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Aco Overview For Ahca V32
- 1. Healthcare Reform and What it Means to You Tim Tarpey Regional Sales Manager, VCPI
- 2. 2 © 2010 VCPI 2
- 3. “They will 3 Hospital 2010 VCPI © blow up” Strategy Wait & We better see get moving Source: Kubler Ross Grief Cycle
- 4. What’s different nowvs. the 1990s 4 © 2010 VCPI • Bigger cost and quality problems • Evidence-based medicine #1 • Linking of outcomes, December 1990 patient sat, and cost info.cern.ch efficiency • Integration and risk contracting • IT has advanced significantly • Pilots and demonstrations Source: Royal Pingdom showing promise Source: KPMG
- 5. Why reform #1: Cost too much, quality too low 5 © 2010 VCPI Sources: UC Atlas of Global Inequality: Health Care Spending http://ucatlas.ucsc.edu/spend.php
- 6. Care delivery 2010 6 © 2010 VCPI Issues: -Medications - Re-admits -Accountability -COST! Source: http://www.ahima.org/downloads/pdfs/meetings/handouts/ltpac2010/2010%20LTPAC%20Summit%20(2).pdf
- 7. Why reform #2: Unsustainable 7 © 2010 VCPI “The projected date of HI Trust Fund exhaustion is 2024.” Source: 2011 report by the Social Security and Medicare Boards of Trustees Source: CBO 7
- 8. Value-based programs 8 © 2010 VCPI Value-based programs • Medicare Hospital Gainsharing • 2008, 9 NJ hospitals, rewarded physicians who reduced costs while improving quality and efficiency • Physician Hospital Collaboration • 2009, 72 hospitals, tested bundled payments • Tracks entire episode of care – beyond hospitalization • Hospital Quality Incentive Demonstration • 2003, 200 hospitals, tested pay for performance • Links incentives to improved quality • Physician Group Practice • 2005, 10 physicians groups, tested ACO idea • Medicare Care Management Performance • Through 2011, 560 small physicians earned incentives for quality • Double bonuses for meeting benchmarks and using EMR http://www.cms.gov/DemoProjectsEvalRpts/
- 9. Follow the Money 9 © 2010 VCPI Source: Perspectives: Controlling US Health Care Spending – Separating Promising from Unpromising Approaches, Hussey, Peter, Ph.D., et. al., NEJM, 11/09; accessed via the web 12/09.
- 10. Accountable Care Organization(ACO) 10 © 2010 VCPI Legal Evidence- Physicians & based specialists medicine 5000 Medicare Fee-for-service Beneficiaries Patient- Administrative Centered Processes Source: Section 3022, Medicare Shared Savings Program
- 11. Milestones 11 © 2010 VCPI Medicaid global payment demonstration in 5 states 2010 2011 2012 2013 2014 January October January January October Center for Medicare & Final set of Formal Bundled Hospital Medicaid Innovation to rules to form implementation episodic Medicare test payment models ACOs available of ACOs begins payments cut 2% Beginning Oct. 1, 2012, total Medicare payments to hospitals with high readmission rates will be reduced: FY2013: Up to 1% FY2015: Up to 3% Source: Sections 1151 and 3025 of the Patient Protection and Affordable Care Act
- 12. The Risk Shiftsto Providers 12 © 2010 VCPI Fee for Pay for Value-based Bundled Shared Global Capitation service performance purchasing payments savings payments Services are Incentives for Percentage Single payment Percentage of All services A fixed "per unbundled and higher quality reimbursement for episodes of savings from compensated capita" amount paid for measured by at risk, earned treatment, reduced cost of in one that is paid to a separately. evidence- back by shared by care shared payment that delivery based high-quality hospitals, with providers. manages a system. standards. outcomes. physicians and patient across other a delivery providers. system. Source: PricewaterhouseCoopers, 2009
- 13. Where savings willcome from: reducing readmissions 13 © 2010 VCPI 19.6% of hospitalized Medicare patients are readmitted within 30 days.1 Section 3025 requires HHS to establish a “Hospital Readmissions Reduction Program” effective 10/1/2012 for potentially preventable Medicare inpatient hospital readmissions. Number of days Rate of potentially Spending on after discharge preventable potentially readmissions preventable readmissions Within 7 days 5.2% $5 Billion Within 15 days 8.8% $8 Billion Within 30 days 13.3% $12 Billion Source: New England Journal of Medicine, 2009.
- 14. Where savings willcome from: care transition management 14 © 2010 VCPI $47 Billion Cost of drug-related hospitalizations $290 Billion Avoidable healthcare expenditures if “Among seniors with at least three medication adherence was improved chronic health conditions, nearly three of four (73%) take five or more Source: The New England Healthcare Institute medications regularly and more than half (52%) do not take all their drugs as prescribed.” Source: Kaiser Family Foundation
- 15. The Audition 15 © 2010 VCPI Costs Quality Readmits “By 2014, Accountable Care Organizations (ACOs) will shop around and award business to providers with the best outcomes related to quality, costs, and hospital readmission rates.” Dr. Kathleen Griffin, PhD, National Director, Post-Acute and Senior Services , Health Dimensions Group
- 16. Strategic Implications 16 © 2010 VCPI Ask a hospital CFO: How you can win: • Top 5 DRGs? • Specialize • Help the hospital solve a problem • Top readmit DRGs? • Prove avoidable readmits • Goals? • Know how your outcomes • US averages compare to others – Heart attack 19.9% • Communicate outcomes – Heart failure 24.7% – Pneumonia 18.3% Getting a patient home is no longer enough. Because outcome-based bonuses will be paid across the network of providers. Source: Health Dimensions Group
- 17. USA Today’s “100Worst Hospitals” KS Hospital MC Revenue $300M 17 © 2010 VCPI Sources: http://www.usatoday.com/yourlife/health/hospitals-compare.htm http://data.medicare.gov/dataset/Hospital-Medicare-Payment-And-Volume-Measures/7aac-tz9t
- 18. USA Today’s “100Worst Hospitals” KS Hospital MC Revenue $300M 18 © 2010 VCPI Hospital City State Heart #Patients Heart #Patients Pneumonia #Patients Attack Heart Failure Heart Pneumonia Attack Failure JFK MEDICAL CENTER ATLANTIS FL 19.8 768 26.1 1240 19.7 763 MORTON PLANT HOSPITAL CLEARWATER FL 19.5 864 23.4 838 18.7 564 LEESBURG REGIONAL MEDICAL CENTER LEESBURG FL 20.2 1054 26.7 1340 17.5 649 FLORIDA HOSPITAL ORLANDO FL 23 1502 25.9 3410 19.4 2359 Sources: http://www.usatoday.com/yourlife/health/hospitals-compare.htm
- 19. 19 © 2010 VCPI
- 20. 3-D, Zero Sum 20 © 2010 VCPI
- 21. Technology Implications 21 © 2010 VCPI Technology Implications • Business intelligence • EMR • HIE(s) • Outcomes reporting • Disease management • DRG-based cost accounting • “Always-on”
- 22. LTC Adoption Model 22 © 2010 VCPI Stage 10: Interoperable EHR Stage 9: Decision support Stage 8: EDM and ancillary integration Stage 7: Clinical documentation Stage 6: Care planning Stage 5: Assessments Stage 4: e-MAR and e-TAR Stage 3: Order management Stage 2: CNA documentation Stage 1: ADT (census) and MDS Stage 0: Manual/paper-based processes Source: Savage-Gutkind EMR adoption model for LTC.
- 23. 23 © 2010 VCPI “Always On” 4 -5X
- 24. CIO Consortium Companies 24 © 2010 VCPI • ACTS Retirement Life Communities • Good Samaritan Society • Avalon HCI • Gulf Coast Health Care • HCR Manor Care • Avamere • Harden Healthcare Services • Brookdale Senior Living • Health Care Navigator • Christian Homes • Kindred Healthcare • Complete Healthcare Resources, Inc • LaVie Administrative Services • Covenant Care • Life Care Centers of America / • Affinity Hospice of Life / Life Care at Home • Covenant Retirement Communities • Medical Facilities of America • Cypress Health Group • NHS Management, LLC • Diakon Lutheran Social Services • Reit Management and Research, LLC • Diversicare • SavaSeniorCare • Ensign Facility Services, Inc • Signature HealthCARE, LLC • Skilled Healthcare • Erickson Retirement Comm. • Sun Healthcare Group • Extendicare • Sunrise Senior Living / • Five Star Quality Care • Greystone • Fundamental • TAG-IT / The Asbury Group • Genesis • Tara Cares, LLC • UHS-Pruitt Corp • Golden Living Source: CIOC Electronic Medical Records (EMR) Cost Study Final Report, February 2011
- 25. CIO Consortium Study 25 © 2010 VCPI What does it cost for a “typical” 25-facility chain providing nursing care and rehabilitation services to evaluate, deploy, and operate an Electronic Medical Record (EMR) system? EMR costs per facility Source: CIOC Electronic Medical Records (EMR) Cost Study Final Report, February 2011
- 26. Your Software Provider 26 © 2010 VCPI
- 27. It’s Not aTechnology Initiative 27 © 2010 VCPI Clinical EMR Technology 1) The implications are strategic for the 2014, outcomes-driven world of healthcare to come. 2) EMR will fundamentally change the way you deliver care.
- 28. Impact on YourBusiness 28 © 2010 VCPI People Process Technology Managed Secure Available • # of people using • Complex technology implementation increases 4-5X requires dedicated • Disaster • HIPAA • Minutes vs. recovery hours of • First time many project • HITECH downtime management • Discovery have interacted • Encryption with technology • Workflows totally protection • 24 x 7 • Monitoring support • Major training transformed • Ready for images • Filtering requirements • Data will be available to drive • Provisioning • Major clinical outcomes • Separate communication requirements clinical & consumer traffic
- 29. 4 Take-Aways 29 © 2010 VCPI 1 2 3 4 Fee for Service C-Suite ACOs Health Exchanges Phase-out • Differentiate • Scale is not • Value not volume • Care transitions • Tighten a value necessarily a • Quality • Outcomes proposition competitive • Cost reporting advantage for • Readmissions post-acute providers
- 30. 30 © 2010 VCPI If we cannot demonstrate value… The value to others is zero.
Editor's Notes
- #3 Good Morning, my name is Loren Claypool and today we’re here to talk about healthcare reform.Note the distance between you and the patient!There are 4 major themes of healthcare reform that we’ll cover today, including the impact that ACOs are having on our industry. Payment reform Cost control Access Information
- #4 The Kubler-Ross model is in action in our sector! Where are you? Denial, Anger, Bargaining, Depression, or Acceptance?There are four likely camps in this room when it comes to ACOs. 1) Those in denial This was an actual call a couple of weeks ago with a CEO:“ACOs won’t last.They are going to blow up.” – Maybe. But what about episodic bundled payments? 2) Skeptics who will let others figure it out 3) Experimenters who are moving forward cautiously 4) Visionaries who are acting early, embracing change, and are positioning to make a lot of money.While I’m not here to convince you about the viability of ACOs, I trust you’ll walk away from today’s conversation with perspective that payment reform, regardless of what the government calls it, is here to stay. The proposed rule published on the 31st of March set the table for the first ACOs to sign up in January of 2012, less than a year away. I’ll share with you ideas for shaping your strategy in the communities you serve.
- #5 But, you may say, what about all of the failures of the 1990s. Here are some reasons why today’s healthcare reform is different than last decade’s healthcare reform. I’ll start the ‘differences’ list with this interesting chart. Let’s geek out for a second! In December 1990 the world’s first website was launched (BTW, it’s still out there…). Today there upwards of 200M websites and growing exponentially. IT infrastructure has advanced significantly since the 1990s. Other differences include: There is greater recognition of the urgency of cost and quality problems Evidence-based medicine is more widely understood and accepted There is greater understanding that good outcomes, patient sat, and cost efficiency are linked We have learned from past experience with provider integration efforts and risk contracting Pilots and demonstrations have shown promise
- #6 This chart disturbs me.We know that the USA leads the world in medical innovation and many countries ride on our coat tails.But, from a CMS perspective,we spend twice as much as other countries and don’t reap the benefits.
- #7 The fee for service model as we know it is too expensive and will be phased out. Today care is delivered in silos. each requires a new admission each has a separate care plan each has its own workflow processes each has its own industry organizations each has its own software few have transitional care plans redundant data lives in systems that don’t talk to each otherThe Fee for Service model costs the taxpayer too much. How much? Let’s have a look…
- #8 The current model is unsustainable.This chart shows spending pre-healthcare reform. 2008 projection was 2019, 2010 projection was 2029, 2011 is 2024.Without reform, Medicare and Medicaid were on a fast track to bankruptcy.So that’s why the industry is so interested in “bending the cost curve.” What does “bending the cost curve mean?” Guy Masters, Senior Vice President with The Camden Group, has been watching the rise of ACO models over the past 20 years and recently commented at Health Dimensions Group’s executive conference in Phoenix: “95% of hospitals do not make money on Medicare. With healthcare reform, they need to aggressively achieve 25% reductions in costs. How will they get there? By redesigning clinical care delivery processes.” Let’s look next at the experiments.
- #9 Over the last 15 years the government has launched many pilot and demonstration projects to measure the outcomes in terms of cost and quality. I’m not going to go through all of these, but you get the idea that this did not happen overnight. Here are the CMS sponsored programs: CMS PILOT PROGRRAMS TheEngelberg Center for Healthcare Reform at Brookings The Dartmouth InstituteMEDICARE PILOT SITES Carillion Clinic, Roanoke, VA Norton Healthcare, Louisville, KY Tucson Medical Center, Tucson, AZPRIVATE PAYOR PILOT SITES Anthem Blue Cross Blue Shield Monarch Healthcare Advocate Healthcare Blue Cross Blue Shield of IL Healthcare Partners, Torrence, CA What are the results?
- #10 The studies have proven that nothing yields greater savings to the taxpayer than BUNDLED PAYMENTS. And who will be the quarterback over the entire episode of care? As defined today, THE ACO.
- #11 So that’s why the government is looking at new care models, and placing bets on bundled payments to save money. The vehicle for savings delivery will be the ACO - or something akin to it. What is an ACO? It’s an entity, typically a physician’s network or hospital network, that agrees to become accountable for overall care of Medicarebeneficiaries. ACOs create incentives for health care providers to work together to treat an individual patient across care settings – including doctor’s offices, hospitals, and long-term care facilities. The Medicare Shared Savings Program will reward ACOs that lower growth in health care costs while meeting performance standards on quality of care and putting patients first. Patient and provider participation in an ACO is purely voluntary. Requirements: Enter into 3-year agreement with HHS Have a formal legal structure, with a TIN, that will allow the organization to receive and distribute payments to participating providers Include sufficient primary care physicians for at least 5,000 Medicare fee-for-service beneficiaries Have arrangements in place with sufficient specialist physicians Identify all participants by TIN Have a governance structure, or Board, that represents all participants Have in place a leadership and management structure including clinical and administrative systems Define processes to promote evidence-based medicine, report on quality and cost measures; and coordinate care Demonstrate patient-centeredness
- #12 Sec. 1151. Reducing potentially preventable hospital readmissions. Beginning in fiscal year 2012, adjusts payments for 1886(d) hospitals, critical access hospitals and hospitals paid under 1814(b)(3) based on the dollar value of each hospital’s percentage of potentially preventable Medicare readmissions for 3 conditions with risk adjusted readmission measures that are endorsed by the National Quality Forum. CMS will rank hospitals based on 30-day readmission rate for heart attack, heart failure and pneumonia. Not limited to preventable, avoidable readmissions Applies even if readmitted to another hospital There are 2 exceptions: readmission for a heart stent or bypass surgery. That’s it. Critical access hospitals are excluded. Secretary can add more conditions in future years. Those in bottom quartile (nationally) from prior year will have a % of total Medicare payments withheld 2013: Up to 1% 2014: Up to 2% 2015: Up to 3%So hospitals see the stick, SNFs and Home Health are under rate attacks. Is this a coordinated effort on the part of CMS?The Brookings Institution – “Reduced payments for hospital readmissions accelerates the need for high-quality post acute care.”
- #13 In your information package I’m including a dictionary of the different payment types. According to health Dimensions Group, SNFs are the only providers who are NOT paid episodically. Home health, LTACs, hospice, acute – all paid per the episode.We continue to pour over the proposed rule published on 3/31. It’s a 429 page document, not for the feint of heart!Under the proposed rule, Medicare would continue to pay individual providers and suppliers for specific items and services as it currently does under the fee-for-service payment systems. The proposed rule would require CMS to develop a benchmark for savings to be achieved by each ACO if the ACO is to receive shared savings, or be held liable for losses. To provide an entry point for organizations with varied levels of experience with and willingness to take on risk, the proposed rule would allow an ACO to choose one of two program tracks. The “one-sided model” would allow an ACO to operate on a shared savings only track for the first two years, but would then require the ACO to assume the risk for shared losses in the third year. The second track is a “two-sided risk model” that would allow ACOs to share in savings and risk liability for losses beginning in their first performance year, in return for a higher share of any savings it generates. This is the latest in the payment evolution (published 3/31) that marches the industry towards capitation.
- #14 The #1 outcome the government is targeting? Readmissions, because accountants estimate that avoiding re-admissions will save billions. Data suggests: 20% of Medicare beneficiaries readmitted to hospital within 30 days 34% within 90 days 67% readmitted or died within 1 year of discharge. Some estimate as much as 75% of readmits are preventable.
- #15 If we were running an ACO, we would demand that all providers work against shared “cross-provider clinical pathways” to ensure evidence-based medicine is being practiced across the continuum of care at the highest level of quality at the lowest expense. Our clinical pathways would include medications.The biggest offender when it comes to readmissions: medications. Older adults account for more than 1.1 million trips to the ER as a result of adverse drug interactions every year, says a report from federal entity SAMHSA, which reports thatadults over 65 make up more than three out of five of those costly visits. Because seniors often take multiple medications, they are at greater risk of an adverse episode.
- #16 Guy Masters, Senior Vice President with The Camden Group, has been watching the rise of ACOs over the past 20 years and recently commented at Health Dimensions Group’s executive conference in Phoenix: “there will be no free standing LTACs in the future – a great consolidation is about to happen…in the next two years there will be just a handful of healthcare systems.”So the message for providers is to audition early, make the cut early, and lock up the business. So let’s transition now to how you audition and make the cut.
- #17 Diagnosis-related group (DRG) is a system to classify hospital cases To survive in this new world, a post-acute provider must have:Its EMR house in order – EMR is table stakes to get in the gameCoordinationBe able to communicate clinical information across care settings (HIE, EHR)EfficiencyKnow our cost of careSpecialize and SQUEEZE COSTS OUT. Produce a predictable, lower risk outcome (RISK = READMIT), prove it and report it*** Margin is all about our ability to manage resources***AccountabilityWe are part of a network of providers.Bonuses are paid to the network, not us individually.One piece of the network fails, the entire system fails.The Brookings Institution – Role for LTC and PAC in ACOsImproved Information SharingCompete on value by demonstrating quality and cost of careReduce unnecessary readmissionsBetter integrate medical services and social supportsSustain effective care delivery reforms through simultaneous payment and benefit reforms
- #18 Like preparing for any sales call, you’ll have to “do your homework” and get to know your prospect. Good news is that there is a lot of publically available data – Using a tool we found in USA Today, you can drill down on a map and look at the readmissions and death rates for every hospital in the country. Here are the rates for three hospitals in Kansas. The blue bars are “red flags” regarding readmission rates – they are higher than national averages. SO it’s easy to do YOUR INITIAL “EXTERNAL” HOMEWORK before a “sales” call. How about your “internal” homework?Your advantage in your marketplace will be the extent to which you can help a hospital solve a known problem and demonstrate with data-driven evidence how you’ll contribute.
- #19 Like preparing for any sales call, you’ll have to “do your homework” and get to know your prospect. Good news is that there is a lot of publically available data – Using a tool we found in USA Today, you can drill down on a map and look at the readmissions and death rates for every hospital in the country. Here are the rates for three hospitals in Kansas. The blue bars are “red flags” regarding readmission rates – they are higher than national averages. SO it’s easy to do YOUR INITIAL “EXTERNAL” HOMEWORK before a “sales” call. How about your “internal” homework?Your advantage in your marketplace will be the extent to which you can help a hospital solve a known problem and demonstrate with data-driven evidence how you’ll contribute.
- #20 Premier is an organization that is helping ACOs organize in your markets. There are two types:FIRST: Premier’s Accountable Care IMPLEMENTATION Collaborative will consist of members who can pursue accountability for a portion of their population today, evolving from fee-for-service to value-driven business models by modifying existing payor contracts.
- #21 Understand this is a ZERO SUM GAME: it is impossible for both players to win (or to lose). In the ACO world, welcome to THREE dimensional chess. Your new market reality: Your strategy The hospital’s strategy Your competitor’s strategyAnd a 4th dimension: the political climate. Medicaid ACOs are forming in Colorado, Florida…
- #22 ELECTRONIC MEDICAL RECORDS are STRATEGICSharing information from our EMR with the EMRs of other providers is critical and necessary.Providers must be able to PROVE that your outcomes are superior to neighboring providers in order to win business. For SNFs, it may not be other SNFs. It may be a home health provider. As a result we’ll see an industry-wide revolution in specialization to drive up outcomes.We will need to negotiate with ACOs by DRG on both outcomes and costs – this presents a challenge borne by the COO, CFO, and CIO in how to capture and analyze the informationEMR is essential for being the game driving up outcomes proving lower readmits driving down costs
- #23 So, how do we get there from here?Here is a 10 step program for LTC that was developed by a provider in upstate NY. It has been adopted by the CIOC.90% of companies start with MDS and CNA documentation because there’s ROI to be had to fund the rest of the paperless revolution. Today all of the top 10 providers in the country are somewhere on the path of expediting EMR rollouts to be ready for ACOs. They are anxious to win the ACOs loyalty LONG BEFORE THE CONTRACTS GET SIGNED.
- #24 So let’s imagine that your organization is fully digital. What does that world look like? Physicians orders are sent via encrypted emails Nurses notes and CNA documentation are entered into devices at the point of care. Therapists update rehab records in real time for clinicians to proactively update plans of care. And med passes are delivered by laptops on carts. THIS IS THE “ALWAYS ON” WORLD OF HEALTHCARE. Going from pre-ADL Capture to full EMR, it’s not unusual for the number of users to increase 4-5 times. So doing the math, 10-15 users todaycan quickly become40-50 users per facility. Basically all the CNAs and nurses that in the past wouldn’t have had access…now have access…
- #25 This was NOT a VCPI initiative.
- #26 LEAVE ME A BUSINESS CARD AND I WILL EMAIL YOU A COPY OF THIS REPORT
- #27 Your Software provider – is the horse you’re riding going to be the horse that wins the race in your market?We have seen software provider consolidation over the last few years and we expect more to come.But we also have seen, and expect to see more, new players. New players that come from acute care… Will the system you choose be “ACO ready?” HIE ready?
- #28 EMR is not a technology project! “Leadership Freak” Joe Tye: “Culture Eats Strategy for Lunch” You can have the greatest strategy in the world, but if the right people are not on the bus, you go nowhere.Net/net: EMR is about changing the way you fundamentally deliver care, from the inside out.
- #29 An EMR initiative is about people, process, and technology. You need all of these disciplines at the table to make it successful. PEOPLE 50 YEAR OLD NURSES USING A MOUSE FOR THE FIRST TIME… With my own eyes I’ve seen…Some members of your staff will need remedial technology training before they can learn a new system.Many underestimate the cost of training…PROCESSEMR is about focusing on patients, focusing on caregivers, and optimizing WORKFLOWS. And working within cross-provider workflows!Enable caregivers to be creative when they need to be creative, not when they don’t.The granular data you derive from an EMR is worth the price of admission. From this data you can create invaluable COST & QUALITY information.The hottest field in post-acute is called “clinical informatics.” This role combines clinical and technology expertise to optimize how the system interacts with your caregivers to optimize outcomes.It’s all about leveraging your data to drive better clinical outcomes, that result in lower readmissions, at the lowest cost…Educate state surveyors BEFORE they come in your building. TECHNOLOGY What makes healthcare IT different from mainstream IT?Security – have to lock down data. Provision user access. Shut users off when they leave. Breach – have protocols in place to manage the unthinkable. Storage – images are coming, and with them exploding needs for capacity.Always On – 24x7. Can’t afford a med pass from memory. Saturday night is just as critical as Tuesday morning.BI - KPIs to proactively vs. reactively manage the business. Clinically and Financially.
- #30 In what areas will you be world class? Specialize, differentiate, and communicate.While scale will most likely be a factor for ACOs, it is not necessarily true for post-acute providers.You’re going to be paid differently and you’ll have to negotiate for it – from a position of strength and VALUE.You’re going to have to electronically share information across the spectrum of care with other providers.
- #31 Click for animation