The following table (in thousands, except percentages and membership data) is provided to facilitate a more meaningful discussion regarding the comparison of our operations for each of the three years in the period ended December 31, 2001.

	2001	2000	Increase (Decrease)	2000	1999	Increase (Decrease)

Operating revenues:
Managed care premiums	$ 3,082,825	$ 2,556,953	$ 525,872	$ 2,556,953	$ 2,082,075	$ 474,878
Management services	64,420	47,957	16,463	47,957	80,297	(32,340)

Total operating revenues	3,147,245	2,604,910	542,335	2,604,910	2,162,372	442,538
Operating expenses:
Medical costs	$ 2,650,993	$ 2,192,899	$ 458,094	$ 2,192,899	$ 1,792,652	$ 400,247
Selling, general and administrative	379,234	330,899	48,335	330,899	297,922	32,977
Depreciation and amortization	25,910	27,026	(1,116)	27,026	28,205	(1,179)
Other charges	-	(8,429)	8,429	(8,429)	(4,262)	(4,167)

Total operating expenses	3,056,137	2,542,395	513,742	2,542,395	2,114,517	427,878
Operating earnings	91,108	62,515	28,593	62,515	47,855	14,660

Net earnings	$ 84,407	$ 61,340	$ 23,067	$ 61,340	$ 43,435	$ 17,905

Basic earnings per share	$ 1.30	$ 1.03	$ 0.27	$ 1.03	$ 0.74	$ 0.29
Diluted earnings per share	$ 1.24	$ 0.93	$ 0.31	$ 0.93	$ 0.69	$ 0.24

Medical loss ratios:
Commercial	85.9%	85.4%	0.5%	85.4%	85.2%	0.2%
Medicare	89.4%	89.0%	0.4%	89.0%	92.2%	(3.2%)
Medicaid	83.5%	83.8%	(0.3%)	83.8%	81.8%	2.0%

Total	86.0%	85.8%	0.2%	85.8%	86.1%	(0.3%)

Administrative ratios:
Selling, general, and administrative	12.0%	12.7%	(0.7%)	12.7%	13.8%	(1.1%)

Membership at December 31:
Commercial	1,210,739	1,170,239	40,500	1,170,239	1,010,282	159,957
Medicare	53,543	71,967	(18,424)	71,967	68,632	3,335
Medicaid	257,916	194,412	63,504	194,412	146,491	47,921
Non-risk	318,528	276,416	42,112	276,416	237,968	38,448

Total Membership	1,840,726	1,713,034	127,692	1,713,034	1,463,373	249,661

Managed care premium revenue increased in 2001 over 2000 primarily from rate increases that occurred throughout both years and from member growth, both organic and through acquisitions. Premium rates increased by an average of $11.36 over 2000 on a per member per month (“PMPM”) basis, to $174.50 PMPM. We will continue to be diligent in attempting to obtain adequate premium increases and expect premium rates to increase more than 14.5% on Commercial renewals in the first quarter of 2002. The acquisitions that contributed to the increase in premium revenues occurred in the fourth quarter of 2000 and in the first, second, and third quarters of 2001. Membership, and thus premium revenues, in the Medicaid program continues to increase almost exclusively from growth in existing markets, including a new product offering in the fourth quarter of 2001 in our Pennsylvania market. During 2001, we significantly increased Medicare premiums in the St. Louis market, which was the primary reason for a 54.7% membership loss in that market.

Management services revenue increased in 2001 from 2000 as a result of three significant acquisitions: WellPath in the fourth quarter of 2000, Health Partners in the first quarter of 2001 and Blue Ridge in the third quarter of 2001. These three acquisitions accounted for approximately 94,000 new ASO members.

Medical costs increased in 2001 compared to 2000 due to business growth and medical trend. Business growth was primarily in the Commercial and Medicaid segments. In the Commercial segment, the increase in