HEALTHEON/WEBMD: Moving Up in the Industry Despite Slow Start
Healtheon/WebMD has "emerged as a leader in areas as diverse as consumer health information on the Web and electronic transactions between doctors and health insurers," despite a "difficult four-year incubation," Fortune magazine reports. Healtheon founder Jim Clark's original vision was a system that used "the power of computing and the Internet to revolutionize the health care industry, stripping away its inefficiencies and inequities and streamlining it for the new millenium." Clark now admits this might have been "'a bit' too big and the industry more resistant to change than he had imagined." But since November's merger of Healtheon and WebMD, the firm has closed more than half a dozen deals, including:
- An alliance with Medibuy.com, an up-and-coming online medical-equipment supplier;
- A partnership with drugstore giant CVS to link consumers with chain pharmacists and shopping options via the Internet;
- A deal with Humana to help network doctors transmit claims;
- The acquisition of Envoy for $2.5 billion and other similar mergers in 1999, making Healtheon/WebMD the largest processor of electronic transactions in the industry; and
- A deal with drugmaker Eli Lilly to promote medications, including Prozac, to consumers.
Healtheon/WebMD Corp. announced plans to invest as much as $100 million of cash and stock in VitalWorks.com, an online provider of medical practice management software. The company will pay $10 million in cash "immediately for convertible preferred stock in VitalWorks.com." An additional $90 million -- $40 million in cash and $50 million in stocks -- will be included after VitalWorks.com's initial public offering is completed (Wall Street Journal, 2/14).