Having successfully completed the arduous task of converting the company to for-profit status, officials of Health Net until recently figured they could relax a bit.

The conversion, they reasoned, assured the big health maintenance organization's position among the major players in the state's health care industry.

But that assumption, and many others about health care delivery in the state, were toppled earlier this week when San Francisco-based Blue Shield of California and UniHealth America of Burbank announced a merger that would create the state's third-largest managed-care operation.

The proposal to create a statewide, one-stop health care services conglomerate has sent shock waves through California's health care industry and will undoubtedly force competitors to rethink their growth strategies, consider new ways to market themselves and offer more diverse options for consumers, medical industry observers said.

For Woodland Hills-based Health Net, the merger may force it to consider sooner--rather than later--selling stock to the public, or going into debt, to raise cash for acquisitions.

"I think you'll see a lot of focus on consolidation and acquisitions by us also," said Health Net Chief Executive Roger Greaves. "That is going to continue, and we've got to go with it."

Health care experts and industry officials this week were scrambling to analyze the implications of the merger. The merged company would have revenue of about $6.8 billion and serve about 4.5 million people, rivaling the HMO giant Kaiser Permanente in size. Oakland-based Kaiser has 4.6 million members in California and 6.7 million nationwide. Blue Cross of California remains the largest managed-care organization in the state, with 5.6 million members.

A company with the broad services and geographic reach of the proposed Blue Shield/UniHealth combination cannot be ignored and should be considered in any growth plan, experts and health care executives said.

But there was little consensus on how to stay competitive. While Health Net has said it will be aggressive, other firms are more reticent to enter the fray, despite predictions that the merger will trigger a wave of buyouts.

Maxicare Health Plans Inc. in Los Angeles, for instance, is not interested in getting into the thick of things. Having emerged three years ago from bankruptcy--brought on, in part, by a massive acquisition program--Maxicare officials said they are happy with the company as a relatively small but efficiently organized firm.