IHC Health Plans, Inc. - Page 6

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          eastern Nevada, western Colorado, and the States of Utah, Idaho,            
          Wyoming, and Montana).  The McKay-Dee Institute operated a free-            
          standing psychiatric and behavioral health facility located in              
          Ogden, Utah.  LDS Hospital, Health Services’ largest hospital,              
          located in Salt Lake City, Utah, provided a number of specialized           
          medical services, including open heart surgery, pulmonary                   
          medicine, and coronary care.                                                
               In addition to traditional hospital services, the hospital             
          division conducted a wide range of special care programs,                   
          including women’s services, InstaCare Centers, home health care             
          services, ambulatory surgery centers, cardiac services,                     
          rehabilitation services, psychiatric services, and occupational             
          health and mission services.  Health Services used its mission              
          services as a means to serve the community’s charitable needs.              
          Health Services provided quality management services by tracking            
          measures for improvement in clinical care.                                  
               All Health Services hospitals participated in Medicare and             
          Medicaid programs for inpatient and outpatient hospital services,           
          and for a number of free-standing ambulatory care services such             
          as ambulatory surgery, home health care, and kidney dialysis.  In           
          1998, Health Services was not reimbursed for approximately $254             
          million in medical care provided to patients covered by Medicare,           
          Medicaid, and other governmental programs.  In 1997, 1998, and              
          1999, Health Services provided charity services to indigent                 

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