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Merging—But Not with the Universe

Over the years, I had come to see that I really had no idea where life was going to put me on any given day. And, in truth, it was none of my business. My job was to simply continue surrendering and serving what was put in front of me. Such was the case on the day I found myself chairing a Medical Manager Corporation board meeting specifically called to discuss the proposed merger with Synetic.

Medical Manager had a very active board of directors, many of whom had tremendous business experience, including a previous treasurer of General Motors. The board was seriously considering our various options going forward. We had done $140 million of business the previous year versus Synetic’s $70 million. But the tremendous potential value of its web portal had pushed Synetic’s market value way beyond ours and made the company an attractive partner. In the end, the board unanimously decided to accept Synetic’s $1.3 billion offer for the company.

I, of course, had never been involved in a billion-dollar merger before. But we had great outside counsel and a good team of bankers to assist us. I turned to Sabrina to work by my side on this enormous project. Marty had put the merger on the fast track, and all the details had to be worked out in a few weeks. We worked day and night to get the final deal presented to both boards, and the merger was announced publicly on May 17, 1999.

The merger between Medical Manager Corporation and Synetic created quite a stir. It was the main business story on CNN that evening and was prominent in the Wall Street Journal the next day. The new company kept the Medical Manager Corporation name, and John Kang and I were co-CEOs and sat on the board of directors with Marty as chairman. Though I still lived at the Temple of the Universe and simply drove across the street to get to work, my world had instantly expanded. My responsibilities now stretched beyond the practice management business and included all the areas of business Marty’s team had been working on. In truth, that was the most exciting part of the merger. I now had an entire team of world-class executives to work with. Marty surrounded himself with the best of the best, and it was really an honor to get to work with these people.

As it turned out, Synetic’s main competitors were our old friends, WebMD and Healtheon, who had merged together by now. Their combined company provided serious competition for our health-care Internet portal. The question was simply one of time—would there be enough time for us to build out our highly sophisticated web offering before Healtheon/WebMD attracted too much of the available funding?

The answer to that question came on January 25, 2000, just six months after our merger with Synetic. We awoke to the news that Healtheon/WebMD had managed to acquire Envoy, the largest claims clearinghouse in the industry, for $2.5 billion. That was quite an acquisition considering that Healtheon/WebMD was a web start-up company reporting enormous losses, and Envoy was a well-established, highly profitable clearinghouse for health-care transactions. It was quickly determined that we could not maintain a competitive position in light of this deal. From Medical Manager’s point of view, the deal meant that our competitor now owned the clearinghouse through which we were channeling all of our clients’ hundreds of millions of claims a year. There were times when I was very glad I was no longer in charge—late January 2000 was definitely one of them.