[Management 3200 – Business & Society
I. Background Information
a.) HealthSouth Corp. is the nation’s largest provider of rehabilitation, outpatient surgery and diagnostic services. Now however, it is the nation’s largest inpatient rehabilitation hospital. * At the company's height in 2003, it recorded nearly $4.5 billion in revenue, dominated the rehabilitation, surgery and diagnostic services market and employed more than 60,000 people at 2,000 facilities in every state of the U.S. * HealthSouth’s hospitals provide a higher level of rehabilitative care to patients who are recovering from conditions such as stroke and other neurological disorders, orthopedic, cardiac and pulmonary conditions, brain and spinal cord injury, and amputations. * The company’s mission is “to be the healthcare company of choice for patients, employees, physicians and shareholders by providing high quality care in the communities we serve.” b.)
HealthSouth was involved in a corporate accounting scandal in which its Chief Executive Officer, Richard M. Scrushy, was accused of directing company employees to falsely report grossly exaggerated company earnings in order to meet stockholder expectations. c.)
In 2002 through 2003, Scrushy was accused of poor over-sight and leading an extravagant CEO life-style instead of running the day-to-day management of the company. *
The company was also accused of rigging Medicare and Medicaid billing histories and investors were pushing for a change in overall management. *
Scrushy was also nailed for not returning a $25 million loan he had received as an executive stock-purchase plan on time, and eventually paid it in stocks instead of cash like it was planned. *
A lot of the scandal had to do with Scrushy’s need for self-affirmation and lead the company as if he was the king of an empire.
The first of HealthSouth's accounting problems surfaced...
Please join StudyMode to read the full document