1. 1 Jerry Vaccaro, M.D. SVP, Specialty Health Businesses.…a health and consumer services company making people’s lives better

2. 2 Specialty Companies Best in Class Margins Best in Class Care and Service Steady Growth and Profitability

3. PacifiCare Behavioral Health Company Overview

4. 4 Downward Spending Leveling Off 1988 - 1998 –Behavioral health spending continuously declined, reaching a total drop of 54.7% –As a percent of premium, behavioral health dropped from 6.2% to 3.1% 1998 - 1999 –Behavioral health spending experienced its lowest drop in a decade of 1.5% –Declining trend appears to have leveled off U.S. Annual Behavioral Health Spending per Covered Life 1988 - $154.48 1998 - $69.67 Over Spending Appropriate Spending Under Spending

5. 5 National Competitive Landscape

6. 6 CA Market Share by Revenue #1 in CA

7. 7 PBH Today In operation since 1986 4.3 million members in 12 states NCQA accredited in Western, NW Regions –Only fully accredited MBHO in CA CA Knox-Keene licensed

8. 8 Internal vs. External Membership As of June 2002

9. 9 PBH Differentiators ALERT Best Care IT Infrastructure & Reporting NCQA Health Plan Expertise

10. 10 Product Leadership ALERT SM Best Care SM PBH Spectrum PBH Caregiver Taking Charge of Depression SM Taking Charge SM Health Improvement Series LifeStrategies

11. 11 ALERT SM Groundbreaking Outcomes Management Program Decreases medical errors (35%, year one) Next generation Provider Report Cards

12. 12 Growth Strategy Super-Regional Company –Market Leader in California –Selective expansion (health plans, Labor/ Trust, other niches) –Evaluate Acquisition Opportunities Take advantage of Federal Parity Legislation –PBH risk-based experience

13. 13 Steady Growth 1996 1997 1998 1999 2000 2001 2002 (est.)

14. 14 Net Income Analysis (in 000s)

15. PacifiCare Dental & Vision Company Overview

16. 16 Market at a Glance Dental penetration: 50-60% purchase dental benefits Vision penetration: 20-40% purchase vision benefits DHMO growth flat, PPO expanding

17. 17 PDV Today Largest California DHMO network PacifiCare Dental penetration 13% PacifiCare Vision penetration under 5% Product offerings in all PacifiCare states

18. 18 Growth Strategy Super-Regional Company Service Excellence: #1 in Service Maximize penetration within PacifiCare

19. 19 Steady Growth 2002 estimate

20. 20 Total Commercial Membership & Penetration 2002 estimate