Access Health Group of HBOC Buys FHS Call Center Assets and Enters Into Long-Term Services Agreement.

LOS ANGELES and ATLANTA--(BUSINESS WIRE)--Jan. 5, 1999-- Foundation Health Systems Inc. (NYSE:FHS) and HBO & Company (Nasdaq:HBOC) announced that on Dec. 31, 1998, HBOC's Access Health Group completed the purchase of certain assets of FHS' Healthline(R) call center for $38 million in cash.

In addition, the companies entered into a 10-year agreement whereby the Access Health Group will provide call center services to an additional 4 million enrollees in FHS' health plans and continue to serve the enrollees currently covered by FHS' government contracts division. Combined, these FHS operations serve more than 6 million enrollees in 18 states.

"This transaction is yet another positive step forward in our strategic plan to focus on our core health plan, specialty and government operations," said Jay M. Gellert, president and chief executive officer of FHS. "We determined that we did not have the necessary scale to be cost-effective in the call center business. The agreement with the Access Health Group secures a long-term relationship with the leading provider of call center services. The cash generated from the sale will further reduce corporate debt."

"We are pleased to expand our relationship with FHS to include an additional 4 million covered lives as well as gain triage clinical assessment guidelines developed by FHS as part of its `Fourth Generation' medical management system," stated Joe Tallman, senior vice president and general manager of HBOC's Access Health Group. "We are proud of the work we've done for FHS' CHAMPUS (Civilian Health and Medical Program -- Uniformed Services) members since 1995 and look forward to serving them and all FHS members in the years to come."

In the transaction, the Access Health Group purchased the triage clinical assessment guidelines and protocols developed by FHS as part of its "Fourth Generation" medical management system. All other parts of the "Fourth Generation" system have been retained by FHS.

"We continue to evaluate the potential of `Fourth Generation' to improve the management of care and contain its cost increases," Gellert said.

FHS' Healthline(R) call center opened in the fall of 1996 serving primarily FHS enrollees in the Philadelphia area. Since that time, it has expanded its operations to serve most FHS health plan members.

HBOC delivers enterprisewide patient care, clinical, financial and strategic management software solutions, as well as networking technologies, electronic commerce, outsourcing and other services to health care organizations throughout the world.

FHS is the nation's fourth-largest publicly traded managed health care company. Its mission is to enhance quality of life for its customers by offering products distinguished by their quality, service and affordability. The company's HMO, insured PPO and government contracts subsidiaries provide health benefits to more than 6 million individuals in 18 states through group, individual, Medicare risk, Medicaid and CHAMPUS programs. FHS subsidiaries also offer managed health care products related to PPO networks, behavioral health, dental, vision and prescription drugs, and offer managed health care product coordination for multiregion employers and administrative services for medical groups and self-funded benefits programs.

Certain statements contained in this news release are "forward- looking" statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties and actual results may differ materially from those results expressed or implied by such "forward- looking" statements. For more information, refer to the Risk Factors section of FHS' and HBOC's various filings with the Securities and Exchange Commission and the respective documents incorporated by reference therein.