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Thank you for your time
and attention today.
Please visit us at Perficient.com
Align Patient Outcomes with
Financial Data:...
Perficient is a leading information technology consulting firm serving clients throughout
North America.
We help clients i...
• Founded in 1997
• Public, NASDAQ: PRFT
• 2013 revenue ~$373 million
• Major market locations throughout North America
• ...
BUSINESS SOLUTIONS
Business Intelligence
Business Process Management
Customer Experience and CRM
Enterprise Performance Ma...
Partnership & Expertise:
• Oracle Platinum Partner
• Oracle Certified Education Training Partner
• 12+ year relationship o...
Connected
Health
Business Intelligence
and Analytics
Interoperability
and Integration
Information
Exchange
Regulatory
Comp...
Introductions
Lesli Adams, MPA
Director, Oracle Healthcare Business Intelligence
Lesli is the Director of Oracle Healthcare Business Int...
The Cost Crisis in Healthcare
“To put it bluntly, there is an almost
complete lack of understanding of
how much it costs to deliver patient
care.”
– Rob...
“We view this as a game changer….
We’ve got all the money we’re ever
going to get – we need to manage
smarter.”
– Don Rief...
• Labor-intensive cost capturing process
• Need for departmental analysis of procedures and cost
• Lack of budgeting by se...
Healthcare Cost Management:
Macro Drivers
• Increased market competition combined
with increasing healthcare costs have
ma...
Drugs
Blood 
Products
Corporate 
Expenses
Administrative 
Support Utilities
Physician 
Support
Diagnostic 
Equipment
Clini...
Data is recorded in structures to satisfy statutory requirements
Country
Region
Hospital
Sub account
Account
Department
Li...
P&L by Patient / Clinician
Indirect
Semi Direct
Direct
Physician
Procedure
Patient Interactions
Potentially millions of un...
Events
Financial
Events
Operational 
Sub Systems
Key drivers and details are retained
Specialty
Surgeon
Patient
Ward
Proce...
What Does the Market Want?
Defining a Business Decision Support System (DSS)
EDW
• Retrospective and prospective
(planning...
Help Answer Critical Questions
Strategy
Development
Capital
Allocation
Revenue Cycle
Management
In what services do I mak...
DSS - Key to Enterprise
Management Reporting
End Users
Executive 
Team
Information
Quality  
Management 
Information
Physi...
Cost vs. Quality
Top 5 Expensive Conditions Treated
• Septicemia
• Osteoarthritis
• Device, implant or
graft complication
• Birth
• Acute m...
In the Numbers
Average hospital overall operating margin
% of hospitals with a NEGATIVE operating margin
As bundled paymen...
High Performance Costing Expressway
• Faster deployment, lower risk,
reduced cost of ownership,
scalable and flexible
• Pr...
Perficient
Analytics
Oracle Hyperion
Profitability & Cost
Management
Perficient
Standard
Interface Files
EPIC
Data
Warehou...
Enterprise Healthcare Analytics
EMR OBIData Mart
HPCM
EHA
Patient
Accounting
Patient
Event
Human
Resource
General
Ledger
Data Flow (Simplified)
Data
Oracl...
Use Case - Stages
• Hospital-based clinic – Pediatric visits, well-child w/vaccine or cellulitis
• 4 pediatricians, 19 sup...
Costs for Indirect Supplies and Furniture & Fixture allocated per visitCosts for Indirect Supplies and Furniture & Fixture...
Overhead G&A
Patient Visit
Overhead Activities - to be allocated Driver Budgeted Amount
HR Support Headcount ($1,367,560)
...
Indirect Supplies
Patient Visit
Cost Type Supplies Supply Item CPT Each
Indirect Supplies Clinic Supplies Treatment Room S...
Semi-Direct Labor
Patient Visit
Cost Type Clinical Staff Annual Salary Fringe
Fully
Burdened
Salary
Monthly Labor
+ Fringe...
Direct Supplies
Patient Visit
Cost Type Supplies Supply Item CPT Each
Direct Supplies Vaccines Flu 99460 $ 5.13
Vaccines P...
Direct Labor
Patient Visit
Cost Type Physician
Basic $ /per Visit
992x1
Inter $ / per Visit
992x2
Inter $ / per Visit
992x...
Time for Action
1. Combine clinical & financial data
2. Use enterprise wide data sets to improve validity
3. Drive to an a...
Cost Management: Overall Analysis
Encounter Detail
1. Evaluate Payment Model Structures
2. Evaluate Performance Levels
3. Partner with Finance/Clinical Operations
4. Start t...
Lesli Adams, MPA
Director, Oracle Healthcare Business Intelligence
lesli.adams@perficent.com
281-435-8473
William Bercik
D...
Perficient.com
Follow us on Twitter
@PRFT_Oracle
@Perficient_HC
@lesliadams
@teriemc
Out and About
Stop by and see us at
Oracle Open Worl...
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Align Patient Outcomes with Financial Data: a Formula for Correlating Cost and Quality

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This slideshare discusses the cost crisis in healthcare, challenges healthcare organizations are facing, and how to:

Uncover true patient costs and value based purchasing

Understand quality and cost outcomes by aligning clinical and financial data

Identify trends and opportunities, and create actionable steps to improve business

Accelerate data integration with Perficient's High-Performance Costing Expressway

Leverage actionable visuals via dashboards with Oracle Business Intelligence tools

Evaluate patient complications, outcomes and detailed costs with Oracle’s Enterprise Healthcare Analytics Data Model

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Transcript of "Align Patient Outcomes with Financial Data: a Formula for Correlating Cost and Quality"

  1. 1. Thank you for your time and attention today. Please visit us at Perficient.com Align Patient Outcomes with Financial Data: A Formula for Correlating Cost and Quality
  2. 2. Perficient is a leading information technology consulting firm serving clients throughout North America. We help clients implement business-driven technology solutions that integrate business processes, improve worker productivity, increase customer loyalty and create a more agile enterprise to better respond to new business opportunities. About Perficient
  3. 3. • Founded in 1997 • Public, NASDAQ: PRFT • 2013 revenue ~$373 million • Major market locations throughout North America • Atlanta, Boston, Charlotte, Chicago, Cincinnati, Columbus, Dallas, Denver, Detroit, Fairfax, Houston, Indianapolis, Los Angeles, Minneapolis, New York City, Northern California, Oxford (UK), Philadelphia, Southern California, St. Louis, Toronto and Washington, D.C. • Global delivery centers in China, Europe and India • >2,200 colleagues • Dedicated solution practices • ~85% repeat business rate • Alliance partnerships with major technology vendors • Multiple vendor/industry technology and growth awards Perficient Profile
  4. 4. BUSINESS SOLUTIONS Business Intelligence Business Process Management Customer Experience and CRM Enterprise Performance Management Enterprise Resource Planning Experience Design (XD) Management Consulting TECHNOLOGY SOLUTIONS Business Integration/SOA Cloud Services Commerce Content Management Custom Application Development Education Information Management Mobile Platforms Platform Integration Portal & Social Our Solutions Expertise
  5. 5. Partnership & Expertise: • Oracle Platinum Partner • Oracle Certified Education Training Partner • 12+ year relationship of loyalty and trust • Hundreds of successful implementations • Over 200 delivery consultants on-shore and off-shore • Five pillar practices Oracle Partnership
  6. 6. Connected Health Business Intelligence and Analytics Interoperability and Integration Information Exchange Regulatory Compliance Solutions & Services Experts in Consumer-Driven Healthcare Technology HEALTH PLAN PROVIDER CONSUMERS Select Clients Healthcare PracticeGlobalDeliveryCenters/OffshoreDelivery
  7. 7. Introductions
  8. 8. Lesli Adams, MPA Director, Oracle Healthcare Business Intelligence Lesli is the Director of Oracle Healthcare Business Intelligence for Perficient. She is a clinical measurement advocate with 17 years of healthcare analytics and business intelligence experience covering for-profit, state, academic and federal healthcare including ambulatory clinic management, comparative effectiveness evaluation, evidence-based medicine, population health and clinical data warehousing. Prior to joining Perficient, Lesli championed activities with Tenet, MD Anderson, The University of Virginia Medical Center and the US Navy. William Bercik Director of Healthcare, Oracle William has over 25 years of experience in the healthcare industry and has specialized in enterprise applications and technology solutions since 1992. He provides specialist product expertise and develops and executes solution strategies for the healthcare market. Prior to joining Oracle, William was a former chief financial officer of a 350 bed acute care hospital. . Our Speakers
  9. 9. The Cost Crisis in Healthcare
  10. 10. “To put it bluntly, there is an almost complete lack of understanding of how much it costs to deliver patient care.” – Robert S. Kaplan (Baker Foundation Professor at Harvard Business School) – Michael E. Porter (Bishop William Lawrence University Professor at Harvard Business School) The Big Idea: How to Solve the Cost Crisis in Health Care Harvard Business Review, Sept 2011 Why Now?
  11. 11. “We view this as a game changer…. We’ve got all the money we’re ever going to get – we need to manage smarter.” – Don Riefner, Vice-President, Finance Oracle Open World 2013 Game Changer
  12. 12. • Labor-intensive cost capturing process • Need for departmental analysis of procedures and cost • Lack of budgeting by service-line • Inability to detail traceability all the way back to the episode of care and the charge code • Automating payor contract management process and analysis • Executive-level decision reporting impacting key decisions on how to run their business • Lack of dashboards to service-line management in order to impact day to ay operations The Challenges We’re Hearing
  13. 13. Healthcare Cost Management: Macro Drivers • Increased market competition combined with increasing healthcare costs have made understanding product line and market segment costs and profitability essential • Efficiency will allow insurers to maintain stability in operations and rates • Increased regulation and oversight will require payers and providers to have a better understanding of cost drivers • May alter the ways that benefits are funded and delivered • Complex rules regarding reimbursements • Shift from “fee for service” payment structures to shared risk has placed increased emphasis on cost and cost control • Patient profitability at the service line is becoming best practice Revenue Clinical Quality Cost Provider Operational Analytics
  14. 14. Drugs Blood  Products Corporate  Expenses Administrative  Support Utilities Physician  Support Diagnostic  Equipment Clinical  Salaries Others require analysis to appropriately assign Some costs are obvious and easy to assign Direct Costs Semi-Direct Costs Indirect Costs Why Do We Need to Allocate? Provider
  15. 15. Data is recorded in structures to satisfy statutory requirements Country Region Hospital Sub account Account Department Line item Financial P&Ls Traditional Financial Statements
  16. 16. P&L by Patient / Clinician Indirect Semi Direct Direct Physician Procedure Patient Interactions Potentially millions of unique items Rows of Data True Profitability
  17. 17. Events Financial Events Operational  Sub Systems Key drivers and details are retained Specialty Surgeon Patient Ward Procedure Insurer ImplantPatient P&Ls Retained By Dimension Revenues and expenses are connected strategically The Patient Level P&L
  18. 18. What Does the Market Want? Defining a Business Decision Support System (DSS) EDW • Retrospective and prospective (planning) view • Merges clinical and financial information • Real-time access • Care process and results orientation Business Decision Support Systems Clinical Decision Support Systems • A fully integrated business and clinical repository • Gives executives and managers the tools to: • Control cost • Improve productivity • Manage change • Increase quality • Achieve successful clinical outcomes • Plan strategically in an increasingly competitive and volatile health care environment
  19. 19. Help Answer Critical Questions Strategy Development Capital Allocation Revenue Cycle Management In what services do I make money? Lose money? Why? How do my hospitals services compare across the health system? How can I optimize service location? Should I consolidate services? What is my profitability across service lines by hospital? Where should I focus my cost reduction initiatives? How do I track success? Why are costs for X service increasing, is it labor, supplies or physician practices? How can we decrease these costs? Are patient care processes following protocols? Why not? Is it physician or patient complexity driven? What impact to my bottom line will a rate change create? Can I afford to sign this managed care contract? What types, how much and where are my denials originating? Are my payors paying correctly? Timely? Can I compare my payors profitability and score them? Am I charging for all the services I am performing? Operations Improvement What services should I invest capital? What financial return can I expect? What incremental ancillary capacity will be affected by additional capital purchases? Decision Support Systems (DSS)
  20. 20. DSS - Key to Enterprise Management Reporting End Users Executive  Team Information Quality   Management  Information Physician/Clinical  Management  Information Financial Information Managed Care Information Data Integration (Comprises the processing engine to collect, cleanse, transform, and aggregate data from different sources) Enterprise Portal (Provides a single, secure and integrated point  of access to reports, content, and applications) Data Aggregation and Storage (Comprises the data repository of historical details  and summary  transaction data)  Presentation, Personalization  Access / Authorization Views  Views  Views  Views Views Value Delivered Business Intelligence (Provides reporting and analytic capabilities  across varying levels of granularity and timeliness  (e.g., historical, operational, predictive and what‐if analysis) Infrastructure (Comprises the infrastructure platform to host, maintain and operate the BI solution) Online Analytical Processing  Pre‐Defined Data Cubes  Pre‐Defined Reporting  Data Consolidation  Historical Data  Data Extraction  Data Cleansing  Data Loading  Data Sources, Real time data  Certain Operational Reports Data Acquisition (Comprises internal, external, reference, and shared sources of data)  Hardware, Software  Network   Operations ERPCIS Revenue Cycle Decision  Support
  21. 21. Cost vs. Quality
  22. 22. Top 5 Expensive Conditions Treated • Septicemia • Osteoarthritis • Device, implant or graft complication • Birth • Acute myocardial infarction Source: Healthcare Cost and Utilization Project (HCUP), Agency for Healthcare Research and Quality (AHRQ), Statistical Brief #160, Dec 2013. http://hcup-us.ahrq.gov/reports/infographics/HCUP_MostExpensiveCond2011.jpg
  23. 23. In the Numbers Average hospital overall operating margin % of hospitals with a NEGATIVE operating margin As bundled payments, ACOs, and population health comes into focus The level of effectiveness in setting and controlling operating and capital expenses for service line and populations will be the mark of survival 2% 33% American Hospital Association Database www.aha.org/research/reports/tw/chartbook/ch4.shtml
  24. 24. High Performance Costing Expressway • Faster deployment, lower risk, reduced cost of ownership, scalable and flexible • Provider effort and clinical evidence for resources used • Impact day-to-day service line by providing patient level margin • Enhanced understanding = enhanced planning and forecasting models • Cost management culture needed to measure cost vs. quality
  25. 25. Perficient Analytics Oracle Hyperion Profitability & Cost Management Perficient Standard Interface Files EPIC Data Warehouse Labor General Ledger High Performance Costing Expressway • Oracle Hyperion Profitability & Cost Management platform • Built to leverage the Oracle Enterprise Health Analytics model for continual integration of data for advanced costing subject areas including: • Service line costing • Pharmacy costing • Surgical costing • Encounter level: cost vs. quality • Built to leverage Oracle Engineered Systems (Oracle Exadata and Oracle Exalytics)
  26. 26. Enterprise Healthcare Analytics
  27. 27. EMR OBIData Mart HPCM EHA Patient Accounting Patient Event Human Resource General Ledger Data Flow (Simplified) Data Oracle Perficient Legend
  28. 28. Use Case - Stages • Hospital-based clinic – Pediatric visits, well-child w/vaccine or cellulitis • 4 pediatricians, 19 support staff • Forecasted annualized and monthly volumes and capacity for providers, clinic spaces, and treatment rooms • Synthetic data set as proxy for EMR file, general ledger, labor sub- ledger and supply sub-ledger Answering the question.. • Every patient is different, why is their cost the same?
  29. 29. Costs for Indirect Supplies and Furniture & Fixture allocated per visitCosts for Indirect Supplies and Furniture & Fixture allocated per visit Costs (Direct Labor + Direct Fringe) for physicians to patient encounters based on CPT4 992x2; time and motion study Costs (Direct Labor + Direct Fringe) for physicians to patient encounters based on CPT4 992x2; time and motion study 5 Direct Supply Costs per patient visit (e.g. Vaccines)Direct Supply Costs per patient visit (e.g. Vaccines) 2 Costs for Indirect Labor / Clinical Staff (Semi-Direct Labor + Semi-Direct Fringe) allocated per visit Costs for Indirect Labor / Clinical Staff (Semi-Direct Labor + Semi-Direct Fringe) allocated per visit 3 4 Overhead G&A and Support Services allocated per visitOverhead G&A and Support Services allocated per visit 1 Use Case - Stages Patient Visit
  30. 30. Overhead G&A Patient Visit Overhead Activities - to be allocated Driver Budgeted Amount HR Support Headcount ($1,367,560) Administration Headcount ($3,499,400) IT Devices ($3,986,920) IT / EMR Visits + (Patient Days) +(Births*3)+(Surgeries*3)+(Lab tests/5)+ OBS+ (Pharm Doses/5) + (Prescriptions/2) + (Procedures/4) ($13,000,000) Supply Chain / Inventory Visits + (Patient Days) +(Births*3)+(Surgeries*3)+(Lab tests/5)+ OBS+ (Pharm Doses/5) + (Prescriptions/2) + (Procedures/4) ($4,353,000) Finance Visits + (Patient Days) +(Births*3)+(Surgeries*3)+(Lab tests/5)+ OBS+ (Pharm Doses/5) + (Prescriptions/2) + (Procedures/4) ($2,346,400) Patient Access Visits + (Patient Days) +(Births*3)+(Surgeries*3)+(Lab tests/5)+ OBS+ (Pharm Doses/5) + (Prescriptions/2) + (Procedures/4) ($1,513,960) Perf Improvement/Quality Visits + (Patient Days) +(Births*3)+(Surgeries*3)+(Lab tests/5)+ OBS+ (Pharm Doses/5) + (Prescriptions/2) + (Procedures/4) ($3,063,960) Nursing Management Visits + (Patient Days) +(Births*3)+(Surgeries*3)+(Lab tests/5)+ OBS+ (Pharm Doses/5) + (Prescriptions/2) + (Procedures/4) ($13,754,400) Case Management Visits + (Patient Days) +(Births*3)+(Surgeries*3)+(Lab tests/5)+ OBS+ (Pharm Doses/5) + (Prescriptions/2) + (Procedures/4) ($2,100,480) Provider Relations Visits + (Patient Days) +(Births*3)+(Surgeries*3)+(Lab tests/5)+ OBS+ (Pharm Doses/5) + (Prescriptions/2) + (Procedures/4) ($2,290,480) Records/HIM Visits + (Patient Days) +(Births*3)+(Surgeries*3)+(Lab tests/5)+ OBS+ (Pharm Doses/5) + (Prescriptions/2) + (Procedures/4) ($1,731,200) Maintenance & Repairs Square Feet ($54,026,000) BME Equipment $ ($21,202,000) Cleaning/Housekeeping Square Feet ($9,726,000) Insurance Visits + (Patient Days) +(Births*3)+(Surgeries*3)+(Lab tests/5)+OBS+(Pharm Doses/5) + (Prescriptions/2) + (Procedures/4) ($100,738,480) Utilities Square Feet ($100,100,000) Laundry & Linen Visits + (Patient Days) +(Births*3)+(Surgeries*3)+(Lab tests/5)+OBS+(Pharm Doses/5) + (Prescriptions/2) + (Procedures/4) ($1,437,000) Dietary Visits + (Patient Days) +(Births*3)+(Surgeries*3)+(Lab tests/5)+OBS+(Pharm Doses/5) + (Prescriptions/2) + (Procedures/4) ($5,656,960) Total Overhead Expenses ($345,894,200) Overhead G&A and Support Services allocated per visitOverhead G&A and Support Services allocated per visit 1
  31. 31. Indirect Supplies Patient Visit Cost Type Supplies Supply Item CPT Each Indirect Supplies Clinic Supplies Treatment Room Supplies 11042 $ 16.25 Clinic Supplies Bandages & Consumables Each Visit $ 1.50 Clinic Supplies Room Prep Materials Each Visit $ 1.92 Costs for Indirect Supplies and Furniture & Fixture allocated per visitCosts for Indirect Supplies and Furniture & Fixture allocated per visit 2
  32. 32. Semi-Direct Labor Patient Visit Cost Type Clinical Staff Annual Salary Fringe Fully Burdened Salary Monthly Labor + Fringe Monthly Visits (Budget) Indirect Labor + Fringe Per Visit Indirect Labor + Fringe RN Doyle $ 45,000 $ 10,800 $ 55,800 RN Gibson $ 45,000 $ 10,800 $ 55,800 RN Howard $ 45,000 $ 10,800 $ 55,800 RN Ignacio $ 45,000 $ 10,800 $ 55,800 NA Jones $ 33,500 $ 8,040 $ 41,540 NA Kilmore $ 33,500 $ 8,040 $ 41,540 NA Limon $ 33,500 $ 8,040 $ 41,540 Cost Type Clinical Staff Annual Salary Fringe Fully Burdened Salary Monthly Labor + Fringe Monthly Visits (Budget) Indirect Labor + Fringe Per Visit NA Micheals $ 33,500 $ 8,040 $ 41,540 NA Noman $ 33,500 $ 8,040 $ 41,540 NA Oscar $ 33,500 $ 8,040 $ 41,540 NA Phillips $ 33,500 $ 8,040 $ 41,540 NA Quinn $ 33,500 $ 8,040 $ 41,540 NA Roscoe $ 33,500 $ 8,040 $ 41,540 NA Simmons $ 33,000 $ 7,920 $ 40,920 MA Taylor $ 33,000 $ 7,920 $ 40,920 RN Ukon $ 45,000 $ 10,800 $ 55,800 MA Vikes $ 27,500 $ 6,600 $ 34,100 MA Farmer $ 27,500 $ 6,600 $ 34,100 MA George $ 27,500 $ 6,600 $ 34,100 Totals, 19 Staff $ 837,000 $ 69,750 1,996 $ 34.94 Costs for Indirect Labor / Clinical Staff (Semi-Direct Labor + Semi-Direct Fringe) allocated per visit Costs for Indirect Labor / Clinical Staff (Semi-Direct Labor + Semi-Direct Fringe) allocated per visit 3
  33. 33. Direct Supplies Patient Visit Cost Type Supplies Supply Item CPT Each Direct Supplies Vaccines Flu 99460 $ 5.13 Vaccines Pneumo 99470 $ 12.45 Direct Supply Costs per patient visit (e.g. Vaccines)Direct Supply Costs per patient visit (e.g. Vaccines) 4
  34. 34. Direct Labor Patient Visit Cost Type Physician Basic $ /per Visit 992x1 Inter $ / per Visit 992x2 Inter $ / per Visit 992x3 Inter $ / per Visit 992x4 Complex $ / per Visit 992x5 Direct Labor Dr. Adams $ 14.33 $ 21.49 $ 28.66 $ 35.82 $ 42.99 Dr. Bishop $ 15.43 $ 23.15 $ 30.86 $ 38.58 $ 46.30 Dr. Crisp $ 14.33 $ 21.49 $ 28.66 $ 35.82 $ 42.99 Dr. Edwards $ 13.78 $ 20.67 $ 27.56 $ 34.45 $ 41.34 Direct Fringe Dr. Adams $ 2.15 $ 3.22 $ 4.30 $ 5.37 $ 6.45 Dr. Bishop $ 2.31 $ 3.47 $ 4.63 $ 5.79 $ 6.94 Dr. Crisp $ 2.15 $ 3.22 $ 4.30 $ 5.37 $ 6.45 Dr. Edwards $ 2.07 $ 3.10 $ 4.13 $ 5.17 $ 6.20 Costs (Direct Labor + Direct Fringe) for physicians to patient encounters based on CPT4 992x2; time and motion study Costs (Direct Labor + Direct Fringe) for physicians to patient encounters based on CPT4 992x2; time and motion study 5
  35. 35. Time for Action 1. Combine clinical & financial data 2. Use enterprise wide data sets to improve validity 3. Drive to an actionable level of detail 4. Show findings in a highly visual, action-ready format
  36. 36. Cost Management: Overall Analysis
  37. 37. Encounter Detail
  38. 38. 1. Evaluate Payment Model Structures 2. Evaluate Performance Levels 3. Partner with Finance/Clinical Operations 4. Start the Conversation 5. Develop a Prototype 6. Implement Capability / Improvements Incrementally Next Steps
  39. 39. Lesli Adams, MPA Director, Oracle Healthcare Business Intelligence lesli.adams@perficent.com 281-435-8473 William Bercik Director of Healthcare, Oracle William.bercik@oracle.com 312-203-9641 Perficient/Oracle Contacts
  40. 40. Perficient.com
  41. 41. Follow us on Twitter @PRFT_Oracle @Perficient_HC @lesliadams @teriemc Out and About Stop by and see us at Oracle Open World Booth #2221 Sept. 28 – Oct. 2 San Francisco, CA
  42. 42. Questions?
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