HealthSouth
HealthSouth Corporation (NYSE: HRC), based in Birmingham, Alabama, is the nation's largest healthcare services provider. Best known for its rehabilitation services, HealthSouth has more than 1,900 facilities in fifty states, Canada, Australia, and Puerto Rico. It has both inpatient and outpatient rehabilitation facilities and outpatient surgery centers, including more than 330 hospitals. HealthSouth was involved in a corporate accounting scandal where its CEO Richard M. Scrushy allegedly directed company employees to falsely report grossly exaggerated company earnings in order to meet stockholder expectations.
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Company beginnings
HealthSouth was incorporated in Delaware in 1984 by its founder Richard M. Scrushy. The company went public with its IPO in 1986. Scrushy became chairman and chief executive officer in 1994.
Accounting scandal
- See also: creative accounting
On March 202003 HealthSouth and its founder/CEO Richard M. Scrushy were accused by the Securities Exchange Commission of an accounting scandal where the compnay's earnings were falsely inflated by $1.4 billion. In 1986, Scrushy allegedly instructed the company's senior officers and accountants to falsify company earnings reports in order to meet investor expectations and control the price of the company's stock. In certain fiscal years, the company's income was overstated by as much as 4700 percent. The $1.4 billion represents more than 10 percent of the company's total assets.
Affiliated companies
Offspring companies:
- MedPartners Inc. — a physician practice management company founded by Scrushy
- Capstone Capital Corp. — a real estate investment trust founded by Scrushy
- Source Medical Solutions — healthcare technology systems
Other affiliated companies:
- GG Enterprises (Hoover, Alabama) — founded by Scrushy's mother and brother
- 21st Century Health Ventures (Birmingham) — founded by Scrushy and former HealthSouth CEO Michael Martin
- MedCenterDirect.com (Atlanta) — HealthSouth bought 6.4 million shares of this hospital supplies company
- Integrated Health Services Inc. (Sparks, Maryland) — a nursing homes and rehabilitation center company that Scrushy was a director of in the 1990s
- HealthTronics Surgical Services Inc. (Marietta, Georgia) — Michael Martin was director while CFO at HealthSouth
External links
References
- SEC litigation release - SEC Charges HealthSouth Corp., CEO Richard Scrushy With $1.4 Billion Accounting Fraud
- Birmingham News Special Report on the HealthSouth Scandal