Healtheon/WebMD and CareInsite, emerging heavyweights in the fight to wire healthcare, generated plenty of buzz at an investment conference in New York earlier this month.
Deal-happy Jeffrey Arnold, chief executive officer of Healtheon/WebMD, assured attendees at the U.S. Bancorp Piper Jaffray healthcare conference that his company's already ravenous buying binge was no cause for investor concern.
But it wouldn't be long before Atlanta-based Healtheon/WebMD fed its insatiable appetite again. On Feb. 14, it agreed to gobble up Elmwood Park, N.J.-based CareInsite by buying its parent, Medical Manager, for more than $5 billion.
Outliers would forgive skeptics for wondering what exactly Healtheon/WebMD does besides acquire things.
Arnold acknowledged that unspoken question during the investment conference.
"We're working hard to execute on the press releases we've announced over the past year, " he told investors.
Arnold then proceeded to sketch Healtheon/WebMD's plans to get operations rolling by targeting sales of services to doctors in six key metro markets-including New York, which is CareInsite's home turf. His plans would have put it on a collision course with CareInsite.
CareInsite executives at the conference explained that a combination of Medical Manager software and exclusive contracts to process claims for doctors would have given it an insurmountable grip on hundreds of thousands of physicians across the country, including 30,000 around New York.
Perhaps all that talk got to Arnold, and his buyout deal was a way for Healtheon/WebMD to win the war without fighting the battle.
Inside trader. Healtheon/WebMD got more than a thoroughbred when it agreed to add CareInsite to its growing stable of wired companies.
CareInsite Chairman Martin Wygod-whose role in the new company hasn't been spelled out-knows all about horse-trading, and not just the corporate kind.
With his wife, Pam, Wygod is a mainstay in thoroughbred racing circles. The two own River Edge Farm in California, where they have bred more than 50 horses alone or in partnership. The Thoroughbred Owners and Breeders Association named the Wygods Breeders of the Year in 1995, the year their horses earned $2.2 million and won a record 25 races.
Hollywood story. The downbeat business story at McKesson HBOC may have a Hollywood ending after all. David Geffen, one of the most powerful men in Tinseltown, disclosed that he owns a 5%stake in the San Francisco-based drug distributor-cum-healthcare information company.
Geffen bought more than 8 million shares in stumbling McKesson HBOC at an average price of $20.64 from Dec. 13, 1999, to Feb. 11. The bargain hunting brought Geffen's total holdings to more than 14 million shares. The company's stock price plummeted last year from a 52-week high of $72.62 after accounting irregularities at the former HBOC surfaced.
In a required filing with the Securities and Exchange Commission earlier this month, Geffen said he took the position in McKesson HBOC for general investment purposes. Geffen, who co-founded the DreamWorks entertainment monolith with Jeffrey Katzenberg and Steven Spielberg, may be banking on a happy sequel to the so-far ill-fated McKesson merger.
Maybe the hit-making trio could rewrite the script of "Saving Private Ryan" to be "Saving McKesson HBOC."
Nothing to brag about. As the healthcare industry goes, so do the reputations of its companies. Birmingham, Ala.-based Caremark Rx, formerly MedPartners, is the least-admired company in America, according to an annual survey in Fortune magazine. But Humana is nipping at its heels.
Fortune invited 10,000 executives, directors and securities analysts to evaluate companies in their industries. Only for-profit companies were included.
Caremark Rx scored in the bottom three in all eight categories Fortune rated. Overall, Caremark scored 2.75 out of a possible 10. About a year ago, Caremark sold its physician practice management business after taking a financial bath and now concentrates on pharmacy benefit management.
Humana, the other healthcare company in the bottom 10 least-admired crowd, scored 3.80.
By comparison, Nashville-based Columbia/HCA Healthcare Corp. scored 5.19 and Santa Barbara, Calif.-based Tenet Healthcare Corp. earned 5.26. The highest score among the healthcare companies went to Thousand Oaks, Calif.-based WellPoint Health Networks, with 6.55.
Looking for a good funeral home? A judge in Rio de Janeiro, Brazil, sentenced a former nurse's aide to 76 years in prison after he was convicted of murdering four patients to receive kickbacks from a funeral home, the Associated Press has reported.
The former nurse's aide, Edson Izidoro, was arrested last May at Rio's Salgado Filho Hospital, after the wife of a patient who died suddenly during recovery said Izidoro recommended a funeral home. In a televised interview, Izidoro confessed to killing patients with lethal injections or by removing their oxygen masks. He said certain funeral homes paid him to recommend them, although directors of the funeral homes denied the charges.
At the trial, Izidoro pleaded innocent and said he was coerced to confess, but the seven jurors unanimously convicted him. Izidoro's attorneys are expected to appeal.