Today, Politico reported on a conservative initiative to block healthcare reform: “Firing some of the first shots in the coming showdown over health care, a conservative group led by the former owner of the Hospital Corporation of America is beginning a multimillion-dollar campaign Tuesday in opposition to government-run coverage.
“Conservatives for Patients Rights is going on TV, radio and the Web in the same week President Barack Obama hosts a health care summit at the White House. The group’s leader, Richard Scott, is hoping a pro-free-market message will rally the right to join the fray on what may be the most hard-fought policy battle in the first year of the new administration.
“’If we have more government involvement we’re going to have dramatically worse health care,’” said Scott, the wealthy health care executive who is overseeing the effort and seeding it with $5 million of his own cash.
Who Is Richard Scott ?
I interviewed Rick Scott many years ago when he had just become CEO of Columbia/HCA Healthcare Corp., a for-profit hospital chain that was the offspring of a merger between Columbia Healthcare (a chain that Scott had forged with the help of Texas financier Richard Rainwater) and Hospital Corporation of America (the for-profit hospital giant created by father and son team Dr. Thomas Frist Sr.and Dr Thomas Frist Jr.,– along with Jack Massey, the promoter who turned Harland Sander’s recipe for Kentucky fried chicken into a fast-food emporium.
Much of the story below is adapted from my book: Money-Driven Medicine: The Real Reason Healthcare Costs So Much. There, you will find copious footnotes documenting the facts.
When Scott got into the hospital business his medical experience was limited to helping health care companies buy and sell each other. A mergers and acquisitions lawyer from Dallas, Scott had worked on deals involving radio stations and fast-food businesses before zeroing in how just how much money could be made by acquiring hospitals.
Then along came Rainwater, asking Scott to join him in “doing for hospitals . . .what McDonald’s has done in the food business and what WalMart has done in the retailing business.” (Needless to say, Rainwater had never tried to run a hospital) I can still recall how Scott looked: a lean man with a receding hairline and a hungry look, he didn’t fit my image of a hospital executive. He had grown up in Kansas City, Missouri where his mother helped support five children by selling encyclopedias door-ro-door, doing other people’s laundry, cleaning telephone booths and clerking at J.C. Penney. Understandably, money was very important to Scott. He liked to pinch pennies. I remember he boasted to me about the old clunker of a car that he drove for years..
The frugality carried over the Columbia/HCA’s hospitals. “Gloves rip easily,” complained hospital workers in Florida. In California, some nurses protested “filthy conditions” and being “stretched to the limit as the hospital slashed the ratio of nurses to patients”
“I sometimes had to watch 72 patients heart monitors at a time,” one nurse reported. “I was told, either do it, or there’s the door.” In Indianapolis nurses complained to state authorities that babies in the neonatal unit were left unattended for as long as three hours.
How to Build An Empire
Scott’s goal: to lay claim to 25 percent of the nation’s hospitals. He felt the country had too many hospitals, and was hoping for a shakeout that would cut the number in half, leaving Columbia with a larger slice of what was left. To be sure, excess capacity was a problem in some parts of the country, but Scott’s solution was chillingly Darwinian. In his vision of the future, the hospitals most likely to succumb to competition would be “teaching hospitals and children’s hospitals”—institutions where operating costs are highest. His business plan left no room for unprofitable hospitals that nonetheless serve vital needs.
Meanwhile, within HCA Scott was known as a bully. “I never witnessed such an extent of demeaning, debasing and devaluing behavior as I personally experienced at Columbia,” one administrative director told the New York Times.
But if you brought in the money, you were rewarded handsomely. Internal hospital records would later show that hospital executives were paid enormous bonuses, not for reducing infections or lowering mortality rates, but for meeting financial targets such as “growth in admissions and surgery cases.” In 1995 one-fourth of Columbia’s administrators won bonuses equaling 80 percent of their salaries—or more. When bonuses become that large, some critics charge, they no longer function simply as incentives. They invite fraud. Scott also did his best to avoid needy patients, questioning whether hospitals should throw their doors open to one and all. “Do we have an obligation to provide health care for everybody? Where do we draw the line? Is any fast-food restaurant obliged to feed everyone who shows up?
Meanwhile, Wall Street scrambled to finance Columbia/HCA’s growth. The stock spiraled, and Scott used the company’s ever-more valuable stock to acquire more hospitals. He quickly became a serial acquirer. Growth for the sake of growth. That was the mantra of the 1990s. Until the music stopped.
In Scott’s case, that happened a short three years after he became CEO of Columbia/HCA. In July of 1997, the FBI swooped down on HCA hospitals in five states. Within weeks, three executives were indicted on charges of Medicare fraud, and the board had ousted Scott.
The investigation revealed that the hospital chain had been bilking Medicare while simultaneously handing over kickbacks and perks to physicians who steered patients to its hospitals. One can only wonder how many of those patients really needed to be hospitalized—and how many were harmed.
The company did not fight the charges. In 2000, HCA (which by then had expunged “Columbia” from its name) pleaded guilty to no fewer than 14 felonies. Over the next two years, it would pay a total of $1.7 billion in criminal and civil fines.
And now . . . .Scott’s back.
Firing His First Salvo on Conservative Talk Radio
According to Politico, “his group is enlisting a group of veteran Republican consultants to fashion a multi-media battle, warning against the move toward more government involvement. The new group starts a three-week TV and radio campaign featuring Scott Tuesday and will plaster the Internet with ads while also launching its homepage.
“The goal is to provide conservatives with a central organization to resist any move by Obama and congressional Democrats toward universal coverage. Scott said the group would spend up to $20 million on the campaign, and volunteered that he would consider reaching further into his pocket.
“Scott’s first salvo is being fired tonight,Tuesday, March 3, largely on conservative talk radio shows and on cable news.
“’Imagine waking up one day and all your medical decisions are made by a central national board,” Scott says in the radio ad. “Bureaucrats decide the treatments you receive, the drugs you take, even the doctors you.”
He goes on to raise the prospect of ‘national boards’ and ‘waiting lists” as in the nationalized systems of Great Britain and Canada.” Politico reports. “’That’s what some in Washington mean by reform,’ Scott says in the spot.”
A postcript: Today, Media Matters disclosed that On February 26, The Wall Street Journal reported that Richard Scott, "the former chief executive of HCA Inc," had formed the non-profit organization Conservatives for Patients’ Rights –without mentioning HCA’s fate under his leadership.
One could not make this stuff up. Someone involved in health care fraud is now “warning” Americans about the dangers of health care reform!
I wonder if Richard Scott will be at the White House tomorrow? –taking the place of respected physicians who support a single payer, taxpayer-funded plan.
In a recent CBS-NY Times poll, 59 percent of Americans said they favored government-run health care. Given that message, I would hope that the HMOs are running scared, but I doubt it. They have mega-bucks to spend for ads favoring retention of the profiteering status quo.
The Nobel prizewinner in Economics, Joseph Stiglitz, has pointed out that the free market does not work when there is an imbalance of power among participants, unequal access to information, and a lack of transparency. That’s my layperson take on the Stiglitz message. Add a strong dose of subterfuge and greed and that seems to describe the business ethic of most private health insurance corporations.
Tell the White House that the country needs the savings we could reap under a single payer system. Send a message at http://www.whitehouse.gov
You will see the Contact form.
apparently, being fined 1.7 billion, and charged with 14 felonies, means scott is fit to be the governor of florida. this billionaire is purging democrats off voter lists. the purge list is 87% latino and black. this is what i dont understand. how could floridians elect him to governorship? how blind and lazy are you fools down there? damn, at least do some homework, you are completely influenced by t.v. ads. pathetic. this man needs to go!
Healthcare Finance Fraud?
Who is R Scott? He was Richard Rainwater’s partner before GW BUSH was.
ALL of Richard Scott’s Columbia Homecare Group’s units were in the MASSIVE FRAUD uncovered at the nation’s largest financial fraud case in our history that just ended December 2008. 12 EXECUTIVES were found guilty-ONE was acquitted. Guess who that was? The ex- CFO at Scott’s baby-Columbia Homecare Group, prior to arriving at NCFE.
I wonder, can any of you brilliant reporters connect the dots? I doubt it!
“This case is one of the largest corporate fraud investigations involving a privately held company headquartered in small town America,” said …of the FBI Criminal Investigative Division.
JPMORGAN CHASE and CITI PAID GOVERNMENT SETTLED AGREEMENTS FOR FRAUD in National Century Financial Enterprises, Inc.
JULY 10, 2007 – SUPERSEDING INDICTMENT CHARGES EIGHT FORMER EXECUTIVES OF HEALTH CARE FINANCING COMPANY WITH CONSPIRACY, FRAUD, MONEY LAUNDERING
At trial, the government presented evidence that the defendants engaged in a scheme to deceive investors and rating agencies …between May 1998 and May 2001.
SEC: May 1998 James K Happ was the CFO of the Dallas-based Columbia Homecare Group, Inc. (Richard Rainwater’s). In ’98 & ’99 NCFE financed this divestiture to Medshares, Inc. in Memphis, TN.
July 1999, Medshares, Inc. filed the LARGEST Bankruptcy case in the history of Western TN’s bankruptcy court; ALL of the NCFE financed Columbia Homecare Group, Inc.’s divestiture months earlier. In this court, lawyers cried fraud; the JUDGE forbade the ‘F’ word in her court.
February 21, 2008 – COLUMBUS, Ohio (AP) – A guilty executive told jurors she told investors “absolutely nothing” about National Century’s practices of advancing cash to Memphis, Tenn.-based Medshares,…
December 18, 2008 – National Century fraud case produces 1st (AND ONLY) acquittal
Prosecutors’ case fell short, juror says
By Jodi Andes THE COLUMBUS DISPATCH
“Conservatives for Patient’s Rights” I’d like to see what’s on Richard Scott’s list of Patient’s Rights. We Patients in need of Rights need money to fight this battle and Richard Scott isn’t fighting for patients you can rest assured of that. Richard Scott the PATIENT ADVOCATES from coast to coast challenge you to a dual. We put our as of now top-secret-campaign up against your pathetic media blitz and we’ll see whose still standing at the end of the summer. Richard, you should be sure and hit the Rush Limbaugh Show, that will give you tons of credibility.
Thanks for filling in more of the story.
I connected quite a few of the dots in my book.
After the board fired
Scott, Frist took over as CEO of HCA– then HCA got into more trouble. . . .
Washington saved him from having to testify.
Misplaced this link in other blog post:
It appears that Money still is and will always be the means to BUY Access.
However,this fight of mis-information cannot be bought and most importantly sold to the American Public.
The consumer has had enough.
Mr. Scott has done all Americans a great service by working to ensure that the government does not take over medicine. If you are a potential patient, you do NOT want a Federal Health Board deciding what medical care you can have.
Obama’s plan is for rationing and cookbook medicine. As an experienced neurosurgeon, I won’t participate in it, but I will do all I can to practice medicine.
Richard Scott sounds like a hero to me.
Obama said he’s going to form a Federal Health Board to decide what medical care I can or can’t have and ration my family’s medical care? Wow. You’re right, Dr McKalip it’s much better what we have right now, for hospitals to ration our care and decide we can’t have anything unless we sell our homes and/or possessions to pay for that life-saving treatment. Dr. McKalip, while you’re here a lot of us patient advocates have always wondered, exactly what is it a neurosurgeon has to do to earn a bonus? Why would a hospital pay bonus’ to a neurosurgeon, what are neurosurgeon’s doing to earn that bonus?
I’m a family doc, and I can’t tell you what a service you are doing by revealing who is pushing what agenda in the healthcare debate. Have you considered sharing your insights with some of the cable new folks? Olberman or Maddow? I’m certain they’d love your input, especially given the thoroughness of your research. I think you could inject a lot of clarity into the debate. I hope you’ll give it some thought. Thanks.
Who is Richard Scott? Before GW Bush was affiliated with Richard Rainwater may I remind you-Richard Scott was the ex-partner of Richard Rainwater with Columbia Homecare Group.
Why does this matter? Because the wrath of Richard Scott’s fraud just ended in December 2008 in the largest private financial fraud case in our country’s history in 2002 when FBI raided the offices of National Century Financial Enterprises Dublin, Ohio, headquarters.
From the July 26, 1997, Los Angeles Times article:
A controversial deal maker whose hard-nosed business tactics have reshaped the medical industry resigned Friday as scandal engulfed the vast hospital empire he had assembled over the last decade.
Richard Scott — sometimes called “the Bill Gates of health care” — quit as chairman of Columbia/HCA Healthcare Corp. amid a massive federal investigation into the Medicare billing, physician recruiting and home-care practices of the nation’s largest for-profit health care company.
Though the federal probe focuses on other states, Columbia’s aggressive expansion has included California, where the company operates 15 hospitals, 13 surgery centers and 10 home-health-care agencies, employing more than 11,000.
Just a reminder relating to the need for a financial service institute as NCFE: home health – which is struggling under the Balanced Budget Act of 1997; about 1,400 agencies closed nationwide in 1998.
“This case is one of the largest corporate fraud investigations involving a privately held company headquartered in small town America,” said Assistant Director Kenneth W. Kaiser of the FBI Criminal Investigative Division.
The following is an excerpt from a 10-K SEC Filing, filed by J P MORGAN CHASE & CO on 3/9/2006: Enron litigation. JPMorgan Chase and certain of its officers and directors are involved in a number of lawsuits arising out of its banking relationships with Enron Corp.; the three current or former Firm employees are sued in their roles as former members of NCFE’s board of directors
March 26, 2008; By Jodi Andes; THE COLUMBUS DISPATCH; Nine other executives have been convicted or pleaded guilty in National Century’s collapse. Only Poulsen and executive James Happ still await trial.
December 18, 2008 – The ONE AND ONLY acquittal; By Jodi Andes THE COLUMBUS DISPATCH ; Prosecutors’ case fell short, juror says National Century fraud case produces 1st acquittal ; The “not guilty” verdicts that came in federal court yesterday were not so much a vindication of the last National Century Financial Enterprises executive to stand trial, a juror said.
Instead, they were more a belief that federal prosecutors had not done their job, the juror said after he and his fellow jurors acquitted James K. Happ of five counts after 12 hours of deliberation. “He very well may have been guilty. A lot of us thought he was,” said the juror who wouldn’t give his name. “But if he was, you gotta have the evidence.”
July 26, 1997- Where was James K Happ?
SEC Form September 9, 2003 Annual Meeting of Stockholders, Med Diversified Inc.:
Previously, Mr. Happ served for three years as executive vice president of NCFE, during which time he restructured the servicer department to improve operational performance and accelerated the utilization of technology to increase operational efficiency.
Mr. Happ also served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc.,
… In this role, he directed the company through the challenging reimbursement climate, known as the interim payment system, and participated in the divestiture of all of Columbia/HCA’s home care operations
Who purchased the majority of this divestiture in late ’98 & early ’99? Medshares, Inc. of Memphis, Tennessee. Who financed this divestiture? National Century Financial Enterprises, Inc.
Iam glad you touch on this in your book however, this is bigger then Enron.
I am searching for an author that can put it all together–and we MUST NOT allow HCA otr ANY of it’s affiliated involved in the IT that may be implemented.
Funny-the one and only acquittal James K Happ was the CFO at COlumbioa Homecare Group-because the PROSECUTOR did not do his job-
Want to write another book?
I have YEARS of legal documents just waiting for the right author!
To Healthcare Fraud Exposed, your name links to a blogspot titled “biggerthenenron” but the site isn’t accessable. FYI The correct spelling is T-H-A-N Bigger than Enron.
Rick Scott a hero in David McKalip, MD’s eyes?
How many felony counts, yet this man is made up of the “right” stuff. I don’t get it.
The only docs that were fans of Scott’s rein were the so called “medical directors” (or perhaps minority interest partners as well) on thinly veiled payola arrangements to avoid Stark claims.
When are felony convictions considered resume building entries?
The surgeon involved in our case was paid by the local small hospital involved 60 thousand monthly – and a huge bonus of 534,000 plus for the NUMBER of patients he ran thru the system – as his QUALITY of WORK was never questioned, as is the case to this day – QUALITY surgeons are hard to find – and the incompetent rule – as they are allowed to move from state to state disabeling and maiming hourly.
Greg, Gary, David, Lisa, Concerned FPs, Healthcare Fraud Exposed, Lisa, Greg, DiAnn
Greg–thanks for the link– it’s a very good one for anyone interested in the HCA story.
Gary– Yes, money talks and spreads misinformation, as you can see from Dr. David McKalip’s comment, just above yours.
Davd– No one is talking about “cook-book medicine.” What the administration is talking about is coparative effectiveness reserach that would do head-to-head comparisons of varoius drugs, surgiical procedures and surgical devices to find out which ones offer the greatest benefit for patients who fit a paritcular profile.
I wonder if you have a fnancial interst in a particular procedure, device or drug that you would just as soon not see tested?
The infor would then be used when deciding co-pays and fees– paying doctors more and charging patients lower co-pays when they choose the treatment that would be most effective in a particular case.
M.D.’s who don’t have a financial interst in the outcome would be conducting the research.
Lisa– Patient’s advocates should definitely throw a spotlight on Scott and make it clear how little he thought of patients when running his hospitals.
Thank you. I would love to spread the word about Scott any way I can.
By the way, who are concerned FPs? If you have time, please send me an e-mail (email@example.com)
It’s a small world isn’t it? When you start looking at the board of one corrupt company, you find more corrupt companies . . .
Lisa– Thanks for the link. .
Greg– Yes, isn’t it extraodinary that this guy could get publicity in the WAll Street Journal and on Fox as some sort of Patient’s Advocate?
At one time, jouranlists used fact-checkers (or checked their own facts.)
This would mean at least goggling the name Rick Scott, not just to make sure that you were spelling his name right, but to make sure there wasn’t something major that you didn’t know about him. . ..
Yes hospitals to often overlook the sloppy practices of so-called “rain-maker” surgeons (who bring a lot of lucrative business into a hospital).
Too often, these guys are doing too much “volume” and patients suffer.
Somebody in charge of patient safety should talk to the surgical nurses in every hospital. They know which ones are capable of doing a large number of surgeries very, very well-and which ones are cutting corners.
How can we get your great background research out to the mass media?
If this isn’t a billboard for why we need a single payor system, I don’t know what is. There are microscosyms of Mr. Scott’s perverse self interest and greed pervading healthcare in communities across America.
We need to speak boldly and loudly about the corruption in healthcare and use that as the powerful force behind a single payor system.
What’s happened on Wall Street is happening in healthcare as we speak. It is just disguised so much better because insurance companies are exchanging the money and doing deals with hospitals with OUR money.
The sooner we work to uncover this on a local level, the more we will empower healthcare consumers to stand up against it.
This seems to be the way the wind blows right now. Put anybody up who will espouse your beliefs, no matter their credibility or qualifications. I’m sure his script will include the word “socialism” ad infinitum.
Great post. Well done!!!
Lori, Jess, Shazia
Lori– Somesimes the mass media does write about corruption in the system–
for intance, the NYT has a couple of excellent people who cover it.
But much of the mass media prefers to write about successes in the system (including hyped miracle break-throughs) because these stories sell newspapers and draw an audience for the local news.
Many Americans want to believe that we have the best healthcare system in the world. They don’t want to hear “criticism” and “bad news”. And the media tells them what they want to hear.
Jess–I’m afraid you’re right
Shazia– Thanks much , and welcome to the blog
Thanks for that interesting post.I really like it very much.
Thanks for that interesting post.Thanks for information on topic.
Great job, Maggie! I saw my first CPR ad on tv this morning – awful! Just to let you know, the SourceWatch page on Conservatives for Patients’ Rights, describes CPR as a “front group” for Richard Scott, and mentions your research:
“Maggie Mahar at the Century Foundation’s Health Beat blog reports that Scott previously started the for-profit hospital chain in 1987 that later became the $23 billion Columbia/HCA. He was ousted from this post in 1997 after an FBI investigation of Columbia/HCA that led to 14 felony convictions and $1.7 billion in criminal and civil fines for Medicare fraud.”
It’s appalling that some of the organizations that quote Scott haven’t checked his background.
Thanks very much.
Good to know Sourcewatch picked up on it.
It does strike me as odd that people quote Scott without disclosing his background. I have to assume most people just don’t know who he is.
What a nasty piece of work. This makes me glad to be living in the UK with the NHS, a bastion of public health care in the west, but also extremely worried that people like this will g privatisation ain more power in the UK, especially as we are seeing the shameless privatisation of our hospitals under ‘New Labour’ (i.e. the newly conservatives)
Yes, in recent years, peope like this have been everywhere.
But perhaps the current economic melt-down will make people more aware of the need for government regulation in all countries.
Excellent post write now.Thanks for sharing….
I just saw this weasel in a commercial for his new venture, Conservatives for Patients Rights. What cojones!!!
For shits and giggles, I just checked out his bio on wikipedia. Reads as if he wrote it himself. Not one word on why he was forced out at Columbia/HCA. If anyone out there cares to straighten out this b.s., please do so.
Great job, Maggie. I’ve joined the ranks of healthcare journalists and find your work exquisite. Keep up the good work.
Richard Scott is nothing but a criminal. He has only one goal – to bleed everything dry that he can. He walked away from his crimes at HCA with a golden parachute and the employees have suffered ever since.
Excellent reporting/ One might like to know that Scott left the company embarassed and left with a million severence and 3 hundred million in stock. He became a partner with George Bush in the ball team.
I’m sorry to see that you have to lie about health insurance reform to scare the public. You would be better served if you came up with answers insted of complaints. Don’t forget not to bare false witness !
This is an excellent expose. I cited this article in an article I posted on my blog at http://www.alanoldstudent.com
The name of my article is “Lying about Canada and UK”
If you have seen any of Scott’s disgusting ad on TV, he comments that he has learned from mistakes. Since when is fraud a mistake? It is a deliberate criminal act. His only regret was getting caught. Sad commentary on our society.
And now, as Paul Harvey would have said, “Page 2”. Rick Scott must have surveyed the various states in our nation and decided that he could sell his snake oil in Florida. He’s running for Governor. (It’s almost too much to comprehend!) Yes, Scott is running for Governor of the state where many Medicare-covered seniors reside. Senior citizens who have the prospect of a full and happy life as long as they never have to depend on Rick Scott for their healthcare. I listened to this bozo try to convince the hospital I was working for in the 1990s to join Columbia/HCA. Thank God we didn’t. The hospital in town that bought his line went from being a decent hospital to being a shithole. If Rick Scott becomes Governor of Florida I will lose all faith in the ability of the American people to think. Maybe I’ll move to Alabama.
If you are found guilty of a feloney don,t you lose your rights to vote and to run for office/
And now, the rest of the story…This bozo thinks he explained his involvement in the Medcare/Medicaid fraud scam from the Bill McCollum ad. Rick, I don’t think you learned a damn thing. You and your companies defrauded Medicare/Medicaid for over a decade and don’t say you didn’t know about it. The big honchos always know who they’re scamming…you should have received jail time…at least 1 year for every year you and your companies defrauded Medicare/Medicaid. I am surprised that you didn’t even get your hand slapped by Uncle Sam. I am a republican and you definitely will not get my vote.
Why does the main stream media — the corporatist press — not report this?
They laughed when Hillary Clinton said there was a “a right wing conspiracy” against her husband.
During the battle against President Barack Obama’s healthcare we saw these cast of characters again.
Remember Dick Armey wrote a memo how to sent Tea Party goons to disrupt Town Hall meetings.
Sarah Palin and Chuck Grassley invented “death panels” and the GOP repeated the line until it was actually believed.
They spoke “of a complete government takeover” and “socialized medicine” just like they did when JFK proposed and LBJ passed Medicare.
Now the guys who fought Medicare tried to picture themselves as its defenders. Meanwhile, they are trying to kill it by privatizing it. Sound familiar?
And don’t forget the PR firm that managed the Swift Boaters campaign against John Kerry managed Rick Scott’s Conservative Patient Rights campaign.
If you have seen any of Scott’s disgusting ad on TV, he comments that he has learned from mistakes. Since when is fraud a mistake? It is a deliberate criminal act. His only regret was getting caught. Sad commentary on our society.
Thanks for this one!! Keep it up!
I don’t think i know this person.
Healthcare is always a big issue – thanks for your info.
It saddens me to see what our health care is coming to these days.
This is sickening.I just read “Knockout” about cancer treatment. Alternative treatments that work are prosecuted by the FDA. Meanwhile the big drug companies make many BILLIONS $$ pushing chemotherapy which has only been proven to help in 3 types of cancer. We need to wake up and take charge of our own health!
No doubt the health care system needs to be reformed, but Obamacare is not the answer