Health Net of California and Leading Providers to Create ACO-Like Arrangement for University of California Employees in the Bay Area

Source: Health Net, Inc.

Health Net of California, Inc., a subsidiary of Health Net, Inc. (NYSE: HNT), and San Francisco health care providers Hill Physicians Medical Group, UCSF Medical Center, UCSF Benioff Children’s Hospital, and both St. Mary’s Medical Center and Saint Francis Memorial Hospital of Dignity Health, have formed an accountable care arrangement for University of California (UC) employees living or working in San Francisco, similar to an Accountable Care Organization (ACO). Implementation is pending regulatory approval by the California Department of Managed Health Care.

“This arrangement is modeled on the structure of ACOs, aligning incentives and promoting better care coordination, which is an important element of improving health,” said Darryl Cardoza, CEO of Hill Physicians.

ACOs are organizations of health care providers that are accountable to both patients and themselves for the quality, cost and overall care experience. Rather than serving Medicare patients, as an ACO does, the arrangement will serve UC members/enrollees in the San Francisco Bay Area.

“This collaboration represents some of the strongest aspects of accountable care by bringing together some of the best known health care providers and focusing on the key principles of affordability, quality and innovation,” said Steve Sell, president of Health Net, Inc.’s Western Region Health Plan.

“We fully anticipate that this arrangement will foster more frequent communication among all the involved medical providers, which will give patients more support and a better quality of care,” said Glenna Vaskelis, SVP Operations, Bay Area Service Area of Dignity Health. “Ultimately our goal is to improve patient care and satisfaction as a whole while containing costs.”

“This accountable care arrangement moves our organizations and the patients we serve into a future where traditional barriers to coordinated, integrated and efficient care can be eliminated, and the focus can be squarely placed on providing what our patients need,” said Josh Adler, MD, chief medical officer, UCSF Medical Center and UCSF Benioff Children’s Hospital. “I believe this new model will be a significant step forward for UC employees.”

Key to the arrangement are enhancements to how care is planned for and delivered – from before hospital admission through post-discharge – and support systems to encourage prevention and early detection of diseases and conditions.

The accountable care arrangement is available to UC employees, non-Medicare retirees and covered family members who live or work in San Francisco, enroll in Health Net’s full-network HMO or the Health Net Blue & Gold HMO for 2013, and have a Hill Physicians Medical Group doctor in San Francisco or northern San Mateo counties. Those who do not already have the Health Net Blue & Gold HMO or the full-network HMO and a Hill Physicians Medical Group doctor may select them during the university’s open enrollment period, which ends Nov. 20.

University of California employees who have questions about their Health Net medical plan options can get answers at www.healthnet.com/uc or by calling 800-539-4072.

About Health Net

Health Net, Inc. is a publicly traded managed care organization that delivers managed health care services through health plans and government-sponsored managed care plans. Its mission is to help people be healthy, secure and comfortable. Health Net, through its subsidiaries, provides and administers health benefits to approximately 5.4 million individuals across the country through group, individual, Medicare (including the Medicare prescription drug benefit commonly referred to as “Part D”), Medicaid, U.S. Department of Defense, including TRICARE, and Veterans Affairs programs. Health Net's behavioral health services subsidiary, Managed Health Network, Inc., provides behavioral health, substance abuse and employee assistance programs to approximately 4.9 million individuals, including Health Net’s own health plan members. Health Net’s subsidiaries also offer managed health care products related to prescription drugs, and offer managed health care product coordination for multi-region employers and administrative services for medical groups and self-funded benefits programs.

For more information on Health Net, Inc., please visit the company’s website at http://www.healthnet.com.

This press release contains information provided by and regarding third parties that are not affiliated with Health Net, as well as links to websites that are not owned or controlled by Health Net. Please be aware that Health Net is not responsible for any such third-party information or the contents of any websites linked or referred to in this release. Health Net does not express an opinion on the content or the properties of such third-party information or linked websites and disclaims any liability in connection therewith.

About Hill Physicians Medical Group

Hill Physicians Medical Group is the largest independent physician association in Northern California and a recognized leader in innovative healthcare. The Standards of Excellence Program of the California Association of Physician Groups recognizes Hill Physicians as a statewide leader in patient-centered care, care management practices, health information technology, accountability and transparency. Committed to serving healthy lifestyles, Hill Physicians Medical Group offers extensive health education services to its patients, including wellness classes, health screenings and self-help through its online information portal at www.HillPhysicians.com.

About Dignity Health

Dignity Health, one of the nation’s five largest health care systems, is a 16-state network of nearly 10,000 physicians and 56,000 employees who provide patient-centered care at more than 300 care centers, including hospitals, urgent and occupational care, imaging centers, home health, and primary care clinics. Headquartered in San Francisco, Dignity Health is dedicated to providing compassionate, high-quality and affordable patient-centered care with special attention to the poor and underserved. In 2012, Dignity Health provided $1.6 billion in charitable care and services. For more information, please visit www.dignityhealth.org. You can also follow Dignity Health on Twitter and Facebook.

About UCSF Medical Center

UCSF Medical Center consistently ranks among the top hospitals in the United States. Recognized for innovative treatments, advanced technology, collaboration among health care professionals and scientists, and a highly compassionate patient care team, UCSF Medical Center serves as the academic medical center of the University of California, San Francisco. The medical center's nationally preeminent programs include children's health, the brain and nervous system, organ transplantation, women's health and cancer. It operates as a self-supporting enterprise within UCSF and generates its own revenues to cover the operating costs of providing patient care. Follow UCSF Medical Center on www.facebook.com/UCSFMedicalCenter or on Twitter @UCSFHospitals.

About UCSF Benioff Children’s Hospital

UCSF Benioff Children’s Hospital creates an environment where children and their families find compassionate care at the forefront of scientific discovery, with more than 150 experts in 50 medical specialties serving patients throughout Northern California and beyond. The hospital admits about 5,000 children each year, including 2,000 babies born in the hospital. For more information, visit www.ucsfbenioffchildrens.org.

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Health Net, Inc. and its representatives may from time to time make written and oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act (“PSLRA”) of 1995, including statements in this and other press releases, in presentations, filings with the Securities and Exchange Commission (“SEC”), reports to stockholders and in meetings with investors and analysts. All statements in this press release, other than statements of historical information provided herein, may be deemed to be forward-looking statements and as such are intended to be covered by the safe harbor for “forward-looking statements” provided by PSLRA. These statements are based on management’s analysis, judgment, belief and expectation only as of the date hereof, and are subject to changes in circumstances and a number of risks and uncertainties. Without limiting the foregoing, statements including the words “believes,” “anticipates,” “plans,” “expects,” “may,” “should,” “could,” “estimate,” “intend,” “feels,” “will,” “projects” and other similar expressions are intended to identify forward-looking statements. Actual results could differ materially from those expressed in, or implied or projected by the forward-looking information and statements due to, among other things, health care reform and other increased government participation in and regulation of health benefits and managed care operations, including the ultimate impact of the Affordable Care Act, which could materially adversely affect Health Net’s financial condition, results of operations and cash flows through, among other things, reduced revenues, new taxes, expanded liability, and increased costs (including medical, administrative, technology or other costs), or require changes to the ways in which Health Net does business; rising health care costs; continued slow economic growth or a further decline in the economy; negative prior period claims reserve developments; trends in medical care ratios; membership declines; unexpected utilization patterns or unexpectedly severe or widespread illnesses; rate cuts and other risks and uncertainties affecting Health Net’s Medicare or Medicaid businesses; Health Net’s ability to successfully participate in the dual-eligibles pilot programs; litigation costs; regulatory issues with federal and state agencies including, but not limited to, the California Department of Managed Health Care, the Centers for Medicare & Medicaid Services, the Office of Civil Rights of the U.S. Department of Health and Human Services and state departments of insurance; operational issues; failure to effectively oversee our third-party vendors; noncompliance by Health Net or Health Net’s business associates with any privacy laws or any security breach involving the misappropriation, loss or other unauthorized use or disclosure of confidential information; liabilities incurred in connection with Health Net’s divested operations; impairment of Health Net’s goodwill or other intangible assets; investment portfolio impairment charges; volatility in the financial markets; and general business and market conditions. Additional factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, the risks discussed in the “Risk Factors” section included within Health Net’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q filed with the SEC, and the other risks discussed in Health Net’s filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements. Except as may be required by law, Health Net undertakes no obligation to address or publicly update any of its forward-looking statements to reflect events or circumstances that arise after the date of this release.