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.