Health Net 1998 Annual Report Download - page 11

F O U N DAT IO N H EALTH SYSTEM S, I N C . 9
W ith these kinds of losses, why even stay in this line of business?
If we approach Medicare in the right way, we think there are good opportunities,particularly in
NewYork City.
The reimbursement rates in New York’s five boroughs are consistent with the actual cost of care
and allow us to offer seniors comprehensive benefits.
In addition, we are establishing strong provider relationships with some of New Yo r k ’s finest health
c a r e organizations.These groups are centrally located in the areas where we have great growth oppor-
t u n i t i e s and can offer a competitively priced pro d u c t . Most import a n t , these organizations have the
e x p e rtise to effectively manage both the processes of care and sophisticated financial arr a n g e m e n t s .
Last, we truly believe that health plans can help the government manage rising health care costs
that threaten the future of Medicare, and at the same time help improve quality and access to
health care services.
W hat can you do when health care costs are rising so dramatically?
We need to better manage the costs of providing quality health care services to our members.
Part of this is making sure we have the right relationships in place with physicians and hospitals.We
made great strides on this front in 1998 with new contracts for radiology and lab services.
In addition,during the first quarter of 1999, we entered into a long-term contract based on sound
economics with Connecticut’s largest physician group, the Connecticut State Medical Society
Independent Physician Association.
We also are making sure our internal systems are as efficient as possible. Part of this effort included
instituting a code and patterns review program to ensure PHS is processing the right claims for the
right services.This helps us check for potential billing errors,and most importantly, helps us guard
against potential fraud or abuse.
W hat were the significant accomplishments in 1998?
Bringing MD Health Plan of Connecticut,First Option Health Plan of New Jersey and PHS
together as a singular business organization was the most significant accomplishment.During the
latter part of 1998, we successfully integrated the operations and information systems of three
health plans,which was truly a monumental task.The Northeast health plan now operates as a sin-
gle organization under the PHS name, and we are the third largest health plan in the tri-state area.
In addition,in 1998 the Medicare plan was developed to drastically contain our Medicare losses
in 1999.We also began the process of working with providers to re-engineer our medical
management system so PHS can continue to provide consumers with quality health care services
at affordable prices.
W hy did you decide to take on this challenge?
I’ve had such great opportunities throughout my career, starting as a registered nurse at the bedside
then moving on to running hospitals, and now health plans. I also enjoy turn - a round situations and
I truly believe this company has enormous opportunities from both a turn-around and growth
standpoint, and I didn’t want to stand by and miss out.
We offer the right product and receive strong premiums.We have good market share, yet still have
lots of room to grow.We have a strong name.And most import a n t , I think we have the right people
in place to really make things happen in 1999.