimony does not directly lead to better health outcomes for patients, but the action could, in fact, be tied to creating a more just world in which evidence-based rulings are used in conjunction with the input that only medical professionals are able to provide. In addition, the values shown by the small medical practice’s performance of cosmetic procedures are the patients’ rights to decide what is proper for their bodies and for their own emotional wellbeing. Thus the small medical practice must make a greater effort to include its areas of competence and capability into a rewording of the current values system by which it operates. In fact, though this is a rather small recommendation, it can only help to pave the way for larger, more impactful recommendations.

Recommendations to the Organization Based on Situation Analysis

Primary Recommendations

Primarily, the situation analysis suggests that the small medical practice being discussed here must essentially continue to work in the same vein that it has been operating within this whole time, with particular emphasis on its already established new areas of growth. Due to the outcome of the situation analysis, it is now obvious that the family practice aspects of the business must continue to take front and center stage, particularly in light of the aforementioned changing population needs that are continuously bringing more and more citizens—and young citizens or children in particular—into a state where their healthcare coverage allows for regular doctor visits and even for optional procedures to be performed. This is thanks in large part to the Patient Protection and Affordable Care Act of 2010 in the United States of America, which, as it has been said before, may particularly affect Hispanic citizens and thus require the staff of the small medical clinic here under scrutiny to develop at least a minimum cultural competency in dealing with patients from backgrounds that may be different from their own. Overall, however, it is obvious that merely doing what the business has been doing for years will likely continue to be sufficient for maintenance income and perhaps even for expansion, should the opportunity for such expansion arise. Indeed, that question is valid to ask as well. Should this small medical practice perhaps take a chance on adding additional premises if the option becomes available? Thanks to the situation analysis already performed, it is facile to answer this question simply in the affirmative. The population will only continue to grow, at least for the foreseen future, and so being able to serve more people will work in the small medical practice’s favor. In addition, there are some secondary recommendations to be noted as well when it comes to the topic of staying the course.

Secondary Recommendations

Aside from continuing to function normally as a family medical practice, this firm would do well to reinforce its current efforts in the realm of cosmetic or optional medical treatments and providing expert medical testimony to lawyers, insurance companies, and other specialists in the field. At the same time, it would be extremely useful for the business to refocus its mission, vision, and values to incorporate these secondary streams of income and alternative areas of work, for currently, the relationship between the physicality and the stated desired results is not terribly strong. This revision does not confer any particular urgency on the small medical firm, but regardless, it is a task that needs to be done. Procrastination on the matter will serve no purpose and indeed will only instead cause the rather striking disparity between practicality and stated ideals to widen as time goes on, ultimately resulting in a mission, vision, and values that do not in the slightest bit match the demonstrated actual mission, vision, and values of the small medical practice.


Overall, it is obvious that this small medical firm has excelled in numerous ways in the past, from thoroughly anchoring its primary resources in its family practice to seizing the opportunities that arose to venture into new territory and break new ground by exploring such new potential areas of business as providing expert medical testimony to legal entities and giving patients the option of undergoing some minor cosmetic medical treatments at an out-of-pocket cost to those patients. This strategy in general, one of putting the most effort into one’s primary areas of concern while at the same time ensuring that other, more tangential areas are not neglected, is a sound strategy not only for small medical practices but for large ones as well. In fact, these ideas can even be generalized not only to all medical practices, but indeed to business endeavors of a wide variety of types, from retail to service industries, from the abstruse reaches of law to the mundane sphere of construction, and from the most avaricious of endeavors to the most selfless of charitable non-profit work. Without a doubt, the framework here introduced is so flexible and even so broad that it can be also applied to the real and authentic life of an actual single individual, and the reader might even be encouraged to do so with that reader’s own life, identifying that which it is necessary to continue to do in order to pay the bills while at the same time applying a value chain analysis that illuminates both areas of competence and potential capabilities in areas to which that individual might turn some attention in the future. If only everyone strove to approach life with the same careful tactics with which small medical practices and other businesses are approached, it could potentially lead to better outcomes for all concerned, and ultimately, that is the best that can be hoped for. 


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