At least four times a year, I drive down Highway 280 in Birmingham, AL, to see my Auburn Tigers play football, and I pass the shell of what was supposed to be HealthSouth’s 13-story digital hospital and 200,000-square-foot headquarters palace. There are even a couple of chain restaurants next to it that are shuttered, like plants hit with an overspray of weed killer.
Former HealthSouth CEO Richard Scrushy is awaiting sentencing on bribery charges unrelated to the accounting scandal that brought disgrace to the company. Oh, and what a scandal it was, complete with Scrushy’s turn as a TV evangelist; his bizarre sidekick, actor Jason Hervey from The Wonder Years; and his eventual acquittal by a Birmingham jury. Recently, current HealthSouth CEO Jay Grinney announced that the company was selling the expansive headquarters, 104 acres of land and the still-unfinished hospital. Grinney called the headquarters “poorly designed for what we need and more opulent than what I am comfortable with” and announced plans to rent space until it can find another Birmingham-area location. I am certain that for Grinney and the HealthSouth employees, moving will be a welcome release from a steel-and-glass symbol of excess.
The move caused me to wonder whether the healthcare industry is equally ready to enter a few years of relatively scandal-free clean behavior. HealthSouth and Columbia/HCA were corporate scandals—the former involving accounting tricks to pump up earnings and the latter involving Medicare false claims. But fraud and abuse is a problem everywhere a claim is submitted for a healthcare service. By some estimates, fraud and abuse accounts for at least 3 percent of the nation’s healthcare bill.
Trustees and boards in large and small healthcare organizations are much more in tune to Sarbanes-Oxley-style reporting than any time in the past decade. Many healthcare organizations have latched onto the notion of transparency as part of their mission. I still wonder whether this positive movement is enough to inoculate the industry against another scandal that will sap momentum on issues of more urgent concern, such as the uninsured or patient safety.
The buildings on a sprawling highway in Birmingham will always be reminders of an era many in the industry would rather forget, so it’s right that the current occupants are moving out. But the ingredients for a new round of healthcare turmoil—shrinking margins and mounting pressures—are percolating now.Jim MolpusEditor