My daughter is seven. If she gets sick, I want to know that Ican get her the care she needs at a fair price. I want thefreedom and control to decide, together with my daughter’spediatrician, which course of treatment is most appropriatefor her and to have my health care company respect ourdecision. And I want the whole process to be simpler.

I need help accessing quality care and using health careresources effectively, but I want enough control andflexibility to choose what’s best for our family. And becauseour lives are so hectic, our benefits have to be easy tounderstand and convenient to use.

It’s not too much to ask.

We understand. That’s why foursimple principles shapeUnitedHealthcare and, webelieve, will ultimately shapethe marketplace for health careservices.

Simple, Convenient Accessto Quality CareUnitedHealthcare is making iteasier for people to get the carethey need, when they need it,with its comprehensive CareCoordination philosophy. CareCoordination helps make theuse of health care servicesmore effective and efficient,while helping to preserve broadaccess. Health care profession-als work with individuals to helpidentify and prevent delays in

receiving care, assist them inunderstanding and complyingwith doctors’ instructions andmedication requirements, andcoordinate access to a broadset of resources and services.

UnitedHealthcare has pro-grams that provide health edu-cation, admission counselingbefore a hospital stay, careadvocacy to help preventdelays in accessing resources,help ensuring a safe transitionfrom the hospital, support forindividuals at risk of needingintensive treatment, continuouscoordination for people withchronic conditions, and pre-scription drug management,which promotes safe and effec-tive use of medications.

Benefits and Services thatValue Individual Choice and ControlUnitedHealthcare wants people to be engaged and activeparticipants in managing theirown health and well-being. Thecompany designs options thatlet individuals choose what isbest for themselves and theirfamilies and offers incentivesthat increase involvement intreatment and buying decisions.

UnitedHealthcare’s multi-tiered pharmacy benefitprogram, for example, providesaccess to a wide range ofgeneric and brand-name drugs.Individuals can benefit byaccessing higher-priced brand-name drugs, as well as generic

drugs, which will cost them less.In addition, UnitedHealthcarewas a leader in aggressivelypromoting open access, whichallows individuals to scheduleappointments directly with specialists without a referralfrom a primary care physician.

Improved Quality of CareThrough InformationTo help physicians make better treatment decisions,UnitedHealthcare uses ClinicalProfiles — data that compares aphysician’s actual practices tonationally accepted benchmarksfor the most successful care.

UnitedHealthcare distrib-utes profiles to physicians twicea year, and has added physi-

UnitedHealthcare

What’s right

8

cians with each distribution.More than 70,000 physicianscurrently participate in this leading-edge effort.

An enriched Web site puts in-depth information at consumers’ fingertips: adirectory of physicians andhospitals, reports on thou-sands of health topics, andsoon, a health profile tailored to individual interests.

Affordable ValueUnitedHealthcare’s efforts tohelp improve quality also helpkeep health care costs afford-able. Care Coordination, byhelping connect people with theright care in a timely manner,strives to improve health out-

comes by avoiding complica-tions and optimizing the use ofhealth care resources, which ultimately lowers costs.

Further, UnitedHealthcarearranges access to carethrough more than 340,000physicians and 3,200 hospitalsacross the United States. The consolidated purchasingpower represented by the individuals we serve makes itpossible for UnitedHealthcareto contract cost-effectively,passing on savings to con-sumers and employers while providing access to broad convenient networks of care providers.

for my family

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Specialized Care Services wasconceived and built to respondto people’s desire for affordableaccess to an ever broadeningrange of specialized health andwell-being resources. Its portfo-lio of businesses connects peo-ple with leading care providersin more specialized fields, givesthem access to valuable infor-mation and educational materi-als, and makes these servicesincreasingly affordable.

Specialized Care Servicesoffers access to the most com-prehensive array of specializedand alternative care available to the consumer directly or

through the business-to-busi-ness marketplace. For a wideset of needs — whether as acomprehensive package ofspecialty services or as accessto a specific, individual service— Specialized Care Servicescan organize services that canhelp. That translates into addedconvenience, simplicity andvalue for its customers.

Critical Care United Resource Networks is agateway to leading critical careand chronic care programs atmore than 50 of the best med-ical centers throughout the

United States. The company’sfocus on quality helps improveoutcomes — including survivalrates — even as it lowers costsan average of 35 percent.

Behavioral Health United Behavioral Health provides mental health and substance abuse services,employee assistance programsand PsychWorksSM, a uniqueservice that helps manage theimpact of short-term disabilitydue to mental illness. In 1999,United Behavioral Health addedspecific programs that helphealth care professionals

manage psychiatric medicationsand, in turn, provide quality careat a reasonable cost in thisgrowing and sensitive area.

Health Information Optum® helps individuals takecharge of their health and well-being. For 10 years, Optum hasbeen a leader in helping peoplemeet their personal healthneeds in a confidential and pro-tected manner. The companyprovides information, educationand support in print, by phone,on tape, face-to-face and overthe Internet. Optum Internetservices contain comprehensive

I have a great relationship with my physician, but I know shemay not be able to provide all of the services I need tomaintain my total health and well-being. I need vision careand dental services. I believe many alternative therapiesprovide valuable benefits, and I want affordable access toservices such as acupuncture and chiropractic care.

And though I feel healthy today, I want to know that if I everneed special help, I will have access to quality specialized carefor things like heart or cancer treatment, transplantation,behavioral health services or counseling support.

Specialized Care Services

Specialized care

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information, including interac-tive features for personalizedinformation.

Dental CareDental Benefit Providers offersconvenient access to afford-able dental care with thebroadest benefits portfolio,demonstrated cost advantagesand extensive networks thatallow maximum accessibility.

Vision CareCoordinated Vision Care facilitates each step in thedelivery of vision services andproducts, helping to enhancequality and control costs to

create value for individual consumers or for health careorganizations.

Life and Accident Benefits Unimerica Life and Accident isa single convenient source forlife and accident benefits thatalign with other health and spe-cialty coverages and benefits.

at my fingertips

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I’m not a kid anymore, and I love it. I’ve worked hard all mylife, and now I have time to be myself, enjoy my grandkids,travel with my wife and hit the bike trails.

I recognize my needs and opportunities are changing. My health concerns are increasing. I need to understand my health care choices, whether I have enough money, whatcoverage Medicare will provide, and what supplementalcoverage I will need. I want information and services tailoredto my needs — family, health and fitness, travel andrecreation, home and work.

After all, I intend to enjoy the second half of my life, notworry about it.

Ovations serves the needs and aspirations of people in the second half of life, usingUnitedHealth Group capabili-ties and buying power to develop products and servicesaround the distinct health andlife-stage needs of people age 50 and older.

Affordable Health CareAmericans are caught betweenthe soaring cost of health careand pressure on Medicare toremain viable by reducingcosts. Ovations is respondingthrough a 10-year partnershipwith AARP, offering MedicareSupplement and Hospital

Indemnity insurance to morethan 3.7 million AARP members.Recently, Ovations introducedAARP Eye Health Services tooffer affordable eye exams,complimentary glaucomascreenings and discounts oneyewear. Ovations’ MedicareSupplement Pharmacy Serviceaddresses one of the most sig-nificant cost problems facingolder Americans — prescriptiondrug costs. These servicessaved AARP members nearly$60 million in 1999. Ovations’AARP Division also developed avaluable offering with lower costMedicare Supplement coverage

that provides a hospital networkand 24-hour access to healthcare information from nurses.

Healthy LifestylesIn nearly every person’s life,there comes a time when thinking about where to live isinfluenced by health and familyconsiderations. Ovations isshaping a distinctive servicethat will respond to the complex health, housing and well-being needs of olderAmericans. This integrated set of services will leverageOvations’ and UnitedHealthGroup’s capabilities to serve the unique needs of this market.

Knowledge About Health and Well-BeingOvations Knowledge Groupprovides useful information formaking health and lifestyledecisions. The Ovations Pressis developing books designedto improve understanding ofcomplex questions faced in life.The first books provide guidesto financial planning, caring for your heart, forgetfulness,memory loss and Alzheimer’sdisease, and wills, trusts andestate planning.

Ovations

Services to meet my

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Eldercare Through the EverCare® net-work, on-site nurse practition-ers collaborate with physiciansto enhance care to the elderlythrough improved timeliness,disciplined continuity and coordination of care. EverCarehas innovative programs todetect and treat common conditions — such as pneumonia and other infec-tions, congestive heart failure,hip fractures and medicationside effects — which are

among the top reasons for hospital admissions among elderly individuals. In its firstyear, the pneumonia earlytreatment and detection program helped individualsserved by EverCare receivetimely access to services totreat their illnesses, helpingthem avoid the trauma of hospitalization, and loweringhospital admissions for pneumonia by 10 percent.

changing needs

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Uniprise offers the mostadvanced and comprehensiveset of employee services andtechnologies in the entire spectrum of health care benefits. Uniprise services fitseamlessly into any businessenvironment and serve theneeds of employees and theirfamilies — from simplified benefits design with broad network access to world-classInternet connectivity to consumer-friendly services and experiences.

Whether you represent a large domestic company, university, government agency

or diverse global enterprise, or an insurance company, aprovider network or health carecompany seeking an outsourc-ing solution, Uniprise canrespond with a set of servicesappropriate for your needs.

Uniprise works with clientsto develop a strategic plan thattakes them from where they aretoday to wherever they want togo — and gets them there fast.That’s why, in 1998 and 1999,Uniprise grew more than anyother enterprise in its market-place, and has retained morethan 98 percent of its customersover the past three years.

Consumer FocusUniprise serves more thanone-fourth of the Fortune 500companies, including many ofthe most progressive compa-nies in the world. In 2000,Uniprise will handle more than350 million transactions withindustry-leading levels of timeliness and quality.

During the past 24months, Uniprise has investedmore than $100 million in infra-structure enhancements aimedat improving the consumerexperience by strengtheningservice quality and accuracy,simplifying operations and

applying advanced technology.In this effort, Uniprise is lookingbeyond the historic health careservices industry and emulatingthe best consumer servicescompanies, regardless ofindustry. In 2000, Uniprise willexpand these investments and continue to advance itsconsumer-focused agenda.That is what the marketplacedesires, and it defines a greatfuture for Uniprise.

Advanced Technology Uniprise has aggressivelyexpanded its Internet tech-nology. Already among themost connected, Internet-

To run a world-class business, you need to recruit and retainworld-class employees. That’s why it’s so important to me tobe able to offer my employees and their families competitivebenefits that are distinctive in how they combine quality,convenience and affordability.

I want to align with an organization that makes it easy formy company to offer a set of employee services that deliversmaximum value to our people. And as my business needschange, I want a technologically advanced, progressivepartner with the initiative to continually strive to developand deliver superior solutions.

Uniprise

Benefits that run as well as

14

capable companies in all ofhealth care, Uniprise hasinvested heavily to enhanceservice features, speed andfunctionality even further, sothat ease of use and speed of service is optimized.

Comprehensive OutsourcingThrough Uniprise, clients canseamlessly access all of theservices and features withinthe domain of UnitedHealthGroup, as well as products and services from providersin any location outside ofUnitedHealth Group, if thatworks best for their situation.Uniprise is rapidly expanding

institutional outsourcing relationships with insurers,providers and other health care industry participants.

2000 will be a definingyear for Uniprise as the company continues to applyinnovative solutions to its deepunderstanding of the needs of large employers. What will emerge is an ever moreconsumer-centered operating environment that opens newopportunities and enhancesservice for clients and theiremployees or customers.

my business

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Whether you represent a corpo-ration trying to better under-stand and shape health carebenefits for its employees, apharmaceutical manufacturerseeking to bring a new productto market, a health insurer orpayer trying to understandcosts, or a health care providertrying to improve coding andbilling disciplines, Ingenix hasthe health care informatic data-bases and expertise to help.Ingenix combines the power ofinformation and technology toguide better clinical, technicaland financial decisions. Throughits information, analysis,research and consulting servic-es, Ingenix can help customers

improve health care operationsand address critical issues,such as rising medical costs,quality of care and new therapies and compounds.

The Source forPharmaceutical ServicesIngenix conducts clinicalresearch and studies to helpdevelop new therapeuticagents, evaluate medical out-comes and consider economicimpacts. Ingenix helps deviseresearch protocols, identify andtrain investigators, and assistwith recruitment. The companyalso provides data manage-ment, biostatistics, regulatoryservices and overall projectmanagement services.

With access to massivedatabases, Ingenix can identifyphysicians with the necessaryexperience for a certain studyand establish data sets forbroad populations. As demon-strated in its work on clinical trials, Ingenix’s ability to organize physician and patientpopulations advances thesearch for better treatmentsand cures. Its access toUnitedHealth Group’s deep,rich base of care and outcomesdata aids in trial design andenables Ingenix to identifytreatment patterns and out-comes, as well as pinpoint factors that contribute toadverse effects or other problems.

The Source for Health InformationAs a leader in health informa-tion, Ingenix offers one-stopshopping to meet business-to-business health care information needs.

From the beginning,UnitedHealth Group has usedinformation to study and makeadvances in care, the reim-bursement process, populationrisk management and costmanagement. Now, with agrowing arsenal of advancedinformation technologies,including increasingly sophisti-cated analytic tools, Ingenix ispoised to help solve the mostchallenging operational issuesand make breakthroughs in

How are new technologies changing care protocols and costs?Who provides the best care? What should I expect in terms ofduration, recovery and total costs for a given procedure?

Health care is too important for guesswork. I want informationI can use — evidence — to improve outcomes and helpcontrol costs.

Knowing the cost of a single procedure or the result of onepatient’s experience with a treatment just isn’t enough. Todraw meaningful conclusions, I need information that helpsme understand broad trends, evaluate what works and doesn’twork, consider results and costs over a longer period of time,and learn from the experience of large populations.

Ingenix

Knowledge that

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the treatment of today’s mostserious health problems. • Data and SoftwareProducts. Ingenix helps companies streamline, inter-pret and manage activities byproviding data services andsoftware to support bench-marking, pricing, cost manage-ment, utilization, regulation,reporting, coding, claim reviewand provider contracting.UnitedHealthcare’s ClinicalProfiling, which encouragesimprovement in clinical performance by comparing an individual physician’s practices to local peer groupand national standards, is

conducted using Ingenix dataand software products.• Publishing. Ingenix busi-ness-to-business publicationsdeal with coding and reim-bursement information. Thesepublications are used by virtu-ally all providers and payers inAmerica to understand the useof health benefits more clearly.• Consulting. In the UnitedStates and abroad, Ingenixadvises providers, insurancecompanies and governmentprograms on their health careoperations.

drives results

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UnitedHealth Group Not applicable

Business Customer Base (as of Jan. 31, 2000)

Focused on forming and operating orderly,efficient markets for the exchange of highquality health and well-being services throughfive distinct businesses operating in strategicalignment across separate market segments.

Description

$1.1 trillion in aggregate U.S.health care spending, and furtherpotential in worldwide activities in various markets.

Market Opportunity

UnitedHealthcare • 7.4 million individuals from small andmid-sized employers

• 412,000 Medicare-eligible individuals• 485,000 Medicaid-eligible individuals

Network-based health and well-being services,including commercial, Medicare and Medicaidproducts for locally based employers andindividuals in six broad regional markets.

Approximately $150 billion insmall and mid-sized employergroup, Medicare and Medicaidspending across theUnitedHealthcare markets.

Ovations • 3.7 million individuals served throughthe AARP Division

• 16,000 individuals served throughEverCare®

Health and well-being services for people inthe second half of life and their families.

About $20 billion of spending in supplemental Medicare andhospital indemnity products;about $18 billion in eldercareservices; additional revenueopportunity in emergingbusinesses, such as health andhousing, and knowledge andinformation services.

Uniprise • 218 large organizations, including 131 Fortune 500 companies,representing 6.3 million individuals

Network-based health and well-being services,business-to-business transactional infrastructureservices, consumer connectivity and service,and technology support for large employers,health plans, and other payers.

More than $100 billion inaggregate spending each year byU.S. employers with more than5,000 employees through eitherfee-based or risk--sharingbusiness models; furtheropportunity to manageinfrastructure for other payers inthe marketplace.

Specialized CareServices

• United Behavioral Health serves more than 15 million individuals

• United Resource Networks serves 1,400 clients representing more than 41 million individuals

• Optum® services are available to morethan 16 million individuals

• Dental Benefit Providers serves morethan 2 million individuals

Portfolio of specialized health and well-beingcompanies, each serving a specialized marketneed with a unique blend of benefits, providernetworks, services and resources.

More than $200 billion in totalpayer, employer and consumerspending across the spectrum ofspecialized benefits andproducts; purchases made onboth a fee basis as well as onpartially or fully insured terms.

Ingenix • More than 200,000 health care providers• 2,000 payers• 100 Fortune 500 companies• Most major pharmaceutical manufacturers

Two primary business unit divisions —pharmaceutical services and healthinformation — providing a comprehensiveline of health care knowledge and informationproducts and services to pharmaceuticalcompanies, health insurers and payers, careproviders, large employers and governments.

More than $40 billion inworldwide spending onpharmaceutical research anddevelopment; an additional $13 billion in data, software and health business informationservices.

UnitedHealth Group At A Glance

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• Strategically aligned, market-facing business model

• Deep, talented and motivated management team

• Entrepreneurial roots

• Advanced technology capabilities

Competitive Strengths

• Revenues increased nearly 13% to $19.6 billion

• Earnings per share grew by 22%

• More than 40% of operating income contributed from outside of our health plan business

• Cash flows from operations well exceeded $1 billion for the second consecutive year

• Return on equity rose to 14.1%

• Stock price increased 23%

• Flexible, access-oriented products• Pro-consumer philosophy• Local orientation• Simplicity, quality and affordability of services• Strong underwriting capabilities• Focus on health care providers as central participants in the system

• Revenues reached $13.9 billion, an increase of 16%• Introduced Care Coordination process to help enhance health outcomes• What works for you?SM campaign and branding initiatives launched• Added 160,000 net new fee-based commercial individuals

• Exclusive focus on needs of people 50 and older• Nation’s largest Medicare Supplement insurance offering with AARP,

including unique services to address affordability and quality of health care• EverCare®, one of the nation’s largest eldercare

companies• EverCare’s award-winning nurse practitioner model• Depth of research and information through the Ovations Knowledge Group

• Revenues increased 1% to $3.6 billion• Enhanced the AARP Medicare Supplement product offerings for

individuals, improving membership trends• Expanded EverCare® membership and revenues 47% with improving

clinical and operational performance• Created total consumer savings of $60 million through Medicare

Supplement Pharmacy Service offering• New operational processes created medical savings of more than $50 million• Launched publishing enterprise

• Focused commitment to this market segment• Consumer orientation• Advanced technology• Scalable infrastructure serving 1.5 million members covered

by other health insurers• Comprehensive outsourcing for employee services

• Revenues increased 15% to $1.9 billion• Added 30 new major corporate employers as clients• Processed 300 million transactions• Achieved customer retention rate of 98.7%• Electronic claim submission hit 46% and claim auto-adjudication

rate exceeded 65%• Financial accuracy measured 99%• Developing new customer service solutions leveraging the Internet

• Most complete offering of access to specialized health care services in America

• Premier behavioral health offering• Largest center of excellence critical care program in the nation• One of top consumer health information services• One of largest managed dental services companies• Vision care services that help improve quality and control costs

• Revenues increased 17% to $726 million• Added dental, vision, life and accident product capabilities• Enhanced behavioral health, catastrophic care and information-based

service offerings

• Unique, proprietary data sets• Therapeutic clinical expertise• Commercialized medical cost and utilization knowledge and

information in business-to-business sector

• Revenues reached $258 million, an increase of 40%• Enrolled 13,000 physicians in clinical investigator network• Increased clinical trials business sixfold

1999 Operating Highlights

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