4th Annual Investor Conference

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4th Annual Investor Conference
BUSINESS TRANSFORMATION AND INNOVATION
SERVICES Gary Velasquez President

• May 16, 2001

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Business Transformation and Innovation Services
was formed to

• Expand capabilities to ensure business goals are
  met
• Reduce operating costs
• Manage operating/technology risks
• Ensure disciplined use of capital for technology
  projects

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Infrastructure a year ago was complex adding
non-value added costs
Existing Environment
New
Provider Connectivity
External
EAI
Internal
Network
Enterprise Portal
QCare
ABS
MC400
KBASE
IRMA
Call Center Applications
Macess
Macess Imagine
FARE
Filenet
Call Center Applications
JD Edwards
CSC MH Power
Packaged Applications
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BTIS Short-term Goals

• Reduce operating costs
• Extend PPO Infrastructure to meet current
  production goals
• Develop and implement product enhancements to
  drive top-line growth
• Create a common technology architecture

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BTIS Long-term Goals

• Continue to reduce operating costs
• Install common technology architecture
• Expand capability to support broader product
  portfolio
• Develop solutions that support seamless
  interaction among consumer, provider, employer
  and health plans

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Health Net is moving to enterprise standards
Customer Interface
Provider Connectivity
External
EAI
Network
Internal
Data Warehouse
Sales Force Automation
Call Center Applications
Consumer Self Service
Consumer Analytics
Product Configurator
Medical Management
Digital Transaction Engine
...building in flexibility speed to market
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To meet goals, focus on the five core
competencies...

• Product Development
• Customer Services
• Distribution
• Care Management
• Administrative Services

which drives annual SGA expenditures of 1.4Bor
14 of Revenue
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Targeted savings will reduce SGA expenditures by
100 bps
Fully Operational Annual SGA Savings Targets
1500
20
20
Total 100 bps
20
10
5
25
0
Enrollment Billing
Target Spend
Information Technology
Customer Service
Medical Mgmt
Current Spend
Other
Claims
Reductions are not driven by revenue volume
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Project Portfolio
Health Net Competencies
Questium
MedUnite
NaviMedix
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Partner for Solutions, not Build

• Partners bring
• Proven, market-tested solutions and services
• Highly technical and skilled labor force
• RD environment
• Leverage non-Health Net capital base

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5-phased Approach to Deployment
Execution requires a disciplined approach
Specific Outcomes for each phase
Phase
Demonstrate the flexibility and capability of the
system
Prototype
Maximum benefits will be realized from
engineering business processes. Most
efficient/effective processes with companion
metrics will be developed
Model Office
Fully test the model office hypotheses in a
non-live environment on real business Create
tailored implementation plan
Solution Lab
Small scale, live environment test (10-20K lives)

Pilot
Deployment
Deploy to the full book of business
to achieve results and mitigate risks
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Moderated Panel

• Product Development and Customer Service
• Distribution
• Care Management
• Administrative Services

• Steve Sell
• Kathleen Richard
• Jonathan Scheff, MD
• Paul Gilbertson

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Product Development/Customer Service Competencies

• Steve Sell
• Questium
• Business Transformation and Innovation Services
• Health Net, Inc.

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Consumer Timetable - May 15, 2000

• Consumer Website Development Well Along
• Functions Include Registration, Changes,
  History, E-mail, Reminders, Actionable Content
• Introduce for Health Net California for 2000 Open
  Enrollment

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Questium Health and Wellness
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Questium Personal and Professional Life
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Distribution Competency

• Kathleen Richard
• Senior Vice President
• Business Transformation and Innovation Services
• Health Net, Inc.

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Sales Automation System
Challenges/Opportunities Streamlined,
effective processes and tools to drive
new sales and retention Target Market Health
Net California Mid Market Capabilities
Contact/communication management
Lead/prospect management Reporting
150 Users Partner Seibel
Systems Expected Outcomes 8 Increased Sales
Force Capacity 8 Improved Close Rate
8 Improved Sales to Existing Customers 8
Improved Retention Full Benefits Realized
in 2003
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Sales Web Portal
Challenges/Opportunities Provide customers
with access to online quotes Automate and
streamline current processes Target Market
Health Net California Individual and Small
Group Capabilities Online Quoting
Interactive Product Comparisons Proposal
Generation Collateral Ordering/Downloads
Full Broker Sales Functionality
Smart Applications e-Signature Expected
Outcomes 15-25 Improved Sales Force
Productivity 95 Clean Application 30
With No Underwriting Improved Account
Management, Lead Management and Broker
Service
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Care Management Competency

• Jonathan Scheff, MD
• Chief Medical Officer
• Health Net Federal Services

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Medical Management Capability
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Administrative Services Competencies

• Paul Gilbertson
• Senior Vice President
• Business Transformation and Innovation Services
• Health Net, Inc.

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Enrollment and Billing
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Provider Initiative - May 15, 2000

• Single Website for Provider Interaction with
  Plans
• Focus on Eligibility, Claims Referral and
  Formulary Compliance First
• Claims Adjudication and Payment Further Out
• Easy to Use, Single Site with Links to Plans and
  Other Services

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Provider Connectivity
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Business Transformation and Innovation Services
was formed to
Goals
Actions

• Utilize partnerships that have technical
  capability and financial resources
• Develop an enterprise technical architecture
  which leverages existing investments
• Implement a portfolio of business/technology
  linked initiatives that drive results across
  business units
• Continue use of existing capital approval
  process ensure all major initiatives are driven
  through Solution Lab methodology

• Expand capabilities to ensure
• business goals are met
• Reduce operating costs
• Manage operating/technology risks
• Ensure disciplined use of capital for
• technology projects

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Demonstration Booths

• Questium - Personal and Professional Life
• Questium - Health and Wellness
• Online Enrollment Billing
• MedUnite
• Enterprise Portal