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Payer uses risk-adjusted hospital data for utilization and cost comparisons that identify cost-efficient providers

As a leading payer in the important California risk-contracting market and a growing presence in five other states, Van Nuys, CA-based Health Net naturally looks for provider partners with efficient healthcare delivery systems. Until recently, the challenge in attaining that goal was to employ an analytical model that would correctly gauge true measures of efficiency, while accounting for the acuity of a provider organization's member population, says Alan W. Sterling, MHA, Health Net's director of contracts and analysis.

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