Health Net 1999 Annual Report Download - page 7

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assets of our Integrated Pharmaceutical Services
(IPS) pharmacy subsidiary for $65 million.We
had determined that claims processing and other
administrative functions were not essential to IPS.
We also gained important administrative efficien-
cies, as Advance Paradigm is now a key supplier of
pharmaceutical services claims processing to FHS.
FHS also completed the sale of the two hospitals
the company owned in Los Angeles, and its
Preferred Health Network, Inc. and Foundation
Health Preferred Administrator subsidiaries.The
company also sold several real estate assets, primarily
medical offices and clinics in Northern California.
This ambitious divestiture program’s successful
completion resulted in cash proceeds to FHS in
excess of $137 million in 1999, all of which was
used to reduce corporate debt.
With the divestiture program complete, on
January 1, 2000, we reorganized health plan
operations into two simplified geographic health
plan divisions – the Western Division, comprised
of plans in Arizona, California and Oregon, under
Cora Tellez; and the Eastern Division, comprised
of plans in Connecticut, Florida, New Jersey, New
York and Pennsylvania, under Karen Coughlin.
HEALTH PLANS
Health plan premiums declined slightly in 1999,
to $7,031,055,000 as a result of the company’s
divestiture program and disciplined pricing
philosophy.The gross margin contribution from
health plans was $1,081,053,000, a 5 percent
increase over 1998’s contribution. Enrollment in
FHS health plans at the end of 1999 stood at
3,971,000. Included in this total are 227,000
members from Colorado, Idaho and Washington.
FHS expects that the substantial majority of these
members will enroll in new plans in the first
quarter of 2000 as part of our divestiture
agreements and will no longer be included in
FHS enrollment.
Western Division
CALIFO R NIA
The Western Division was led in 1999 by out-
standing performance at Health Net.With more
than 2.2 million members, Health Net is one of
California’s largest and best-regarded health plans.
ASTHMA CARE FOR KI DS
Asthma affects mo re than 10 percent o f
Arizona’s kids, making it the mo st co mmo n
chro nic illness among children in the state.
Armed with these statistics and its o wn data
o n asthmatic members, Intergro up of Arizona
intro duced AsthmaWise in 1994 to its members
and o thers in the co mmunity.
AsthmaWise is no w a natio nally reco gnized
pro gram that has helped to impro ve the quality
of life fo r tho usands of asthmatics in Arizo na.
The pro gram educates children with asthma,
their families, and scho ol and wo rk asso ciates
abo ut the chro nic disease. It also helps
asthmatic s develop written co ntro l plans to
self-manage their disease.
Amo ng its many features, AsthmaWise
pro vides bo th members and physicians
with a dedicated to ll-free help line,
special co ntro l kits that include a
peak-flo w meter, which is used to
measure airway o bstructio n, and
quarterly co mmunicatio ns that
pro vide informatio n as well as
reminders and tips to help
members successfully manage
this disease.