Friday, March 06, 2009

HealthSouth, Colombia/HCA, & Tenet Health

What do for-profit healthcare firms HealthSouth, Colombia/HCA and Tenet Health have in common? They were fined by federal authorities for fraud.

HealthSouth overstated earnings by $2.7 billion between 1996 and 2003. They paid a $100 million fine.

Colombia/HCA paid a $1.7 billion fine for fraud, physician pay for referral performance, and illegal kickbacks.

Tenet Health is a serial ethics abuser. One look at Tenet's 10-K shows numerous government settlements. One was a $54 million fine for performing unnecessary cardiac procedures at their Redding, CA facility. Litigation and investigation costs for 2006 were $766 million, primarily consisting of legal settlements with the federal government and costs to defend Tenet in various lawsuits. (The picture above is Tenet's Memorial Medical Center after Hurricane Katrina. 34 patients perished in that building).

Why are these three firms and their past fines important? For at least three reasons. One, the White House health care czar spent the last eight years deeply entwined in for-profit healthcare. Nancy-Ann DeParle served on eight for-profit healthcare boards. Triad Hospitals and Legacy Health Partners, are for-profit hospital chains, like HCA and Tenet.

Two, Richard Scott hit the news again. The former Colombia/HCA CEO challenged President Obama's reform efforts.

Three, former Alabama Governor Don Siegleman's legal appeal hit the news. His partner in conviction was Richard Scrushy, former HealthSouth CEO.

Illegal activity, huge fines, bad CEO's repackaged, and a private equity underwriter (PEU) leading health care change. Reform or deform? More likely the latter. (Bonus fact: Bob Kerrey D-NE and Jeb Bush R-FL serve on the Tenet Health Board)

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