Civic Intelligence

Php Familycare

990 • Fiscal year 2015 • EIN 36-4497604

Jan 01, 2015 to Dec 31, 2015 • Filed on Nov 02, 2016

PO Box 30377Lansing, MI 48909

(517) 364-8400

Siviq Scores

Precomputed percentiles for this filing year versus similar nonprofits in the same peer cohort.

Liabilities / Assets

73rd percentile

0.55x

Higher debt load relative to assets than 73% of similar nonprofits.

2015 filings • $50M-$100M nonprofits • Source year 2015

Liabilities / Revenue

31st percentile

0.14x

Higher debt load relative to revenue than 31% of similar nonprofits.

2015 filings • $50M-$100M nonprofits • Source year 2015

Net Margin

45th percentile

3.0%

Higher net margin than 45% of similar nonprofits.

2015 filings • $50M-$100M nonprofits • Source year 2015

Top Officer Pay

95th percentile

$1,560,020

Higher top officer pay than 95% of similar nonprofits.

Top officer pay equals 1.6% of source-year revenue.

2015 filings • $50M-$100M nonprofits • Source year 2015

Asset Growth

90th percentile

21%

Faster asset growth than 90% of similar nonprofits.

2015 filings • $50M-$100M nonprofits • Annualized from 2013 to 2015

Revenue Growth

86th percentile

28%

Faster revenue growth than 86% of similar nonprofits.

2015 filings • $50M-$100M nonprofits • Annualized from 2013 to 2015

Assets

Up

$24,790,567

Up $7,799,752 (+46%) from 2013

Net Assets

Up

$11,062,001

Up $3,158,868 (+40%) from 2013

Liabilities

Up

$13,728,566

Up $4,640,884 (+51%) from 2013

Revenue

Up

$94,927,311

Up $36,911,013 (+64%) from 2013

Expenses

Up

$92,033,291

Up $34,815,223 (+61%) from 2013

Net Income

Up

$2,894,020

Up $2,095,790 (+263%) from 2013

Historical Trend

Balance Sheet Trend

The highlighted filing sits inside the broader history for assets, liabilities, and net assets.

$30M$20M$10M$0Assets 2010: $12,927,161Liabilities 2010: $6,286,141Net Assets 2010: $6,641,0202010Assets 2012: $14,030,458Liabilities 2012: $7,225,251Net Assets 2012: $6,805,2072012Assets 2013: $16,990,815Liabilities 2013: $9,087,682Net Assets 2013: $7,903,1332013Assets 2015: $24,790,567Liabilities 2015: $13,728,566Net Assets 2015: $11,062,0012015Assets 2016: $12,577,811Liabilities 2016: $891,816Net Assets 2016: $11,685,9952016Assets 2017: $0Liabilities 2017: $0Net Assets 2017: $02017

Highlighted filing

2015

Assets$24,790,567
Liabilities$13,728,566
Net Assets$11,062,001

Operations Trend

Revenue, expenses, and net income across loaded years, with this filing highlighted.

$100M$50M$0-$50MExpenses 2010: $56,553,6132010Expenses 2012: $56,420,7272012Revenue 2013: $58,016,298Expenses 2013: $57,218,068Net Income 2013: $798,2302013Revenue 2015: $94,927,311Expenses 2015: $92,033,291Net Income 2015: $2,894,0202015Revenue 2016: $1,546,174Expenses 2016: $1,032,196Net Income 2016: $513,9782016Revenue 2017: $22,571Expenses 2017: $25,898Net Income 2017: -$3,3272017

Highlighted filing

2015

Revenue$94,927,311
Expenses$92,033,291
Net Income$2,894,020
Jump To
Filing Snapshot
Filing Period
Jan 1, 2015 to Dec 31, 2015
Signed
Nov 2, 2016
Return Version
2015v2.1
Gross Receipts
$94,927,311
Mission and Program Overview

Mission

Sparrow php's mission is to improve the health status of its members by facilitating quality, compassionate, accessible, and cost effective healthcare.

Balance Sheet Detail
LineBeginningEndChange
Assets
Savings and Temporary Cash Investments$15,157,538$15,296,673▲ $139,135
Investments in Publicly Traded Securities$4,775,056$4,638,209▼ $136,847
Accounts Receivable$1,271,181$937,750▼ $333,431
Total Assets$21,285,488$24,790,567▲ $3,505,079
Other Assets Total$81,713$3,917,935▲ $3,836,222
Liabilities
Accounts Payable and Accrued Expenses$11,734,761$12,612,193▲ $877,432
Other Liabilities$886,281$1,116,373▲ $230,092
Total Liabilities$12,621,042$13,728,566▲ $1,107,524
Net Assets / Fund Balance
Unrestricted Net Assets$8,664,446$11,062,001▲ $2,397,555
Total Net Assets Fund Balance$8,664,446$11,062,001▲ $2,397,555
Total Liabilities and Net Assets / Fund Balance$21,285,488$24,790,567▲ $3,505,079

Asset Categories

AssetBook ValueDepreciationBasis
Other Assets Org$917,935--

Endowment Activity

PeriodBeginningContrib.Gain/LossOther UsesEnd
2015$3,411,165$361,583▼ $49,824-$3,707,924
2014$3,184,706$200,567▲ $40,893-$3,411,165
2013$2,926,676$82,387▲ $187,643-$3,184,706
2012$2,641,860$147,795▲ $149,021-$2,926,676
2011$1,779,759$796,243▲ $97,691-$2,641,860
Compensation and Service Providers

Employees

NameTitleFull / Part TimeOtherTotal
Dennis SwanPres/CEO - S-$1,560,020$1,560,020
Dennis ReesePresident/cePT$467,629$467,629
George SchneiderCFO/COO - PhPT$240,625$240,625
Linda DickinsonDirector of Med RPT$183,141$183,141
Ann Hunt-fugate RphMgr ClinicalPT$182,112$182,112
Paula HowardSenior SalesPT$167,738$167,738
Scott WilkersonFormer Pres/-$43,337$43,337
James Butler IiiDirector-$1,350$1,350

Board Members and Trustees

NameTitle
Dennis ReesePresident/CEO - Php
Gwen HallDirector
Linda DickinsonDirector of Med Res Mgmt
George SchneiderCFO/COO - Php
Kevin EssenmacherController
Scott WilkersonFormer Pres/CEO/sec
Ann Hunt-fugate RphMgr Clinical Pharm
Dennis SwanPres/CEO - Shs
Paula HowardSenior Sales Rep
Kevin KaplanVP Sales

Highest Paid Contractors

ContractorServicesLocationCompensation
TrizettoHealthcare It1085 MORRIS AVENUE, Union, NJ 07083$1,252,693
Globalcare INCHealth6875 SHILOH RD E, Alpharetta, GA 30005-8403$368,409
MillimanConsulting15800 BLUEMOUND DR STE 100, Brookfield, WI 53005$304,422
The Advisory Board CompanyConsulting227 WEST MONROE STREET SUITE 5100, Chicago, IL 60606$277,835
Highpoint SolutionsHealth301 E GERMANTOWN PIKE, East Norriton, PA 19401$269,542
Revenue and Support

Revenue Composition

Contributions and Grants
$0
Program Service Revenue
$92,432,304
Investment Income
$470,088
Other Revenue
$2,024,919
Change in Net Assets
$2,894,020

Audited Revenue Reconciliation

Revenue per Audited Statements
$91,152,377
Revenue Not Reported on Financial Statements
$3,774,934
Revenue Not Reported on Form 990
$666,535
Other Revenue Adjustments
$3,774,934
Total Revenue per Audited Statements
$91,818,912
Total Revenue per Form 990
$94,927,311
Expenses and Functional Allocation

Major Expense Lines

Line ItemAmount
Other Expenses$29,246,794
Salaries, Compensation, and Employee Benefits$2,666,712
Grants and Similar Amounts Paid$0
Professional Fundraising Fees$0
Total Fundraising Expense$0

Functional Expense Allocation

Line ItemProgramManagementFundraisingTotal
Benefits to Members$60,119,785--$60,119,785
Other Salaries and Wages$1,580,208$507,253-$2,087,461
Fees for Services Management-$1,425,246-$1,425,246
Fees for Services Other$614,089$197,125-$811,214
Other Employee Benefits$249,127$79,971-$329,098
Information Technology$233,742$75,032-$308,774
Office Expenses$179,071$57,483-$236,554
Payroll Taxes$98,176$31,515-$129,691
Pension Plan Contributions$91,190$29,272-$120,462
Fees for Services Accounting-$81,298-$81,298
Occupancy-$34,263-$34,263
Other Expenses$150,942$32,791-$32,791
Fees for Services Legal-$26,630-$26,630
Fees for Service Investment Mgmnt Fees-$24,662-$24,662
Travel-$23,379-$23,379
Advertising$21,475--$21,475
Insurance-$20,380-$20,380
Conferences and Meetings-$383-$383
Total Functional Expenses$89,144,102$2,889,189$0$92,033,291

Audited Expense Reconciliation

Line ItemAmount
Total Expenses per Form 990$92,033,291
Total Expenses per Audited Statements$89,421,357
Expenses per Audited Statements$88,258,357
Expenses Not Reported on Financial Statements$3,774,934
Other Expense Adjustments$3,774,934
Expenses Not Reported on Form 990$1,163,000
Fundraising, Events, and Gaming
Fundraising activities
No
Gaming activities
No
Professional fundraiser used
No

Fundraising and Gaming Totals

Line ItemAmount
Professional Fundraising Fees$0
Political and Lobbying Activity
Political campaign activity
No
Subject to proxy tax
No
Debt and Bond Financing

Other Reported Liabilities

LiabilityAmount
State Refundable$627,000
Related Party Payable$489,373
Governance and Compliance

Governance Checklist

Compiled or reviewed by an accountant
No
Annual disclosure for covered persons
Yes
Audit committee
Yes
Business relationship with family members
No
Business relationship with organization members
No
Material changes to governing documents
No
Compensation from other sources disclosed
No
CEO compensation reviewed
Yes
Other officer compensation reviewed
Yes
Conflict-of-interest policy
Yes
Audited financial statements prepared
Yes
Key decisions subject to board approval
Yes
Management duties delegated
No

Governance Explanations

Form 990, Page 6, Part VI, Line 6

Physicians health plan (php) is the sole member of sparrow php (sphp) and sparrow health system is the parent and sole member of php. The board members elected by the board of directors are ratified by the sparrow health system board of directors. Decisions of the sphp board of directors may be subject to approval by the sparrow health system board of directors.

Form 990, Page 6, Part VI, Line 7A

Physicians health plan (php) is the sole member of sparrow php (sphp) and sparrow health system is the parent and sole member of php. The board members elected by the board of directors are ratified by the sparrow health system board of directors. Decisions of the sphp board of directors are subject to approval by the sparrow health system board of directors.

Form 990, Page 6, Part VI, Line 7B

Physicians health plan (php) is the sole member of sparrow php (sphp) and sparrow health system is the parent and sole member of php. The board members elected by the board of directors are ratified by the sparrow health system board of directors. Decisions of the sphp board of directors are subject to approval by the sparrow health system board of directors.

Form 990, Page 6, Part VI, Line 11B

Copies of the 2015 form 990 are reviewed by management. Once management completed its review of the form 990 copies were provided at the september 2016 board meeting for all board members to review and comment on.

Form 990, Page 6, Part VI, Line 12C

1) corporate compliance sends out the conflict of interest policy and questionnaires to all voting board members and the executive team annually. 2) all disclosures are received and reviewed by corporate compliance. 3) all disclosures are given a resolution code and presented to the ceo and governance committee of the board. 4) all board/committee level disclosures are provided to the respective board chair and executive liaison to ensure issues can be addressed on a transactional level (i.e. If a vote is required on a transaction involving an interested person).

Form 990, Page 6, Part VI, Line 15A

The process for determining compensation for the ceo of the organization involved the following: utilizing the compensation committee, using independent consultants, reviewing other similar organizations' 990s, compensation surveys, and final approval by the shs board of directors, as well as finalizing the salary package with a written employment contract.

Form 990, Page 6, Part VI, Line 15B

The process for determining compensation for officers or key employees of the organization involved the following: utilizing the compensation committee, using independent consultants, reviewing other similar organizations' 990s, using compensation surveys, and final approval by the shs board of directors, as well as finalizing the salary package with a written employment contract.

Form 990, Page 6, Part VI, Line 19

The governing documents, conflict of interest policy and financial statements are made available to the public as follows: the governing documents of sparrow php are submitted to department of insurance and financial services (difs). Those are publicly available to interested parties. The conflict of interest is available through sparrow health system by request to the sparrow compliance officer.

Filing and Contact Details

Filer

Filer Name
Sparrow Php
EIN
36-4497604
Phone
5173648400
Address
PO BOX 30377, LANSING, MI 48909

Signing Officer

Name
Dennis Reese
Title
President/CEO - Php
Phone
5173648400
Signed
2016-11-02
Discuss with paid preparer
Yes

Organization Details

Principal Officer
Dennis Swan
Formed
2002
Legal Domicile
Mi
Voting Board Members
3
Independent Board Members
2
Employees
0

Preparer

Firm
Andrews Hooper Pavlik Plc
Address
4295 OKEMOS RD STE 200, OKEMOS, MI 48864-6201
Preparer
Mark E Hooper
Phone
5177060800
Supplemental Narrative

Additional Explanations

Form 990

All lines left blank are not applicable to the organization.

Form 990, Page 2, Part III, Line 3

During the year ended december 31, 2015 sparrow php was not recommended by the state of michigan as an approved carrier of michigan medicaid insurance for the prosperity region in which the company operates. As a result effective december 31, 2015, sparrow php sold 100 percent of the membership to an unaffiliated health plan. The membership was sold for an agreed upon sum that was collected subsequent to year end.

Form 990, Page 2, Part III, Line 4A

Sphp's success in managing health care is due in part to the extensive network of participating providers in the hdn network. The hmo/hdn contractual arrangements allow sphp to arrange for healthcare to patients covered by the state of michigan's medicaid benefit plan. This arrangement allows the members to access a wide variety of independent providers within each hdn including physicians, hospitals, pharmacies, skilled nursing facilities, and allied health professionals. Sphp members may also receive care for services from a nonparticipating provider if such referral is recommended by a hdn participating physician and the service required for treatment, as determined by the hdn, is not available within the hdn's network. Sphp offers a variety of health care programs. Sphp offers choices that provide coverage within the network of contracted hdn providers, limited coverage outside of the sphp network, various levels of deductibles, co- payments, and coverage limits, all of which are designed to be responsive to payor needs. Sparrow php is owned by physician health plan (php). Physicians health plan (php) is owned by sparrow health system (shs) and holds a certificate of authority as an hmo in the state of michigan. Php is primarily a commercial hmo and also operates three subsidiaries, php insurance company (phpic), a commercial insurance company, sphp, and php service company (tpa) a third party administrator. All staffing functions and reporting are accomplished through the use of the same staff as php. Unless specifically noted, all references to php apply to php, phpic, sphp, and tpa. Php's service area includes the michigan counties of ingham, eaton, clinton, shiawassee, montcalm, gratiot, ionia, jackson, hillsdale, portions of isabella, saginaw, washtenaw, and lenawee. Phpic offers products across michigan. The sparrow php product is available to medicaid enrollees in eaton, clinton, ingham, ionia, montcalm, isabella, and shiawassee counties. As of december 31, 2015, there were approximately 34,000 enrollees in php's commercial hmo, 14,700 in tpa, 9,000 in phpic, and 21,600 enrollees in sphp. Php and sphp contracts directly with physicians health network (phn), a wholly owned subsidiary of shs. The php network is approximately 1,030 primary care physicians, 1,860 specialty care physicians, 800 allied health professionals, and 1,180 organizational providers that include 45 hospitals. Php measures the quality of care provided to its enrollees through annual review of indicators such as: - disease management program participation and outcomes, - quality of care concerns, and - hedis measures: the health plan effectiveness data and information set (hedis) is a group of nationally recognized measures of health plan performance in a variety of clinical and non-clinical areas. Php uses the effectiveness of care measures to determine progress and improvement in areas such as: diabetes, asthma, depression and follow-up after mental health admissions, breast and cervical cancer screenings, use of beta- blockers after heart attacks, child and adolescent immunizations, cholesterol management, controlling high blood pressure, smoking cessation, prenatal and postpartum care, and treatment of childhood respiratory infections. Php measures the quality of service provided to its enrollees by the review of performance measures related to: - access and availability of providers, - enrollee complaints and appeals, - customer service telephone access performance, and - member assessment. The consumer assessment of healthcare providers and systems (cahps) survey gives a general indication of how well the organization meets members expectations. The php qi program is ultimately accountable to the board of directors. In 2015 php received "full accreditation" status from urac for both health plan accreditation and health plan accreditation with health insurance marketplace. Urac accreditation signifies an issuer has undergone and passed a rigor

Form 990, Part XI, Line 9

Membership transfer 1,163,000 statutory reclass from revenue to expense -3,486,825 ceded reinsurance -263,446 investment expenses -24,663 membership transfer -1,163,000 statutory reclass from revenue to expense 3,486,825 investment expenses 24,663 ceded reinsurance 263,446

Financial Statement Notes

Schedule D, Page 2, Part V, Line 4

Sparrow php does not hold endowments. The endowments are held by sparrow clinton hospital and sparrow foundation. Sparrow health system is the sole member of physicians health plan, sparrow clinton hospital and sparrow foundation. Physicians health plan is the sole member of sparrow php. The endowments are maintained to provide a permanent source of income with the stipulation the principal is kept intact in perpetuity and the income generated from investments of the endowment funds can be used for the purpose established by the endowment.

Schedule D, Page 4, Part XI, Line 2D

Membership transfer 1,163,000

Schedule D, Page 4, Part XI, Line 4B

Statutory reclass from revenue to expense 3,486,825 ceded reinsurance 263,446 investment expenses 24,663

Schedule D, Page 4, Part XII, Line 2D

Membership transfer 1,163,000

Schedule D, Page 4, Part XII, Line 4B

Statutory reclass from revenue to expense 3,486,825 investment expenses 24,663 ceded reinsurance 263,446

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This appendix keeps the raw XML leaves available for debugging and edge-case review. The human report above is the primary experience.

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IRS990/Desc0SPARROW PHP (SPHP)IS A NON-PROFIT HEALTH MAINTENANCE ORGANIZATION (HMO). SPHP USES A PRIMARY CARE CONCEPT FOR DELIVERING HEALTH CARE IN A HEALTH DELIVERY NETWORK (HDN) STRUCTURE. IT ARRANGES FOR THE PROVISION OF COMPREHENSIVE OUTPATIENT AND INPATIENT MEDICAL AND SURGICAL SERVICES TO MEMBERS AND THEIR QUALIFIED DEPENDENTS ON THE BASIS OF A FIXED PREPAID SUM WITHOUT REGARD TO THE FREQUENCY OR EXTENT OF SERVICES FURNISHED TO ANY PARTICULAR MEMBER OR QUALIFIED DEPENDENT. SPHP CONTRACTS WITH VARIOUS HDNS WHO PROVIDE HEALTHCARE SERVICES TO MEMBERS. SPHP'S COMMITMENT IS TO DEVELOP AND DELIVER QUALITY MANAGED CARE PRODUCTS AT A REASONABLE COST FOR ITS MEMBERS. SPHP'S SUCCESS IN MANAGING HEALTH CARE IS DUE IN PART TO THE EXTENSIVE NETWORK OF PARTICIPATING PROVIDERS IN THE HDN NETWORK. THE HMO/HDN CONTRACTUAL ARRANGEMENTS ALLOW SPHP TO ARRANGE FOR HEALTHCARE TO PATIENTS COVERED BY THE STATE OF MICHIGAN'S MEDICAID BENEFIT PLAN. THIS ARRANGEMENT ALLOWS THE MEMBERS TO ACCESS A WIDE VARIETY OF INDEPENDENT PROVIDERS WITHIN EACH HDN INCLUDING PHYSICIANS, HOSPITALS, PHARMACIES, SKILLED NURSING FACILITIES, AND ALLIED HEALTH PROFESSIONALS. SPHP MEMBERS MAY ALSO RECEIVE CARE FOR SERVICES FROM A NONPARTICIPATING PROVIDER IF SUCH REFERRAL IS RECOMMENDED BY A HDN PARTICIPATING PHYSICIAN AND THE SERVICE REQUIRED FOR TREATMENT, AS DETERMINED BY THE HDN, IS NOT AVAILABLE WITHIN THE HDN'S NETWORK. SPHP OFFERS A VARIETY OF HEALTH CARE PROGRAMS. SPHP OFFERS CHOICES THAT PROVIDE COVERAGE WITHIN THE NETWORK OF CONTRACTED HDN PROVIDERS, LIMITED COVERAGE OUTSIDE OF THE SPHP NETWORK, VARIOUS LEVELS OF DEDUCTIBLES, CO- PAYMENTS, AND COVERAGE LIMITS, ALL OF WHICH ARE DESIGNED TO BE RESPONSIVE TO PAYOR NEEDS. SPARROW PHP IS OWNED BY PHYSICIAN HEALTH PLAN (PHP). PHYSICIANS HEALTH PLAN (PHP) IS OWNED BY SPARROW HEALTH SYSTEM (SHS) AND HOLDS A CERTIFICATE OF AUTHORITY AS AN HMO IN THE STATE OF MICHIGAN. PHP IS PRIMARILY A COMMERCIAL HMO AND ALSO OPERATES THREE SUBSIDIARIES, PHP INSURANCE COMPANY (PHPIC), A COMMERCIAL INSURANCE COMPANY, SPHP, AND PHP SERVICE COMPANY (TPA) A THIRD PARTY ADMINISTRATOR. ALL STAFFING FUNCTIONS AND REPORTING ARE ACCOMPLISHED THROUGH THE USE OF THE SAME STAFF AS PHP. UNLESS SPECIFICALLY NOTED, ALL REFERENCES TO PHP APPLY TO PHP, PHPIC, SPHP, AND TPA. PHP'S SERVICE AREA INCLUDES THE MICHIGAN COUNTIES OF INGHAM, EATON, CLINTON, SHIAWASSEE, MONTCALM, GRATIOT, IONIA, JACKSON, HILLSDALE, PORTIONS OF ISABELLA, SAGINAW, WASHTENAW, AND LENAWEE. PHPIC OFFERS PRODUCTS ACROSS MICHIGAN. THE SPARROW PHP PRODUCT IS AVAILABLE TO MEDICAID ENROLLEES IN EATON, CLINTON, INGHAM, IONIA, MONTCALM, ISABELLA, AND SHIAWASSEE COUNTIES. AS OF DECEMBER 31, 2015, THERE WERE APPROXIMATELY 34,000 ENROLLEES IN PHP'S COMMERCIAL HMO, 14,700 IN TPA, 9,000 IN PHPIC, AND 21,600 ENROLLEES IN SPHP. PHP AND SPHP CONTRACTS DIRECTLY WITH PHYSICIANS HEALTH NETWORK (PHN), A WHOLLY OWNED SUBSIDIARY OF SHS. THE PHP NETWORK IS APPROXIMATELY 1,030 PRIMARY CARE PHYSICIANS, 1,860 SPECIALTY CARE PHYSICIANS, 800 ALLIED HEALTH PROFESSIONALS, AND 1,180 ORGANIZATIONAL PROVIDERS THAT INCLUDE 45 HOSPITALS. PHP MEASURES THE QUALITY OF CARE PROVIDED TO ITS ENROLLEES THROUGH ANNUAL REVIEW OF INDICATORS SUCH AS: - DISEASE MANAGEMENT PROGRAM PARTICIPATION AND OUTCOMES, - QUALITY OF CARE CONCERNS, AND - HEDIS MEASURES: THE HEALTH PLAN EFFECTIVENESS DATA AND INFORMATION SET (HEDIS) IS A GROUP OF NATIONALLY RECOGNIZED MEASURES OF HEALTH PLAN PERFORMANCE IN A VARIETY OF CLINICAL AND NON-CLINICAL AREAS. PHP USES THE EFFECTIVENESS OF CARE MEASURES TO DETERMINE PROGRESS AND IMPROVEMENT IN AREAS SUCH AS: DIABETES, ASTHMA, DEPRESSION AND FOLLOW-UP AFTER MENTAL HEALTH ADMISSIONS, BREAST AND CERVICAL CANCER SCREENINGS, USE OF BETA- BLOCKERS AFTER HEART ATTACKS, CHILD AND ADOLESCENT IMMUNIZATIONS, CHOLESTEROL MANAGEMENT, CONTROLLING HIGH BLOOD PRESSURE, SMOKING CESSATION, PRENATAL AND POSTPARTUM CARE, AND TREATMENT OF CHILDHOOD RESPIRATORY INFECTIONS. PHP MEASURES THE QUALITY OF SERVICE PROVIDED TO ITS ENROLLEES
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