Humana 1999 Annual Report Download - page 5

David A. Jones, Humana's
co-founder, long-time chairman and
former chief executive officer,
became interim CEO and appointed
a committee from the Board of
Directors to find the best chief
executive officer from inside or
outside the company as a perma-
nent replacement. At the same time,
Humana's leadership was charged
with restoring accountability and
focus to the company's business.
Throughout the remainder of 1999,
the company concentrated on five
tactical initiatives designed to set the
stage for profitable growth in 2000
and beyond.
Results from the fourth quarter of
fiscal year 1999 indicate that the
initiatives already are succeeding.
Adjusted earnings improved
sequentially for the second
consecutive quarter (before a non-
cash charge primarily related to
goodwill write-offs and losses on
sales of non-core assets). Our
adjusted medical expense ratio
improved sequentially by 20 basis
points, we experienced strong
growth in our key Medicare markets
and adjusted cash flow from
operations improved to $234 million
from $78 million in the third quarter.
With new leadership and a
recommitment to openness and
accountability, the company's
17,000 associates have been
re-energized and refocused.
Michael B. McCallister, appointed
president and chief executive officer
on February 3, 2000, is a 26-year
Humana veteran who performed
superbly as a member of the Office
of the Chairman from August 1999
until his selection as chief executive
officer. As a long-time operations
executive, he successfully managed
both the payor and payee sides of
the health care equation in chief
executive officer roles at Humana
hospitals (before they were spun off
in 1993) and health plans in such
major company markets as Arizona,
Texas and Florida. Together with
his leadership team, Mr. McCallister
has developed a long-term vision,
purpose and value proposition
designed to answer the needs
of members, physicians and
employers in the age of Internet-
based business.
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Joe Berding
Regional Vice President
Miami, FL
Barry Averill
Regional Vice President
Chicago, IL
Larry Savage
President, Humana/ChoiceCare — Ohio
Cincinnati, OH
Photo: Greater Cincinnati Convention & Visitors Bureau Photo: Peter J. Schultz — City of Chicago
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Since its inception in 1996, the Sachs Award has quickly become the "gold standard" for
quality in the managed care industry. It is awarded by the Sachs Group, a health care consulting
firm based in Evanston, Illinois, to a select number of health plans each year. The award is based
on member survey results measuring satisfaction, ease of health plan use, availability of quality
physicians and other factors important to health plan members. In 1999, two Humana health plans
— Cincinnati and Kansas City — won Sachs Awards out of only 17 presented nationwide. The
Cincinnati plan was given an award for an unprecedented fourth year in a row.
Ex c e l l e n c e