1. 4th Annual Investor Conference May 16, 2001 BUSINESS TRANSFORMATION AND INNOVATION SERVICES Gary Velasquez President

2. 2 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

3. 3 EAI Network KBASE Call Center Applications IRMA External Internal JD Edwards Macess Imagine MC400 FARE QCare Filenet Macess ABS Call Center Applications Enterprise Portal Packaged Applications Provider Connectivity New Existing Environment CSC MH Power Infrastructure a year ago was complex adding non-value added costs

4. 4 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

5. 5 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

6. 6 Network External Internal Call Center Applications EAI Customer Interface Provider Connectivity Digital Transaction Engine Data Warehouse Consumer Self Service Consumer Analytics Product Configurator Sales Force Automation Medical Management Health Net is moving to enterprise standards...building in flexibility & speed to market

7. 7 To meet goals, focus on the five core competencies...  Product Development  Customer Services  Distribution  Care Management  Administrative Services which drives annual SG&A expenditures of $1.4B or 14% of Revenue

8. 8 Targeted savings will reduce SG&A expenditures by 100 bps Fully Operational Annual SG&A Savings Targets 20 Total 100 bps 5 0 Current Spend Claims Enrollment & Billing Target Spend Information Technology Customer Service 10 Medical Mgmt 20 1500 25 Other “Reductions are not driven by revenue volume”

9. 9 Project Portfolio Health Net Competencies Questium MedUnite NaviMedix

10. 10 Partner for Solutions, not Build Partners bring:  Proven, market-tested solutions and services  Highly technical and skilled labor force  R&D environment  Leverage non-Health Net capital base

11. 11 Small scale, live environment test (10-20K lives) Pilot Demonstrate the flexibility and capability of the system Prototype Fully test the model office hypotheses in a non-live environment on real business Create tailored implementation plan Solution Lab Maximum benefits will be realized from engineering business processes. Most efficient/effective processes with companion metrics will be developed Model Office Specific Outcomes for each phase Phase Deployment Deploy to the full book of business 5-phased Approach to Deployment Execution requires a disciplined approach …to achieve results and mitigate risks

12. 12 Moderated Panel Product Development and Customer Service Distribution Care Management Administrative Services Steve Sell Kathleen Richard Jonathan Scheff, MD Paul Gilbertson

13. 13 Product Development/Customer Service Competencies Steve Sell Questium Business Transformation and Innovation Services Health Net, Inc.

14. 14 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

15. 15 Questium Health and Wellness

16. 16 Questium Personal and Professional Life

17. 17 Distribution Competency Kathleen Richard Senior Vice President Business Transformation and Innovation Services Health Net, Inc.

18. 18 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

19. 19 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

20. 20 Care Management Competency Jonathan Scheff, MD Chief Medical Officer Health Net Federal Services

21. 21 Medical Management Capability

22. 22 Administrative Services Competencies Paul Gilbertson Senior Vice President Business Transformation and Innovation Services Health Net, Inc.

23. 23 Enrollment and Billing

24. 24 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

25. 25 Provider Connectivity

26. 26 Business Transformation and Innovation Services was formed to:  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 GoalsActions

27. 27 Demonstration Booths Questium - Personal and Professional Life Questium - Health and Wellness Online Enrollment & Billing MedUnite Enterprise Portal Questium - Personal and Professional Life Questium - Health and Wellness Online Enrollment & Billing MedUnite Enterprise Portal