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April 25, 2026 02:30-03:12 - CSPAN
41:58
Washington Journal Brian Blase

Brian Blaise argues that U.S. healthcare costs stem from government policies protecting hospitals, which drive consolidation and inflate prices through certificate of need laws, ACA reimbursement limits, cost-based Medicare models, and the 340B drug program. He contends these distortions enable systems to acquire physician offices and profit from Medicaid, citing Los Angeles hospice waste and Premier Health's Dayton closure as evidence. Blaise supports site-neutral payments and most-favored-nation drug deals to shift control to consumers, asserting that removing these barriers is essential for sustainable federal spending. [Automatically generated summary]

Transcriber: nvidia/parakeet-tdt-0.6b-v2, sat-12l-sm, and large-v3-turbo Source

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Policies Driving Hospital Consolidation 00:09:18
On this episode of Book Notes Plus with our host Brian Lamb.
Sir Anthony Bieber, an historian based in London, has authored 13 books which have sold at least 8.5 million copies and been translated into 35 different languages.
In his latest book, he focuses on Ras Putin and the downfall of the Romanos.
The country is Russia and the timeframe is the early 1900s.
Sir Anthony Bieber on his official website sums up his findings this way.
Gregory Rasputin, a barely literate peasant from Siberia, is one of the most enigmatic and influential figures in modern history.
Anthony Bieber points out, quote, in a bizarre reverse of the great man theory of history, he had no official position and no mass following, unquote.
His book details Ras Putin's relationship with the Tsar and Tsarina of Russia before their downfall.
A new interview with author Anthony Bieber about his book, Ras Putin and the Downfall of the Romanovs.
Book Notes Plus with our host Brian Lamb is available wherever you get your podcasts and on the C-SPAN Now app.
Here in the Washington Journal this morning, we want to turn our attention to health care.
Joining us this morning is Brian Blaise.
He's the president of the Paragon Health Institute and a former White House economic policy advisor in the Trump administration.
Brian Belaise, I want to start with the report from your group, the hospital cost crisis.
And in the report, you write hospitals are the largest cost drivers in the U.S. healthcare system, accounting for about one-third of total expenditures.
Government payments into the system are a primary driver of the nation's worsening fiscal outlook.
Given these realities, it is imperative that policymakers understand the role of modern hospitals, the development of giant health systems, and the incentives driving their business decisions.
Unfortunately, hospital care in the United States does not reflect a well-functioning, dynamic market that provides efficient, cost-effective care.
It is marked by opacity complexity and distorted prices.
Do you blame this situation on government-run programs like Medicare and Medicaid?
Hey, Greta, it is great to be on with you this morning.
And thank you for highlighting our new and very important new paper.
Hospital prices have risen faster than any other economic sector.
Since the turn of the century, they've increased three times faster than inflation and more than twice as fast as worker wages.
Family budgets are increasingly strained under high health insurance premiums, and worker wages are much, increases are much lower than they would otherwise be because of health insurance premium increases.
And hospital prices and costs are the primary driver.
What we looked at in the report are the numerous federal and state policies that protect hospitals from competition, that lead to excessive consolidation in the market, and consolidation leads to higher prices and actually worse quality of care, and that subsidize inefficiency.
You know, government payment programs have historically paid hospitals based on costs and cost-based reimbursement.
And if you reimburse based on costs, what you are going to get is higher costs and administrative bloat.
So we do have a hospital cost crisis.
It is driven primarily by policy failure.
And it's important for policymakers to have the correct diagnosis because there's going to have to be policy changes that bring down hospital prices and that improve overall health care affordability.
What government programs are you referring to?
So we can sort of separate out into a few categories.
There are policies that protect hospitals from competition.
One of them is a state-level policy.
It's called a certificate of need law.
What these do is basically give hospitals veto power over competition.
So in order for new supply to come into the market, you need to apply to a state board, the certificate of need board, and that board is often controlled by the incumbent hospital providers.
So that gives them a veto power over new competition.
There are a policy in the Affordable Care Act, limited Medicare reimbursement for physician-down hospitals.
Physician-downed hospitals were increasing in the market prior to the enactment of the Affordable Care Act, and their growth has completely stagnated.
Again, it was the traditional hospital systems that argued for that inclusion in the ACA and protecting them from competition.
There are government payment policies through Medicare and Medicaid that have incentivized higher costs and consolidation.
The Medicare and Medicaid program will both pay more for identical services provided in a hospital than in an independent physician office, like much more, two to three times.
What that does is lead to incentives for consolidation.
So hospitals have acquired physician offices, and when they do, they then bill for the exact same service, but at a much higher rate.
And the Medicaid program has distortions as well.
There is Medicaid program is a joint federal state program.
States are spending mostly with federal dollars.
Hospital systems and states have colluded on financing gimmicks that enable the hospital systems within the states to get much more federal money and where you've got hospital systems that are now making large profits off of the Medicaid welfare program.
And we did detail a whole bunch more in the report.
But in totality, what those government protections from competition and subsidies for inefficiency have done is led to consolidation.
So many parts of the country, there's only one or two hospital systems.
When you have that much consolidation in the market, that leads to much higher prices for commercial payers.
So people that have employer-sponsored insurance are paying much higher premiums because of the bad government policies that have led to so much distortion and so much consolidation in the market.
Why is it leading to consolidation?
Why is there an incentive to try to consolidate?
So the hospital, if they acquire the physician office, are then able to bill at a much higher rate.
So it actually leads to incentives with hospitals and with physicians For the hospital to acquire the physician practice, the physician will get a cut of the higher rate that the hospital is able to secure.
So there are direct financial incentives.
Hospitals that the payments increase for the same service delivered in a hospital than in a physician office.
There's also this program, the 340B drug program, that has also led to consolidation.
What the 340B drug program does is it was meant to be a small program for safety net providers to allow them to access drugs at a discount and then sell them at a much higher rate, netting the difference.
It was a way for safety net providers to be able to provide care to lower-income Americans to be able to gain some extra revenue in order to do that.
But what we've seen is that big hospital systems have acquired these smaller covered entities, and the 340B program has exploded, and it's another major factor with consolidation.
According to the Centers for Medicare and Medicaid Services, 68 million people currently are enrolled in Medicare Part A, which covers hospital stays.
82 million Americans covered by Medicaid and the Children's Health Insurance Program known as CHIP.
1.5 million births paid for by Medicaid and CHIP each year.
Fighting Fraud in Health Care 00:15:43
Recently, this is the NBC news headline: President Trump says it's not possible for the U.S. to pay for Medicaid and Medicare and daycare.
Do you agree, Brian Blaise, with the president's remarks on Medicare and Medicaid?
Well, I mean, the federal government is paying an enormous amount for Medicare and Medicaid.
If you look at the federal budget, and the federal budget has grown significantly, it grew significantly during the Biden administration, during the COVID pandemic.
The Medicaid program in particular just exploded with extra enrollment from the pandemic, improper enrollment, and then a lot of this corporate welfare, these financing schemes that Paragon, we've written a lot about them.
I mean, I think what the president is saying is that resources are ultimately limited.
The government can't do anything.
It can't do everything.
And what we need is these programs to be put on a sustainable trajectory.
They are the primary driver of rising federal spending and putting significant pressure on interest rates and inflation because of how large the deficits are.
So I think it is really important that we get Medicare and Medicaid both put on sustainable trajectories so that they can serve the patients who truly need them.
And I think one of the things that we're seeing from CMS is this war on fraud.
There is tremendous waste, fraud, and abuse in government health care programs.
And this is money that doesn't go into patient care.
It's just lost.
And that is, I think, the administration targeting waste, fraud, and abuse.
I really applaud that and the moves of Dr. Oz and the broader administration to protect these programs for Americans who are eligible for them and who most need them.
We're talking about health care costs and the role hospitals play in it.
Our guest is Brian Blaise.
He's the president of Paragon Health Institute and a former White House National Economic Policy Advisor in the Trump administration.
We'll take your phone calls here this morning, and this is how we're dividing the lines.
If you have private insurance, dial in at 202-748-8000.
If you are on Medicaid or Medicare, 202-748-8001.
If you have the ACA insurance, dial in at 202-748-8002.
And all others, your line is 202-748-8003.
Brian Blaise, let me show you this headline from the Washington Post.
White House says it's boosting affordability through physician reforms.
What is the White House doing?
And do you agree?
I do.
So the White House is enacting a series of proposals through their rulemaking authority to help primary care providers and general practitioners.
The Medicare payment formulas have a long-standing bias towards specialists, and that is another distortion.
Like the government payment policies, we talked about them on the hospital side.
They also cause distortions on the physician side, where there's a financial incentive because of government payment programs for doctors to pursue a specialty rather than go into general medicine.
So they're making moves to correct that disparity.
And they're also taking the steps that they have within their authorities to get at this differential between much higher payments for hospitals and much lower payments for the same service and physician offices.
So they're moving in the direction of site neutral payment in terms of the administration of drugs and really trying to push the boundaries of that as far as they can.
We don't want government policy to incentivize doctors to sell out to big hospital systems.
And what about the president yesterday at the healthcare event that he hosted at the White House?
What did you hear?
What's the headline?
Well, the president, the focus yesterday is the president's most favored nation drug pricing policy.
It is by far the health policy issue that animates the president the most.
And I learned that when I worked for the White House during term one.
And, you know, if you listen to Secretary Kennedy yesterday, he said that the president is often calling late into the evening, the Secretary and Dr. Oz, to talk about the need to lower the pharmaceutical prices that Americans pay.
What the aim of most favored nation pricing is to address the fact that Americans pay much higher rates for brand name pharmaceuticals than people in other developed countries pay and to bring about a process where that disparity is closed so that Americans aren't subsidizing the research and development for pharmaceuticals for people across the globe.
So they've entered into agreements now with 17 pharmaceutical companies.
Yesterday was the announcement of the because they sent letters many, many months ago laying out the process with 17 companies.
And the company that came in yesterday was the 17th company that has reached agreement with the administration on the most favored nation drug pricing, with the main point being that they're going to launch new medications, many new medications at the same prices in the U.S. as in other developed countries.
All right, let's get to calls.
Steve is waiting in Freeland, Maryland.
You have private insurance, health insurance, Steve.
Good morning to you.
Brian Blaise, I want to thank you so much for everything you've done.
This is not the first time you've been on C-SPAN.
You are knocking this out of the park.
I wish the topic that we just discussed about Congress, I think Congress is the largest procrastinating body that I've ever seen, and we avoid this health care cost issue in this country like cancer.
And we do that because of everything you've just talked about.
The fraud in this is unbearable.
And the consolidation is obvious.
We're eliminating all competition.
I don't know how you do it without banging your head against the wall every day, but you, sir, need to keep up the good work.
And I don't know how we get you in charge of this whole program for the United States of America to get and open the eyes up of the legislative branch who are fully aware of all this, but choose to do nothing about it.
All right.
So, Brian Blaise, if you were in charge, what would you do first?
Well, I love Steve.
He's a great caller.
Thank you, Steve, for those very kind remarks.
You know, we're animated at Paragon to address the problems that emanate from government programs.
And we are very concerned about families that are paying much more for health care that is not delivering the quality.
For patients, we want patients to have access to the most innovative medications without going into financial ruin.
And for the American taxpayer, and you're correct, these programs are loaded with waste, fraud, and abuse.
And the government, both state and federal governments, have been complicit in allowing so much to get siphoned off to fraudsters, to bad actors, and really to organized crime.
So the challenges are really significant.
I view this as the most important domestic policy issue that we need to reform federal health programs.
If I was in charge, I would go and try to remove as many distortions as possible.
So first of all, I would enact, we have 12 recommendations in the hospital cost crisis paper that we put out.
We should enact those, remove distortions that advantage big, politically powerful hospital systems over independent physicians and smaller facilities.
We should enact price transparency so that Americans actually know how much they're paying for services that they receive at hospitals.
And on the demand side of the market, the main problem is the consumer isn't in control.
We don't have a patient-driven health care system.
So what we need to have is the patient, the family, to be in control of the money.
They should be the ones making more of the decisions, not the government bureaucracies, not the insurance companies, and not their employers.
So to get the financial power and control in the hands of the individual consumer.
Mike in Florida, you have your insurance through Medicare.
Is that right?
Yes, yes, ma'am.
Okay, question or comment.
Go ahead.
Yeah, my question is to this person here.
They keep talking about waste, fraud, and abuse in the system.
Now, Trump, I'm looking, has pardoned many of these people that were charged with waste, fraud, and abuse, and they owe the government like over $2 billion.
Don't we have to pay that back?
How do you explain that?
So I'm not familiar with the individuals that President Trump has pardoned.
So I can't really comment on your direct question.
I mean, I do.
There are a lot of bad actors that, unfortunately, the way that our Medicare program works in particular is a pay and chase model.
So the CMS, Centers for Medicare and Medicaid Services, they operate, the main thing that they do is pay claims.
And the people that submit the claims, the entities that submit the claims, they want those claims paid as quickly as possible.
And so they're very good at paying claims.
They are not very good at making sure that the claims that they're paying are appropriate.
And let me give you a good example.
I was with Dr. Oz last week, and I heard Secretary Kennedy talk about this in sort of the whirlwind testimonies that he gave on Capitol Hill.
There is massive fraud in hospice in the Medicare program, and it's centered in Los Angeles County.
One-third of all Medicare spending on hospice is in one county in the country, Los Angeles County.
They sent letters to 450 hospice providers, basically shutting them down, saying that they were going to stop Medicare reimbursement.
The number of hospice, those providers that appealed is zero, right?
That shows rampant fraud.
We have been spending billions of dollars towards these hospice providers that aren't providing any services and that are completely fraudulent.
Like that is such an indictment on the way that these federal health programs are working.
And we need to focus more attention on shutting down fraud schemes like that.
Our topic is healthcare.
Our guest is Brian Blaise.
And we'll go to John in Dallas, Texas.
Get your insurance privately.
Is that right, John?
Hi, yes, that is correct.
I just wanted to bring up a trend in our country that I've been noticing, and it extends to all kinds of different fields, but it seems to be this kind of reluctance or even this aversion to sort of a strictness towards groups that we consider disenfranchised or victim groups.
And so an example in the healthcare industry or the health insurance industry or just health benefits is the SNAP program, where recently there was cuts made to allowing people with SNAP to buy candy and soda, which seems like a pretty obvious thing that should have been enacted before and now.
But then you see reports coming out in the media.
And I'm not sure if you're noticing this.
I'm curious to know your take on this.
But the reports come out, these news articles talking about the reasons why this is bad, or it's causing confusion, or it's resulting in a stigma.
And it seems like there's all this pushback in public opinion to why we shouldn't be doing this thing that seems very obvious.
And to me, it just seems like it stems from this tendency that, like I said in the beginning, goes through all kinds of different areas in our culture to be very reluctant to be strict towards people that we consider victims.
And I'm just wondering if you, do you notice this?
And what do you think it might be caused by?
Thank you.
Yeah, so let me to talk about SNAP, the food stamp program.
And that's not a program that Paragon has done a lot of work on.
But I think one of the issues, so the Make America Healthy Again movement has really looked at SNAP and said SNAP, a large part of what people use their SNAP benefit for is junk food, soda.
So a lot of high calorie, basically nutrition substances.
And should we limit the coverage of SNAP? so that it can't be used for junk food.
And several states have gotten waivers, and this is a sort of big priority of Secretary Kennedy and to restrict SNAP recipients' ability to use those benefits on junk food.
I'm sympathetic to those efforts.
I think that it's a welfare program.
And if the government is going to place restrictions on them, these seem like pretty sensible restrictions to place in my view.
There are other people who think that these programs should operate where the recipient should have the freedom to make their own decisions and the government shouldn't come in and restrict the types of products that you can use with that benefit.
Bill's in Arizona.
Bill?
The Real Cost of Medicare 00:14:41
Yes, I'm on Medicare.
And recently, United Healthcare, who I'm on, canceled all their PPO plans and kicked me off my insurance, so I had to get an inferior insurance.
And I've been paying into the thing since I was a kid.
They could fund that thing a little better, but instead they give tax breaks to rich and the big corporations.
All they'd have to do instead of giving those tax breaks to the rich is take a little extra money for them and Shazam, you'd have this whole thing paid for.
All right.
Well, let's get Brian Blaze's take on that, Bill.
So Bill said that his plan was canceled by United.
So that means Bill was enrolled in a Medicare Advantage plan.
And most seniors on Medicare are now enrolled in a Medicare Advantage plan.
That means that the government is paying a health insurance company, and the health insurance company has a provider network, and they are managing the care for that individual.
Medicare Advantage plans are increasingly popular because they offer a lot of supplemental benefits that aren't available for original Medicare.
So people can use, so there's lower cost sharing with Medicare Advantage, but people can use Medicare Advantage for often dental coverage, vision coverage, even things like gym memberships.
And I think Medicare Advantage, their plans can come and go with Medicare Advantage.
The enrollee will have a choice whether to enroll in a PPO, which is a much broader set of providers, or a health maintenance organization, which is a smaller set of providers.
You know, to the point about sort of the Medicare versus tax comparison, I will say just looking at federal expenditures, the growth of Medicare, Medicaid, and the ACA is outpacing every other part of the federal budget.
It is a real threat to future American prosperity if we don't get Medicare, Medicaid, and the ACA back on sustainable trajectory.
And you can't raise taxes high enough to solve the fiscal budget problem.
You need to address the unsustainability of the federal health programs.
What is the history of the Medicare Advantage program?
And do you agree with it?
Is it run well?
Medicare Advantage was, there were some elements of insurance company involvement with Medicare prior to the Bush administration, but President Bush signed the Medicare Modernization Act.
And so Medicare Advantage really started in 2003.
And enrollment growth has been pretty steady.
There were changes made to Medicare Advantage in the Affordable Care Act that reduced some of the spending in Medicare Advantage.
But enrollment has remained steady.
And now, you know, more than half of all seniors are enrolled in Medicare Advantage.
I think there are severe problems with original Medicare.
Original Medicare is the government setting all prices throughout the health care sector and this pay-and-chase model where doctors are also incentivized just to provide more because the more they provide and the more hospitals provide, the more they get paid.
So I think Medicare Advantage is an important alternative for seniors.
I think there's certain advantages with Medicare Advantage.
That said, I think Medicare Advantage needs reform.
There are inefficiencies with Medicare Advantage.
And I think Medicare Advantage costs the American taxpayer slightly more than original Medicare.
So we did a paper at Paragon two years ago on how you could reform Medicare by improving Medicare Advantage.
And we have a bunch of recommendations that we make that really should be bipartisan on ways to improve some of the excesses of Medicare Advantage.
Floyd in Indiana, good morning to you.
Go ahead.
Good morning.
Thanks for taking my call.
Yes, I am an individual without insurance and hadn't had this experience ever since I got married and got on my own in 1986.
And just this year alone, I had a surgery done in Mexico because I had a doctor in 2002 that wouldn't help me here in the States.
If I had to go back there to have repair surgery done on a bone graft, I pinched my nerves.
But anyway, I ended up with a $31,000 hospital bill there and came back here and got an infection.
And so locally, I've got over a $40,000 hospital bill right now to be paid.
And just one of the ridiculous things, and I understand where they're coming from, I'm on the board of a local healthcare clinic.
That's a nonprofit, FQHC.
So I looked at my itemized bill, and so to do a glucose test, just this rep, they charged $58.88.
By the same token, I didn't realize by owning the physicians' offices.
So on the hospital bill, this is Baptist Health.
They offered me an 86% discount, which is super, a lot better than it was 40 years ago.
No discount then for self-pay.
But then on the physician's part, they only allow a 35% discount.
So I've got $1,000 of bills from the hospitalist, from the infectious disease doctor, from the neurosurgeon.
And Floyd, with those discounts, you have a $40,000 bill.
No, that was...
Oh, yeah, with the discounts.
Yes, with the discounts.
Absolutely.
Astronomical, the figures on the hospital bill, it was over $200,000.
Brian Blaise.
I'll have Brian Blaise jump in.
Floyd, thanks for the call.
Hey, Floyd, yeah, thank you for the call.
And I'm very sorry to hear about the health issues that you've experienced and the problems with the hospital billing.
I mean, this is the reason why we wrote this paper.
The hospital cost crisis is very real.
People in the country are harmed by excessive out-of-control hospital bills.
And unfortunately, Indiana, and I've done significant work on hospital prices in Indiana, hospital prices in Indiana are among the highest in the country.
These charges that you see from hospitals are complete fictions.
They do not represent reality in the real world.
And then you get discounts off of these fictions.
Unfortunately, government payment policy has incentivized hospital bloat and inefficiency.
So the prices that Americans are paying for hospital care is outrageously more expensive than it should be.
And I think rising, high and rising hospital prices is the number one threat to the American family budget.
Hospitals are very politically powerful and they are increasingly politically powerful because of just how massive they have become and how they are also like the major employer in many congressional districts.
But if policymakers are serious about health care affordability, like they this issue has to be dealt with.
And from our perspective, the best way to deal with it is to undo all of the government rules and policies that protect hospitals from competition that have led to consolidation and that incentivize bloat and waste.
Josephine is in New Jersey and has Medicare as her insurance.
Josephine, question or comment?
Well, I'd like to comment.
And my comment is, I'm glad he mentioned that it was on the Republicans that came under the or created the Advantage program.
It was brought under that guise for the reason to get rid of Medicare.
52% of seniors belong on Advantage.
And who came along to carry the Advantage program?
It's we, John Q citizens.
I now pay $656 a month to cover people on Advantage so that the insurance companies, which are privately owned, are so corrupt that he's thinking, oh, they do such good work.
Let's be quite honest.
We under Medicare cannot submit a billing in it.
Only the vendor can.
And let's target one of the biggest areas on it.
The state of Florida, Senator Scott, was found guilty of fraud with $600 million for the organization that he ran.
Okay, Josephine, before you go down that road, I just want to get Brian Blaise's response to your argument that people on Medicare are footing the bill for Medicare Advantage.
Brian Blaise?
I have a hard time following that argument.
I mean, the vast majority of Medicare costs for both original Medicare and Medicare Advantage are from taxpayers.
So you have the payroll tax that finances Medicare Part A, which is the hospital insurance program.
And then Part B and Part D.
So Part B is outpatient services.
Part D is prescription drugs.
You do have beneficiary premiums.
The beneficiary premium is about 25% of the cost, but the rest is general tax revenue.
So Medicare is largely financed by American workers, and it's a transfer for American to American retirees.
Now, the people that are on Medicare now, they did pay into the program or for the program when they were working, but those payments didn't represent like an fund that finances their receipt of the benefits from the program now.
It was just a transfer program to people that were on the Medicare program back then.
One of the problems in the financing is that current retirees on Medicare paid $1 for every $3 that they're expected to get in benefits.
So the Medicare program is a major transfer from workers to people on the program.
In terms of Medicare Advantage, I mean, I share a skepticism of health insurance companies too, and think that we should reduce in many ways the role of health insurance companies in our healthcare sector.
But at age 65, seniors will get a choice.
They can join original Medicare or they can opt into Medicare Advantage.
And then they could choose every year during an open enrollment about which type of coverage that they want.
And I am a strong supporter of choice and think that seniors should have that choice of the way that they want their Medicare benefit to be structured.
Kathleen in Dayton, Ohio.
Good morning.
Good morning.
And boy, I hope I'll have time to explain an issue I've been involved with here in Dayton about the closure of a 93-year-old hospital opened by the Sisters of Charity here in Dayton 93 years ago called Good Samaritan Hospital.
And the closure of that hospital in a 75% black neighborhood in Northwest Dayton by Premier Health Network.
When I asked why, when I asked the workers in that hospital why they thought that hospital was closing, they believed that it was because most of the customers coming in were on Medicare and Medicaid.
Then Premier expanded out in there in the predominantly white neighborhoods around Dayton and expanded their services in those neighborhoods while closing it in that 75% black neighborhood.
So Kathleen, I will jump in.
I think we have the gist of this.
Brian Blaise, go ahead.
I mean, it's hard for me to, I don't know the details of this specific example.
I do the concerns that Kathleen is raising have been raised in other states as well that with these hospital mergers.
And I think some of it is related to the 340B program that I described earlier.
Hospitals are acquiring other facilities, gaining the ability to charge higher prices, and then closing some of the facilities down.
I mean, I think it's hard to comment on the specifics with this example.
King's State Visit to Congress 00:02:09
So I think it's probably just leave it there.
Our viewers can learn more about this new report by the Paragon Health Institute if you go to paragoninstitute.org.
Brian Blaise is the president.
He's also a former White House Economic Policy Advisor in the first Trump administration.
Thank you for the conversation this morning.
Thank you very much, Greta.
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