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Business Plan House Calls Docs
Christine Lewandowski
Healthcare mangement Siena Heights University
Table of Contents
Executive Summary 2
Program Overview 3-4
Market Analysis 4-8
Physician Analysis 8-9
SWOT Analysis 9-10
Program Design 11-12
Financial Analysis 12-16
Service Line Strategies 16-17
Market Initiatives 17-20
Implementation and Monitoring of the Plan 20-21
Implications 22
Appendix 23-25
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Business Plan House Calls Docs
Executive Summary
The community has identified a significant need for transitional care. This is evident in
the readmission rates for seniors in our community. Readmissions have been related to a lack of
coordination of care, lack of communication, lack of support and access to primary care, adverse
drug events, and a lack of transportation for post-acute care. There are many reasons this has
created the perfect storm for poor patient outcomes. Under the new CMS payment models,
including bundling payments and value-based purchasing alignment, quality of care needs to be
the forefront agenda for all providers.
House Calls Docs propose to provide a solution to the lack of access to care for the senior
community of Orange, Osceola, and Seminole counties in Florida. Home based medical care will
be provided post-discharge from an acute care setting. In addition, chronic disease management
will be closely monitored to ensure barriers are removed from better outcomes and achieve goals
of self-management by means of educating patients.
The market for these services include urban and rural populations of Medicare
beneficiaries. The partnership with Florida Hospital Orlando and its Florida Hospital Medical
Group will allow for greater access to a referral base, HIT system, and opportunity to improve
the community’s health and outcomes. Addressing the lack of coordination in the care continuum
by bringing the care to the patient in their home setting (home, skilled nursing facility, or assisted
living facility) will allow for patient-centered care and closely monitor chronic diseases and
prevent them from necessitating acute care. This will benefit House Calls Docs and Florida
Hospital Orlando mutually by improving quality and reducing readmission rates.
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Program Overview
Mission: The mission of House Calls Docs is to treat the senior population manage chronic
conditions and improve better outcomes by treating the patient’s whole person, body, mind, and
spirit.
The service line objectives include partnering with the community to create a transitional care
model and relationships to further positively impact the communication across the care
continuum. We will share best practices and successes with the community to improve the health
of the population and reduce medical errors.
Service Line Objectives
To provide chronic care management to the community
To reduce unnecessary readmissions to acute care by providing transitional care
management
To provide convenience to patients who require or request home care
To provide preventative treatment
To provide high quality care and remove barriers of patients traveling to appointments
Scope of Service
Primary care medicine
Wellness visits
New illness exams
Follow-up care from discharge
Referral for specialty care
Medication management
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Mission and strategic goals are aligned. Florida Hospital has performed a community needs
assessment and our goals are aligned in addressing health issues in the community. The focus
will be on the most vulnerable population who have limited access to healthcare. The community
has a high prevalence for heart disease, utilization of mental health services, and limited access
to care. Our goals are aligned with Florida Hospital Orlando’s to address these issues. Our
missions are in line to treat the whole person- mind, body, and spirit.
Market Analysis
Market share
Utilization volume, both current and projected
Current volumes were not available at this time. Projected volumes are 22,700 for initial year
and 35,800 for subsequent years two through five. According to the federal labor bureau of
statistics, healthcare is projected to be a rapidly growing market in response to the aging baby
boomer population. There are currently three direct competitors in mobile physician care. There
are hundreds of family and internal medicine practitioners; however, they don’t deliver the
unique care we provide.
Competitor Profile
In the factoring of the competition, the primary care market and home health agencies available
to the community were counted. In this geographic are, there are a total of sixty-two home health
agencies. There are innumerable amount of primary care physicians. However, there are only
three that provide mobile physician care.
Performance Metrics
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Orlando Health is the biggest competitor health service organization in the market area. The
readmission rates are lower at 19.4% compared to Florida Hospital Orlando at 21.9%. Our
performance will be measured by the ability to impact readmission rates for Florida Hospital
Orlando and PQRS measures.
Defined service area
Orange, Osceola, and Seminole counties in Florida.
Orange County:
Population Age 65+: 117,189
Medicare Beneficiaries: 110, 919
Osceola County:
Population Age 65+: 32,428
Medicare Beneficiaries: 29,656
Seminole County:
Population Age 65+: 54,244
Medicare Beneficiaries: 50,677
Population demographics:
Orange County
o Population of people 65+ under poverty level: 10.6%
o Median Income: $47,581
o Disability Rate: 35.5%
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o Race:
White: 45.1%
Hispanic: 27.6%
African American: 19.7%
Other: 7.6%
Osceola County
o Population of people 65+ under poverty level: 11.2%
o Median Income: $43,891
o Disability Rate: 41.7%
o Race:
White: 38.9%
Hispanic: 46.8%
African American: 9.3%
Other: 5%
Seminole County
o Population of people 65+ under poverty level: 7.8%
o Median Income: $58,175
o Disability Rate: 34%
o Race:
White: 65.6%
Hispanic: 17.8%
African American: 10.7%
Other: 5.9%
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In this region, the readmission data available at Hospital Compare is:
Hospital Compare data is more up to data compared to CMS data. CMS data, however, is
matured and will not adjust.
According to CMS data from CY 2014 for readmission data
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Of those Medicare beneficiaries that were readmitted, only 66% had a follow-up appointment
with a primary care physician. Of those will a follow-up, 46.8% were subsequently still
readmitted. 92.5% of those patients were readmitted within 1-14 days. 7.5% of those within 15-
30 days.
Defined service area
Orange, Osceola, and Seminole Counties, Florida
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Nation Florida Region Florida Hospital Orlando Orlando Health0
5
10
15
20
25
Readmission Data CY 2014
Readmission Data CY 2014
Zip Codes for Orange, Osceola, and Seminole Counties33848 34770 32751 32814 3471534770 34772 32801 32825 3474734771 32730 32807 32831 3474432732 32750 32817 34711 3474532746 32803 32824 34753 3270732804 32806 32832 34743 3270832805 32818 32839 34746 3277932819 32822 34756 32703 3278932820 32833 34742 32709 3281032835 32837 34758 32766 3281132836 34761 32701 32792 3282834786 34741 32712 32809 3282934787 34769 32765 32812 3473434739 34773 32798 32827 34736
32714 32808 32830
Physician Analysis
Medical Staff Age Assessment
The number of retiring physicians in the market exceed the number of new entering physicians.
This demonstrates a physician shortage, especially in primary care.
Recruitment recommendations
It is recommended to recruit physicians who are committed to delivering a model of care that
focuses on the entire patient, not just a visit. There must be a commitment to managing the
seniors in our community and preventing unnecessary admission and readmission to the acute
care setting. Recruitment efforts should be made to capitalize on physicians who have
established a knowledge and relationship with post-acute care providers and understand how to
manage the transitions of care.
SWOT Analysis
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Strengths = Partnership with Florida Hospital and Physician Medical Group. Few competitors in
mobile physician care.
Weaknesses = High readmission rates.
Opportunities = Only 2 competitors in direct service line of home physician care, opportunity to
reduce readmission rates with transitional care model.
Threats = Many competitors in primary care available as alternatives to care, ACOs.
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Program Design
Volume projections
Year 1= 22,700
Year 2-5= 35,800
Services provided
Primary Care medicine
Wellness visits
New illness exams
Follow-up care
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Environmental Analysis
Business Plan House Calls Docs
Referral for specialty care
Medication management
Capacity and space allocation
2,500 sqft office space to be leased centrally in Orlando. There is also the capacity to utilize the
EMR/EHR framework Florida Hospital Orlando currently operates. The benefit from this is to be
able to view EMR data from Orlando Health too.
Facility/Equipment needs
The facility will need office equipment, for example, desk, computers, printers, EMR system
(Cerner), chairs, etc. Also to be purchased for home care: portable EKG machine, nebulizer,
portable x-ray and ultrasound machine, and a Doppler machine.
Management and personnel
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Florida Hospital Orlando
Medical Director Florida Hospital Medical Group Administrator
Physicians
SLP PT
MSW NP
RN HHA
Business Plan House Calls Docs
Financial Analysis
Pursuant to a request from Florida Hospital Medical Group and Florida Hospital Orlando,
an analysis has been completed to provide mobile primary care services including transitional
care models for Florida Hospital Orlando.
BACKGROUND
Currently, Florida Hospital Orlando has a high rate of readmissions. This has been
determined by CMS data to be related to a lack of coordination of care following the patients’
discharge. Patients are typically discharged to home, skilled nursing facilities, or home health
agencies. The readmission rates are above Florida averages and above national averages.
According to payment reforms, Florida Hospital Orlando will face penalties for these rates if
they do not improve. This has created a need to reach the patients discharged to the community
at their convenience. Many patients do not have the ability due to socioeconomic reasons and
disabilities to get to a physician office. This provides an opportunity for House Calls Docs to
partner with Florida Medical Group to provide in-house services to those homebound Medicare
fee-for-service (FFS) beneficiaries. This partnership will create a transitional care model to
manage chronic conditions to reduce the instances of necessity for patients to return to the acute
care setting. This community, Orange, Seminole, and Osceola counties have been identified as a
need for a coordination of care services to improve the senior patient outcomes and reduce
readmission rates. With the ever-increasing demand for improved quality of care, it has become
apparent that Florida Hospital Orlando could expand its primary care and chronic conditions
management services. Volume forecasts to support this were supplied by Florida Hospital
Medical Group.
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The total project cost is $ 1,379,517.
FACTS AND ASSUMPTIONS
1. The initial investment of $ 1,300,000 consists of obtaining a leased office space for 2,500
square feet for $24,000 annually. There will be business equipment expenses estimated at
$50,000. The capital expenses for Ultrasound, X-ray, EKG, and Doppler machines is estimated
at$ 329,185. Medical equipment is estimated at $40,000 for miscellaneous supplies annually.
2. Florida Hospital Medical Group, provided volume estimates based on geographic
demographics. These estimates include a 3% increase each year. The projected volume for year 1
is 22,700 services provided.
3. The estimated gross revenue per visit is $250, Supplies are estimated at $5.00 per patient, for a
net revenue of $245 per patient. While gross and net revenue per patient were kept constant,
supply expense was increased by 3% each year to allow for inflation.
4. Salary expenses were provided by salary.com to account for fair market value for the specific
market area. The salary expense consists of 11.0 FTE. Salary expense was increased by 3% each
year to match the procedural growth rate.
5. Depreciation expenses for Ultrasound (5years), EKG (7 years), and Doppler (5 years)
equipment were based on a useful life chart provided by Northwestern University (Accounting
Services. (n.d.).
6. Rent, utilities and related expenses were calculated at $24,000 annually.
7. The indirect expenses are estimated at $10,000 per year to account for expenses involving
travel and administrative costs that are not directly related to patient care.
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FINDINGS AND RECOMMENDATIONS
The attached schedule was completed based on the above Facts and Assumptions.
With an initial investment of $1,300,000, the project provides a positive Net Present Value
(NPV) of $ 23,825,281with an Internal Rate of Return (IRR) of 480% and a Payback. Period of
less than one year. This rate of return represents an acceptable return according to corporate
guidelines. As such, this project is financially feasible.
NPV @ 10% $ 23,825,281
IRR of 480%
Payback (yrs) > 1 year
The expected financial impact for House Calls Docs and Florida Hospital Orlando and Medical
Group is expected to be extremely profitable.
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Assumptions used on financials
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The assumptions used were that there would be three physicians, three nurse
practitioners, social worker, speech language pathologist, home health aides, and two registered
nurses to be able to care for patients at initial estimate of eight visits per day. The initial year
would be a growing of the referral base from Florida Hospital Medical Group and Florida
Hospital Orlando. That patient base would grow and keep steady through year five. A volume of
22,700 for the initial year and 35,800 for following years. It is estimated that a Medicare
payment for each patient visit is $250 with $5 in supplies costs. Indirect costs are related to travel
and administrative costs. Insurance estimates were based on an online search. Rent is estimated
at $2,000 per month based on going rates for the community and square footage. Maintenance is
not expected to be needed in the first year and minimally the four years following. Florida
Hospital has placed in the joint-venture contract of $50,000 for House Calls Docs to receive if
successfully impacting readmission rates of 4% or greater each year. Depreciation of capital
equipment costs have been spread over the five years. Salaries were estimated using an online
resource for market area rates. Changes in volume will impact the financial standing of House
Calls Docs minimally and the risk is low. At 10,000 services per year, the company will still
remain profitable. The visit amount is an estimate based on all services available and the average
rate of disability for the community at approximately 35%.
Service Line Strategies
The strategies directly correlate with the plan’s objective(s) and those items identified in
the SWOT analysis. A strategic focus should remain on quality of care, consumer satisfaction,
volume, utilization management and cost control. “It has been widely argued that geographic
markets for physician services are relatively local and segmented by specialty” (Kleiner, Sam,
Lyons, Sean, White, and William, 2012, p. 4). The mobility of the practice will greater expand
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the advantages of the primary care market in potential to reaching a greater span. In turn, this
business has higher potential for growth by not be limited to a close proximity of geographic
location.
Marketing Initiatives
Target market and demand forecasts are optimistic with a higher than average population
ages 65 and over and 35% disability rate. The brand name will be owned by Florida Hospital
Orlando and House Calls Docs respectively. Marketing will be focused on communicating to the
customers that our focus is on patient satisfaction and quality. It is by mindful relationship
building that we intend to get this message out. Communicating with the community through
coalitions and patients, we will demonstrate our commitment to quality.
Marketing will be facilitated by Florida Hospital Orlando on behalf of Florida Hospital
Medical Group and House Calls Docs. The target market is to seniors in the Orange, Seminole,
and Osceola counties. Marketing will be facilitated at outreach communities meetings, aging
adult community service organizations, and at the time of discharge from Florida Hospital
Orlando.
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Florida Hospital Orlando was ranked number one in Florida and the Orlando region.
According to Becker’s Hospital Review in 2012, the market share included 157,585 outpatients,
44, 099 inpatients, and 59, 961 Emergency room visits. In Florida, 46.4% of hospital discharges
in the 60 + population accounted for in 2013. In Florida, 53.9% of total healthcare charges were
to Medicare. The trends in readmissions have been negative. Despite efforts to improve the
coordination of care, readmission rates have been trending upwards.
Pricing and price sensitivity
The proposed prices are estimated. It was not possible to gain actual pricing strategy
based on information available to the public. Medicare only provides a formula for basing
pricing schedules on. Being that we don’t have an actual physician provider number and analysis
of the history of costs to provide care, the geographically appropriate factor in the equation is the
only information available. That information is not quantifiable at this point. Further consultation
with Florida Hospital Orlando and medical group will be necessary to access Medicare’s fee
schedule.
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There is a strong referral base in the community by partnering with Florida Hospital
Orlando. They possess a high market presence and are one of the largest providers in the state of
Florida. The partnership to reduce readmissions is based on the readmission rate the hospital had
from 2014 CMS data. Osceola County is at 23.9%, Orange County is at 20.92%. Seminole
county is rural and the referral base there is included in Orange counties readmission rate.
Promotion and advertising
The proposed business venture will be marketed to the target population from referral
from Florida Hospital Orlando, referrals from Florida Hospital Medical Group for patients who
are unable to travel to appointments. Marketing will also be advertised through word of mouth
through a professional network at the community coalitions for organizations wishing to reduce
their readmission rates with a transitional care model.
Implementation Plan
The Medical Director will be responsible for the onboarding of the physicians and Nurse
practitioners. The Administrator will be on boarded with Florida Hospital Orlando. The manuals
of policies and procedures will be created for accreditation by the Medical Director. The
Administrator will facilitated accreditation and contracts with lab and physical therapy with
Florida Hospital Orlando. The Administrator will research and contract with a pharmacy service
to utilize. Currently, Florida Hospital Orlando utilizes Walgreens. Physicians and NP will meet
with the case management team at the hospital to discuss appropriate referrals. Accreditation will
be obtained and operations will start January 4th. The physicians will see patients in home and the
NP and/or RN will follow up with the patient as appropriate. A case manager will also be
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assigned the patient for instances of patient transfer between settings to facilitate smooth
coordination.
Evaluation Criteria
The project will be evaluated on its impact on reducing readmissions to Florida Hospital
Orlando, the physicians, and the post- acute care providers with whom patients are discharged to.
The success of the business will also be reflected in a minimum of 5% growth in revenue.
Evaluation of Medicare reimbursement penalties and reimbursement rates based on quality
metrics reported will also determine if the transitional care model is successful and the care
providers are providing high quality care. The estimated workload is eight patient encounters a
day at minimum. This may be exceeded for visits to skilled nursing facilities in which providers
are able to care for patients in a group setting. The Medical Director will be responsible for
monitoring the quality outputs and the administrator of House Calls Docs will monitor the
readmission data and it will be compared to CMS data for its completeness and accuracy.
Exit Strategy
If the proposed joint venture is not successful in mutually reaching goals for Florida
Hospital Orlando, Florida Hospital Medical Group, and House Calls Docs, then the assets will be
forfeited to Florida Hospital Orlando. Contracts for laboratory utilization and physical therapy
services will be terminated. The cost for terminating will include sunk costs of capital
equipment, marketing, and training.
Implementation and Monitoring of Plan
This business plan will be implemented by the Medical Director of Florida Hospital
Medical Group in partnership with the three physicians of House Calls Docs. Monitoring of
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Quality metrics and business appropriateness will be overseen by the Medical Director of Florida
Hospital Medical Group. Quality measures will be submitted to CMS. The business plan
implementation will be monitored on a quarterly basis for financial stability and quality.
Physician quality measures will be assessed monthly. Readmission data will be provided per
Medicare claims from Florida Hospital Orlando and CMS. Volumes will be assessed according
to administrator records, in addition, to claims data. Employed will be three primary care
physicians, three nurse practitioners, two registered nurses, and a case manager to coordinate the
care continuum, an administrator to facilitate appropriate practices in line with regulations and
appropriate billing, and a social worker to manage patients’ needs to adhere to management of
chronic illness.
The health information technology system that will be utilized will be jointly used with
Florida Hospital Orlando, Cerner. This will be used in conjunction with a business enterprise
system to link financial, clinical, and operational data. Electronic medical records can be
accessed from Florida hospital Orlando and Orlando Health due to a partnership.
Physician referrals will be from Florida Hospital Orlando upon discharge. Florida
Hospital Medical Group will refer patients who request home care. Referrals also can be
accepted from other systems in the community, such as, Orlando Health. Patient volume is
estimated to start for the first year at 22,700 patient services and grow to 35,800 annually once
the relationships have been established. It is estimated that the capacity for provider to reach
eight patients per day and more if providing care in a group setting, i.e., skilled nursing facility.
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Implications
Impact of Plan
The goal of this plan is to partner with Florida Hospital Orlando and Florida Hospital Medical
Group in order to address a community need of managing chronic conditions and reducing
unnecessary readmissions to the acute care setting. It is expected to provide high quality care in
the convenience of the patients’ home setting. It is also expected to improve patient follow up
care from the acute care setting by eliminating the barriers of traveling.
“This analysis of market-level Medicare spending data between 1995 and 2005 reveals that the
proportion of PCPs is not associated with spending growth” (
Risk Factors
There is inherent risk in providing a new model of care not experienced by the community for
quite some time. There are risks that the Florida Hospital Physician Group may interpret this
service as a threat to their current market share. In fact, it is not a threat, it is a partnership to
improve the community’s care and ensure patient’s follow up to manage their chronic condition
without barriers.
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Appendix
References
2012-2015 Orange County Community Health Improvement Plan (CHIP). (2009). Retrieved
from http://www.orchd.com/documents/chip.pdf
Accounting Services. (n.d.). Retrieved from http://www.northwestern.edu/controller/accounting-
services/equipment-inventory/useful-lives.html
Brown, B. (2015, March 26). Best Way to Run a Hospital Readmissions Reduction Program.
Retrieved from https://www.healthcatalyst.com/healthcare-data-warehouse-hospital-
readmissions-reduction
Chernew, M., Sabik, L., Chandra, A., & Newhouse, J. (2009). Would Having More Primary Care
Doctors Cut Health Spending Growth? Health Affairs, 28(5), 1327-1335.
doi:10.1377/hlthaff.28.5.1327
Current US Inflation Rates: 2005-2015. (2008, July 22). Retrieved from
http://www.usinflationcalculator.com/inflation/current-inflation-rates/
Evans, M. (2013). ACOs could hurt competition, Health Affairs authors say. Retrieved from
http://www.modernhealthcare.com/article/20130806/BLOG/308069996
Florida Cunningham Group. (n.d.). Retrieved from
http://www.cunninghamgroupins.com/historic-medical-malpractice-insurance-rates/
florida/
Florida Hospital Orlando | 100 Great Hospitals in America 2015. (2015). Retrieved from
http://www.beckershospitalreview.com/100-great-hospitals-2015/florida-hospital-
orlando-15.html
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GE MAC 1200 Resting EKG Machine (Refurbished). (n.d.). Retrieved from
http://discountcardiology.com/GE-MAC-1200-Resting-EKG-Machine.html?
gclid=CPXYl_P928gCFY8dgQodrHkBJg
Hospital Discharge Summary, 2013. (2014). Retrieved from
https://floridahealthfinderstore.blob.core.windows.net/documents/researchers/QuickStat/
documents/HospitalDischargeQuickSummary2013.pdf
Kleiner, Sam and Lyons, Sean and White, William, 2012, “Provider Concentration in Markets
for Physician Services for Patients with Traditional Medicare” Health Management,
Policy and Innovation, 1(1) 3-18.
Our Mission. (n.d.). Retrieved from https://www.floridahospital.com
Nelson, O. N. (2012). Relationship quality: Upshot of mindfulness-based marketing strategy in
small organizations. The International Journal of Quality & Reliability Management,
29(6), 626-641. doi:http://dx.doi.org/10.1108/02656711211245638
Roney, K. (2012). 10 Things to Know About Florida Hospital Orlando. Retrieved from
http://www.beckershospitalreview.com/hospital-profile/10-things-to-know-about-florida-
hospital-orlando.html
Salary Wizard- Do you know what you're worth? (2015). Retrieved from
http://swz.salary.com/SalaryWizard/Case-Management-Director-Salary-Details-32709-
Christmas-FL.aspx?&fromevent=swz.jobdetails.freepop
SonoScape A6 Review. (n.d.). Retrieved from http://www.providianmedical.com/ultrasound-
machines/sonoscape/sonoscape-a6/
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Your Geography Selections. (n.d.). Retrieved from
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk
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