Rick Scott

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This article is about the American businessman and conservative activist. For other people of the same name, see Richard Scott.
Rick Scott

Born December 1, 1952 (1952-12-01) (age 57)
Bloomington, Illinois, U.S.
Political party Republican
Spouse(s) Ann Scott
Children Jordan Scott
Allison Scott
Residence Naples, Florida, U.S.
Alma mater University of Missouri–Kansas City
Southern Methodist University
Occupation Health Care Executive
Plastics Executive
Religion Methodist
Website Official website

Richard Lynn "Rick" Scott (born December 1, 1952) is an American politician, businessman, healthcare industry executive, attorney, and founder of Conservatives for Patients' Rights (CPR), a group that advocates against expanding the U.S. government's role in healthcare. Having defeated Bill McCollum in the Republican primary election, Scott is competing against Democrat Alex Sink in the 2010 Florida gubernatorial election.[1]

Scott served in the U.S. Navy and then went into business redeveloping donut shops while in college. He earned a business degree, law degree and joined a Dallas firm where he became partner. In 1987 he helped found the Columbia Hospital Corporation with two business partners. It was merged with Columbia Hospital Corporation of America in 1989 to form Columbia/HCA and eventually became the largest private for-profit health care company in the U.S.

Scott was ousted by Columbia/HCA's board of directors in 1997 in the midst of the nation's biggest health care fraud scandal. The company ultimately settled accusations of Medicaid and Medicare fraud by paying a total of $1.7 billion in fines and civil claims.[2][3] After his departure from Columbia/HCA, Scott established Richard L. Scott Investments, a private investment firm based in Naples, Florida that owns stakes in health care, manufacturing and technology companies.

Contents

[edit] Early life and education

Rick Scott was born in Bloomington, Illinois and raised in Kansas City, Missouri, where his father was a truck driver and his mother worked as a clerk at J.C. Penney, among other jobs.[4] Scott graduated from high school in 1970, and then attended one year of community college after which he enlisted in the United States Navy. He was in the Navy for 29 months[5] and served on the USS Glover as a radar technician. Scott later attended the University of Missouri and earned a law degree from Southern Methodist University.

In 1972, he married his high school sweetheart.[4] As of early 2009 the couple lived in Naples, Florida.

[edit] Business career

Scott made his first foray into business while he was in college, buying and reviving two Kansas City doughnut shops. After graduating from law school, Scott practiced law in Dallas, Texas. He was a partner at Johnson & Swanson, which was the largest law firm in Dallas at that time. One of his major clients was Tom Hicks of HM Capital Partners.

[edit] Columbia Hospital Corporation

In April 1987, Scott made his first attempt to buy the Hospital Corporation of America (HCA). While still a partner at Johnson & Swanson, Scott formed the HCA Acquisition Company with two former executives of Republic Health Corporation, Charles Miller and Richard Ragsdale.[6] With financing from Citicorp conditional on acquisition of HCA,[7] the proposed holding company offered $3.85 billion for 80 million shares at $47 each, intending to assume an additional $1.2 billion in debt, for a total $5 billion deal.[8] However, HCA declined the offer, and the bid was withdrawn.[9]

In 1988, Scott and Richard Rainwater, a multimillionaire financier from Fort Worth, each put up $125,000 in working capital in their new company, Columbia Hospital Corporation,[10] and borrowed the remaining money needed to purchase two struggling hospitals in El Paso for $60 million.[11] Then they acquired a neighboring hospital and shut it down. Within a year, the remaining two were doing much better.[5] By the end of 1989, Columbia Hospital Corporation owned four hospitals with a total of 833 beds.[11]

In 1992, Columbia made a stock purchase of Basic American Medical, which owned eight hospitals, primarily in southwestern Florida. In September 1993, Columbia did another stock purchase, worth $3.4 billion, of Galen Healthcare, which had been spun off by Humana Inc. a few months before.[12] At the time, Galen had approximately 90 hospitals. After the purchase, Galen stockholders had 82 percent of the stock in the combined company, with Scott still running the company.[11]

In 1994, Columbia purchased Scott's former acquisition target, HCA, which had approximately 100 hospitals. In 1995, Columbia purchased Healthtrust, which had approximately 80 hospitals, primarily in rural communities. By 1997, Columbia/HCA had become the world's largest health care provider with more than 340 hospitals, 130 surgery centers, and 550 home health locations in 38 states and two foreign countries. With annual revenues in excess of $23 billion, the company employed more than 285,000 people, making it the 7th largest U.S. employer and the 12th largest employer worldwide. Based on market capitalization, Columbia ranked in the top 50 companies in America and top 100 worldwide. That same year, the company was recognized by Business Week magazine as one of the 50 Best Performing Companies of the S&P 500.

[edit] Columbia/HCA fraud cases

In the mid-1990s, the Department of Health and Human Services increased its enforcement of Medicare regulations and compliance, increasing its allocation of agents to such cases from 100 in 1992 to 375 by the first half of 1998.[13] Prominent targets of federal investigations included Harvard-affiliated Beth Israel Deaconess Medical Center,[14] Johns Hopkins University hospitals,[15] and Columbia/HCA.

Documents from Columbia/HCA facilities were seized by federal agents in March 1997,[16] forming the basis of an investigation into Columbia/HCA for unnecessary lab tests, falsifiying reports to increase Medicare reimbursements, among other violations. In 2001, HCA reached a plea agreement with the U.S. government that avoided criminal charges against the company and included $95 million in fines.[4] In late 2002, HCA agreed to pay the U.S. government $631 million, plus interest, and pay $17.5 million to state Medicaid agencies, in addition to $250 million paid up to that point to resolve outstanding Medicare expense claims.[17][18] In all, civil law suits cost HCA more than $1.7 billion to settle, including payments of more than $500 million paid in 2003 to two whistleblowers, under controversial qui tam provisions of the False Claims Act.[19] In 2000, following the settlement, Columbia/HCA reverted to using the name HCA.[20]

Scott was never charged with any wrongdoing, and later revealed that he had argued that the company should fight the government's charges, saying, "My belief when I was there was that if we did something wrong, then we would live up to any of our mistakes. If we didn't do something wrong, we should not settle things."[21] According to a website associated with the Rick Scott campaign, the board of directors approved a severance package and a 10-year consulting contract.[22]

[edit] Venture capitalist

After his forced departure from Columbia/HCA in 1997, Scott launched Richard L. Scott Investments, based in Naples, Florida (originally in Stamford, Connecticut[23]), which has stakes in health care, manufacturing and technology companies.

Between 1998 and 2001, Scott purchased 50% of CyberGuard Corporation for approximately $10 million. Amongst his investors was Metro Nashville finance director David Manning.[23] In 2006, CyberGuard was sold to Secure Computing for over $300 million.

In February 2005, Scott purchased Continental Structural Plastics, Inc. (CSP) in Detroit, Michigan. In July 2006, CSP purchased Budd Plastics from ThyssenKrupp, making Continental Structural Plastics the largest industrial composites molder in North America.

In 2005-2006, Scott provided the initial round of funding of $3 million to Alijor.com, which offered hospitals, physicians, and other health care providers the opportunity to post information about their prices, hours, locations, insurance accepted, and personal backgrounds online.[24] The company was founded with his daughter Allison.[23] In 2008, Alijor was sold to Healthgrades, Inc.

In May 2008, Scott purchased Drives, one of the world's leading independent designers and manufacturers of heavy-duty drive chain-based products and assemblies for industrial and agricultural applications and precision-engineered augers for agricultural, material handling, construction and related applications.

Scott reportedly has an interest in a chain of family fun centers/bowling alleys, S&S Family Entertainment, in Kentucky and Tennessee led by Larry Schmittou, one of baseball's legendary minor league owners.[25]

[edit] The Health Network

In July 1997, Columbia/HCA Healthcare purchased controlling interest in America's Health Network (AHN), the first 24-hour health care cable channel, which had 6.5 million viewers at the time.[26] Later in 1997, Scott became majority owner of AHN.[27] In 1998, Scott and former Columbia/HCA Healthcare President David Vandewater were the leaders in a group of investors that gave AHN a major infusion of cash so that the company could continue to operate.[28][29]

In mid-1999 AHN merged with Fit TV, a subsidiary of Fox Networks; the combination was renamed The Health Network.[30] Later in 1999, in a deal between News Corp., Fox Network's owner, and WebMD, the latter received half-ownership of The Health Network. WebMD planned to relaunch The Health Network as WebMD Television in the fall of 2000, with new programming, but that company announced cutbacks and restructuring in September 2000, and in January 2001, Fox regained 100% ownership.[31] In September 2001, The Fox Cable Networks Group sold The Health Network to its main rival, the Discovery Health Channel, for $155 million in cash plus a 10 percent equity stake in Discovery Health.[32]

[edit] Solantic

Solantic, based in in Jacksonville, Florida, was co-founded in 2001 by Scott and Karen Bowling, a former television anchor whom Scott met after Columbia bought what is now Memorial Hospital Jacksonville in 1995.[4] Solantic opened its first urgent care center in 2002. It provides urgent care services, immunizations, physicals, drug screening, and care for injured workers. The corporation attracts patients who do not have insurance, cannot get appointments with their primary care physicians, or do not have primary care physicians. Solantic is intended to be an alternative to the emergency room care that these types of patients often seek, or for not seeing a doctor at all.

In 2006, Scott said that his plans for Solantic were to establish a national brand of medical clinics.[4] In August 2007, the company received a $40 million investment from private equity firm, and said that it expected to have open 35 clinics by the end of 2009, with annual revenues of $100 million once all these clinics were open, compared to $20 million at the time.[33] As of March 2009, Solantic had 24 centers, all located in Florida.[34]

Solantic has been the target of numerous employment discrimination suits, including one that settled with 7 plaintiffs for an undisclosed sum on May 23, 2007. These suits allegedly stem from a Scott directed policy to not hire elderly or overweight applicants, preferring "mainstream" candidates.[35]

[edit] Pharmaca

In 2003, Scott invested $5.5 million in Pharmaca Integrative Pharmacies,[36] which operates drugstore/pharmacies that offer vitamins, herbal medicine, skin products, homeopathic medicines, and prescriptions. Other investors in Pharmaca include Tom Stemberg, founder and former CEO of Staples, and Arthur Blank, co-founder of Home Depot.

[edit] Other work

In the 1990s, Scott was a partner of George W. Bush in ownership of the Texas Rangers.[37]

[edit] Politics

[edit] Conservatives for Patients' Rights

Main article: Conservatives for Patients' Rights

In February 2009, Scott founded Conservatives for Patients' Rights (CPR), which he said was intended to put pressure on U.S. Democrats to enact health care legislation based on free-market principles.[38] As of March, Scott had given about $5 million for a planned $20 million ad campaign by CPR.[39] CPR opposes the broad outlines of President Obama's health-care plans, and has hired Creative Response Concepts, a public relations firm which previously worked with the Swift Boat Veterans for Truth.

In early May 2009, in an ad broadcast in the Washington D.C. area and in Scott's home town of Naples, Florida, a group called Health Care for America Now said of Scott: "He and his insurance-company friends make millions from the broken system we have now."[40][41] Some conservative health-care policy experts also questioned Scott's involvement on grounds that Obama's health-care plan had yet to be made public, or on grounds that the insurance industry is willing to consider a compromise which would allow greater government involvement in health care. Other conservative groups have been more welcoming; the director of the Council for Affordable Health Insurance indicated a willingness to work with Scott, saying: "He's bringing a lot of money to the table."[2]

[edit] Florida Republican gubernatorial candidate, 2010

Main article: Florida gubernatorial election, 2010

On April 9, 2010, Scott announced his candidacy for the Republican Party nomination for Governor of Florida in the 2010 election.[42] Susie Wiles, former communications chief to Jacksonville Mayor John Peyton, serves as his campaign manager. Tony Fabrizio is his chief pollster. It was reported on May 7 that Scott's campaign has already spent $4.7 million on television and radio ads.[43] Scott's first video advertisement was released to YouTube on April 13.[44]

During the primary campaign, Scott's opponent, Bill McCollum, made an issue of Scott's role at Columbia/HCA. Scott countered that the FBI never targeted him. Marc Caputo of Miami Herald contended that a 1998 bill sponsored by McCollum would have made it more difficult to prosecute Medicare fraud cases, and is counter to his current view and allegation.[45]

Scott won the August primary with approximately 47% percent of the vote, compared to 43% voting for McCollum, with McCollum conceding the race after midnight. Scott will face Democrat Alex Sink in the general election.[46]

[edit] Other

[edit] See also

[edit] References

  1. ^ Smith, Ben (April 13, 2010). "Health Care Figure Running for Florida Governor". Politico. http://www.politico.com/blogs/bensmith/0410/Health_care_figure_running_for_Florida_Governor.html. Retrieved April 13, 2010. 
  2. ^ a b Rutenberg, Jim (April 1, 2009). "Health Critic Brings a Past and a Wallet". The New York Times. http://www.nytimes.com/2009/04/02/us/politics/02scott.html. Retrieved April 2, 2009. 
  3. ^ Richard L. Scott, The New York Times
  4. ^ a b c d e M.C. Moewe (April 14, 2006). "Ex-Columbia chief helps grow Solantic". Jacksonville Business Journal. http://www.bizjournals.com/jacksonville/stories/2006/04/17/story1.html. 
  5. ^ a b c "Time 25". Time Magazine. June 17, 1996. http://www.time.com/time/printout/0,8816,984696,00.html. 
  6. ^ "Hospital Corp. Bid Is Dropped". The New York Times. April 22, 1987. http://www.nytimes.com/1987/04/22/business/hospital-corp-bid-is-dropped.html. 
  7. ^ Milt Freudenheim (5 October 1993). "http://www.nytimes.com/1993/10/05/business/the-hospital-world-s-hard-driving-money-man.html". The New York Times. http://www.nytimes.com/1993/10/05/business/the-hospital-world-s-hard-driving-money-man.html. 
  8. ^ "Bid for Hospital Corporation Withdrawn". The Washington Post. 
  9. ^ "HCA Board Takes No Action on $3.85 Billion Takeover Bid". Associated Press. 17 April 1987. 
  10. ^ Milt Freudenheim (October 4, 1993). "Largest Publicly Held Hospital Chain Is Planned". New York Times. http://www.nytimes.com/1993/10/04/business/largest-publicly-held-hospital-chain-is-planned.html. 
  11. ^ a b c Floyd Norris (October 6, 1994). "Efficiencies of scale are taken to the nth degree at Columbia". New York Times. http://www.nytimes.com/1994/10/06/business/market-place-efficiencies-of-scale-are-taken-to-the-nth-degree-at-columbia.html. 
  12. ^ Kathryn Jones (November 21, 1993). "A Hospital Giant Comes to Town, Bringing Change". New York Times. http://www.nytimes.com/1993/11/21/business/a-hospital-giant-comes-to-town-bringing-change.html?pagewanted=all. 
  13. ^ Gloria Lau (18 May 1998). "Gotcha!". Forbes. http://www.forbes.com/forbes/1998/0518/6110130a.html. 
  14. ^ U.S. Department of Justice (17 October 2002). "U.S. settles with seven hospitals; files complaints against four in cardiac devices litigation". Press release. http://www.justice.gov/opa/pr/2002/October/02_civ_600.htm. Retrieved 2010-07-16. 
  15. ^ Jonathan Bor (27 February 2004). "JHU, Bayview settle federal lawsuit for $2.6 million". The Baltimore Sun. http://articles.baltimoresun.com/2004-02-27/news/0402270228_1_bayview-false-claims-claims-act. 
  16. ^ Douglas Holt (20 March 1997). "U.S. agents raid hospital chain's El Paso facilities". Dallas Morning News. 
  17. ^ David Stires (9 February 2004). "Bringing HCA Back to Life After years of scandal, the hospital chain is healthy again--and might just be a buy". Fortune. http://money.cnn.com/magazines/fortune/fortune_archive/2004/02/09/360103/index.htm. 
  18. ^ Julie Appleby (December 18, 2002). "HCA to settle more allegations for $631M". USA Today. http://www.usatoday.com/money/industries/health/2002-12-18-hca-settlement-_x.htm. 
  19. ^ Correy E. Stephenson (23 November 2005). "Health care whistleblower suits under False Claims Act on the rise". Kansas City Daily Record. "However, the Act remains controversial, in large part because whistleblowers - who weren't personally harmed by the companies they sued - were awarded $166 million in 2005 alone." 
  20. ^ Barbara Kirchheimer (19 June 2000). "Move over Columbia, HCA is back; With new name comes a new focus on communities". Modern Healthcare. http://www.ncbi.nlm.nih.gov/pubmed/11183507. 
  21. ^ William March (28 May 2010). "Rick Scott criticized for heading company that committed fraud". The Tampa Tribune. http://www2.tbo.com/content/2010/may/28/281228/gop-candidate-scott-criticized-heading-company-com/news-politics/. 
  22. ^ "The Truth About Rick Scott". truthaboutrickscott.com. Rick Scott, Republican, For Governor. 2010. http://www.truthaboutrickscott.com/. Retrieved 8 July 2010. 
  23. ^ a b c "Great Scott by Drew Ruble, businesstn, July, 2006. Retrieved 6/23/09.
  24. ^ Lisa Sibley (July 25, 2008). "Alijor's online directory of providers growing". San Jose Business Journal. http://sanjose.bizjournals.com/sanjose/stories/2008/07/28/newscolumn1.html. 
  25. ^ "25 Emerging Companies." Nashville Post. December 1, 2002. Retrieved 6/23/09.
  26. ^ Tom Brinkmoeller (July 25, 1997). "Columbia buys stake in America's Health Network". Orlando Business Journal. http://philadelphia.bizjournals.com/orlando/stories/1997/07/28/newscolumn2.html. 
  27. ^ "Former Columbia/HCA official gains $9.9 million in severances". The (Oklahoma City) Journal Record. November 14, 1997. http://findarticles.com/p/articles/mi_qn4182/is_19971114/ai_n10113667/. 
  28. ^ "What's Richard Scott been doing? Keeping a low profile". The (Oklahoma City) Journal Record. August 3, 1998. http://findarticles.com/p/articles/mi_qn4182/is_19980803/ai_n10120850/. 
  29. ^ By early 1999, the network was available in 9.5 million American homes.Lisa Napoli (February 22, 1999). "Where Dr. Spock Meets 'E.R.' on Line". New York Times. http://www.nytimes.com/1999/02/22/business/media-where-dr-spock-meets-er-on-line.html. 
  30. ^ Jill Krueger (June 4, 1999). "AHN getting `fit' with Fox TV; Cable start-up gets backing, distribution muscle with network merger". Orlando Business Journal. http://birmingham.bizjournals.com/orlando/stories/1999/06/07/story1.html. 
  31. ^ Linda Moss (January 8, 2001). "News Corp. Gets All of Health Network". Multichannel News. http://www.accessmylibrary.com/coms2/summary_0286-10555169_ITM. 
  32. ^ "Discovery snaps up rival health network". Media Life Magazine. September 4, 2001. http://www.medialifemagazine.com/news2001/sep01/sep03/4_thurs/news7thursday.html. .
  33. ^ Urvaksh Karkaria (August 15, 2007). "Solantic to expand well beyond state: The urgent-care center is planning to open 35 more clinics by the end of 2009". Jacksonville Times-Union. http://www.jacksonville.com/tu-online/stories/081507/bus_191384274.shtml. 
  34. ^ Phil Galewitz (April 1, 2009). "Bethesda hospital, Solantic to open urgent care center". Palm Beach Post. http://www.palmbeachpost.com/business/content/business/epaper/2009/04/01/a7b_urgent_0402.html. 
  35. ^ Tristram Korten (October 10, 2009). "A healthcare reform foe's alleged history of discrimination". Salon.com. http://www.salon.com/news/feature/2009/10/01/rick_scott_two/index.html. 
  36. ^ "Pharmaca gets equity to expand store base". Chain Drug Review. December 15, 2003. http://www.accessmylibrary.com/coms2/summary_0286-3536615_ITM. 
  37. ^ Ex-Hospital CEO Battles Reform Effort, Dan Eggen, Washington Post, May 11, 2009
  38. ^ Mullins, Brody; Kilman, Scott (February 26, 2009). "Lobbyists Line Up to Torpedo Speech Proposals". Wall Street Journal. http://online.wsj.com/article/SB123561083268377547.html. Retrieved April 2, 2009. 
  39. ^ Edward Lee Pitts (March 28, 2009). "Conservatives worry that the cost of a government health plan can go in only one direction". World Magazine. http://www.worldmag.com/articles/15157. 
  40. ^ New TV Ad Exposes Health Reform Critic’s Shady Past, Health Care for America Now
  41. ^ Dan Eggen (May 11, 2009). "Ex-Hospital CEO Battles Reform Effort; Ads Cite Long Waits In Canada and Britain". Washington Post. http://www.washingtonpost.com/wp-dyn/content/story/2009/05/10/ST2009051002320.html. 
  42. ^ "Is Rick Scott the top Republican governor candidate on Facebook?". Politifact. St. Petersburg Times, Miami Herald. April 22, 2010. http://www.politifact.com/florida/statements/2010/apr/22/rick-scott/rick-scott-republican-governor-facebook/. Retrieved June 24, 2010. 
  43. ^ Smith, Adam C. (May 7, 2010). "Rick Scott, multimillionaire political rookie, gunning to be governor of Florida". St. Petersburg Times. http://www.tampabay.com/news/politics/elections/rick-scott-multimillionaire-political-rookie-gunning-to-be-governor-of/1093234. 
  44. ^ Scott for Florida (April 13, 2010). "Accountable". YouTube. http://www.youtube.com/watch?v=-jibG4DwBsE. Retrieved June 24, 2010. 
  45. ^ Caputo, Marc (May 25, 2010). "Bill McCollum's attacks on rival Rick Scott clash with record". Miami Herald. http://www.miamiherald.com/2010/05/25/1646281/mccollums-attacks-on-rival-scott.html. 
  46. ^ . 
  47. ^ "Revised Board of Governors, April 1997", unitedway.org, via archive.org, retrieved April 4, 2009
  48. ^ "United Way of America Board of Governors, As of April 27, 2002, unitedway.org, via archive.org, retrieved April 4, 2009 (web page dated February 2003)
  49. ^ a b "Health Plan Exec Honored by Nursing School". Columbia University Record (Columbia University). October 20, 1995. http://www.columbia.edu/cu/record/archives/vol21/vol21_iss7/record2107.17.html. Retrieved 2009-04-05. 

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