Known as one of the most successful turnaround CEOs and M&A (mergers and acquisitions) experts in the healthcare industry, Edwin "Mac" Crawford spent the first 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 roles.
Crawford’s legendary career in healthcare began in 1990, when he was recruited to turn around Charter Medical, a struggling owner and operator of psychiatric hospitals. Over the course of his seven-year tenure, he transformed Charter from a bankrupt enterprise into the largest behavioral health services company in the U.S.
Crawford is also known as the Chair and CEO who transformed MedPartners from a seriously mismanaged company with huge operating losses into Caremark Rx, one of the largest prescription benefits management (PBM) and mail-order pharmaceutical companies in the U.S.—and then orchestrated the $26.5-billion merger with CVS in a deal that created CVS Caremark, a $75-billion Fortune 20 company.
Since he stepped down as Chair of CVS Caremark in 2007, Crawford has served as Principal of CrawfordSpalding, an investment banking advisory firm focused on turning around distressed businesses. He has also partnered with JANA Partners, an activist hedge fund, on investments in underperforming healthcare companies.
- Edwin "Mac" Crawford is known as one of the most successful turnaround CEOs and M&A experts in the healthcare industry.
- In his first role in the healthcare sector, Crawford transformed Charter Medical, a bankrupt owner and operator of psychiatric hospitals, into the largest behavioral health services company in the U.S.—and he did it within seven years.
- Crawford is also known for transforming MedPartners, a mismanaged company with huge operating losses, into Caremark Rx, a leading PBM and mail-order pharmaceutical company—and then orchestrating the $26.5-billion sale to CVS in a deal that created CVS Caremark, a $75-billion Fortune 20 company.
Education and Early Career
Edwin "Mac" Crawford (born 1949) earned a B.S. in Accounting from Auburn University in Alabama (1971), qualified as a certified public accountant (CPA), and joined Arthur Young (a predecessor company to Big Four accounting firm, Ernst & Young), where he spent 10 years (1971 to 1981) honing his business and financial management skills.
After leaving Arthur Young, Crawford spent five years in Chief Financial Officer (CFO) roles, at an accounting firm (GTI, 1981 to 1985) and an Alabama-based machine manufacturer (Oxylance Corporation, 1985 to 1986).
In 1986, Crawford was recruited as President of Mulberry Street Investment Company in Georgia, where he spent four years managing 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 began in 1990, when he was recruited as Executive Vice President of Hospital Operations at Charter Medical Corporation, a Georgia-based company that owned over 100 psychiatric and acute-care hospitals throughout the U.S. and Europe. Over the course of his seven-year tenure, he transformed Charter from a struggling owner and operator of psychiatric hospitals to the largest behavioral health services company in the U.S.
When Crawford joined in 1990, Charter was facing bankruptcy due to serious financial, legal, and leadership issues, ranging from allegations of Medicare and Medicaid fraud to a lawsuit 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 relatives. On top of this, despite the onslaught of unprecedented cost controls the hospital industry was facing from managed care in the early 1990s, CEO Fickling had continued to pour money into unprofitable inpatient facilities—accruing even bigger losses.
Although he was a healthcare novice in 1990, Crawford was praised by both industry insiders and analysts for how rapidly he developed and executed a cross-enterprise strategy at Charter to rein in operational costs and realign the business. With an urgent mandate to restructure the company, Crawford quickly realized that—as the industry shifted to managed care and psychiatric and acute-care patients were pushed out of inpatient facilities into less expensive programs—Charter needed an entirely new model to deliver cost-effective behavioral healthcare in the growing outpatient and home-based healthcare market. After leading Charter through Chapter 11 bankruptcy and a major restructuring, Crawford was promoted to President and Chief Operating Officer (COO) in 1992. In March of 1993, he replaced William Fickling as Chair and Chief Executive Officer (CEO).
As soon as Crawford took over as CEO, he began selling off acute-care facilities and psychiatric hospitals, ramping up Charter’s outpatient and home-care services, and lining up partnerships with large healthcare systems to manage their behavioral health services. In 1995, Crawford led the acquisition of one of Charter’s rivals in behavioral health services, Florida-based Magellan Health Services. After divesting Magellan’s psychiatric in-patient business to legendary dealmaker Richard Rainwater's Crescent Real Estate Equities, he used the proceeds to erase Charter’s remaining 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 next two years, the sale of the former Magellan psychiatric 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 health by 1997.
MedPartners and Caremark Rx (1998 to 2007)
Based on his successful turnaround of Charter-Magellan, Crawford was recruited in March 1998 as Chair and CEO of MedPartners, a physician practice management (PPM) business that had imploded three months earlier, when massive 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 favorite, MedPartners’ fortunes had plunged in early 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 drained to hit earnings numbers.” The PhyCor team also described “frightening” mismanagement in MedPartners’ California businesses, including systems “in chaos,” “inadequate” reserves to cover incoming bills, and “thousands of unpaid claims.” What was perhaps most alarming to PhyCor (and Wall Street) was that “MedPartners' senior management didn't know how broken the company was."
In January of 1998, three months before Crawford was brought in, PhyCor terminated the merger, and MedPartners announced both a restructuring charge of $115 million in California and future earnings far short of expectations. Almost immediately, the stock plunged 45%, and the CEO, Larry Ray House, was fired. When Crawford came in, the full extent of the massive operating losses began to surface. The California business was “losing $200 million a year” and “lawsuits from shareholders and physicians began to pile up.”
Faced with turning around a net loss of $821 million at year-end 1997, Crawford announced his intention to sell off MedPartners’ entire PPM operation within three years and refocus the company on one profitable division with large cash flows: a $2.4-billion prescription benefit management (PBM) division that had been acquired as part of MedPartners’ 1996 acquisition of Caremark.
Unlike the troubled PPM industry, prescription benefit management (PBM) businesses like Caremark function as intermediaries that negotiate discounts with pharmaceutical companies on behalf of employers and insurers—and Crawford immediately saw the potential of PBMs in the volatile, cost-cutting healthcare market of the late 1990s. To reflect this enterprise-wide shift to PBMs, MedPartners was renamed Caremark Rx, and Crawford spent the next year selling off almost all the U.S. physician practices, which involved laying off several thousand workers.
Over the next six years, Crawford transformed a mismanaged company that was hemorrhaging cash into one of the largest PBM and mail-order pharmaceutical companies in the U.S. Under his leadership, Caremark Rx revenues grew from $2.4 billion in 1998 to $9 billion in 2003. With almost all debt paid off by 2004, the company was in a position to acquire a PBM rival, AdvancePCS—a merger that made Caremark Rx the largest PBM company in the U.S., with annual revenues of over $23 billion.
CVS Caremark (2007)
In 2007, Crawford orchestrated the $26.5-billion sale of Caremark Rx to drugstore chain CVS in an all-stock deal that created 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 a new company, CVS Caremark. Following the merger, Crawford was named Chair of CVS Caremark but retired from the Board later that year.
CrawfordSpalding Group (Since 2008)
In 2008, Crawford launched CrawfordSpalding Group, an investment banking advisory firm focused on turning around distressed businesses. In addition to offering strategic, management, and financial services based, CrawfordSpalding invests in certain struggling client companies. His co-founders in the new advisory firm were two ex-CVS Caremark executives, Bill Spalding, the former Executive Vice President of Strategy, and his son Drew Crawford, the former Senior Vice President of Underwriting and Analytics.
JANA Partners and WL Ross & Co. LLC
Since his retirement from CVS Caremark, Crawford has worked on several healthcare investments with JANA Partners, an activist hedge fund founded by Barry Rosenstein in 2001. As an industry veteran and turnaround specialist, Crawford has significant credibility as a shareholder activist, i.e., an investor who buys a significant stake in a public company and gets a seat on the board of directors to influence how the company is run—often because they believe that the company is mismanaged from a financial or leadership perspective. If the board resists the proposed changes, the activist can use various offensive tactics to force change, e.g., media campaigns, lawsuits, or proxy fights: persuading other shareholders to allow them to use their proxy votes against the board.
Working with JANA, Crawford’s participation has ranged from taking seats on the Boards of Labcorp (a clinical laboratory network) and Team Health Holdings (a physician services organization) to serving on the search committee for the CEO of Team Health. As JANA’s partner, Crawford has also exerted more assertive pressure on boards. For example, in 2021, when Alabama-based Encompass Health, a $6.4-billion network of inpatient and outpatient hospitals, was planning to spin off the home health and hospice unit, Crawford partnered with JANA to push the company to pursue a merger instead. Both Crawford and JANA Partners have invested in Encompass (JANA owns more than 2%), and Reuters reported in December 2021 that Crawford “signaled privately that he would be ready to join the Encompass Board, if necessary, as part of a dissident slate (of directors).”
Post CVS Caremark, Crawford has also partnered with Wilbur Ross, a billionaire investor who spent 25 years as a bankruptcy restructuring advisor for Rothschild Investments. In 2010, Crawford and Ross announced the launch of Crawford-Ross, a joint venture to co-invest in and restructure healthcare companies. In addition to stating 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," Ross said that “given his track record in successfully restructuring and operating healthcare businesses, (Crawford) is the executive best positioned to find and capitalize on opportunities created by the turmoil caused by the recent healthcare legislation."
What Does Crawford Consider the Most Valuable Commodity in a Restructuring?
In a 2004 article in The Tennessean, Crawford cited the fact that Caremark's PBM business generated large amounts of cash as the reason he identified that business as the one with the highest growth potential. "Any time you're doing a restructuring, you need cash flow. Cash is a valuable commodity."
What Awards Has Crawford Won?
Based on his impressive track record of saving floundering 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 Are Crawford’s Charitable Causes?
In 2008, Crawford established The Crawford Family Deanship at Washington and Lee University in Virginia to support “competitive salaries” for the Dean and Faculty in the Williams School of Commerce, Economics, and Politics.
The Bottom Line
When Crawford was recruited to restructure Charter Medical, he was a complete healthcare novice—and both industry insiders and analysts were impressed with how rapidly he recognized a shift in industry demand that would make PBMs high-growth businesses in the cost-cutting healthcare market of the late 1990s.
When the CVS-Caremark merger that Crawford orchestrated was announced in 2006, The Wall Street Journal predicted that the new “behemoth” would control “the dispensing of one billion prescriptions a year—more than a quarter of the U.S. total.” By 2012, the CVS Caremark share of retail prescriptions filled in the U.S. was 17.25%; by 2021, that share was 38.55%.
Discussing his strategy for CrawfordSpalding with The New York Times in the troubled leveraged buyout market in 2008, Crawford anticipated being able to take advantage of the turmoil. “I’m at my best in a messy situation.”