Health Net 2001 Annual Report Download - page 4

have contractual relationships with health care providers for the delivery of health care to our
enrollees.
The following table contains information relating to our HMO and PPO members, POS members,
Medicare members and Medicaid members as of December 31, 2001 (our Medicare and Medicaid
businesses are discussed below under ‘‘Medicare’’ and ‘‘Medicaid Products’’):
Commercial HMO and PPO Members .......................... 2,114,511(a)
POS Members ........................................... 870,051(b)
Medicare Members (risk only) ................................ 215,813
Medicaid Members ........................................ 787,584
(a) Includes 37,222 members under our arrangement with The Guardian described elsewhere in this
Annual Report.
(b) Includes 267,258 members under our arrangement with The Guardian described elsewhere in this
Annual Report and 292,854 POS members insured by our indemnity insurance operations
described below.
In addition, the following table sets forth certain information regarding our employer groups in the
commercial managed care operations of our Health Plan Services segment as of December 31, 2001:
Number of Employer Groups .................................. 58,788
Largest Employer Group as % of enrollment ....................... 9.1%
10 largest Employer Groups as % of enrollment ..................... 24.1%
During 2001, our Health Plan Services segment had health plan operations in Arizona, California,
Oregon, Connecticut, Florida, New Jersey, New York and Pennsylvania.
In Arizona, we believe that our commercial managed care operations rank us third largest as
measured by total membership and fourth largest as measured by size of provider network. Our
commercial membership in Arizona was 167,845 as of December 31, 2001, which represented a
decrease of approximately 44% during 2001. This decrease is primarily due to membership losses in the
large group market. The loss of the state of Arizona employer group accounted for 65,000 of the
membership loss. Our Medicare membership in Arizona was 49,926 as of December 31, 2001, which
represented a decrease of approximately 18% during 2001. We did not have any Medicaid members in
Arizona as of December 31, 2001 and 2000.
The California market is characterized by a concentrated population. We believe that Health Net
of California, Inc., our California HMO, is the second largest HMO in California in terms of
membership and in terms of size of provider network. Our commercial membership in California as of
December 31, 2001 was 1,830,130, which represented an increase of approximately 13% during 2001.
The increase in commercial membership was primarily due to enrollment increases within the small
group market most notably as a result of the growth in the PPO product. Our Medicare membership in
California as of December 31, 2001 was 119,204, which represented a decrease of approximately 3%
during 2001. Our Medicaid membership in California as of December 31, 2001 was 651,411 members,
which represented an increase of approximately 22% during 2001 primarily in Los Angeles County.
We believe that our Oregon operations make us the ninth largest managed care provider in
Oregon in terms of membership and the second largest HMO in Oregon in terms of size of provider
network. Our commercial membership in Oregon was 75,447 as of December 31, 2001, which
represented a decrease of approximately 18% during 2001. The decrease was due, in part, to our
pricing discipline and focus on profitable accounts and our withdrawal from certain counties in central
3