Health Net 2001 Annual Report Download - page 7

Download and view the complete annual report

Please find page 7 of the 2001 Health Net annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 48

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48

Our health and life insurance products are provided throughout most of our service areas. The
following table contains membership information relating to our health and life insurance companies’
insured PPO, POS, indemnity and group life products as of December 31, 2001:
Insured PPO Members ...................................... 30,902
POS Members ............................................ 292,854(a)
Indemnity Members ........................................ 146
Group Life Members ........................................ 7,589
(a) Includes 267,258 members under our arrangement with The Guardian described elsewhere in this
Annual Report. (Please note that there were 37,222 Guardian HMO members in addition to the
POS members included in the above table.)
PHARMACY BENEFIT MANAGEMENT. Pharmacy benefits are managed through a variety of
clinical, technological and contractual tools. We seek to provide safe, effective medications that are
affordable to our members. We outsource certain capital and labor intensive functions of pharmacy
benefit management, such as claim processing. However, we continue to actively utilize all other
pharmacy management tools available. Some of the tools used are as follows:
• Pharmacy benefit design—we have designed and sell three-tier pharmacy products that allow
consumer choice while encouraging member financial participation.
• Clinical programs that improve safety, efficacy and member compliance with prescribed medical
treatment.
• Retail and manufacturer contracts that lower the net cost.
• Technological tools that automate claim adjudication and payment.
• Technology that plays a key role in preventing members from receiving drugs that may harmfully
interact with other medications they are taking.
GOVERNMENT CONTRACTS AND SPECIALTY SERVICES SEGMENT
Government Contracts
TRICARE. Our wholly-owned subsidiary, Health Net Federal Services, Inc. (‘‘Federal Services’’)
(formerly known as Foundation Health Federal Services, Inc.), administers large, multi-year managed
care federal contracts with the United States Department of Defense (‘‘DoD’’).
Federal Services currently administers health care contracts for DoD’s TRICARE program
covering approximately 1.5 million eligible individuals under TRICARE. Through TRICARE, Federal
Services provides eligible beneficiaries with improved access to care, lower out-of-pocket expenses and
fewer claims forms. Federal Services currently administers three TRICARE contracts for five regions:
• Region 11, covering Washington, Oregon and part of Idaho
• Region 6, covering Arkansas, Oklahoma, most of Texas, and most of Louisiana
• Regions 9, 10 and 12, covering California, Hawaii, Alaska and part of Arizona
During 2001, enrollment of TRICARE beneficiaries in the HMO option (called ‘‘TRICARE
Prime’’) of the TRICARE program for the Region 11 contract increased by 34% to 187,340 while the
total estimated number of eligible beneficiaries, based on DoD data, decreased by 2% to 237,329.
During 2001, enrollment of TRICARE beneficiaries in TRICARE Prime for the Region 6 contract
increased by 9% to 415,645 while the total estimated number of eligible beneficiaries, based on DoD
data, increased by 1% to 617,718. During 2001, enrollment of TRICARE beneficiaries in TRICARE
6