Mac Crawford

Known as one of the best turnaround CEOs and M&A (mergers and acquisitions) experts in the healthcare industry, Edwin "Mac" Crawford spent the initial 15 years of his career (1971 to 1986) in the financial and industrial sectors in a series of certified public accountant (CPA), chief financial officer (CFO), and President jobs.

Crawford's legendary career in healthcare started in 1990, when he was enlisted to pivot Charter Medical, a striving owner and operator of mental hospitals. Throughout his seven-year tenure, he changed Charter from a bankrupt enterprise into the largest behavioral wellbeing services company in the U.S.

Crawford is otherwise called the Chair and CEO who changed MedPartners from a seriously mismanaged company with immense operating losses into Caremark Rx, perhaps of the largest solution benefit management (PBM) and mail-request pharmaceutical companies in the U.S. — and afterward coordinated the $26.5-billion merger with CVS in a deal that made CVS Caremark, a $75-billion Fortune 20 company.

Since he ventured down as Chair of CVS Caremark in 2007, Crawford has filled in as Principal of CrawfordSpalding, a investment banking advisory firm centered around pivoting distressed businesses. He has additionally partnered with JANA Partners, an activist hedge fund, on investments in failing to meet expectations healthcare companies.

Education and Early Career

Edwin "Mac" Crawford (conceived 1949) earned a B.S. in Accounting from Auburn University in Alabama (1971), qualified as a certified public accountant (CPA), and joined Arthur Young (an ancestor company to Big Four accounting firm, Ernst and Young), where he burned through 10 years (1971 to 1981) sharpening his business and financial management skills.

In the wake of leaving Arthur Young, Crawford burned through five years in Chief Financial Officer (CFO) jobs, at an accounting firm (GTI, 1981 to 1985) and an Alabama-based machine manufacturer (Oxylance Corporation, 1985 to 1986).

In 1986, Crawford was selected as President of Mulberry Street Investment Company in Georgia, where he endured four years dealing with the firm's real estate, O&G (oil and gas), and venture capital investments.

Charter Medical and Magellan Health (1990 to 1997)

Crawford's legendary career in the healthcare sector started in 1990, when he was enrolled as Executive Vice President of Hospital Operations at Charter Medical Corporation, a Georgia-based company that owned north of 100 mental and intense care hospitals all through the U.S. also, Europe. Throughout the span of his seven-year tenure, he changed Charter from a striving owner and operator of mental hospitals to the largest behavioral wellbeing services company in the U.S.

At the point when Crawford joined in 1990, Charter was facing bankruptcy due to serious financial, legal, and leadership issues, going from allegations of Medicare and Medicaid fraud to a claim claiming that the employee stock ownership plan (ESOP) had overpaid for 11.8 million Charter shares purchased from Chair and CEO William Fickling and his family members. On top of this, notwithstanding the attack of exceptional cost controls the hospital industry was facing from managed care in the mid 1990s, CEO Fickling had continued to pour money into unprofitable long term facilities — building even bigger losses.

Despite the fact that he was a healthcare novice in 1990, Crawford was commended by both industry insiders and analysts for how quickly he developed and executed a cross-enterprise strategy at Charter to get control over operational costs and realign the business. With an earnest order to rebuild the company, Crawford immediately realized that — as the industry shifted to managed care and mental and intense care patients were pushed out of long term facilities into more affordable projects — Charter required a completely new model to deliver cost-compelling behavioral healthcare in the developing short term and locally situated healthcare market. In the wake of leading Charter through Chapter 11 bankruptcy and a major restructuring, Crawford was elevated to President and Chief Operating Officer (COO) in 1992. In March of 1993, he supplanted William Fickling as Chair and Chief Executive Officer (CEO).

When Crawford took over as CEO, he started selling off intense care facilities and mental hospitals, sloping up Charter's short term and home-care services, and fixing up partnerships with large healthcare systems to deal with their behavioral wellbeing services. In 1995, Crawford drove the acquisition of one of Charter's rivals in behavioral wellbeing services, Florida-based Magellan Health Services. After divesting Magellan's mental in-patient business to legendary dealmaker Richard Rainwater's Crescent Real Estate Equities, he utilized the proceeds to delete Charter's excess debts. With Charter's financial slate cleaned, the combined company was renamed Magellan Health Services in October of 1995, with Crawford as Chair, CEO, and President.

Over the course of the next two years, the sale of the former Magellan mental hospitals funded the acquisitions of other small competitors, including Green Spring Health Services (1995) and Aetna's Behavioral Health Unit (1997), making Magellan the largest managed care company in U.S. behavioral wellbeing by 1997.

MedPartners and Caremark Rx (1998 to 2007)

In view of his effective turnaround of Charter-Magellan, Crawford was selected in March 1998 as Chair and CEO of MedPartners, a physician practice management (PPM) business that had collapsed three months sooner, while huge operating losses of $840 million from its Western U.S. operations and debt obligations in excess of $1.8 billion were reported.

A former Wall Street #1, MedPartners' fortunes had plunged in mid 1998, when the due diligence team of PhyCor, a potential merger partner in the PPM space, had uncovered that the "merger and restructuring reserves had been depleted to hit earnings numbers." The PhyCor team likewise depicted "startling" mismanagement in MedPartners' California businesses, including systems "in chaos," "deficient" reserves to cover incoming bills, and "a great many unpaid claims." What was maybe generally disturbing to PhyCor (and Wall Street) was that "MedPartners' senior management didn't have the foggiest idea how broken the company was."

In January of 1998, 90 days before Crawford was brought in, PhyCor ended the merger, and MedPartners announced both a restructuring charge of $115 million in California and future earnings far short of expectations. Very quickly, the stock plunged 45%, and the CEO, Larry Ray House, was terminated. At the point when Crawford came in, the full degree of the monstrous operating losses started to surface. The California business was "losing $200 million every year" and "lawsuits from shareholders and physicians started to stack up."

Confronted with pivoting a net loss of $821 million at year-end 1997, Crawford announced his expectation to sell off MedPartners' whole PPM operation in something like three years and pull together the company on one profitable division with large cash flows: a $2.4-billion solution benefit management (PBM) division that had been acquired as part of MedPartners' 1996 acquisition of Caremark.

Dissimilar to the troubled PPM industry, solution benefit management (PBM) businesses like Caremark function as intermediaries that arrange discounts with pharmaceutical companies for employers and guarantors — and Crawford immediately saw the capability of PBMs in the unpredictable, cost-cutting healthcare market of the late 1990s. To mirror this broad shift to PBMs, MedPartners was renamed Caremark Rx, and Crawford went through the next year selling off practically all the U.S. physician practices, which included laying off several thousand workers.

Over the course of the next six years, Crawford changed a mismanaged company that was discharging cash into one of the largest PBM and mail-request pharmaceutical companies in the U.S. Under his leadership, Caremark Rx revenues developed from $2.4 billion out of 1998 to $9 billion out of 2003. With practically all debt paid off by 2004, the company was in a position to obtain a PBM rival, AdvancePCS — a merger that made Caremark Rx the largest PBM company in the U.S., with annual revenues of more than $23 billion.

CVS Caremark (2007)

In 2007, Crawford organized the $26.5-billion sale of Caremark Rx to pharmacy chain CVS in an all-stock deal that made a Fortune 20 company with annual revenue estimated at $75 billion. Called a "merger of equals," the deal combined Caremark's pharmacy benefits management services with the largest U.S. pharmacy chain into another company, CVS Caremark. Following the merger, Crawford was named Chair of CVS Caremark yet retired from the Board later that year.

CrawfordSpalding Group (Since 2008)

In 2008, Crawford sent off CrawfordSpalding Group, an investment banking advisory firm centered around pivoting distressed businesses. As well as offering strategic, management, and financial services based, CrawfordSpalding invests in certain striving client companies. His co-organizers in the new advisory firm were two ex-CVS Caremark executives, Bill Spalding, the former Executive Vice President of Strategy, and his child Drew Crawford, the former Senior Vice President of Underwriting and Analytics.

JANA Partners and WL Ross and Co. LLC

Since his retirement from CVS Caremark, Crawford has chipped away at several healthcare investments with JANA Partners, an activist hedge fund established by Barry Rosenstein in 2001. As an industry veteran and turnaround specialist, Crawford has critical credibility as a shareholder activist, i.e., an investor who purchases a huge stake in a public company and gets a seat on the board of directors to influence how the company is run — frequently on the grounds that they accept that the company is mismanaged from a financial or leadership point of view. Assuming the board opposes the proposed changes, the activist can utilize different offensive strategies to force change, e.g., media missions, lawsuits, or proxy battles: convincing different shareholders to allow them to utilize their proxy votes against the board.
Working with JANA, Crawford's participation has gone from taking seats on the Boards of Labcorp (a clinical lab network) and Team Health Holdings (a physician services organization) to serving on the quest committee for the CEO of Team Health. As JANA's partner, Crawford has additionally applied more self-assured pressure on boards. For instance, in 2021, when Alabama-based Encompass Health, a $6.4-billion network of long term and short term hospitals, was planning to veer off the home wellbeing and hospice unit, Crawford partnered with JANA to push the company to seek after a merger all things being equal. Both Crawford and JANA Partners have invested in Encompass (JANA possesses over 2%), and Reuters reported in December 2021 that Crawford "flagged privately that he would be ready to join the Encompass Board, if fundamental, as part of a protester slate (of directors)."

Post CVS Caremark, Crawford has likewise partnered with Wilbur Ross, a billionaire investor who burned through 25 years as a bankruptcy restructuring advisor for Rothschild Investments. In 2010, Crawford and Ross announced the send off of Crawford-Ross, a joint venture to co-invest in and rebuild healthcare companies. As well as expressing that his company was "prepared to invest more than $1 billion to support Mac and his team as we jointly build a major position in healthcare," That's what ross said "given his history in successfully restructuring and operating healthcare businesses, (Crawford) is the executive best positioned to find and capitalize on opportunities made by the turmoil brought about by the recent healthcare legislation."

The Bottom Line

At the point when Crawford was enlisted to rebuild Charter Medical, he was a complete healthcare novice — and both industry insiders and analysts were dazzled with how quickly he recognized a shift in industry demand that would make PBMs high-growth businesses in the cost-cutting healthcare market of the late 1990s.

At the point when the CVS-Caremark merger that Crawford coordinated was announced in 2006, The Wall Street Journal anticipated that the new "behemoth" would control "the administering of one billion solutions per year — in excess of a quarter of the U.S. total." By 2012, the CVS Caremark share of retail remedies filled in the U.S. was 17.25%; by 2021, that share was 38.55%.

Examining his strategy for CrawfordSpalding with The New York Times in the troubled leveraged buyout market in 2008, Crawford anticipated having the option to exploit the turmoil. "I'm at my best in an untidy situation."

Features

• Edwin "Mac" Crawford is known as one of the best turnaround CEOs and M&A experts in the healthcare industry.
• Crawford is likewise known for changing MedPartners, a mismanaged company with colossal operating losses, into Caremark Rx, a leading PBM and mail-request pharmaceutical company — and afterward organizing the $26.5-billion sale to CVS in a deal that made CVS Caremark, a $75-billion Fortune 20 company.
• In his most memorable job in the healthcare sector, Crawford changed Charter Medical, a bankrupt owner and operator of mental hospitals, into the largest behavioral wellbeing services company in the U.S. — and he did it in seven years or less.

FAQ

What Awards Has Crawford Won?

In light of his great history of saving fumbling companies and returning them to profitability, Institutional Investor named Crawford the Top-Performing CEO in Healthcare Technology and Distribution for three straight years: 2005, 2006, and 2007.

What Does Crawford Consider the Most Valuable Commodity in a Restructuring?

In a 2004 article in The Tennessean, Crawford refered to the way that Caremark's PBM business created large measures of cash as the explanation he recognized that business as the one with the highest growth potential. "Any time you're doing a restructuring, you want cash flow. Cash is a valuable commodity."

What Are Crawford's Charitable Causes?

In 2008, Crawford laid out The Crawford Family Deanship at Washington and Lee University in Virginia to support "competitive pay rates" for the Dean and Faculty in the Williams School of Commerce, Economics, and Politics.