2001 results include impairment, disposition, 	restructuring, Office of Personnel Management, or OPM, and other 	pretax charges totaling $61 million ($39 million or 	$1.13 diluted loss per share, net of tax). See Note 9 of 	the Notes to Consolidated Financial Statements.
Decrease of 3,500 members as a result of our exit 	of all HMO operations in Ohio; and
Texas membership includes Harris members totaling 	approximately 130,000 commercial and 43,000 Medicare at 	December 31, 2000.
Growth in California primarily from marketing 	efforts to retain membership and renew major employer accounts.
Pharmacy benefit management unaffiliated membership as of December 31, 2000 decreased approximately 14% compared to the prior year, due to the loss of approximately 120,000 members primarily in connection with the loss of three customers, partially offset by increases in new membership from additional customers of approximately 21,000 members.
Other Income. Other income increased approximately 17% or $21 million for the year ended December 31, 2000 compared to the prior year. The increases were primarily due to increased mail-service revenues of Prescription Solutions, including mail-service revenues from the acquired Harris business. Prescription Solutions generates mail-service revenues, where we, rather than network retail pharmacies, collect the member copayments.
For the year ended December 31, 2000, commercial health care costs outpaced premium rate increases primarily in California, Colorado and Texas. In these states, more members accessed more services from providers with whom we have shared-risk, rather than capitation contracts. Additionally, our California HMO experienced increased health care costs because we became responsible for unpaid health care claims that were previously the responsibility of providers who became insolvent. See Note 10 of the Notes to Consolidated Financial Statements.
At December 31, 2001 we were in compliance with all of our senior credit facility covenants. The terms of the senior credit facility contain various covenants usual for financings of this type, including a minimum net worth requirement, a minimum fixed-charge coverage requirement, a minimum leverage ratio and a minimum liquidity requirement. On January 23, 2002 we negotiated an amendment to our senior credit facility to exclude our fourth quarter restructuring charge from our financial covenants. In connection with the extension of the maturity of the senior credit facility, our unregulated subsidiaries provided guarantees and have granted security interests to the lenders in all of their personal property.
Medical Claims and Benefits Payable. The majority of our medical claims and benefits payable represent liabilities related to our risk-based contracts. Under risk-based contracts, claims are payable once incurred and cash disbursements are made to health care providers for services provided to members after the related claim has been submitted and adjudicated. Under capitated contracts, health care providers are prepaid on a fixed-fee per-member per-month basis, regardless of the services provided to members. The liabilities that arise for capitated contracts relate to timing issues primarily due to membership changes that may occur. As of December 31, 2001, approximately 79% of medical claims and benefits payable are attributable to risk-based contracts.
We maintain insolvency reserves that include estimates for potentially insolvent providers, where conditions indicate claims are not being paid or have slowed considerably. Providers with whom we have capitated contracts could become insolvent. Depending on states’ laws, we may be held liable for unpaid health care claims that were previously the responsibility of the capitated provider and for which we have already paid capitation. We may also incur additional health care costs in the event of provider instability where we are unable to agree upon a contract that is mutually beneficial. These costs may be incurred when we need to contract with other providers at less than cost-effective rates to continue providing health care services to our members. In addition to our insolvency exposure, our providers have deposited security reserves in third party institutions. Because our access to provider security reserves has, and may be subject to challenge by the provider group or other third parties at interest, we could incur additional charges for unpaid health care claims if we are ultimately denied access to these funds. During 2001, we recorded $58 million in insolvency reserves, primarily as a result of Texas physician bankruptcies and other potentially insolvent providers in Texas.
We have regulatory risk for the accurate and timely processing and payment of claims. If we are unable to handle continued increased claims volume, we may be subject to regulatory censure and penalties, which could have a material adverse effect on our operations and results of operations. In addition, if our claims processing system is unable to handle such increased claims volume, the data we use for our IBNR estimates could be incomplete and our ability to estimate claims liabilities and establish adequate reserves could be adversely affected. See “Item 3. Legal Proceedings, State of Texas Litigation.”
During 2002, we expect our selling, general and administrative expenses, net of savings from our December 2001 restructuring, to increase in connection with a new advertising campaign, new technology initiatives, increased expenses to market our PBM to unaffiliated members and plan sponsors, and expenses to expand our electronic prescription capabilities. Despite our efforts to control our selling, general and administrative expenses, these expenses could increase more than we anticipate as a result of a number of factors, which could adversely impact our profitability. These factors include:
We compete in highly competitive markets and our inability to compete effectively for any reason in any of those markets could adversely affect our profitability.