Health Net 2015 Annual Report Download - page 54

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publicly-traded companies in our industry have in the past or may in the future show significant volatility and
sensitivity in response to many factors, including, without limitation, the price of Centene common stock, developments
in connection with our pending Merger with Centene, the ACA and health care reform generally, public
communications regarding managed care, legislative or regulatory actions, political developments, litigation or
threatened litigation, health care cost trends, proposed premium increases, pricing trends, reductions in government
reimbursement, competition, earnings, proposed changes in or the introduction of new government programs or
initiatives, developments with respect to the CCI, receivable collections or membership reports of particular industry
participants, and market speculation about or actual merger and acquisition activity. Additionally, adverse developments
affecting any one of the companies in our sector could cause the price of our common stock to weaken, even if those
adverse developments do not otherwise affect us. There can be no assurances regarding the level or stability of our
share price at any time or the impact of these or any other factors on our stock price.
Securities class action lawsuits are often brought against companies after periods of volatility in the market price
of their securities. If we were to become involved in securities litigation, it could subject us to substantial costs, divert
resources and the attention of management from our business, and otherwise adversely affect our business.
Negative publicity regarding the managed health care industry and health care reform could adversely affect our
ability to market and sell our products and services.
Managed health care companies have received and continue to receive negative publicity reflecting the public
perception of the industry. For example, the Company and the managed health care industry have been subject to
negative publicity surrounding premium rate increases and government investigations into the industry and our own
business practices. Such risks may be exacerbated in the event we and other companies in our industry raise premium
rates by more than has been done in recent years to price for the expanded benefits required by, and the fees, taxes and
assessments imposed by, the ACA or to respond to any increase in medical cost trends. In addition, health care, health
care reform and its implementation and related health care reform proposals have been and are expected to continue to
be the subject of intense media attention and political debate. Such political discourse can often generate publicity that
portrays managed care in a negative light. Our marketing efforts may be affected by, among other things, the amount of
negative publicity to which the industry has been subject, as well as by speculation and uncertainty relating to merger
and acquisition activity among companies in our industry. Speculation, uncertainty or negative publicity about us, our
industry, our third party vendors or our lines of business could adversely affect our ability to market and sell our
products or services, require changes to our products or services, or stimulate additional legislation, regulation, review
of our practices or those of the industry or litigation that could adversely affect us.
Managing executive succession and retention is critical to our success. If we are unable to manage the succession of
our key executives, it could adversely affect our business.
We are dependent on retaining existing key executives and attracting additional qualified executives to meet
current and future needs. We face intense competition for qualified executives, and there can be no assurance that we
will be able to attract and retain such executives. Although we have succession plans in place and have employment
arrangements with our key executives, these do not guarantee that the services of these key executives will continue to
be available to us or that we will be able to attract and retain suitable successors. We would be adversely affected if we
fail to adequately plan for future turnover of our senior management team. Our ability to retain management personnel
and other key employees may also be impacted by the pendency of the Merger, as further described above under the
risk factor heading “—Uncertainties associated with the Merger may cause a loss of management personnel and other
key employees which could adversely affect our business and results of operations.”
Acquisitions, divestitures and other significant transactions may adversely affect our business.
We continue to evaluate the profitability realized or that we expect to be realized by our existing businesses and
operations. From time to time we review, from a strategic standpoint, potential acquisitions and divestitures in light of
our core businesses and growth strategies. The success of any such acquisition or divestiture depends, in part, upon our
ability to identify suitable buyers or sellers, negotiate favorable contractual terms and, in many cases, obtain
governmental approval. For acquisitions, success is also dependent upon efficiently integrating the acquired business
into our existing operations. For divestitures, success may also be dependent upon efficiently reducing general and
administrative or other functions for our remaining operations. In the event the structure of the transaction results in
continuing obligations by the buyer to us or our customers, a buyer's inability to fulfill these obligations could lead to
future financial loss on our part. As a seller, we may have significant continuing indemnification, administrative