Episode 15: Driving Innovation in Healthcare Through Digital Transformation and Strategic Leadership
Hosted by Aaron Burnett with special guest Kristin Merlo
Kristin Merlo, CEO of Delta Dental of Arkansas, joins Digital Clinic this week to explore the transformative impact of digital innovation and strategic leadership in healthcare. In this insightful episode, Kristin shares her journey from Eli Lilly to leading Delta Dental of Arkansas, and explains how strategic partnerships have been key in driving innovation and scaling successful solutions across the Delta Dental network.
Kristin also provides insight into her vision for using data to improve oral health outcomes and the challenges of simplifying healthcare for consumers. Additionally, she touches on her experience as a woman in a leadership position, highlighting the importance of elevating diverse voices and providing opportunities for those often overlooked in leadership roles. Throughout the episode, Kristin offers valuable insights into the future of healthcare and how organizations can adapt to evolving consumer expectations to drive greater engagement in health services.
From Copiers to CEO: Kristin’s Journey in Healthcare Leadership
Aaron: Welcome to the Digital Clinic, the podcast that goes deep on critical digital marketing trends, strategies and tactics for the healthcare and medical device industries. Each episode brings you expert guests sharing the knowledge, insights and advice that healthcare marketers need to be successful in this complex and rapidly evolving digital landscape. I’m Aaron Burnett, CEO of Wheelhouse Digital Marketing Group, and with me today is Kristin Merlo. Kristin is CEO of Delta Dental of Arkansas, and has more than 30 years experience in healthcare leadership and a strong record of delivering exceptional business value through business transformation, strategic partnerships and talent development. Prior to taking the helm at Delta Dental of Arkansas, Kristin served as Chief Operating Officer at Delta Dental of Virginia, and Chief Sales, Information and Marketing Officer at Delta Dental of Washington, where she was responsible for revenue growth and for all IT systems, infrastructure and analytics. We had a great conversation. Kristin has lots of sage insights to share. I hope you enjoy it.
Aaron:You have such an amazing background, such an interesting and extensive background in healthcare leadership. I wonder if you would sort of briefly recap that professional history for us and tell me about how you came to be leading Delta Dental of Arkansas.
Kristin: Sure. Well, I do like to say that my first job was selling copiers on commission, just because it gives me a little cred with some people. But I did a full-time MBA at a pretty young age. And then started with Eli Lilly, first as a summer intern, and then I spent several years there in brand management and sales management, and absolutely loved that. So two highlights, you know, I started in marketing. Part of the reason I was willing to talk with you guys. I think marketing is a great background for general management. So, you know, I have a heart for people who are moving in that direction. But I had the privilege of being, from the very beginning, launching a novel insulin product that was really formative for me in my career. And then also during the time I was with Lilly, I was the brand manager for Prozac, which was a medicine for depression, when mental health drugs in primary care were very fresh, and was responsible for the first direct-to-consumer ad for a mental health drug. So those were a couple highlights from that experience. And then I joined Delta Dental as Director of Marketing at Delta Dental Washington, and yeah, my career’s long, and I’d say, one of my friends said sort of measured, progressed to VP of Marketing, and then VP of Sales and Marketing, and then one of the jobs that was the biggest leap and where I learned the most was I was asked to take on the IT organization as well in Washington. So for four years, I led sales, marketing and IT, and that set me up, really, to be Chief Operating Officer of Delta Dental of Virginia, where I served for three years and then I’ve been, you know, the CEO of Delta Dental of Arkansas, going on three years.
Delta Dental: A Unique Business Model for Oral Health
Aaron: That’s great. Can you just give us an overview of Delta Dental nationally and where Delta Dental of Arkansas fits within Delta Dental nationally?
Kristin: Yeah, Delta Dental is an interesting organization. We are 501(c)(4), so that’s an unusual business distinction, but it’s a social welfare organization. So it means that Delta Dental member companies, we like to say we exist to serve the citizens of the state. So we are not for profit, but we’re not charities and I always say as far as this is me personally, but not for profit is our tax status, not our business model. And what I mean by that is that we compete against very successful public companies. And I think having a profit orientation, as far as the discipline that that affords, is very, very important. But at the end of the day, Delta Dental companies, most of them put, you know, we don’t dividend to shareholders. We dividend to stakeholders. I like to say, so most of us have very robust foundations and serve oral health in that way. So Delta Dental is the market leader in commercial dental benefits, so we’re very much the dominant carrier in dental benefits on a commercial basis. And we also do many, many Delta Dental member organizations are involved with government in terms of Medicaid, Medicare Advantage and ACA plans as well. So I think between the foundation, our government business and commercial, we’re here to serve to try to make sure that everyone has access to oral health, whether it’s through your employer, through your government, or, you know, maybe through some care that we’re providing through our foundation.
Aaron: You mentioned the foundations that most member organizations have, those are very significant foundations, and very significant investments in your own communities are made on an annual basis, right?
Kristin: That’s right. So, you know, for Delta Dental of Arkansas, we put, essentially, we make sure that we put at least what we would pay in taxes. Because we are, we don’t pay taxes. So we make sure that that’s at least the minimum that we would put into our foundation and that’s multiple million dollars per year. So we’re able to make sure that a lot of clinics have equipment, that kids have education. We put a lot of emphasis here in Arkansas in schools, because that’s a great place for people to get care. We have a very rural state, 40% rural, so we are always actively trying to figure out how we can do more in locations where access is more difficult. But we also work very closely with lots of coalitions. So, you know, coalitions that do pharmacy and dental in these kinds of different communities, essentially BIPOC communities. So we’re cultural, whatever the cultural issue or barrier may be toward getting oral health care, or the physical barrier, the distance barrier, whatever it is, you know, we’re here to break it down.
Aaron: I think I read that the Delta Dental of Arkansas Foundation is a $25 million donation foundation. And I think I read that Delta Dental Plans nationally has donated 2.2 billion over the last decades.
Kristin: Yes, I think you’re right. So across the whole country, it’s very formidable, and within Arkansas, it’s a big foundation, and we fully fund it, so we do a lot of good across the country. And there’s, you know, I guess you asked about Delta Dental. I think one of the strengths of Delta Dental is the sort of federated model. So we are all independent companies. We’ve independent boards and we really exchange best ideas. So we are very local, you know, for different things work in different places. But we also, I think, do sort of 1000 flowers bloom, which, you know, let’s pick the best ones and put those ideas into practice in other places.
Navigating Digital Transformation in Healthcare
Aaron: You mentioned that in your role at Delta Dental of Washington, you took over the IT function. I know Delta Dental Washington was a very innovative member company, member organization, and was very much on the cutting edge of particularly digital transformation among member organizations nationally. I know you’ve been focused on digital transformation there in Arkansas as well. Can you tell me a little bit about that?
Kristin: I’ll tell you a couple stories, really, that get to sort of how we approached it. But it was, I had in my role when I first got there, as Director of Marketing, had responsibility for the website. Now, at that time, it was like, I don’t know if you or your listeners remember, but in the early days of the web, it was like, brochure ware, so you’d pretty much take your brochures, and it would just be static content, you know. So the website had always lived in marketing. As we became more sort of digital tools, my team continued to manage that. So really, the, I think the thought for me taking on IT was, I was essentially my team was the biggest customer, but it was really not working great for the business at that time. And I think this happens in a lot of companies, which is why I’ll share the story. But you know, it was kind of doing their own thing, and then the business was trying to figure out, how do we get into the priority structure here, and what is the governance process, you know, the governance process might could have been a little bit better. So the first day that I was the head of IT, I went had a stand up meeting with the leadership and one of the guys was smart enough to say, hey, we’re launching your project today, which I had been waiting for, and I was like, smart move, you know, but so it was a project that gets to marketing. So one of the barriers with our business, well, I think in many businesses, is passwords and complexity of getting into your content. Well, I was trying to get them to do this project so we could have single sign on. So it was an LDAP project, which many of your listeners probably understand. So we’re going to launch the LDAP today. I said, Great. So, you know, at the end of the day, tell me how our customers like it. So we were having two a day stand ups because I was so new. So we came, you know, at the end of the day, and he’s like, Well, I said, how do the customers like it? Well, they’re not really able to use it yet. I was like, wait, what? Well, when I said we launched it, we launched it into production environment, but it’s not connected to the user interface. So I said, All right, well, let’s get one thing straight. When we say launch now, it’s going to mean that the customers can actually use it so, you know, the point is, with digital transformation, an important part was having a vision connecting the business and the technical team to very much be on the same page. As far as what the priority was, I think we from there, you know, went to we’re going to do fewer product projects faster. Because another thing I heard from them is, priorities are always shifting, and we don’t understand and, you know, and I learned from leading IT just how difficult that is to move, you know, move people off of certain things and on to other things. It’s more easy in marketing and sales, quite honestly, I think. But so we tried to keep the priorities very clear and keep one at a time, and then also help them to understand why we were doing the things we were doing and to better understand the customer experience. So digital transformation had a vision, had connection between business and IT, and had clear priorities, you know, and a clear governance process. And from there, I think one of the other exciting things we did was, to your point, it was, we were, we had been quite innovative. And, you know, with assistance from wheelhouse and other partners, we’d built, and this gets to the Delta Dental system. Like I said, 1000 flowers bloom. You know, people are always saying, Oh, your portals are so nice, and your website, sometimes we developed a product out of it. And so before I left, we brought another Delta Dental member company onto our Washington digital platform, and since then, they’ve continued to do that. In fact, Arkansas just joined.
Aaron: So I was just going to ask you about digital transformation there and your vision, and how you’re executing on that vision. That’s a perfect segue. And so you’ve adopted the platform that you developed in Washington?
Kristin: I’m a big believer in strategic partnerships, for scale, for sharing costs, you know, and for also excellence, you know. So the customer experience, if it’s excellent, you know, let’s share it. So that’s what we’re doing here, basically, is leveraging tools from other member companies, and then our own tools and building connections across. What we’re trying to do in Arkansas is build connections across the ecosystem a little bit more so, including, you know, we would like to build connections more tightly with dental offices and, you know, and get data, eventually, more behavioral data, data from members, different things that you know. So we don’t want to, I don’t want to do the same things that have already been done.
Leveraging Data for Better Outcomes
Aaron: Can you share more about that vision, that sounds very interesting.
Kristin: Many, many deltas have the vision of essentially improving oral health. And but the way that we improve oral health is mostly by providing better access, you know, and as I said, for the foundation, making sure that there’s access to care. We believe that everybody needs to have at least a dental visit each year, because a lot of people think they have good teeth or bad teeth, but the fact the matter is, dental diseases are infections, and you need to get an exam whether or not you have cavities or, you know, really have bad teeth or good teeth, but you have an ecosystem you know that either generates a lot of bacteria that’s difficult for the system to manage or not, but you need to get in there and get to the dentist. So we’re trying to make sure everybody can get to the dentist once a year through having a better network in more places, but and then also making it simple and affordable. So I think that’s what consumers want in general. That’s kind of my theme of health career, simple, convenient, affordable, and the bar keeps rising on all three, right? They want it more affordable. Convenience keeps changing, as Amazon has, you know, sort of famously demonstrated to all of us. And simplicity is also being redefined all the time and so we want to play a bigger role than really, essentially providing the financial and the network piece of it.
Aaron: And so a couple of follow up questions on that, then, is part of your strategy. You mentioned acquiring more behavioral data so that I would assume you can you can act on that data. You can action it, and you can message to folks who perhaps haven’t been seeing a dentist once a year. And you can be more effective in driving the sort of behavior that you want. Is that part of are you developing and implementing a first party data strategy for Delta Dental of Arkansas?
Kristin: So that’s kind of my far end vision, but using the data that we do have, you know, sort of connecting like we have data that dentists don’t have, you know, well, this person moved and, you know, and they have a new address, and so maybe they need a new dentist, or they saw somebody else, because maybe they were traveling or whatever they said they have been to the dentist, but it wasn’t you, you know, within the last three years or whatever. So right now, you know, we want to connect all the data that we do have. And I think going forward, I think it would be good for health care all together, in general, to have more behavioral data and we may try to find ways to gather that.
Raising the Bar: Meeting Modern Consumer Expectations in Healthcare
Aaron: You mentioned Amazon and the expectations that they have set for consumers far and wide. Do you get that sort of feedback? Has that impacted the way that you need to build systems for your customers as well?
Kristin: I just believe that healthcare, in general, needs to set a higher standard for ourselves. I think, you know, a lot of people who’ve been in healthcare for a very long time, and I’ll include myself in this, you know, we sort of get into this situation of, well, this is healthcare. It’s more difficult. You know, convenience means going to the dentist between seven and three, Monday through Thursday or whatever. But I think, you know that is just not how people operate. You know, convenience and simplicity, you just don’t, you know. I think people have the same expectations of their bank now, their shopping, their health care, and they, you know, and they want all of it to be more simple and more accessible. And so I think in our company, we’re trying to really push that bar to say yes, it can be better and it doesn’t have to be different, because it’s health care. So we have a long way to go, but that’s, you know, that’s the premise that we start from.
Aaron: We used Delta Dental for our own employees dental insurance, and I know in looking at benefit statements from Delta Dental, I can at least understand them, whereas benefit statements from our health insurance provider, I feel like anytime anything significant happens. I sort of need to take a half day off just to read.
Kristin: We, you know, we did that in Washington. We wanted to have a cost calculator that was like individual. So if you went in, you know, to look at your costs, it would show you, we call it now Cost Genie. It would show you, here’s what you what you it will calculate what your deductible, what your max, you know, and it would just say, if you’re gonna have filling, you’re gonna pay this amount and and you don’t have to know all the codes. We also did that plain language, and that was hard to do. All the codes and everything on the website, if you want to look up what they are for your dentist, it’s going to show you, it’s not going to say dx, 140 or whatever it’s going to say, you know, exam and cleaning and, you know, and some of that. I mean, we couldn’t call, I think there was a point where we couldn’t call a simplified explanation of benefits. We couldn’t call it that, because that’s a technical, regulated term explanation of benefits. So we had to kind of say this is the light version, but you can definitely get the real version, which is all the stuff. I call it the vomit, all the stuff that you just really don’t even, you know,
Aaron: Don’t need if you really want the confusing version, yes.
Kristin: We have that. We have plenty of jargon and confusion for as much as you want.
Aaron: And so you mentioned this cost calculator that you developed in Washington, is that one of the tools and applications that’s been shared out with other member organizations?
Kristin: Yeah, yeah.
Driving Innovation Through Strategic Partnerships
Aaron: You talked a little bit about strategic partnerships. Can you say a little more about that, and maybe provide examples of the way in which strategic partnerships have benefited you at Delta Dental of Arkansas?
Kristin: So, you know, I think the biggest one is our technology partnerships, but we also have other strategic partnerships. We have investment strategic partnerships, where we get together and do early-stage funding and things like that. From my point of view, they’ve been extremely important. A couple of the unique ones that we did, one was when it became clear there was going to be a consumer market for dental. There was a time when it wasn’t entirely clear, and it was going to be a fairly expensive endeavor to get into individual care. So, we organized a couple of Delta Dentals to actually do market research together. Before that time, individual products were basically miniaturized versions of group plans, with all the 180/50 co-pays, maximums, and waiting periods. We went out and asked, “What if you never had dental benefits? If you’re self-employed or whatever, what is it that you want?” We found that people were telling Congress around the time of the ACA, “We don’t want maximums, we don’t want co-pays, we don’t want waiting periods, we don’t want networks. It’s all too complicated.” Again, simplicity and convenience were key. Unlike the government, we found a way to make that work from an underwriting point of view. We implemented what people later called a fixed co-pay plan, where anytime you go in for an exam, it’s going to cost a set amount. The same applies to fillings or whatever—no waiting periods, instead of maximums. We came up with a plan design that was very desirable for consumers. One company out of the four or five of us implemented what it took to put that on their system, and then we all shared it. Technology partnerships, product development partnerships, and even shared staff partnerships have been extremely valuable.
Aaron: When you develop something innovative like that in one Delta Dental member organization, is it then promoted and syndicated out among other member organizations? Or is each member organization able to develop and tune things as they see fit?
Kristin: We are all independent. We definitely make our own rules. So it depends on what it is. In that case, we ended up forming a company around that product, and it’s been extremely successful. We opened it up to whoever wanted to participate in that. So there’s a lot of cooperation and collaboration across Delta Dental.
The Future of Digital Marketing for Healthcare
Aaron: You’ve talked a little bit about this, but I’m curious to know what you think the future of digital marketing for healthcare is. Where do you think we’re headed? What do healthcare organizations need to do to better serve their customers?
Kristin: For us, digital marketing and digital tools and engagement are all one and the same. We do some pure direct digital marketing to drive people to our individual programs, but I think marketers have a real opportunity to drive the business because the level of engagement in health is very low, and everyone needs it to be higher. We need it to be higher for people to be healthier. Businesses need it to be higher too. So I think there’s a real opportunity. People, especially from a dental point of view, may not care about their oral health, but they care about their smile. They take a zillion pictures a year, right? Zoom and COVID taught us that people were looking at themselves all day—whitening and all these things became more important. So, whatever it is, that’s the way into health. If someone wants a gold tooth, go there. If that’s what brings them into the dentist, great. Give them the gold tooth and try to keep them coming in for their preventive appointments. I think marketers, if they’re good, have a sense of the consumer, where they are, what they’re doing, and how to catch them in those moments. Whatever that is, pull them in and try to increase their engagement. That’s what I meant about behavioral data—the more we know about what people do, the more we can help them be healthier and engage them more in health.
Aaron: You mentioned something that seems self-evident now, but I hadn’t considered—that COVID and everyone going remote maybe changed the focus in terms of dentistry and dental health. I assume you saw big shifts in trends, with people approaching dentistry more aesthetically.
Kristin: Yes. I’m not sure that the claims data bore that out in a big way, but we did hear dentists talk about more grinding due to stress. We did see some differences during COVID. Some of it was obfuscated by the fact that we got no claims, and then we started to get claims again, so trends were just so different for a while. But I do think that if whitening were more of a covered benefit, we might have noticed a bit more of a trend there.
Fostering Talent: Leadership Insights and Career Development
Aaron: Shifting gears a bit, tell me about the role that fostering talent and talent development has had in your career.
Kristin: I really believe that marketers can move into general management because I’ve done it. What’s important to me in fostering talent is to encourage people to take leaps. One of the biggest learning experiences for me was moving into IT, so I always encourage people who are interested in advancing in their careers to take big leaps if they’re offered that opportunity, or to volunteer to take leaps. Our businesses are changing a lot right now, across industries, with the effects of AI, changes in the economy, and figuring things out in terms of in-office and remote work. There’s a lot of transition and change, and I think if people use that to their advantage, they can think about moving into other things. The other thing that’s important to me is to stay in your projects long enough to own your results. The war on talent sometimes encourages people to move at a pace where they don’t get the learning of what happened to the thing they were responsible for if it was a long-term project. I think it’s important to stay long enough to get that learning. I’m also concerned about remote work to the extent that visibility and relationships could suffer. There’s going to be a point where people might say, “I wish I had built better relationships in this company,” maybe for the mentoring, even if they left. I would encourage people to be in the office enough to build relationships and to offer up, “Hey, do you want to know what I’m working on?” Don’t just assume they know. I’ve tried to find talent in places or in people that weren’t otherwise considered high-potential talent at the time and give them these kinds of opportunities. As a woman CEO, I’ve been overlooked and not included in certain things, so maybe I take a more intentional look at people who might not usually be considered for a certain role. We tend to have this idea that a clinical role is a clinical role, a technical role is a technical role, a marketing role is a marketing role, and an analytical role is an analytical role. But we have people who are smart enough to learn how to do different skills.
Aaron: Well, to that end, I’m curious about something. Going back to your experience at Delta Dental of Washington, where you took over IT, you mentioned in some of our email exchanges that you view yourself as a relatively non-technical person, but you took over IT and led it very effectively. So, I’m going to guess that coming from marketing and being “non-technical” gave you an advantage. I’m wondering what that advantage was—what could you see that perhaps other people couldn’t?
Kristin: Well, I think that first story, you know, of launching into a production environment is not the same as launching to the consumer. Let’s all get on the same page here as to why we are actually doing this project—it’s not just to move it from a staging environment to a production environment. A lot of it was asking the right questions and making sure they explained things to me in plain English. If I didn’t understand it, we weren’t doing it. I still see it today—people in IT who sort of hide behind the jargon, and if you ask them to explain it in English, they can’t. Well, if I don’t understand it, I doubt the consumer will understand why it’s important. I worked really hard to learn things, and I had to rely on some people, but the main thing that made it successful was having one priority and pushing that as fast as we could. I got the team on board behind me, even though I wasn’t technical, because they could see that what they were doing was important, had purpose, contributed to the business, and they were going to be able to get it done. At first, they were hesitant, like, “Are we really going to move off this other project, or are you just going to switch it on me?” No, we’re going to do this thing now, and we’re all going to see how much business or benefit that accrues to us. And they enjoyed that part—they enjoyed seeing the results and being part of the whole business.
The Importance of Diverse Leadership
Aaron: You mentioned that being a woman in leadership roles makes mentoring very important. Do you feel that mentoring is more important for a woman in leadership roles than it might be for a man in the same roles? And now that you’ve reached the level of CEO, do you feel like gender is no longer an issue because of your position, or is that not the case?
Kristin: I don’t really focus on it, but I also don’t try to avoid the obvious. I’m also small, you know—I’m just not what you think of when you think of a CEO. I’m aware of that. But yes, I had plenty of really good mentors in my life, and I took full advantage of the advice they were willing to give me. There were situations where, like one time at Eli Lilly, I was put in a meeting that my boss didn’t tell me why he sent me and why he didn’t go. When I got there, it was clear that I was by far the most junior person in that meeting, but I was also the only woman. It was a decision that probably needed a woman in the room. So sometimes, you know, that type of thing is going to happen. Maybe it was more rare, especially many years ago, but I don’t find myself as the only woman in the room very often anymore, although it still does happen. My point is, sometimes it was direct advice, and sometimes it was just being put in a situation where I had to swim versus sink. All of those experiences really helped me grow, and I try to pull people up the same way. Sometimes it’s women, sometimes it’s someone of color, or someone younger than you might think is ready—whatever it is, people might not consider them because they haven’t looked wide enough. I’m obviously highly aware of that. It could be someone with a different educational background, or just someone who doesn’t fit the usual mold.
Aaron: I ask in part because I have two daughters. One is 20, and the other is 15. Both of them are thinking about what they want to do, and I’m thinking about professional dynamics in a closer-to-home sort of way than I maybe have in the past. It seems to me that the results are so much better when you have a mixed, diverse employee base and leadership team. We’ve quite deliberately tried to ensure that our leadership team is 50% female, and our employee base is about the same. We weren’t like that eight or nine years ago, but when we made that shift, the company just worked so much better. The quality of our decision-making improved dramatically. It seems self-evident, and the same is true commercially—the quality of outcomes in venture-backed companies is much better with at least one female founder in the mix, and even better with a female founder leading.
Kristin: I’m pretty individualistic—I think you want the best person for the job. But if you don’t look very wide, you do that at your own peril. If you eliminate candidates before you’ve even considered them, that’s just not good for your business.
Aaron: I completely agree. I think it’s also true that if you have something in your organizational dynamics or culture that means you have a style that doesn’t support that kind of diversity, that’s problematic. You can still be looking for the best person for the job, but if your culture is limiting, that might be the wrong person for your own growth.
Kristin: Right, and you might have to look at your culture to see why you’re not attracting a wider group of candidates. These things absolutely work together. In healthcare, we need to look wider to other industries for inspiration on simplicity, convenience, and affordability. We need to have a more robust standard that’s consistent with how people operate in other spheres of their lives. But I also think, as an industry, we need to look at other industries (for marketing ideas, consumer engagement strategies, and structural solutions). One of the things that early on with Delta Dental of Washington, Wheelhouse helped us with, was looking at other industries. The Delta Dental system was tripping over itself in terms of navigating the marketing challenges of the World Wide Web. We had been able to be local in the past and have fairly good local marketing, but we also maintained a national brand. That was something we did better than the Blues in many ways—we kept the Delta Dental brand prominent and didn’t allow secondary brands. That consistency helped us build a national brand despite having local distinctions. But Wheelhouse helped us see ourselves like, “Okay, Major League Baseball has a similar issue, and they do it this way. Ford has a similar issue with their dealerships, and they do it that way.” In healthcare, we sometimes tend to look at a smaller pool for suggestions or experiments, but it’s really important to look wider for marketing ideas, consumer engagement strategies, and foundational structural issues.
Aaron: Yeah, I remember offering those examples of Major League Baseball and Ford.
Kristin: Yep, yep, it was very helpful.
Aaron: I’ve really enjoyed the conversation. Thank you, Kristin.
Kristin: Thank you, Aaron.
Questions or comments
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