Healtheon
| Company type | Public |
|---|---|
| Industry | Healthcare, Internet |
| Founded | 1996 |
| Founder | James H. Clark, Pavan Nigam |
| Fate | Acquired by WebMD |
| Headquarters | San Francisco , United States |
Key people | Mike Long (CEO from 1997) |
| Products | Healthcare technology platforms |
Healtheon was a dot-com company established by James H. Clark and Pavan Nigam with the goal of transforming the healthcare industry by utilizing computing technology and the Internet to reduce inefficiencies and simplify operations. In 1999, it was acquired by WebMD.
History
In the middle of 1995, James H. Clark, known for founding Netscape, envisioned advancing healthcare through technology. Early in 1996, he launched Healthscape, supported by funding from Kleiner Perkins Caufield & Byers. The company was later renamed Healtheon to differentiate it from Netscape.
Healtheon's initial focus was on connecting insurers with human resources departments; however, insurers declined the expensive platform and HR departments showed minimal enthusiasm.
In 1997, leadership changed when Mike Long took over as CEO. Soon afterward, Healtheon formed a partnership with Brown & Toland, a San Francisco-based network comprising 1,600 physicians.
In February 1998, Healtheon expanded by purchasing ActaMed, a medical records clearinghouse serving doctors and insurers, for $150 million, thereby creating a revenue stream.
The company sought an initial public offering in August 1998 but withdrew in October due to market turmoil triggered by the 1998 Russian financial crisis. The IPO was eventually launched in February 1999, with shares soaring 400% on opening day.
On April 21, 1999, Healtheon revealed its $478 million stock acquisition of MedE America.
Less than a month later, on May 20, 1999, Healtheon declared a merger agreement with WebMD.