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Rick Scott, Enemy of Health Care Reform

By       Message Barbara O'Brien     Permalink
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The late Senator Lloyd Bentsen is credited with coining the phrase "astroturf lobbying." This refers to synthetic grassroots, or organizations that pass themselves off as grassroots when they are really creations of corporations and special interest groups. Today there are PR companies that specialize in creating astroturf organizations, according to SourceWatch. They set up slick websites and hire well-known spokespeople as media fronts. Names of these organizations often begin with "Citizens for ___" and "Americans for ___." SourceWatch writes.

"Funded heavily by corporate largesse, they use sophisticated computer databases, telephone banks and hired organizers to rope less-informed activists into sending letters to their elected officials or engaging in other actions that create the appearance of grassroots support for their client's cause."

On the Right - and astroturf organizations nearly always favor conservative causes - these organizations work in concert with the large conservative think tanks such as the Heritage Foundation and the Manhattan Institute. Because they appear to be independent, they give each other credibility when they site each others' "research" and back up each others' claims. The spurious data is promoted on cable talk shows and is repeated without challenge or correction in news stories.

Currently the right-wing media-industrial complex is fighting on several fronts. The Right wants to defeat the Employee Free Choice Act that would make union organizing easier. It is opposed to climate change legislation that tightens pollution controls on business and challenges the dominance of fossil fuels. It promotes "tort reform," which amounts to a scheme to protect corporations from liability by restricting citizens' rights to file lawsuits. And it is fighting health care reform, in effect by claiming that a profitable private insurance industry is more important than providing health care.

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All of the goals boil down to one big goal, which is to relieve moneyed corporate interests of any accountability to people or to government, or anything that might get in the way of profit.

Several of these issues - union organizing, which is related to workplace safety; environmental protection; citizens' tort rights; and health care are all especially critical for people suffering asbestos-related disease such as mesothelioma, for whom I work as an advocate. But they are critical to all of us as well.

Over the next few days I plan to profile several of the people and organizations lined up against health care reform. In this post I want to look at the group Conservatives for Patients' Rights (CPR), which has been running ads against health care reform. CPR was initiated by former hospital chief executive Rick Scott, who is spending $5 million out of his own pocket and another $15 million from other sources to stop health care reform.

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 About Rick Scott

Richard L. Scott was a Dallas lawyer with no background in medicine, but who specialized in hospital and health care mergers and acquisitions. In 1987, he and Richard Rainwater, a Texas investor and fund manager, each put up $125,000 to start a company called Columbia Hospital Corporation. (In the 1990s Scott and Rainwater also were partners with George W. Bush in ownership of the Texas Rangers.) In 1988, Columbia bought two hospitals in El Paso, Texas. The partners acquired more hospitals through stock purchases. In 1994, Columbia acquired Nashville-based Hospital Corporation of America (HCA), founded by the Frist family, of which former Republican Senator Bill Frist is a member.

By 1997, Scott was Chairman and CEO of Columbia/HCA, then the world's largest health care provider. Scott headed an empire of more than 340 hospitals, many other health care properties, which had annual revenues in excess of $23 billion. But that year, evidence of Medicare fraud emerged, and federal agents seized records from several Columbia/HCA locations. In July 1997, Scott was forced out by the board of directors and replaced by Thomas Frist, Jr., HCA founder and brother of Sen. Bill Frist. Columbia/HCA admitted to "systematically overcharging the government" and increasing "Medicare billings by exaggerating" illnesses, and paid $1.7 billion to settle.

 What Went Wrong?

While he was running Columbia/HCA, Scott preached loudly about the superiority of his efficient, for-profit business model over the sloppy practices of not-for-profit hospitals. Richard Rainwater actually called Columbia/HCA "the Wal-Mart of healthcare." Like Wal-Mart, he said, Columbia/HCA became a chain that used volume buying and strict cost controls to provide services a low cost.

Many not-for-profit administrators believed Columbia/HCA's claims were hyperbole. In an article about Columbia/HCA by Joe Flower in Healthcare Forum Journal (March-April 1995), the senior vice-president of a prominent not-for-profit hospital group pointed out that healthcare managers all went to the same business schools, and that volume buying and cost controls were hardly revolutionary. "Price cuts from volume buying will not represent a sustainable competitive advantage for Columbia/HCA," the senior vice-president predicted.

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One of Scott's trademark tactics was to eliminate competition by buying nearby hospitals and shutting them down, so that his chain could dominate the local hospital market. He argued that this made money for his shareholders, but in many cases this angered local communities, and in some cases the Federal Trade Commission was called in to thwart Scott's plans.

 And then in 1997 the fraudulent billing practices came to light. Scott himself was never accused of a crime. However, Dan Ackman wrote for Forbes (December 14, 2000) that the seven-year federal investigation of Columbia/HCA revealed a pattern of fraud that "ran deep within HCA's way of doing business."

"The company admitted to systematically overcharging the government by claiming marketing costs as reimbursable, by striking illegal deals with home care agencies, and by filing false data about how hospital space was being used.

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I run the website The Mahablog (http://www.mahablog.com), write for Mesothelioma Law and Politics (http://www.maacenter.org/blog/) and am the Guide to Buddhism for About.com (http://buddhism.about.com)

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