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Welcome to the experience economy

Article  in  Health Forum journal · January 2001

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0aude Monet, Private (ollection/5uper5t0ck


Beyond Gseds and Servires ing wa1ls inside many of its latest es- pathways, and consumers gain in-
Experiences are a dlstinct economic of- tablishments and charges guests $5 to creased accessto information about
c1lmb them. Some stores have cross- their conditions, oPtions, and the
fering. as distinct from services as *er-
country ski or bicycle trails, walking quality of doctors and facilities.
vices are from goods, but one that-
paths with different surfaces for testing So where does a health care organi-
until now-went largely unrecognized.
Vhen someone buys a good, he re- shoes, rain rooms, and, in Denver, a zation start? You can do a lot r'vorse
ceives a tangible thing; when he buys a kayaking experience, than examining your EVO-Your ex-
One of our favorite examples is a pe- perience value opportunity (see the ac-
service, he purchases a set ofintangible
activities carried out on his behalf. But diatric dentist outside of Phoenix, Dr. companying article, "Maximizing the
when he buys an experience, he PaYs John Culp. He's known as The Jungle Value of Health Care"). TodaY, manY
for a memorable event that a company Doctor, as he created a jungle motif executives in health care have capital-
stages to engage him in an inherently for his office. His business results have ized on their EVOs to go far beYond
personal rvay. skyrocketed. The word of mouth is mundane treatment services. Some ex-
Companies in industry after industry fantastic. kids don't cancel their ap- amples:
pointments anymore, and they actual- o North Harvaii Community HosPi-
recognize r he need I o stage experiences
for their guests. The Hard Rock Cafe, 1y leave with smiles on their facesl tal, in Kamuela, Hawaii, created a "total
for example, rvhich opened in London The forces of commoditization grow healing environment"-a place to get
stronger every day, especially as the weli, rather than a place to be sick. And
in 1971, merged rock music with food
government puts more and more pres- a wonderful environment it is. Patients
service to create a unique dining expe-
rience-one successful to this day, Seat- sure on cost containment, HMOs can select the artwork that goes on the
t1e-based REI has erected 65-foot climb- practice greater control over clinical wa11s, while every room opens to a
courtyard garden. North Hawaii, start-
ed by Medtronic cofounder Earl
Figure 1:
Bakken, combines high-tech conven-
The Progression of Economic Value tional methods with high-touch comple-
Relevant to
mentary treatments, centered on holis-
0ifferentiated
tic therapies from Hawaiian tradition.
o Memorial Health SYStem in
Springfield, I11inois, offers a rehabilita-
tion center where patients can experi-
ence real-world situatlons such as
cooking, grocery shoPPing, and even
{*mp*ai{:l'r* $leeds of golfing. These experiences help pre-
(ustcmerg pare patients for a return home and
Yssi:t!r:{i
give them the confidence to succeed.
o In California, the Fresno SurgerY
Center provides a comfortable envi-
ronment in a nonhosPital setting,
which research shows helps patients
Undifferentiated
lrrelevant to heal faster. Rooms feel like home,
meals taste as if they come from a fine
Pricing Premium
5ou rce: Strateg ict Horizons LLP Copyright @1 999
restaurant, and management's been
trained by the Ritz-Cariton to provide
Figure 2:
exceptional, personalized attention.
The "l nsurance" I ndustry th rough Successive Economic Offeri n gs Not only is every Patient called a
"guest" and treated as such, but so are
Secure event'situation' or family members, who are invited to
ffilransformation 'ut(ome
stay overnight whenever they want.

ffi Experience
Secure confidence, €ncouragement,
feeling of satisfaction
trust or
r Starbright \7or1d, a company co-
chaired by Steven Spielberg and Gen-
eral H. Norman Schwartzkopf, offers a
"virtual-reality play space" that enables
sick children in hospitals around the
country to interact with each other
over a high-speed network. its goal is
to help kids cope with being in a hos-
pital: they can plaY games with each ffiaaE*dfirtg * fu3Eck*y fut*a;s* ffing*reEx*€**rx
tther, share theirexperiences with
procedures, learn about their illnesses, Bx Flrin ffii;;:
and make ner'v friends.
Staging experiences greatly increases
the value rendered to customers. But ;;sCEoofEastJeffersonGeneralHospital,lmadeguestrelationsourfirstpriorityin
j;-:r1. r saz *r].n three new competitors moved into the New orleans area, bringing the to-
most hospitals must ber'vare a funda- was larger than we were'
mental axiom: the easiest way to turn a ;i''-' 1t.t number of competitors to five. Each of these competitors
more quickly, and did not have to function in the pub-
service into an experience is to provide had many more resources, could move

poor service- thu. creat ing a memo- licsector,Mygoalwastosetthehospitalapartbymakingguestrelationspracticessoperva-


rable encounter of the unPleasant sive that they woutd become a part of the organization's culture'
go to Disney to see how
kind. And the surest way to Provide After eight years of successful in-house training, we decided to
poor service is to treat individual theydidit.IcameawaywiththreemajorimpressionsofwhyDisneyissosuccessful:empha-
(called'tast members"because they are putting on a show)' attention to the
clients via rote, impersonal activities sis on employees
support areas
(,,on stage,,iS where the customer is and,,back stage,,is where the
that sacrifice patient need on the altar environment
of doctor efficlency. are), and understanding and exceeding customers' expectations'
Backhome,lcreatedandchairedasteeringcommifieetoimproveourguestrelationsex-
these task
Ik1ass {*stcmEre Y**r *$f*r;rlgs pectations. we assembled task forces that reported to the steering committee;
guest relations and made rec-
How does a health care organizarion of- forces examined how we handled each of the three aspects of

fer personalized service to thousands of ommendations for imProvements.


that we are
customersl The ansrver is mast cut- we started referring to our employees as"team members"to enhance the fact
another.we also created a service statement,which
tomization-producing standardized all pulli.ng together and depend on one
are our highest mission.
modules that combine in different rvays all employees are required to memorize:,,Providing care and comfort

for different buyers. Think of Lego Wepledgetoourgueststhefinestinpersonalservice,courtesy'andrespectandasatisfying


promote teamwork, we designed easy-to-read name tags without titles and
building blocks. You can build anything experience."To
dress code employees
you want because of the many different degrees.we held focus groups with patients to find out what sort of
of our more important changes was to modify our performance evalua-
sizes, shapes, and colors of blocks, as should follow. One
for a merit in-
well as the simple system of tabs and tion tool so that meeting guest expectations became half of the requirement
holes that lets you easily snap them to- creaSe.

gether. These two basic elements-a set AsCEo,myresponsibilitiesincludedsettingtheVisionandcultureoftheorqanization,as-


and consistently apply
of modules and a linkage system that dy- suring that management serve as role models and that we uniformly
of guest relations has been driven deep into our organization, but it is
namically connects them-define the core values. A culture
nurtured and reinforced.
modular architecture thar equips a com- continually
pany to mass customize. lnlggT,theDisneylnstitutenotedthat30percentofthoseattendingtheirmanagement
to see what we were do-
Consider the Healthcare SuPPort seminars were from health care.They came to East Jefferson General
ing, as they had heard much about,,the Disney hospital,,,and
were impressed enough to pres-
Services division of the managed ser- are the first
vices company Aramark. It created a ent us with their Mousecar, a statuette of Mickey which is, to them, an oscar. we
program called Interserv that provides organization recognized by Disney for custorner service'
customized, integrated, nonclinical Thebestrecognition,however,isfromourteammembers,patients,andphysicians.lnour
in the 99th percentile in
support services to hospitals. The com- most recently tabulated team member satisfaction survey,we scored
for satisfaction, including "This is the best job I have ever had" and "l
pany collaborates rvith its clients to de- the seven key attributes
friends."our medical
sign the specific process modules de- would recommend employment at East Jefferson General to family and
this is the best hospital in the region and that they prefer to care for their pa-
sired in the areas of food service (e'g', stafftells us that

catering, menu distribution), distribu- tients here.


tion (patlent transport, stocking of ourmarketsharehasgrown,andoneofthecompetitorshasclosed.Sincelg95,outpatient
linen carts), maintenance (boiler room, visitsareupl0percent,ERvisitsupgpercent,inpatientadmissionsupl0percent,andour
closest competitor tags 46 percent in being the overall preferred
hospital'
carpentry), and environment (dis- and without think-
creating a culture in which customer service is provided automatically
charge and cleaning, hose down, and persistence and preoccupa-
undertaking for the faint of heart. lt takes years of
so forth). Together, the company rep- ing is not an

resentative and the client redesign the tiontocreateandmaintainaculture.Theresults,however,aremorethanworthit.


overspecialized, functional-si1o meth-
peter Aitis, f[At it pWaent CfOini leffe'rnn Aimt Uospitll in Metlirie' Louisiono'
ods hospitals traditionally use to create
ona

a customized, integrated, modular


architecture that provides customer-
THEEXPERIEN o o M

unique va1ue. Finally, Healthcare Sup-


port and the hospital develop a multi-
f,e$*fur*tEmg €he Gsr*st Hxp*rfremce skilled, comprehenslvely trained work-
force that operates as a team.
Bv lnas H*uh4Arlti A 1oca1 Aramark Resource Center
mcirrrrins in a darcbr:c descriprions of
-g ;{ gralt Disney imagined a prototype town where innovations in education, technolo- all team members, all process modules
:rr.l gy, community, design, and health could be implemented. Part of this dream was contracted by the hospital, and a list of
ti? ZF
!4 realized when Florida Hospital launched Celebration Health, a health care center n,hich team members can execute
located in the Walt Disney company-created town, Celebration, Florida, in
.1998.
u.hich modules. It further classifies
celebration Health provides full inpatient, outpatient, and emergency services with physi- process modules as scheduled or un-
cian offices; a fitness center; and medical, retail, research, and education facilities. Florida Hos- scheduied and interruptible or unin-
pital, an Adventist Health System facility, owns and operates Celebration Health as part of its terruptible. This a1lor,r,s hospital per-
seven-campus network in Central Florida, sonnel to schedule many tasks ahead
The mission statement of the hospital is based on eight principles of health: choice, rest, oI rime yer 'r ill arrange forome
environment, activity, trust in God, interpersonal relationships, outlook, and nutrition (CRE- ra<k- -quch as "mo\ e this parient to ra-
ATION).The facility offers customers a close connection with nature: it has ample outdoor diology, stat"-to be requested and dis-
views, healing gardens, and nature-inspired indoor environ ments. Each patient, visitor, fitness patched at any time.
member, staff, physician-anyone who enters the building-is part of the cREATIoN experi' Think about hou'your health care
ence. Celebration Healtht proglams and services provide a complete health care experience facility can apply the principles of mass
for guests and an opportunity for improved health. Below are four examples: customization to stage a more engag-
CT and MRI scans. Recognizing that many patients are anxious and fearful ofthese scans, ing-and more successful-health care
Celebration Health's diagnostic imaging team declded to turn the scan experience into one experience.
as relaxing as a visit to the beach.
The virtual beach experience begins with a stroll down a wooden boardwalk to a cabana, 1ff*rkiarg *n Stage
where patients change into flip-flops and robes sporting beach imagery.They wait for the Mass customizing your services is a
scan in an area that's scented with coconut oil and filled with sounds of crashing waves and
great way to shift into the Experience
seagulls. Finally, they climb inside an MRI machine that's disguised as a sand castle. Economy. But, particularly for health
Pulmonarytherapy. lnspired by an article about harmonica therapy at a hospital in New care, it's imperative to understand that
Jersey, the respiratory therapy team adapted the concept for patients in pulmonary rehabil-
r,r'hen you are staging experiences.
itation at Celebration Health.Therapy sessions formerly marked by thin attendance now fill rvork is theater. Whenever employees
the room, with harmonica instructor Linda Bouchelt leading a chorus of patients grinning are in front of customers, they are act-
about their therapy.They are enjoying a health care expetience, while achieving once-lost ing-the simplest definition of lr'hich is
skills such as walking without gasping for air. "someone uratches another person
Annual exam. Developed in collaboration with Dr. James Rippe, a cardiologist and au- rvork." They mu.r act in a rvay' rhere-
thor,the Rippe Health Assessment is an all-day affair.After giving blood and urine samples, fore, that engages each guest r'vith
patients eat a healthful breakfast, then meet with a physician for the physical. Later, they un- every interactlon.
dergo cardiovascular testing and talk with an exercise physiologist, nutritionist, and phar- Flight attendants and hotel staff rou-
macist for custom evaluations. After lunch, patients see specialists about specific health con- tinely perform acts of theater when
cerns and talk with counselors to explore personal goals, objectives, and lifestyle concerns. they direct patrons to the nearest exit
Finally, patients see their physicians to review tests results and discuss recommendations' A or rented room. Tl-re u'ork of a retail
comprehensive report is then mailed to the patientt home. store associate is theater u'hen he
Patient rooms, Each room is designed to accommodate a patient at any level of care: in- straighter-rs merchandise on a shelf.
tensive, progressive, or basic medical/surgical. Warm wood tones, cabinetry, and panels that Bank insurance agents, and real
te11ers,

hide outlets and gauges when they're not in use soften the traditional hospital appearance. estate brokers engage in theater vn'hen
Patients remain in the same room and under the care of the same team members for their they explain terms ar-rd conditions.
entire hospital stay.They are clustered by diagnosis, and a high ratio of the nursing staff is Your costumed postal worker performs
trained in critical care. As a result, patients are exposed to fewer hospital moves, they devel- an act of theater with every package
op a healing relationship with their care team, their physician has the same care team to rely she delivers, ar-rd Federal Express's
on forthewhole stay,and staffare more efficient,wasting little effort on the transfer process' "overnighting" is absolutely, positively
These experiences have the potential to greatly improve the outcomes sought by the t1-reater. Even the trading of commodi-
guests of our facilities. ties in exchange pits is theater of a par-
ticular attention-grabbing kind.
iars Hounann is executive viQ-president,0perati0ns,6t Florido Hospital,0rlando, Florido.
And doctors r.r,ho perform surgical
operations in an amphitheater also

6
perform theatrical operatlons by the
side of every patient's bed. But horv {ex* fr*r* €*"xm ffimsp$ca$Bty $r'tdaxstry
Tmkirtg m
differently (and more memorablY)
u,ou1d such activities be performed if Bv &L Silr*llf 1ELr
those executing them understood their
n,ork is theater and acted accordingly?
On September 17, 199'1, Lancet cte- ;twouldhavebeenheresyjustadecadeagotoclaimthathealthcareWasnodifferentfrom
as too lofty an enterprise
ated quite a furor in the health care f the i,otet and restaurant industry. Back then the field still saw itself
patients'tustomers"was near blasphemy'
E ,o .o*pur" *ith ordinary commerce.To call
community rvhen it published an arti-
c1e applying the principle that u'ork is Today,aspresidentofthelargesthealthcareorganizationinnorthwestFlorida,Ihavelearned
theater to medicine. In "Acting in muchfromthehotelandrestaurantindustry.ourfieldshaveagreatdealincommon:theway
Medical Practice," Drs. Hillel Flne' peopleexperienceourserviceswilldeterminewhethertheyreturntouseourservicesagain.
People expect that much'
stone and David Conter of the Uni- Customer loyalty takes more than good or even excellent care'
versity of til/estern Ontario asserted alongwiththemostup-to-datetreatments,therapies,andtechnologies,whentheyreceive
are experiences so
health services.what wins customer loyalty for a health care organization
that physicians, and by extension all customers will not even consider us-
every expectation, that
others in health care, should be great, so outstanding, so far above

trained as actors: ing other providers.


services that make up Baptist
does not possess the The five hospitals,two nursing homes, and myriad outpatient
"If a physician
necessary skil1s to assess a patient's emo- Healthcareemploythesameprinciplesandpracticesformanagingourcustomers,experi-
tional needs and to display clear and ef- ences.Everyemployee-whetheranurse,technician,orclerk-istrainedtoanticipateneeds
is responsible for protect-
and fill them before a customer has to ask for help. Every employee
fective responses to these needs the job
is not done. Consequently, u'e believe ingthecustomer,sprivacyandshowingsensitivitytohisorhersituation.Everyemployeeisre-
that medical training should include an quiredtoask,"lsthereanythingmorelcando?lhavethetime"'wheneverleavingacustomer'
acting curriculum, focused on the con- AteveryBaptistHealthCareentity,customerSatisfactioniscarefullymeasuredandtracked.
patient satisfaction survey of
veying of appropriate, beneficial re- since 1 995 our hospitals have used the Press, Ganey Associates
have dominated the top
sponses to those emotional needs'" more than 600 hospitals across the United States; Baptist hospitals
Many physicians disParaged or percentjlesofthesurveyformorethanthreeyears.WeusethosescorestotellUshowweare
ridiculed the notion of doctors becom- doing:iftheydropevenalittle,wefindoutwhyanduseitasanopportunitytodobetter.
ing actors. One rvrote in the Minneapo- ButatBaptist,wedon,tconcentratejustoncustomersatisfaction-Wealsofocusonem-
l.is Star-Tribune that if drama becomes a ployeeSatisfaction.lftheprovidersaren,tsatisfied,youcanalmostbetthatthepatientsaren,t
employees to understand
part of medical school curriculum, rve either. At Baptist, we have a,,no-secrets,,environment that allows

r'r,ould see scenes iike this one: "Problem: whydecisionsaremadeandwhatthehospitalleadershopetoaccomplishbythem.Weletem-


Obesity. Old tual: Doctor gives printed ployeesshareinthedecisionsthatmostaffectthem,letthemshowinitiative,andeliminate
barriers to their success.
diet sheet. Netu wa1: Music sr've11s as
doctor stands in front of brilliant sun- Behindemployeesatisfactionisanimportant-andoftenover|ooked-component:lead-
set. tears rvelling up, and makes the ershiptraining.EVeryqUarter/everyleaderintheBaptistHealthCarenetworkUndergoeslead.
plans to understanding different
emotional, heart-rending promise,'As ership training, which runs the gamut from writing 90-day
God is my u,itness, you rvi11 211'2vs be personalitytypes'Communicationisalsocrucialinensuringemployeesatisfaction:inFebruary
industry'on every shift
hungry again."'But proper acting does we initiated a program,The Lineup, used in the hotel and restaurant
organization, employees gather in groups for five to ten min-
help a patient tel1 more of u'hat ails him and every day throughout the
discussion, and, most important, inspiration'
during diagnosis, better understand utes of information,

treatment choices, and more readlly Recently,askepticalphysicianwhowasbenchmarkingWithBaptistHospitaldecidedto


gone home.Without identifying
handle the therapy. Further, medical conduct a test. He waited until evening when his hosts had
halls, noting the way he was greet-
research backs up the contention that himself to any of the stafi he strolled through the hospital's
and escorted to the destination
doctors must be actors. Numerous stud- ed by each employee, offered help when he looked confused,

ies demonstrate that those doctors rvho herequested.Stoppingattheemergencyroomregistrationdesk,heto|dtheclerkhewaslook-


decl rvith their patients in o more cor- ingforalovedone.Whentheclerkcouldfindnopatientlistedunderthenamegiven,she
lng, empathic rnanner-in short, those calledPensacola,Stwoothertertiaryhospitals-ourcompetitors-andaskediftheywere
with better bedside manners-not only treating the "Patient" in question'
face feu,er lau,suits but have better pa- Thephysicianwasconvinced.Thenextdayheaskedifhecoulddescribehisexperienceto
tient treatment outcomes. othersWhowerebenchmarkingwithhim.ThatkindoftestimonytellsmethattheBaptist
Similarly, eL'et)one in contact n'lth Health Care experience will continue to win customer loyalty'

patients must find a ro1e, characterize


that ro1e, rehearse it, and perform it il Sruibtkfied'rs pruidrnt ora ctO, Baptist Hellth kre, Pensacola, Florida'

rve1l in every interaction. Whether


you're a receptionist, security guard, assistance, the ostensible reason for To guide a transformation, carriers
nurse, or administrator, the patient's having the service. Rather, most peo- must ensure their PolicYholders-
health care experience depends on ple call when they're feeling isolated, meaning aspirants will secure an actu-
how well you act. and talking to someone at the center al event, situation, or outcome. Busi-
enhances their daily 1ives. Most of Life- ness-to-business provider MMI Com-
ls a 6reat Experienee tnough? line's customers-the ones who actual- panies, Inc., of Deerfield, Illinois-
Embracing theater in your work will go ly pay Lifeline-are family members for purchased by the St. Paul Companies
a long way toward staging a compelling whom the offering relieves them of a year ago-sti1l insures hospitals and
experience and thereby gaining a com- worry. That's Lifeline's true business. physicians' practices against malprac-
petitive advantage. But just as goods At some point in the future the Ex- tice and other risks. But rather than
and services before them, experiences perience Economy will peak, and such just pay for lawyers and claims against
will eventually be commoditized. offerings will become commoditized' policyholders, MMI works hard at en-
Think again about how mass cus- Then, the Transformation Economy suring its doctors don't get sued in the
tomization is the antidote to commodi- will take over. Fitness centers and per- first place. Health care institutions
tization. What about customizing the sonal trainers, universities and man- cannot buy MMI's insurance without
experience itselfl When you customize agement consultants-and, yes, hospi- agreeing to participate in programs
an experience to make it just right for tals and surgeons-are already in the that encompass data gathering and
an individual-providing exactly what business of transforming their cus- analysis, education courses' and
he needs right now-you cannot help tomers, but unfortunately rarely recog- hands-on consulting that together
changing that individual.
til/hen you nize what economic offering they're re- help ensure that doctors, health care
customize an experience you automati- ally se1ling. How should health care fa- professionals, and health administra-
ca1ly turn it into a transt'ormation, which cilities think about making the play tors become less o;f a rlsk. Every year
companies layer on top of experiences, from services to experiences to trans- MMI analyzes how weli each institu-
just as they layer experiences on top o[ formations, without dropping the ball? tion progressed and adjusts its pro-
services. (See figure 1.) The insurance industry makes the grams to respond to changes in the in-
\il/ith transformations, the economic transition through successive econom- dustry, with the emphasis on improv-
offering of a company is the individual ic offerings. Traditional policy carriers ing clinical care. As former CEO Rick
person or company changed as a result merely insure their policyholders- Becker related to us, "ln today's iiti-
of what the company does. ln other meaning, as shown in figure 2, that gious society no one can elimlnate all
words, the customer is the product! clients only secure a payment in the possibilities of a lawsuit. But we're not
Therefore, the exact form and content event of a 1oss. Something happens, interested in a business becoming a
of any particular transformational of- they eventuaily get money-that's it. customer unless that business ls inter-
fering has to be considered very care- Progressive Insurance of Cleveland ested in becoming less of a risk."
fully. The transformation elicitor must takes insurance a step further. lts Doesn't that same sentiment apply
first understand its customers' aspira' claims adjusters ride in SUVs outfitted to patients in the heaith care system?
tions before it can hope to affect the with a personal computer, wireless up' No hospital can eliminate all the possi-
right change in particular traits- link, and everything else needed to effi- bilities of illness and injury. But pa-
whether they be physical, emotional, ciently resolve a claim from the acci- tients aren't interested in treatmenrs,
intellectua1, or spiritual-within that dent site. The Progressive claimant pathways, and procedures per se. Even
individual. These aspirations center finds his particular needs handled right customized services, compelling envi-
not on some externai good or service, then and there: he receives not only a ronments, and engaging interactions
but on the customer herself, about check, but perhaps a cup of coffee as aren't enough. If they're undergoing
what she wants to become. we1l, and, if need be, time to settle his treatment, what patients want is to be
Consider Lifeline Systems, Inc., of emotions inside the van and reassure made whole again. If they are healthy,
Cambridge, Massachusetts, which pro- loved ones of his safety (or arrange for they want to remain so. And in the
vides personal response devices. If the a ride) over the adjuster's ceil phone. end, what we all aspire to is a long and
user presses the device's button, a sig- lrogressive's compelling experience as- healthy, fu1l and productive life. There
nal goes through the telephone line to sures its policyholders-meaning guests are no economic offerings more valued
a Z4-holx monitoring center. There, secure confidence, encouragement, than that, and no company better Po-
trained monitors assess the nature of trust, or a feeiing of satisfaction. When sitioned to provide it than yours. r
the call and, if necessary, dispatch the something happens, Progressive assures
appropriate responder-friend, tela- that its policyholders not only get their B. Joseph Pine ll and James H. Gilmore,
tive, or pubiic emergency personnei- money immediateiy, but also that they founders of Strategic Horizons LLP of Aurora,
to handle the situation. Fewer than 5 feel better about the whole unfortunate Ohio, can be reached at pine&gilmore@cus-
percent of the calls require emergency situation. tomization.com or (330) 995-4680.

Reprinted from: HEALTH FORUM JOURNAL September/October 2001


Volume 44 Number 5 Published bY Health Forum lnc.. Printed in USA
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