Health Net 1999 Annual Report Download - page 14

12 FOUNDATION HEALTH SYSTEMS, INC.
We see technology as a key tool in improving our basic business
model so that our health plans are thought of as gateways to care,
not gatekeepers of care.
be able to significantly expand its scope beyond
the FHS plans for which it provides services.
It is a direct outgrowth of FHS’ former Quality
Initiatives Division and is led by Dr. Antonio
Legorreta, a recognized national leader in health
care quality assessment and improvement.
Legal and Legislative Environment
No report on 1999 would be complete without
a brief discussion of the legal and legislative
environment faced by FHS and every other
company in the managed care industry.
Late in the year a group of trial lawyers, generally
identified with successful plaintiff actions against
the tobacco industry, began filing class action
lawsuits against managed care companies based on
a broad range of allegations. FHS was named in
one such action filed in Mississippi.
While we believe that such lawsuits face significant
hurdles, we are taking these actions very seriously.
We will vigorously defend our interests and
work with others in the industry whenever and
wherever appropriate.
As many of you know, there are bills pending
before the Congress generally referred to as the
Patients’ Bill of R ights. As this is being written, a
Conference Committee is trying to resolve two
very different versions of such bills. At the center
of this debate is the issue of health plan liability.
As a company and an industry, we have made it
clear that a dramatic expansion of liability will not
ensure that anyone will receive higher quality
health care – it will only increase costs.
We believe, however, that the bills passed in
California and signed into law by Governor Davis
last fall represent a step in the right direction in
the debate over patients’ rights. A new law allows
health plan members to sue their plans, but only
after a number of potential remedies have been pur-
sued, such as appeals and external, third-party review.
We believe that such an approach, especially access
to independent, third-party review, assures all
health plan members that they will get the care
they need, when they need it.We will continue to
actively support sensible liability reform.
Conclusion
Let me close by again thanking our associates for
a year of extraordinary effort and accomplishment.
Our team did a great job meeting expectations
despite a tough environment for managed care.
We must now continue to achieve all of our
operational goals while exploring, developing
and implementing new and enhanced consumer
service strategies.
The future in health care will belong to those
companies who are the most innovative in
addressing growing consumer needs.This will
include more open and expanded products,
enhanced service and improved administrative
efficiency.We see technology as a key tool in
improving our basic business model so that our
health plans are thought of as gateways to care,
not gatekeepers of care.
We believe the future for Foundation Health
Systems is filled with exciting opportunities.
We appreciate the support of our stockholders
through some very difficult times in the past two
years.We are working as hard as we can to ensure
that your patience and support are rewarded.
Sincerely,
Jay M. Gellert
President and Chief Executive O fficer