I’d spent six years trying not to ask what God was thinking when he’d given my husband brain cancer, six years filled with work and obligation spent trying not to think of how it all might have turned out differently. Russell had been dead two years before I was tempted back into Stephen Azorini’s bed, but from the beginning I viewed it as an accommodation rather than an act of betrayal.
For a long time it had somehow seemed to work. Stephen was as committed to building his company as I was to my practice. Social obligations were strictly quid pro quo with the difference worked out in bed. On the surface we were the quintessential power couple, accomplished, photogenic (at least in Stephen’s case), and unencumbered by the inconvenience of obligation or emotion.
I don’t know what I was thinking when I agreed to move in with him. Certainly as an attorney I should have known better, but I think I was just dazzled by the view.
In the hundred years since the building had been erected, the apartment had come on the market only twice. A Gold Coast duplex with lake views in three directions, its first owners had been my grandparents, who’d commissioned David Adler, the legendary architect, to design the interior. I’d lived there until I was six years old and my parents decided to forsake the excitement of the city for the sylvan pleasures of suburban Lake Forest. Convinced we’d never have the chance again, we wrote the check and embarked on a yearlong renovation. The only trouble was that by the time the plaster was dry, I knew that I would never live there with Stephen.
But as any lawyer will tell you, things only get more complicated when you start picking them apart. It had taken two months of negotiations to buy back Stephen’s half of the apartment, longer still to straighten out the mess of contractors’ bills and decorator’s invoices. It was like going through a divorce without the benefit of ever having been married, and in the end the whole thing had left me emotionally exhausted.
So for now the big apartment on the lake sat empty and perfect, like a layout for Architectural Digest. For now, I was in no hurry to move in. The idea of taking up residence in a two-story apartment the size of a large house was going to take some getting used to. Besides, I’d agreed to stay on in the Hyde Park apartment with Claudia until her fellowship was over at the end of June. Her dream job was already waiting for her, a faculty appointment at Columbia’s medical school.
I hoisted myself wearily to my feet and dragged myself back into the dining room. If the fact that I already have my dream job isn’t proof that God had a sense of humor, I told myself, nothing else is.
I poured myself the last of the wine and gave myself over to the documents my mother had sent me. When I first started out at the firm, my old mentor, John Gutt-man, used to lecture me about finding the story of a file, the dramatic thread that ran through a particular matter. He believed that when you stripped away the dry terminology and the rigid structure of the legal forms, even the most unexceptional transactions contained the elements of drama.
Back then I thought he was crazy, that he’d spent so much time drafting prospectuses and parsing proxy statements that it had affected his brain. But lately I’d come to realize that he was right. Tonight I was even doing it myself, piecing together the fragments of the story and looking for the nuances in what had been left unsaid.
I began by reading through a sheaf of newspaper clippings I’d found at the bottom of the box. I don’t know who was responsible for compiling them, but there was no doubt they presented an interesting picture of the Health Care Corporation of America. HCC was a company that likened medical specialties to product lines and had pioneered the practice of providing financial incentives to physicians and administrators for meeting financial performance targets. Not unexpectedly, shareholders were ecstatic with the company’s performance, while the medical community was substantially less impressed. A Wall Street Journal profile of the company’s acquisition of a string of community hospitals in Duluth seemed to exemplify HCC’s style of operation.
Within an eight-month period Health Care Corporation, under the guidance of CEO Gerald Packman, bought eight of the twelve hospitals serving the greater Duluth area. Once they effectively controlled the number of beds, they began slashing costs across the board, negotiating discounts with suppliers, centralizing administrative operations, and dramatically cutting the number of beds. They closed three hospitals completely. They also eliminated overtime, cut the staff of registered nurses by a third, and began limiting patient access to unprofitable tests and treatments. The unspoken conclusion of the article was that under the HCC system, profitability went up as the quality of patient care came down.
But Prescott Memorial was not the same as a community hospital in Duluth. It was a charitable teaching hospital as committed to providing care to an indigent inner-city population as it was to educating new doctors. It was also a trauma center, one of the seven hospitals within the city limits that was tied to the 911 system. What that meant was that at Prescott Memorial they had not just a ready operating room, but surgeons, anesthesiologists, and a full blood bank ready round the clock.
Claudia had laid out the practical implications of this when I’d questioned the efficiency of keeping a trauma team on twenty-four-hour call. She’d explained that when someone has a bullet in their heart, the only place they can be treated is in an operating room. If they are taken to another hospital in the city, they may have equally skilled surgeons, but it might take them thirty-five or forty-five minutes to mobilize their operating room, and with each minute that elapses for a critical patient, the potential for survival falls dramatically.
In the parlance of HCC, trauma care was one of Prescott Memorial Hospital’s strongest product lines. It was also one of its least profitable. As I waded through the last three years’ financial statements I could easily understand HCC’s appeal to Kyle Massius, Prescott Memorial’s president. For him, the sale represented deliverance from the constant begging and scraping for donations, a transition to operating on solid financial ground.
Indeed, the more I read, the less I questioned the three board members’ eagerness to jump on the HCC bandwagon. Instead, what puzzled me was that HCC would want to take on the financial burden of Prescott Memorial Hospital at all. Did they really think that they could squeeze a profit out of providing trauma care, or were they planning on shutting down the trauma center altogether in order to provide moneymaking services to Medicaid patients?
While it did nothing to shed light on their motives, a careful reading of the proposed purchase agreement between HCC and Prescott Memorial Hospital made one thing perfectly clear: HCC was no novice when it came to this kind of transaction. There was none of the amorphous, let’s-cover-our-asses-just-in-case language that you usually find in a company’s first time through a particular kind of deal. Indeed, every document generated by HCC was an impervious construction, one that had obviously been passed through many hands and tightened by able minds.
The time frame that HCC had set out for the deal also disturbed me. Despite HCC’s reputation for moving quickly, I still would have expected the purchase of an asset as complex as a hospital to take longer than ten days to complete. Indeed, two years before, when Northwestern Memorial Hospital had approached Prescott Memorial about merging into their system, the two hospitals had negotiated off and on for six months before deciding not to come to terms. Now HCC proposed to do a similar deal in less than two weeks. Not only that, but there were steep financial penalties built into the agreement for even the most trifling delays. Perhaps it was fatigue clouding my judgment, but the reasons for this eluded me. The use of this kind of fast clock was usually reserved for deals where there was another buyer waiting in the wings. But Prescott Memorial wasn’t even up for sale, which meant that it was unlikely that HCC’s haste could be attributed to the fear of competing bidders.
All of this was even more perplexing in light of the hospital’s financial situation. Health Care Corporation was the self-proclaimed leader in the field of for-profit
medicine. What did they want with a hospital whose balance sheet painted a picture that could best be described as hand-to-mouth? While all of this merely buttressed my decision to not get involved, as I slowly returned the documents to the box I couldn’t help but wonder: What on earth did HCC want with Prescott Memorial Hospital, and even more importantly, why were they in such a big hurry?
CHAPTER 4
The next day was an exercise in frustration. While Cheryl kept my mother at bay with a series of increasingly inventive excuses, I found my efforts to reestablish negotiations with Icon deflected every bit as deftly. Under other circumstances I might have appreciated the symmetry of the situation or at least admitted that it served me right for being a coward. But the stakes for Delirium were much too high—something that Mark Millman and Bill Delius had both taken pains to point out separately and at great length.
Summoning the associates who’d been working on Delirium to my office, I set them to work drafting a tentative term sheet based on our negotiations so far, even though I didn’t think we’d ever use it. Besides wanting to keep morale up, I needed to keep them busy. Whenever there was a lull in the action, there was a danger that one of my partners would snag them for another assignment, leaving me scrambling if things with Icon suddenly heated back up.
Afterward I asked Jeff Tannenbaum to stay behind. Jeff was an experienced associate who’d been working Wlth me on Delirium from the beginning. Together we toed to figure out a way to reach out to Gabriel Hurt and rekindle his lust for Delirium’s new technology. I used the word lust deliberately.
The truth is, even I had to admit that what Bill Delius had developed was sexy. It was a new integrated language-based input device designed to free the computer user from having to use a keyboard or mouse. A tiny video camera mounted on the edge of the monitor tracked the user’s voice and movements and, using proprietary software, translated the visual and auditory information into commands the computer could understand. You could literally look at an icon on the screen and command the computer to open it.
Developing the technology had been a tremendous undertaking, Bill Delius’s personal grail, the altar upon which he’d sacrificed everything: his marriage, his life savings, and sometimes, I feared, his sanity. Now its success or failure rested at the whim of a sole eccentric billionaire whose people wouldn’t even return my calls. I was beginning to feel as though the term computer business was an oxymoron.
My thoughts kept turning back to sex. Maybe it was because it was the only thing I could think of that came close to the intensity and desire that fueled high-tech companies’ search for the next big thing. Or maybe it was because I knew that it would take something besides stiletto heels and a leather miniskirt to capture a man like Icon’s founder’s attention. Besides, I wasn’t interested in Hurt’s body—I don’t think anyone was—what I wanted was to catch his eye and kindle his desire.
I had Jeff pull out the file of clippings I’d had him compile on Hurt. We divided it in half and silently pawed through them, looking for anything that might be used as a lever.
I was about to give up when an old article about Hurt’s days at MIT caught my eye. Describing those sleepless, seminal days as a graduate student whose Ph.D. dissertation would revolutionize software and the world, Hurt described his existence as a code-writing marathon punctuated only by pizza delivery and impromptu pinball tournaments. The interview included a two-paragraph quote in which he waxed with a mixture of lyricism and nostalgia about the Dark Invader pinball game he and his roommate played in the basement.
It took Jeff under twenty minutes to find one of the pinball machines on an Internet auction site that could be, by paying an obscene premium, delivered to Chicago by afternoon. I knew it didn’t qualify as a great idea, but it was the only one I had, so I handed Jeff my American Express card and sat down to draft a letter to Hurt. Taping the interview to the bottom of my computer screen, I found myself looking at the photograph of Hurt that had run with the article. I knew he had to be in his twenties when it was taken, but he still looked like a little kid, the nerdy kind who accumulates a little cloud of spittle at the corner of his mouth and never gets picked to play baseball even though he knows every box score. Perhaps because he looked so goofy, I decided to go with an oddball approach. In less than an hour I’d composed a poem in iambic pentameter equating Delirium’s quest for a joint venture with Icon to the quest of the hero of the Dark Invader game.
“No guts, no glory,” I said out loud to myself as I typed in the command that sent it to the printer. “Now if only I could find something to rhyme with orange.”
While Cheryl and Jeff tried to figure out the logistics of wrapping a pinball machine and having it delivered to the Four Seasons, I slipped out for lunch. After all, partnership does have its privileges. Besides, Joan Bornstein never asked me out to lunch without an ulterior motive, and as usual, I was dying to find out what it was.
Joan was a litigator, a high-priced, high-profile medical-malpractice attorney whose skill at defending prominent physicians and hospitals accused of wrongdoing was surpassed only by her talent for promoting herself. Joan had picked Nick’s Fishmarket, a see-and-be-seen power-lunch spot whose deep, secluded booths have long been favored by LaSalle Street deal makers. It was the kind of place that Joan liked, a place where everybody from the busboy to the maitre d’ knew her by name and treated her like a celebrity. As I expected, by the time I arrived, I found her at the best table, holding court with a bunch of insurance types who’d stopped on their way out the door. At the sight of me they moved on, and she made a half-hearted effort to get to her feet, offering up air kisses and exclamations of pleasure at seeing me.
Joan always looked like she was about to step in front of the cameras. With her dark hair and telegenic red suit, she was less pretty than handsome, but struck a memorable figure nonetheless. She was also one of those people who somehow manages to look better on television than in person. Her strong features were somehow softened by the intervention of the camera, and as fond as I was of her, even I had to admit that hers was a personality best appreciated in sound bites. Today she was, as always, impeccably made up and expensively dressed. She was also, by the look of things, about seven months pregnant.
“Long time no see,” I remarked, sliding into the booth across from her. “It looks like you and Adam have both been keeping busy.” Adam was Joan’s husband, a North Shore obstetrician with a gilded practice.
Joan patted her stomach. “I think this is going to be one of the hazards of being Adam’s wife. He always tells people we’re going to keep on having kids because the delivery room is the only place where I’ll let him tell me what to do.”
“So how does little Jared feel about all of this?” I asked.
“Oh, he’s excited about having a little brother to push around,” she replied. “But I didn’t ask you out to lunch to talk about babies and potty training. That’s what I go to the office to get away from.” She leaned across the table conspiratorially. “I wanted to talk about the sale of Prescott Memorial to HCC.”
I was so surprised I practically choked on my ice water.
“Oh, come on,” she continued. “Don’t pretend you don’t know that the board of trustees signed a letter of intent yesterday.”
“If they did, then Pm sure they also signed a confidentiality agreement,” I pointed out. “You wouldn’t be telling me this as if it’s an accomplished fact, hoping to trick me into confirming it’s true?” I asked, being all too familiar with Joan’s courtroom wiles.
“Believe me, Kate. Being a mother has made me a much better lawyer. After all, medicine is a lot like nursery school. No matter what, somebody always tells.”
“So what makes you think I’d want to talk about it?” I asked.
“Because your mother has been publicly associated with raising funds for the hospital her entire adult life. Because your family is the biggest single financial supporter of the hospital.”
“An
d?”
“And if they knew what I know about HCC, they would turn and run the other way.”
“In that case I think you’d better tell me what you know about HCC,” I suggested.
“For one thing, they’re evil.”
“Oh, well, I’ll just go right ahead and take that to the board,” I said, helping myself to rolls and butter. “I’m sure that’ll persuade them.”
“Okay, Miss Smarty Pants, why don’t you tell me what it is that you know about HCC?”
“Not much,” I replied truthfully, “only what I managed to read last night.”
“In that case, let me test the limits of your knowledge. Question one. Why does HCC have its headquarters in Atlanta?”
“I have no idea, but I’m sure you’ll tell me.”
“I’ll give you a hint. They don’t own any hospitals there, but it’s where Quickie-Mart, Circle Seven, and French’s New Orleans Style Fried Chicken all happen to have their national headquarters.”
“I still don’t get it. What does any of that have to do with HCC?”
“You really weren’t kidding when you said you don’t know much, were you? Those are all the companies that Gerald Packman worked for before he decided to strike out on his own and start Health Care Corporation. It only seems natural, doesn’t it, that having conquered the world of convenience markets and fried-chicken franchises that he’d want to share his unique vision with the health care industry?”
“What vision is that?”
“Oh, you know, the usual. Cost cutting, consolidation, taking the paper clips off your memos before you throw them in the trash—all the stuff that gives accountants hard-ons and is pretty much meaningless when it comes to medicine.”
“What makes you so sure it’s meaningless?” I demanded.
“Because in health care what is ultimately at stake is lives, not dollars.”
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