1 Darin Gordon 12/11/2015 GETTING MORE BANG FOR THE BUCK CSG ANNUAL MEETING
1
Darin Gordon
12/11/2015
GETTING MORE BANG FOR THE BUCK
CSG ANNUAL MEETING
2
Medicaid makes up a significant portion of total U.S. health spending
Medicaid 17%
Medicare 22%
Other Public & Private
12%
Private Health Insurance
35%
Consumer Out of Pocket
14%
U.S. Health Spending by Source
Total = $2.5 trillion
• NOTE: Health spending total does not include administrative spending.
• SOURCE: Health expenditures: KFF calculations using 2013 NHE data from CMS, Office of the Actuary
3
Medicaid is a major financing source for health care services
17% 17%
8%
30%
8%
Total HealthServices and
Supplies
Hospital Care ProfessionalServices
Nursing HomeCare
Prescription Drugs
Medicaid as a share of spending by select services, 2013
Total National Spending (billions)
$2,469 $937 $778 $156 $271
• NOTE: Includes neither spending on CHIP nor administrative spending. Definition of nursing facility care was revised from previous years and no longer
includes residential care facilities for mental retardation, mental health or substance abuse. The nursing facility category includes continuing care
retirement communities.
• SOURCE: CMS, Office of the Actuary, National Health Statistics Group, National Health Expenditure Accounts, 2015. Data for 2013.
4
TennCare - Medicaid in Tennessee
53% TennCare pays for
more than 50 percent
of births in the state
1,469,900
More than 1.4 million
Tennesseans are enrolled
in the program
That’s
more
than 20% of the state’s
population
Transplants 78
2,250 Prosthetics
41,400 Treated for cancer
310,200 Receive Medicare
assistance
455,000 Well-child visits
544,900 Children dental
check-ups
762,900 Inpatient days
2,347,50
0 Outpatient visits
2,639,300 Prescriptions to treat diabetes,
heart disease, and asthma 50% of the state’s
children
&
All members are enrolled in one of 3
health plans which consistently ranked in
the top nationwide. 50%
Provides health
insurance to
approximately
2,534,700 Mental health & substance
abuse counseling visits
5
UT conducts an annual
survey of TennCare
members.
Satisfaction has remained
above 90% for the past 7
years.
94% of respondents said
they initially sought care at
a doctor’s office or clinic
rather than a hospital.
60%
65%
70%
75%
80%
85%
90%
95%
100%
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
TennCare Successes - Quality
“TennCare just has [a] really well-
run system right now.” – Matt Salo,
Executive Director of the National
Association of Medicaid Directors
(NAMD). From Governing Magazine
Oct. 6, 2015
• Out of 33 HEDIS measures tracked
since 2007, 85% have shown
improvement over time. These
measures include access and
availability, prevention and screening,
and effectiveness of care.
• 47 measures have shown
improvement from 2014-2015.
• Double digit increase in screening
and counseling related to obesity and
physical activity in children and adults.
2015 HEDIS
QUALITY RESULTS
2015 TENNCARE
SATISFACTION
RESULTS
95%
6
2005
State
TennCare
-2
0
2
4
6
8
10
12
ME
CA
MN
MO AZ
VT
LA OK
CO SD NM FL MS
MA
PA CT
OR
VA
DE
MD
WI
US
Avg
.
ID MT
TX AR
OH
WA IL IA AK RI
WV KY
NC
GA IN NE
AL HI
UT
NV
WY NJ
MI
KS
SC NY
TN NH
ND
2015
http://www.pewtrusts.org/en/multimedia/data-visualizations/2014/fiscal-50#ind7
TennCare Successes - Fiscal
For the past 10 years
we’ve consistently
remained approximately
20% of state
appropriations.
23.4%
22.2%
* So as not to under-report
TennCare Appropriations,
2009, 2010 & 2011 were
increased to account for ARRA.
The increases for these years
were taken from the 2011
Governor's Recommended
Budget.
Percent point increase from
2000 to 2013 in Medicaid
spending as part of state
budget (state dollars).
Change in State Medicaid Spending as a
Share of Own-Source Revenue, 2000 and
2013*
TennCare
Appropriations
Pe
rce
nta
ge
Po
ints
TN
*Own-source revenue is derived from the U.S. Census
Bureau’s “general revenue” minus federal funds to states
This graph shows projected medical trend for commercial insurance, Medicaid nationally, and TennCare. (Sources: Price WaterhouseCooper, CMS National Health Expenditure Data, and TennCare budget data)
According to a GAO report released in June 2014, TN was tied for the 4th lowest Medicaid spend per enrollee nationwide.
6.8% 6.7%
2.5%
0.00%
2.00%
4.00%
6.00%
8.00%
Commercial
Medicaid
TennCare
TennCare Financial Trends
7
National Trends
8
Access to Meaningful Data is Essential
9
Children 48%
Children 21%
Adults 27%
Adults 15%
Elderly 9%
Elderly 21%
Disabled 15%
Disabled 42%
EnrolleesTotal = 68.0 Million
ExpendituresTotal = $420 Billion
• SOURCE: Health expenditures: KFF calculations using 2013 NHE data from CMS, Office of the Actuary
Access to Meaningful Data is Essential
10
0-17 349
Total 748
65 and above 48
18-64 366
0-17 334
Total 546
65 and above 21
18-64 176
Annualized
members
Thousands
Initial baseline
spend
USD millions
PMPM
USD
Male
Female
Share of
total
Percent
27
14
2
42
26
28
4
58
Share of
total
Percent
14
22
5
41
11
35
13
59 3,687
793
2,188
706
2,590
306
1,375
909
395
1,210
651
217
$404
411
1,364
499
177
Note: Applies only exclusion of ineligible members and foster care spend
SOURCE: TN 2011-2014 claims data
CY2014
Grand total: 1,294K $6,277M
Breakdown of membership and spend by demographics
TennCare
11
Concentration of spend by service category
CY2014, $M
SOURCE: TN 2011-2014 claims data
17%
7%
22%
10%
19%
6%
14%
1%
1%
1%
1%
0%
0%
0%
0%
Share of total
Percent
Hospital and ED (46%)
Office and clinic (10%)
Supportive and
institutional care (25%)
Pharmaceuticals (15%)
Diagnostics (2%)
Other (2%)
Total spend=$6,277M
26 Other types of care
Other locations 2
PT/OT/ST 21
DME and supplies 5
Ancillary services 81
Radiology 53
Lab and pathology 87
Specialty pharma 39
Prescription drugs 891
Home and community-based care 381
Institutional care 1,189
Office and clinic care 632
Hospital outpatient care 1,351
ED care 433
Hospital inpatient care 1,086
Initial baseline spend
USD millions
Initial baseline spend by service category
TennCare
12
0%
4%
9%
0%
0%
1%
5%
4%
1%
6%
9%
1%
0%
1%
22% At least one condition
Stroke
Osteoporosis
Ischemic Heart Disease
Hypertension
Hyperlipidemia
Heart Failure
Diabetes
COPD
Chronic Kidney Disease
Cancer (breast, colorectal,
lung, and prostate)
Atrial Fibrillation
Asthma
Arthritis
Alzheimer’s disease
Breakdown of adjusted spend by chronic condition
1 Not mutually exclusive categories
Note: Excludes dual eligibles and TPL; excludes dental, vision, transportation, DME, home health, nursing home and HCBS services; spend
and PMPM may change depending on the final spend exclusion
Share of members with condition
Adjusted spend associated with
members with condition
1%
16%
17%
2%
4%
12%
18%
15%
8%
18%
30%
8%
2%
5%
55%
2014, %
SOURCE: TN 2011-2014 claims data
Patients with chronic disease
TennCare
13
California
Nevada
Arizona
Utah
Idaho
Montana
Wyoming
Maine Vermont
New York
North Carolina
South Carolina
Alabama
Nebraska
Georgia
Mississippi Louisiana
Texas
Oklahoma
Pennsylvania
Wisconsin
Minnesota North Dakota
Ohio
South Dakota
Kansas
Iowa
Illinois Indiana
Tennessee
Missouri
Delaware New Jersey
Connecticut
Massachusetts
Virginia Maryland
Rhode Island
Hawaii
New Hampshire
Alaska
West Virginia
Colorado
New Mexico
Oregon
Washington
Michigan
Arkansas
Kentucky
DC
Florida
Capitated MCO Programs (39 states including DC)
Does not contract with MCOs (12 states)
Capitated MLTSS Programs (18 states)
Comprehensive Managed Care Continues to Grow
Over half of Medicaid beneficiaries receive care through Managed Care Organizations (MCOs) – and growing. States are also increasingly covering long term care in managed care, primarily
through managed long-term services and supports (MLTSS) programs.
14
• Traditionally served mothers and children—a relatively young and healthy group
• States increasingly enrolling higher- needs and higher-cost beneficiaries
Beneficiaries with serious mental illness
Beneficiaries with substance abuse disorders
Intellectually & Developmentally disabled beneficiaries
Dual eligible beneficiaries
• States “carving in” new benefits, such as:
Behavioral health services
Pharmacy
Long-term nursing home stays
Hospice care
Personal care services
Home health services
New Populations
New Services
New Populations and Services in Managed
Care
15
Pioneer ACO States
There are 19 ACOs participating in
the Pioneer ACO Model in 11
states
Comprehensive Primary Care Initiative States
Note: Arkansas, Colorado, New Jersey, and Oregon all have statewide pilots. New York’s pilot is focused in the Capital District-Hudson Valley Region, Ohio and Kentucky’s pilot is focused in the Cincinnati-Dayton Region, and Oklahoma's is focused in the Greater Tulsa Region
SIM Testing States (17)
(round 1 & 2)
SIM Design States (17)
State Innovation Model Design & Testing States
New Payment Models and Delivery Structures
16
Full
risk
In
cen
tive
p
aym
en
t G
ain
sh
arin
g R
isk
shar
ing
Excl
usi
vely
up
sid
e o
pp
ort
un
ity
Bo
th u
psi
de
and
do
wn
sid
e ri
sk “Payor-led”
integrated network
“Provider-led” integrated network
ACO
Episodes of care
Patient centered medical home
Pay for value
“Basic P4P”
Select examples Description
Payor-led affiliation or acquisition of health system which seeks full clinical and operational integration to reduce cost, improve member experience, and manage referral volume
Provider system builds a health-plan, leveraging brand name to drive volume to provider system
An organization of health care providers accountable for quality, cost, and overall care; share cost savings if performance metrics are met
Covers all aspects of preadmission, inpatient, and follow-up care, including postoperative complications within a set time period for procedures, e.g., hip replacement
Team of physicians and extenders, coordinated by a PCP coordinate provide high levels of coordinated care; typically tied to P4P contract
Payment bonus tied to efficiency metrics (e.g., reduction in ER visits, imaging)
Payment upside based on performance metrics linked to value creation (e.g. BCSMA Alternative Quality Contract / AQC)
New Payment Models and Delivery Structures
17
Tennessee’s Healthcare Innovation Initiative
Primary Care
Transformation
Episodes of Care
Long Term Services
and Supports
Examples Source of value
• Maintaining a person’s
health overtime
• Coordinating care by
specialists
• Avoiding episode events
when appropriate
• Encouraging primary
prevention for healthy
consumers and
coordinated care for the
chronically ill
• Coordinating primary and
behavioral health for
people with SPMI
• Achieving a specific
patient objective,
including associated
upstream and
downstream cost and
quality
• Wave 1: Perinatal, joint
replacement, asthma
exacerbation
• Wave 2: COPD,
colonoscopy,
cholecystectomy, PCI
• 75 episodes by 2019
• Provide long-term
services and supports
(LTSS) that are high
quality in the areas that
matter most to recipients
• Aligning payment with
value and quality for
nursing facilities (NFs)
and home and community
based care (HCBS)
• Training for providers
Strategy elements
• Patient Centered Medical
Homes
• Health homes for people
with serious and persistent
mental illness
• Care coordination tool with
Hospital and ED admission
provider alerts
• Retrospective Episodes of
Care
• Quality and acuity adjusted
payments for LTSS services
• Value-based purchasing for
enhanced respiratory care
• Workforce development
New Payment Models and Delivery Structures
18
Primary Care Transformation
Patient Centered Medical Homes (PCMH)
for all TennCare members
• Prevention and chronic disease management
• Avoiding episode events when appropriate
• The highest cost 5% of TennCare members account for nearly half
of total adjusted spend (physical and behavioral health only)
• Members in the highest cost 5% were also in that category the
previous year 43% of the time.
Health Homes
for TennCare members with Severe Mental Illness
• Behavioral and physical health services integration
• Individuals with behavioral health needs make up only 20% of the
TennCare population, but 39% of the total spend.
Patients with
BH needs
Patients with
no BH needs
Spend
for patients with
BH needs
Patients
Spend for patients
with no BH needs
Spend3
2014 Medicaid patients and spend1,2
Annualized patients, share of dollars
1 Distribution of unique claimants shown, excluding members without claims.
Note: Does not include crossover and dental claims, supplemental payments, intellectual disability services, Medicare services, CoverKids, payments to DCS, DME,
vision, transportation, nursing home, long-term care and home health, as well as members who are dual eligible or have third party liability. Top 5% members selected
from claimants only (unique claimant basis).
2 Most inclusive definition of patients with BH needs used here of members who are diagnosed and receiving care, diagnosed but not receiving care, and receiving care but
undiagnosed. Behavioral health spend defined as all spend with a BH primary diagnosis or BH-specific procedure, revenue, or HIC3 pharmacy code.
3 Excludes claims billed through the Department of Children’s Services
61%
39%
80%
20%
SOURCE: TN 2011-2014 claims data
19
Payers reimburse for all
services as they do today
Patients seek care
and select providers as
they do today
1 2 3
Providers submit
claims as they do today
‘Quarterbacks’ are
provided detailed
information for each
episode which includes
actionable data
Unchanged
Billing
Process
New
Information
Retrospective Episodes of Care
20
Average cost
per episode
for each
provider
Cost per
episode
Example provider’s individual episode costs
Risk-adjusted average episode
cost for the example provider
Example provider’s average episode cost
Average
Risk-adjusted costs for one type of episode in
a year for a single example provider
Low
cost
High
cost
Annual performance across all providers
Provider quarterbacks, from highest to lowest average cost
Gain sharing limit
Commendable If average cost lower than commendable and quality
benchmarks met, share cost savings below
commendable line
If average cost higher than acceptable, share
excess costs above acceptable line
If average cost lower than gain sharing limit,
share cost savings but only above gain sharing
limit
If average cost between commendable and
acceptable, no change
This example provider would
see no change.
Acceptable
Episodes of Care: Incentives
21
• Performance summary
▫ Total number of episodes (included and excluded)
▫ Quality thresholds achieved
▫ Average non-risk adjusted and risk adjusted cost of
care
▫ Cost comparison to other providers and gain and
risk sharing thresholds
▫ Gain sharing and risk sharing eligibility and
calculated amounts
▫ Key utilization statistics
• Quality detail: Scores for each quality metric with
comparison to gain share standard or provider base
average
• Cost detail:
▫ Breakdown of episode cost by care category
▫ Benchmarks against provider base average
• Episode detail:
▫ Cost detail by care category for each individual
episode a provider treats
▫ Reason for any episode exclusions
Quarterbacks will receive quarterly report from payers:
You are eligible for gain sharing
Episode cost summary
Overview
Cost of care (avg. adj. episode cost) comparison
1
2
3
[1. Asthma] A. Episode Summary
182122
4337
64
28
$1167-$1500
$833-$1167
$500-$833
Below$500
80
$1833-$2167
60
40
20
Above $2500
$2167-$2500
Distribution of provider average episode cost (risk adj.)
Your episode cost distribution (risk adj.)
Total episodes: 262 Total episodes included: 233 Total episodes excluded: 29
Your average episode cost is commendable
YOUR GAIN/ RISK SHARE
# o
f ep
iso
des
Avg
. ad
j. e
pis
od
e co
st (
$)
Commendable Not acceptableAcceptable
> $4000
Percentile of providers0
500
1,000
1,500
2,000
Not acceptableAcceptableCommendableYou
Less than $1,000 $1,750$1,000 to $1,750
Parameters YouProvider
base average
Episode quality and utilization summary4
You achieved selected quality metrics
1. Follow-up visit w/ physician
2. Patient on appropriate medication
Quality metrics linked to gain sharing
YouGain share
standard
61% 55%
77% 70%
+$10,391.80Number of episodes
Sharefactor
Your avg. cost: $911.80 Providers’ base avg. cost: $1,242.20233 50%
Commendable cost ($)
Your avg. cost ($)
1,000 910.80
– x x
5. Avg. episode cost (risk adj.) $910.80Commendable
$1,242.20Acceptable
Payer Name (TennCare/ Commercial) Provider Name Provider Code Report Date: July 2013
[Period: Start/end dates of period]
1. Repeat acute exacerbation within 30 days
YouProvider
base averageQuality metrics not linked to gain sharing
5% 8%
1. Total cost across episodes
2. Total # of included episodes
3. Avg. episode cost (non adj.)
233 235
$1,012.00 $1,350.22
4. Risk adjustment factor* (avg.) 0.90 0.92
$235,796.00 $317,301.09
* Risk adjustment factor calculated for select provider’s patient base
Metstandard
Preliminary draft of the provider report template for State of TN (for discussion only) | All content/ numbers included in this report are purely illustrative
Episodes of Care: Reporting
22
Episodes of Care: Reporting
23
Episodes of Care: 75 in 5 years
TennCare
State Commercial
Plans
Note: Tennessee may want to assess benefits of securing additional Tennessee Commercial Data with which to design and localize certain episodes (multiple) indication identifies episodes in which more than one episode may be designed Source: TennCare and State Commercial Plans claims data, episode diagnostic model, team analysis
10
20
30
40
50
0
200,000,000
150,000,000
100,000,000
50,000,000
0
25
30
35
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
0
20
15
10
5
0
Der
mat
itis
/Urt
icar
ia
Oth
er r
esp
irat
ory
infe
ctio
n
Kid
ney
& u
rin
ary
trac
t st
on
es
Hyp
ote
nsi
on
/Syn
cop
e Ep
ilep
tic
seiz
ure
C
on
du
ct d
iso
rder
B
ipo
lar
(mu
ltip
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Rh
eum
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id a
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s G
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n
Dru
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D a
cute
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Pan
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epat
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pan
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can
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Ren
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bal
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O
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maj
or
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wel
(m
ult
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) Fe
mal
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pro
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e ca
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r Lu
ng
can
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(mu
ltip
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Maj
or
Dep
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ion
M
ild/M
od
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e D
epre
ssio
n
Pac
emak
er/D
efib
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Sick
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ell
Car
dia
c ar
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ia
Her
nia
pro
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ure
s C
oro
nar
y ar
tery
dis
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& a
ngi
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Co
lon
can
cer
An
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roce
du
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Hem
op
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oth
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Kn
ee a
rth
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ip/P
elvi
c fr
actu
re
Lum
bar
lam
inec
tom
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inal
fu
sio
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xc. c
ervi
cal
Dia
bet
es a
cute
exa
cerb
atio
n
Sch
izo
ph
ren
ia (
mu
ltip
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Med
ical
no
n-i
nfe
ctio
us
ort
ho
ped
ic
Bro
nch
iolit
is &
RSV
pn
eum
on
ia
Hep
atit
is C
H
IV
Neo
nat
al P
art
I (m
ult
iple
) N
eon
atal
Par
t II
(m
ult
iple
) C
ellu
litis
& b
acte
rial
ski
n in
fect
ion
B
reas
t b
iop
sy
PTS
D
An
xiet
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titi
s To
nsi
llect
om
y B
reas
t ca
nce
r (m
ult
iple
) C
ard
iac
valv
e
CA
BG
OD
D
CH
F ac
ute
exa
cerb
atio
n
AD
HD
(m
ult
iple
) O
utp
atie
nt
UTI
In
pat
ien
t U
TI
GI h
em
orr
hag
e
Pn
eu
mo
nia
R
esp
irat
ory
infe
ctio
n
EGD
P
CI (
Acu
te a
nd
No
n A
cute
) C
ho
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ste
cto
my
CO
PD
acu
te e
xac.
C
olo
no
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py
Tota
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int
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lace
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nt
Ast
hm
a ac
ute
exa
c.
Pe
rin
atal
Bar
iatr
ic s
urg
ery
Episode spend, $ Cumulative share of total spend, %
Wave
Design Year 2013 2015 2016 2017 2018 2019 2014
1 2 3 4 5 6 7 8 9 10 11
$ 4,125,011,076.65 $ 1,259,718,441.88
12 episodes to be
implemented May
2016
8 episodes
implemented
Design progress to date
24
THANK YOU