Healthsouth

During the 1990s, Richard Scrushy, the former CEO of HealthSouth Corporation, plotted many acquisitions of rehabilitation clinics, nursing homes, outpatient surgical care operators, and other health care companies. Early 2003, the Securities and Exchange Commission (SEC) accused the company and Scrushy of boosting earnings to of $1.4 billion since 1999. In November 2003, a federal grand jury indicted Scrushy on 85 counts including conspiracy, securities fraud, money laundering and charges related to overstating HealthSouth’s earnings by nearly $3.0 billion. According to federal investigators, the company overstated earnings to meet analysts’ earning estimates, while hiding the accounting fraud from the auditors. This became the unethical scandal of one of Birmingham’s most influential figures and corporation. Scrushy, once a high school dropout, worked as a gas station attendant and a bricklayer before retuning to school and earning his diploma. He studied at University of Alabama, Birmingham and graduated with a degree in respiration therapy in 1974. After graduation he became an instructor at UAB. In 1979, Scrushy left the acadadimic workforce and took up a position at a Texas health care management firm. The firm was sold in 1983 and Scrushy decided to go on his own with a new business idea. In 1984, with help from some friends and an initial investment of $50,000, he founded HealthSouth in Little Rock, Arkansas. In 1985 he moved the company to Birmingham, Alabama.
Richard Scrushy had certain trends that he incorporated in his very successful business model for HealthSouth. These trends were: Lower reimbursement for medical care, new emphasis on rehabilitation as opposed to surgery, the need to get employees back to work faster, and the absence of brand names in health care. He also wanted his rehabilitation centers to look more like upscale clubs than a hospital. He used his super sales skills, boundless energy and entrepreneurial skills in setting up