MedPartners Inc. was a public health care company founded in 1993 in Birmingham. The firm was founded with an initial investment of $1 million by HealthSouth's Richard Scrushy and Larry House, who served as chairman, president and CEO.
The company's primary Physician Practice Management (PPM) division was headed by Lynn Massingale, founder of TeamHealth in Knoxville, Tennessee, which was one of MedPartners' first acquisitions. The company grew rapidly over the next few years by acquiring other PPM networks, mostly through stock swaps. Notable acquisitions included Mullikin Medical Enterprises for $414 million, Pacific Physician Services for $343 million, Caremark International of Northbrook, Illinois for $2.5 billion, and InPhyNet Medical Management of Fort Lauderdale, Florida for $450 million. MedPartners briefly reigned as the largest PPM company in the United States with more than 11,000 affiliated physicians and $3 billion in net revenues. In 1996 MedPartners appeared on the "Fortune 500" list, and also sponsored Mike Harmon's car in the NASCAR Busch Series.
The CareMark acquisition brought with it a number of rehabilitative hospitals and a major Prescription Benefit Management (PBM) operation. MedPartners sold the hospitals to HealthSouth. In 1997 House began negotiating to merge MedPartners into a smaller, but fast-growing PPM network, PhyCor of Nashville, Tennessee. That merger, announced on October 29, fell apart after PhyCor uncovered major weaknesses in MedPartners' business practices. The company lost $841 million in value in the fourth quarter 1997, while holding $1.8 billion in debt.
House resigned his positions in January 1998 and was replaced by Scrushy on an interim basis. In March turnaround specialist Edwin "Mac" Crawford took over as chairman, president and CEO. He announced that MedPartners would refocus on its PBM business and sell off its 240-practice PPM network. The move was successful, as the company reported $2.4 billion in revenues at the end of the year.
MedPartners changed its name to Caremark Rx in 2000 and moved its offices into the Galleria Tower. Scrushy sold his remaining shares and left the board a year later. Caremark Rx moved its corporate headquarters from Birmingham to Nashville, Tennessee in 2003, a year when it reported $9 billion in revenues. It merged with rival AdvancePCS in 2004 and was soon filling 600 million prescriptions per year with over $23 billion in revenues.
- CVS Caremark website
- Sharpe, Anita (January 22, 1997) "MedPartners to Buy InPhyNet For $450 Million in Stock Deal" The Wall Street Journal
- Sharpe, Anita (March 19, 1998) "MedPartners Loss Exceeds Its Forecast." The Wall Street Journal
- Elkind, Peter (June 21, 1999) "Vulgarians at the Gate How ego, greed, and envy turned MedPartners from a hot stock into a Wall Street fiasco" Fortune
- Russell, Keith (February 22, 2004) "Caremark Triumphs in Fight for Profitability," The Tennessean
- "Caremark Rx". (March 17, 2007) Wikipedia - accessed March 19, 2007