A Hospital Giant Comes to Town, Bringing Change
By KATHRYN JONES
Published: Sunday, November 21, 1993
WHEN Richard L. Scott rolled into town three years ago and bought two small, down-at-the-heels hospitals, he and his Columbia Healthcare Corporation made quite an impression on the local health care industry.
"Everybody thought they were crazy," said Dr. Donald Huge, medical director for Sanus/New York Life Health Plan, one of Houston's largest health maintenance organizations. "No one could figure out why they would want hospitals like that." Columbia was largely ignored.
But Columbia kept buying hospitals, here and elsewhere. In September Columbia put up $3.4 billion to acquire Galen Health Care Inc., a 73-hospital chain spun off by Humana Inc. Then last month Columbia announced a merger with the HCA-Hospital Corporation of America that will create the world's largest investor-owned hospital group.
Now, it is hard to ignore Columbia. The HCA merger, if approved, will make Columbia the largest hospital chain in Houston, with 10 hospitals and 2,800 beds, or about 16 percent of the market. It seems everyone is calling Columbia's Houston office, where Jay Grinney, president of the Southwest division, plots Columbia's acquisitions with big red dots on a wall map. Dr. Huge, whose company has been expanding its network of doctors and hospitals, was one of those callers after the Galen merger. "I called Jay and said, 'Hey, we need to have lunch, old buddy.' I was going to need him desperately."
If Rick Scott has his way, the for-profit, publicly traded Columbia will become an equally formidable presence in many other cities, including Atlanta, Chicago and Kansas City. (The company is already strong in Miami and El Paso; it has no hospitals in the Northeast.) For those cities and many others where the hospital industry is fast consolidating, Mr. Scott's performance in Houston could be a study of what happens when a powerful force like Columbia comes to town.
Mr. Scott's guiding philosophy is that bigger is better. In Houston, as in other cities, Columbia has bought hospitals and consolidated overlapping operations like marketing and cardiac treatment to save millions of dollars in overhead, and it has done this with only about 25 layoffs. Using its size, it has negotiated volume discounts from medical-supply companies for everything from surgical masks to operating-room equipment.
To fill more of its beds, it invests heavily in new medical services and better equipment to make the hospitals more attractive to health plans, patients and physicians. It also woos physicians with equity stakes.
The formula has worked for Columbia. All of its hospitals here and elsewhere are profitable. But while Columbia has lowered operating costs, its effect on the prices patients and their insurers pay is still uncertain, although there are some promising signs.
Analysts said the HCA merger will give Columbia the size to bargain with the big buyers of health services envisioned under the Clinton Administration's health reform plan.
But some health care industry experts worry that as the hospital industry consolidates, with Columbia and big competitors gaining strength in markets like Houston, these companies could someday be in a powerful position to raise prices.
Columbia, based in Louisville, was founded in 1987 by Mr. Scott, then a Dallas attorney and now chairman and chief executive, and Richard Rainwater, a Fort Worth financier who made his fortune cutting deals for Sid Bass, one of the billionaire Bass brothers.
After early successes in El Paso and Miami-Fort Lauderdale, the company moved into Houston. In addition to acquiring hospitals, Columbia has added a residential mental health center for adolescents and children. The company has also expanded or started programs including rehabilitation services, inpatient and outpatient psychiatric programs, outpatient diagnostic services, and nursing-home and home-health-care services. A recent affiliation with Medical Care America Inc. will add outpatient surgery and home-infusion care to the list.
"I want to make sure we have all the different systems that managed care needs," Mr. Scott said.
The HCA merger, which still must be approved by shareholders and regulators, would give Columbia four more west side hospitals and 1,200 more beds in Houston. Columbia closed some hospitals in El Paso and Miami; it has not done so here.
Health-care industry executives said Columbia's biggest impact has been to speed an industry consolidation in Houston. Its closest competitor, Memorial Healthcare System, last month announced an agreement that will give it more than 2,000 beds. Other hospitals are also making acquisitions and forming networks with a variety of services and doctors. And many people here say it's just a matter of time before some hospitals close.
Columbia would like to acquire even more hospitals in Houston, Mr. Scott said. It wants 25 percent to 35 percent of the market.
THE Houston area has about 100 hospitals, many owned by several companies -- Columbia, Memorial, American Medical International, Healthtrust and Epic Healthcare Group -- and others independent.
But some who watch the health care business said they are concerned that Columbia and Memorial are emerging as the two dominant hospital companies in Houston. They worry that Columbia particularly, because of its deep pockets, will gain too much power and then dictate prices.
Merrill Matthews, health policy director of the not-for-profit National Center for Policy Analysis in Dallas, compared this business to the military industry. "You could get something like the Pentagon, with a few major suppliers like a Lockheed or a General Dynamics," he said. "Nobody argues that the stuff they sell is cheap. And the little guy, where much of the innovation comes from, gets squeezed out."
MR. Scott recognizes such criticism. "I think that's a concern. I don't think it's good in any business for anyone to have a monopoly. On the other hand, you need to have size to get costs down. The truth is, for patients, physicians and whoever the payer is, I think size is very positive."
With all its hospitals profitable, Columbia, whose shares are traded on the New York Stock Exchange, earned $25.9 million, or $1.18 a share, on revenues of $819.3 million last year. In 1991, it earned $15.2 million, or 92 cents a share, on revenues of $499.4 million. However, the company said it lost $115 million in this year's third quarter after taking charges for the Galen acquisition. Nevertheless, for the year it is expected to earn $1.95 per share, according to analysts. (The HCA merger, expected to be completed in February, would result in an entity called Columbia/HCA Healthcare Corporation, with annual revenues of more than $10 billion.)
Columbia could not show how its presence has affected the prices paid by patients and insurers in Houston. But Mr. Scott said prices are generally falling. Others in the Houston health-care industry said it was too early to tell. But some have seen some good signs. "We've already seen some improvement in quoted rates to us on a per-diem basis in contracts," Dr. Huge said.
Operating expenses per patient day at Columbia's Houston hospitals fell from $801 in 1990 to $794.12 last year. Company officials pointed to several examples of how they have made hospitals more efficient and lowered operating costs.
Columbia said it immediately cut $1.5 million in overhead from its initial acquisitions in Houston. The company said it is also filling more beds. For example, the average daily number of patients in beds at the Sam Houston hospital has almost tripled to 125 from 45 in 1990, Mr. Grinney said. The company said it is attracting more patients with improvements to its hospitals and expanded services.
Columbia's size -- 94 hospitals before the HCA merger, 190 hospitals in 26 states after it -- gives it leverage with big national suppliers. Mr. Scott said Columbia has cut its hospital supply costs in Houston by more than 15 percent.
It has also eliminated some duplication of services. For example, Rosewood Medical Center had planned an $8 million expansion that would have included a comprehensive heart program. But Spring Branch, only 10 to 15 minutes away, already had such a program. Columbia's solution was to set up an outpatient cardiac catheterization unit at Rosewood; more serious cases go to the Spring Branch hospital.
"Instead of assuming that every facility has to be completely equipped, we look at it on a systemwide basis," Mr. Grinney said.
Terry Goss, executive director of the Durham Medical Center, a multi-specialty group with 17 physicians that has aligned with Columbia, recalled how doctors' complaints about outdated CAT-scan, operating-room and intensive-care-unit equipment had been ignored by the previous administration at the Heights Hospital. But when doctors raised the issue with Columbia executives, they ordered the equipment. Columbia also helped negotiate and finance a building for Durham in a good location.
And when negotiating a contract with a health plan, Columbia offers a medical network that includes not only its facilities but also the services of certain doctors. "They're bringing business to the physicians who are in independent practice," said Diane Love, an associate professor of health care administration at the University of Houston at Clear Lake City.
SOME physicians are concerned that Columbia is getting so large that it will control the local market and they won't have a say, equity stake or not. And some competitors played down Columbia's impact in a market where a growing number of services take place outside the hospital.
"We're not doing anything differently since they've been in the market," said W. Randolph Smith, executive vice president of operations at American Medical.
There will be losers. Mr. Scott said he expects 30 percent of the nation's hospitals to close in five years. Some will be in Houston.
"Slowly, they're going to go out of business," he said. "It sounds bad, but it will lower health care costs in the city." SHOULD DOCTORS OWN HOSPITALS?
WHEN the Columbia Healthcare Corporation comes to town, it woos local physicians with promises of an ownership stake in its hospitals.
But the equity stakes, which have become a cornerstone of Columbia's strategy for moving into new markets, are increasingly under fire.
Critics, including some lawmakers, contend that such business relationships are a blatant conflict because they could encourage physicians to order unnecessary treatments and jack up patient bills at hospitals where they have a financial interest.
But Columbia officials said that selling partnerships to a hospital's staff physicians helps reduce the cost of providing care by focusing physicians on the bottom line and giving them a voice in a hospital's operation.Columbia officials said they are well within current Federal guidelines for physician ownership of facilities. The guidelines give a "safe harbor" to organizations with physician ownership of 40 percent or less.
Typically, Columbia limits its aggregate physician ownership in its local hospitals to 30 percent, said Jay Grinney, president of Columbia's southwest division.
In Houston, 130 physicians own 11.5 percent of the hospitals, and that percentage will probably grow as more doctors become interested in investing.
The original partnership units sold for $15,000 each.
Photos: Jay Grinney of Columbia Healthcare plots the company's acquisitions in Houston on a wall map. (F. Carter Smith for The New York Times); Richard Scott, left, visits Willie Burton, a patient in Louisville. (Jackie Wallace for The New York Times)
Sunday, March 8, 2009
Friday, March 6, 2009
"Bigger Than Enron," Friday, June 21, 2002 Where was CNBC?
FRONTLINE's "Bigger Than Enron," airing Thursday, June 20, at 9 p.m. EDT on PBS (check local listings), looks at an oversight system gone soft and how market deregulation and conflicts of interest eroded the system of controls designed to protect stockholders. Producer Hedrick Smith was online Friday, June 21, to talk about what he learned from SEC officials, corporate executives, members of Congress, and investor advocates.
wrath of Richard Scott’s fraud just ended in December 2008
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.
Guess where Columbia and many of the other publicly traded healthcare companies DUMPED their losing asset, Home healthcare? National Century Financial Enterprises
National Century Financial Enterprises:
“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.
Only Poulsen and executive James Happ still await trial?
December 9, 2008. James K. Happ, 48, is charged with conspiracy, money-laundering conspiracy and three counts of wire fraud; the 11th National Century executive to be tried or admit guilt. , Also today, a former friend of Happ's testified that, while working at National Century, Happ boasted that he never could be charged with any fraud because he didn't sign anything.
December 18, 2008 - The ONE AND ONLY acquittal; James K Happ!
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."
Who is James K Happ? Where was James K Happ when Richard Scott was at Columbia in 1997?
Guess where Columbia and many of the other publicly traded healthcare companies DUMPED their losing asset, Home healthcare? National Century Financial Enterprises
National Century Financial Enterprises:
“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.
Only Poulsen and executive James Happ still await trial?
December 9, 2008. James K. Happ, 48, is charged with conspiracy, money-laundering conspiracy and three counts of wire fraud; the 11th National Century executive to be tried or admit guilt. , Also today, a former friend of Happ's testified that, while working at National Century, Happ boasted that he never could be charged with any fraud because he didn't sign anything.
December 18, 2008 - The ONE AND ONLY acquittal; James K Happ!
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."
Who is James K Happ? Where was James K Happ when Richard Scott was at Columbia in 1997?
November 28, 2006 - Bigger Than Enron
"...spying of former Hewlett-Packard (HP) Chair Patricia Dunn on H-P board members and high tech journalists..."
"...antics of Enron bad boys Andrew Fastow and Jeffrey Skilling, but it's depth and breadth are unsurpassed by anything that happened at Enron or HP."
THIS WAS NOTHING!!
November 28, 2006 by Christine Zibas
"...What is the problem so pervasive that it is overtaking these corporate nosedives? It's stock option backdating, and according to the "Wall Street Journal" in its "scandal scorecard," the number of companies now facing federal investigation is at least 130: the number reporting internal probes: 153; the number of executives or directors resigning or being fired: at least 42, including 10 CEOs; the number criminally charged: 5; and the amount of misstated profits from misdated options: $5.3 billion from more than 60 companies."
"...US Attorney's Office for the Northern District of California formed a special force of prosecutors and FBI agents. According to Lynn Turner, a former chief accountant at the SEC, "The sheer magnitude of the numbers of companies, executives, and corporate boards that have disclosed options-related investigations in mind-boggling...." Add to that the millions of dollars being spent in the corporate sector by more than 100 companies, and you have a corporate scandal many times larger than anything cooked up by Enron or HP."
Bigger Than Enron? There's a New Corporate Scandal Brewing
Stock Option Backdating Leads to Federal Scrutiny of More Than 130 Companies
Although much recent attention has been given to the spying of former Hewlett-Packard (HP) Chair Patricia Dunn on H-P board members and high tech journalists, a far greater scandal has been brewing that has flown largely under the public's radar. It's not as tawdry as the Hewlett-Packard scandal, and it does not have the cheekiness of the antics of Enron bad boys Andrew Fastow and Jeffrey Skilling, but it's depth and breadth are unsurpassed by anything that happened at Enron or HP. What is the problem so pervasive that it is overtaking these corporate nosedives? It's stock option backdating, and according to the "Wall Street Journal" in its "scandal scorecard," the number of companies now facing federal investigation is at least 130: the number reporting internal probes: 153; the number of executives or directors resigning or being fired: at least 42, including 10 CEOs; the number criminally charged: 5; and the amount of misstated profits from misdated options: $5.3 billion from more than 60 companies. No small potatoes here.
This dirty little secret has been gracing the pages of the "Wall Street Journal" and other business media, but gone largely unnoticed by the general media. Yet this scandal has rocked some of the most successful companies in the American vernacular: Apple, Home Depot, UnitedHealth Group, and a stunning number of Silicon Valley companies, where backdating one's stock options was a "no brainer."
Stock Option Backdating Leads to Federal Scrutiny of More Than 130 Companies
The current investigation by the Securities and Exchange Commission (SEC) has become so large that it is now relying on internal investigations by companies to determine just which companies to pursue on federal indictments. What is this scandal all about? In a nutshell, this story centers on the practice of corporate executives improperly affording themselves undeserved wealth through the process of backdating stock options to dates when a company's stock price is low, giving the grant recipient an instant paper profit. Stock options, part of the typical corporate executive's pay pack, allow the executive to buy company stock at a fixed price on a certain, pre-determined date, allowing the executive to profit if the stock rises in value from the date of purchase. How to win at this game? Pick the date with the lowest stock price. How can the executive know that date? Only through backdating, an illegal practice that now has some 70 companies scrambling to restate or reduce their profits because of said illegal practice.
This problem first came to the attention of the federal government more than 3 years ago, when Stephen Cutler, then an enforcement officer at the SEC read an account suggesting that executives has issued options just prior to the release of news so favorable that it caused a significant rise in the company's stock price. Today, the problems are so large that the SEC, Federal Bureau of Investigation (FBI), the US Postal Service, and 9 US attorney offices have largely come to rely on corporate self-policing, stepping in when they feel internal probes are skirting serious issues, such as in the case of Affiliated Computer Services, Inc. (ACS). At ACS, the odds of the chosen dates for option granting were determined to be 300 billion to 1 against being randomly selected.
Backdating options are clearly illegal if not reported to shareholders, causing serious accounting and tax problems for companies and their executives. The SEC, which is leading the federal investigation, has more than 150 lawyers and accountants working on the scandal, despite the number of companies conducting their own internal examinations and turning the results over to federal authorities. The situation in Silicon Valley is so serious that the US Attorney's Office for the Northern District of California formed a special force of prosecutors and FBI agents. According to Lynn Turner, a former chief accountant at the SEC, "The sheer magnitude of the numbers of companies, executives, and corporate boards that have disclosed options-related investigations in mind-boggling...." Add to that the millions of dollars being spent in the corporate sector by more than 100 companies, and you have a corporate scandal many times larger than anything cooked up by Enron or HP.
The scandal is now so large that the SEC must let the fox watch the hen house, relying on self-reporting of a practice that has become so common in corporate America as to overwhelm federal investigative resources. Clearly some companies will escape prosecution altogether, while many will be let off the hook for their good effort for restating financials and self-correcting internally. The sheer number of companies conducting such internal investigations, to the tune of several million dollars in legal fees, is unprecendented. Yet, it is clearly not enough and raises questions of fairness for those who choose not to conduct internal reviews, instead taking the gamble such practices will not be discovered. Although the SEC now has put in place measures to evaluate the outside investigators, this is a problem now so widespread that nothing like its magnitude has been seen since the 1970s when the overseas bribery scandal rocked the financial pages of newspapers everywhere.
Stock option backdating may not have the audacity of the Enron scandal or the intrigue of the HP debacle, but it has a serious impact on the earnings of many, many US corporations and the ability of the top 1 percent of wage earners to profit at the expense of us all. Isn't that a scandal you should know about?
"...antics of Enron bad boys Andrew Fastow and Jeffrey Skilling, but it's depth and breadth are unsurpassed by anything that happened at Enron or HP."
THIS WAS NOTHING!!
November 28, 2006 by Christine Zibas
"...What is the problem so pervasive that it is overtaking these corporate nosedives? It's stock option backdating, and according to the "Wall Street Journal" in its "scandal scorecard," the number of companies now facing federal investigation is at least 130: the number reporting internal probes: 153; the number of executives or directors resigning or being fired: at least 42, including 10 CEOs; the number criminally charged: 5; and the amount of misstated profits from misdated options: $5.3 billion from more than 60 companies."
"...US Attorney's Office for the Northern District of California formed a special force of prosecutors and FBI agents. According to Lynn Turner, a former chief accountant at the SEC, "The sheer magnitude of the numbers of companies, executives, and corporate boards that have disclosed options-related investigations in mind-boggling...." Add to that the millions of dollars being spent in the corporate sector by more than 100 companies, and you have a corporate scandal many times larger than anything cooked up by Enron or HP."
Bigger Than Enron? There's a New Corporate Scandal Brewing
Stock Option Backdating Leads to Federal Scrutiny of More Than 130 Companies
Although much recent attention has been given to the spying of former Hewlett-Packard (HP) Chair Patricia Dunn on H-P board members and high tech journalists, a far greater scandal has been brewing that has flown largely under the public's radar. It's not as tawdry as the Hewlett-Packard scandal, and it does not have the cheekiness of the antics of Enron bad boys Andrew Fastow and Jeffrey Skilling, but it's depth and breadth are unsurpassed by anything that happened at Enron or HP. What is the problem so pervasive that it is overtaking these corporate nosedives? It's stock option backdating, and according to the "Wall Street Journal" in its "scandal scorecard," the number of companies now facing federal investigation is at least 130: the number reporting internal probes: 153; the number of executives or directors resigning or being fired: at least 42, including 10 CEOs; the number criminally charged: 5; and the amount of misstated profits from misdated options: $5.3 billion from more than 60 companies. No small potatoes here.
This dirty little secret has been gracing the pages of the "Wall Street Journal" and other business media, but gone largely unnoticed by the general media. Yet this scandal has rocked some of the most successful companies in the American vernacular: Apple, Home Depot, UnitedHealth Group, and a stunning number of Silicon Valley companies, where backdating one's stock options was a "no brainer."
Stock Option Backdating Leads to Federal Scrutiny of More Than 130 Companies
The current investigation by the Securities and Exchange Commission (SEC) has become so large that it is now relying on internal investigations by companies to determine just which companies to pursue on federal indictments. What is this scandal all about? In a nutshell, this story centers on the practice of corporate executives improperly affording themselves undeserved wealth through the process of backdating stock options to dates when a company's stock price is low, giving the grant recipient an instant paper profit. Stock options, part of the typical corporate executive's pay pack, allow the executive to buy company stock at a fixed price on a certain, pre-determined date, allowing the executive to profit if the stock rises in value from the date of purchase. How to win at this game? Pick the date with the lowest stock price. How can the executive know that date? Only through backdating, an illegal practice that now has some 70 companies scrambling to restate or reduce their profits because of said illegal practice.
This problem first came to the attention of the federal government more than 3 years ago, when Stephen Cutler, then an enforcement officer at the SEC read an account suggesting that executives has issued options just prior to the release of news so favorable that it caused a significant rise in the company's stock price. Today, the problems are so large that the SEC, Federal Bureau of Investigation (FBI), the US Postal Service, and 9 US attorney offices have largely come to rely on corporate self-policing, stepping in when they feel internal probes are skirting serious issues, such as in the case of Affiliated Computer Services, Inc. (ACS). At ACS, the odds of the chosen dates for option granting were determined to be 300 billion to 1 against being randomly selected.
Backdating options are clearly illegal if not reported to shareholders, causing serious accounting and tax problems for companies and their executives. The SEC, which is leading the federal investigation, has more than 150 lawyers and accountants working on the scandal, despite the number of companies conducting their own internal examinations and turning the results over to federal authorities. The situation in Silicon Valley is so serious that the US Attorney's Office for the Northern District of California formed a special force of prosecutors and FBI agents. According to Lynn Turner, a former chief accountant at the SEC, "The sheer magnitude of the numbers of companies, executives, and corporate boards that have disclosed options-related investigations in mind-boggling...." Add to that the millions of dollars being spent in the corporate sector by more than 100 companies, and you have a corporate scandal many times larger than anything cooked up by Enron or HP.
The scandal is now so large that the SEC must let the fox watch the hen house, relying on self-reporting of a practice that has become so common in corporate America as to overwhelm federal investigative resources. Clearly some companies will escape prosecution altogether, while many will be let off the hook for their good effort for restating financials and self-correcting internally. The sheer number of companies conducting such internal investigations, to the tune of several million dollars in legal fees, is unprecendented. Yet, it is clearly not enough and raises questions of fairness for those who choose not to conduct internal reviews, instead taking the gamble such practices will not be discovered. Although the SEC now has put in place measures to evaluate the outside investigators, this is a problem now so widespread that nothing like its magnitude has been seen since the 1970s when the overseas bribery scandal rocked the financial pages of newspapers everywhere.
Stock option backdating may not have the audacity of the Enron scandal or the intrigue of the HP debacle, but it has a serious impact on the earnings of many, many US corporations and the ability of the top 1 percent of wage earners to profit at the expense of us all. Isn't that a scandal you should know about?
Thursday, March 5, 2009
The epitome of Fraud Waste and Abuse
The epitome of Fraud Waste and AbuseSummary: 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 as part of a "lobbying campaign to derail or modify" President Obama's health care proposals, but failed to note that Scott resigned from HCA in 1997 amid a federal investigation into the company's Medicare billing, physician recruiting, and home-care practices. HCA eventually pleaded guilty to fraud charges and paid approximately $1.7 billion in fines and penalties.
Who is Richard Scott? Who is Richard Rainwater? Who is Darla Moore?
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.
THURSDAY, JUNE 26, 2003; WWW.USDOJ.GOV;
HCA Inc. (formerly known as Columbia/HCA and HCA - The Healthcare Company)
LARGEST HEALTH CARE FRAUD CASE IN U.S. HISTORY SETTLED; HCA INVESTIGATION NETS RECORD TOTAL OF $1.7 BILLION
Note: Hospital Corporation of America (HCA) was acquired by Columbia in 1994.
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.
Guess where Columbia and many of the other publicly traded healthcare companies DUMPED their losing asset, Home healthcare? National Century Financial Enterprises
National Century Financial Enterprises:
“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.
Only Poulsen and executive James Happ still await trial?
December 9, 2008. James K. Happ, 48, is charged with conspiracy, money-laundering conspiracy and three counts of wire fraud; the 11th National Century executive to be tried or admit guilt. , Also today, a former friend of Happ's testified that, while working at National Century, Happ boasted that he never could be charged with any fraud because he didn't sign anything.
December 18, 2008 - The ONE AND ONLY acquittal; James K Happ!
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
Columbia-Richard Rainwater-GW Bush-and the PROSECUTOR did not do his JOB!
Who is Richard Scott? Who is Richard Rainwater? Who is Darla Moore?
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.
THURSDAY, JUNE 26, 2003; WWW.USDOJ.GOV;
HCA Inc. (formerly known as Columbia/HCA and HCA - The Healthcare Company)
LARGEST HEALTH CARE FRAUD CASE IN U.S. HISTORY SETTLED; HCA INVESTIGATION NETS RECORD TOTAL OF $1.7 BILLION
Note: Hospital Corporation of America (HCA) was acquired by Columbia in 1994.
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.
Guess where Columbia and many of the other publicly traded healthcare companies DUMPED their losing asset, Home healthcare? National Century Financial Enterprises
National Century Financial Enterprises:
“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.
Only Poulsen and executive James Happ still await trial?
December 9, 2008. James K. Happ, 48, is charged with conspiracy, money-laundering conspiracy and three counts of wire fraud; the 11th National Century executive to be tried or admit guilt. , Also today, a former friend of Happ's testified that, while working at National Century, Happ boasted that he never could be charged with any fraud because he didn't sign anything.
December 18, 2008 - The ONE AND ONLY acquittal; James K Happ!
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
Columbia-Richard Rainwater-GW Bush-and the PROSECUTOR did not do his JOB!
Wednesday, March 4, 2009
Who is Richard Scott? Columbia Homecare Group, Inc. and National Century Financial Enterprises
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.
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.
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.
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.
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.
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.
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.
Who is Richard Scott? What the Wall Street Journal won't reveal
Group launches health care offensive
By JONATHAN MARTIN | 3/3/09 4:18 AM EST
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.
Scott, a major GOP donor, is pushing for four principles to any health care reform package: individual choice, competition between carriers, giving patients’ ownership over their own coverage and rewarding those who make healthy lifestyle choices.
“I want health care reform to happen but I want it the right way,” Scott said.
Toward that goal, Scott’s 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 shied away from comparing his effort to the famous industry-led “Harry and Louise” ad campaign that helped torpedo universal coverage in the Clinton administration, saying that while they may receive some aid from health care stakeholders, the “goal is to get support from individuals.”
Scott’s first salvo is being fired Tuesday 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 see.”
He goes on to raise the prospect of “national boards” and “waiting lists” as in the nationalized systems of Great Britain and Canada. “That’s what some in Washington mean by reform,” Scott says in the spot.
Page 2
Some on the left have already formed their own group, Health Care for America Now, a coalition to push for guaranteed health care for all Americans. The group has a $35 million budget this year and is planning on spending half of that on advertising in addition to holding grass-roots events in Washington, and in the districts of key members of Congress.
“We are fully operational, organized, and mobilized to make sure Congress supports the president’s plan to win quality, affordable health care for all this year,” said Jacki Schechner, the group’s communications director
Pro-health reform activists also have begun circulating information in an effort to discredit Scott, a move that underscores the huge stakes involved in the issue.
According to a 2000 article in Forbes, Scott was forced to resign as head of what became known as Columbia/HCA after fraud charges against the massive health care company in 1997. He was replaced by Thomas Frist Jr., the original founder of HCA and brother of future Senate Majority Leader Bill Frist (R-Tenn.)
The company eventually paid over $880 million to reach a settlement with the Justice Department in 2002 on the charges.
Obama already has sought to rebut criticism that he wants a government takeover of health care by outlining eight principles of any overhaul, including letting patients stick with their own doctors and health care plans, reducing insurance premiums and guaranteeing that Americans will have a choice of health plans and physicians.
Beyond that, the Obama administration has signaled that it will push back hard on conservatives who try to label Obama’s efforts as “socialized medicine” or a massive government takeover of day-to-day health decisions. In his radio address Saturday, Obama said he’s ready for a fight against anyone who tries to block his efforts to remake health care and other programs.
But that’s exactly one of Scott’s key arguments. He said he’ll try to draw a comparison between Obama’s plan and nationalized health care systems in Great Britain and Canada, during the second round of its campaign, Scott said in an interview.
“We’ll give people information about how single-payer systems…impact the average person that needs expensive care,” he said.
To do so, Scott has enlisted former CNN reporter Gene Randall and another former producer from the cable network to travel to the two countries to gather footage.
Scott is now primarily an investor, but he does own an urgent care company with over 20 facilities across the country. He said he draws a “very insignificant amount of money from Medicare and Medicaid” and that his primary interest is not his own bottom line.
“What I care about is the free-market system,” he said.
Editor’s Note: Conservatives for Patients’ Rights purchased advertising space on POLITICO.com for this campaign.
By JONATHAN MARTIN | 3/3/09 4:18 AM EST
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.
Scott, a major GOP donor, is pushing for four principles to any health care reform package: individual choice, competition between carriers, giving patients’ ownership over their own coverage and rewarding those who make healthy lifestyle choices.
“I want health care reform to happen but I want it the right way,” Scott said.
Toward that goal, Scott’s 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 shied away from comparing his effort to the famous industry-led “Harry and Louise” ad campaign that helped torpedo universal coverage in the Clinton administration, saying that while they may receive some aid from health care stakeholders, the “goal is to get support from individuals.”
Scott’s first salvo is being fired Tuesday 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 see.”
He goes on to raise the prospect of “national boards” and “waiting lists” as in the nationalized systems of Great Britain and Canada. “That’s what some in Washington mean by reform,” Scott says in the spot.
Page 2
Some on the left have already formed their own group, Health Care for America Now, a coalition to push for guaranteed health care for all Americans. The group has a $35 million budget this year and is planning on spending half of that on advertising in addition to holding grass-roots events in Washington, and in the districts of key members of Congress.
“We are fully operational, organized, and mobilized to make sure Congress supports the president’s plan to win quality, affordable health care for all this year,” said Jacki Schechner, the group’s communications director
Pro-health reform activists also have begun circulating information in an effort to discredit Scott, a move that underscores the huge stakes involved in the issue.
According to a 2000 article in Forbes, Scott was forced to resign as head of what became known as Columbia/HCA after fraud charges against the massive health care company in 1997. He was replaced by Thomas Frist Jr., the original founder of HCA and brother of future Senate Majority Leader Bill Frist (R-Tenn.)
The company eventually paid over $880 million to reach a settlement with the Justice Department in 2002 on the charges.
Obama already has sought to rebut criticism that he wants a government takeover of health care by outlining eight principles of any overhaul, including letting patients stick with their own doctors and health care plans, reducing insurance premiums and guaranteeing that Americans will have a choice of health plans and physicians.
Beyond that, the Obama administration has signaled that it will push back hard on conservatives who try to label Obama’s efforts as “socialized medicine” or a massive government takeover of day-to-day health decisions. In his radio address Saturday, Obama said he’s ready for a fight against anyone who tries to block his efforts to remake health care and other programs.
But that’s exactly one of Scott’s key arguments. He said he’ll try to draw a comparison between Obama’s plan and nationalized health care systems in Great Britain and Canada, during the second round of its campaign, Scott said in an interview.
“We’ll give people information about how single-payer systems…impact the average person that needs expensive care,” he said.
To do so, Scott has enlisted former CNN reporter Gene Randall and another former producer from the cable network to travel to the two countries to gather footage.
Scott is now primarily an investor, but he does own an urgent care company with over 20 facilities across the country. He said he draws a “very insignificant amount of money from Medicare and Medicaid” and that his primary interest is not his own bottom line.
“What I care about is the free-market system,” he said.
Editor’s Note: Conservatives for Patients’ Rights purchased advertising space on POLITICO.com for this campaign.
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