Wednesday, June 07, 2006

Ousted CEO of Columbia/HCA Now Runs In-Store Clinic Chain

One of the latest trends in US health care appears to be, for want of a better name, "in-store clinic chains." We had discussed this trend here, focusing on the MinuteClinics version of the concept. In-store clinics are small clinics are set up in retail outlets, particularly those that already have pharmacies. The clinics are usually staffed by nurse practitioners, and offer limited services, like treatment of sore throats and immunizations, for prices lower than that charged by physicians’ offices or emergency rooms. The clinics are not meant to treat complex, serious, or chronic problems. Supposedly, patients with such problems would be referred to physicians or hospitals. My biggest clinical concern about the concept was the ability of the clinics’ practitioners to truly distinguish patients whose problems are beyond their capabilities.

An article last month in the New York Times discussed several contenders in the field. These include RediClinics, run by CEO Stephen M Case, who used to be chairman of AOL, and Take Care Health Systems, run by Hal Rosenbluth, who used to run a chain of travel agencies. This raises a concern that such chains may be run by people with no obvious background in health care, who may not fully understand the clinical issues involved, or share the values of health care practitioners.

Speaking of values, though, the most interesting example in the Times article was a company called Solantic, whose CEO is Richard L Scott. Solantic is a bit of a variation on the theme, since its clinics will be staffed by physicians, and be thus somewhat more pricy than its competitors, although still offering limited services.

CEO Scott does has previous experience in health care, albeit not hands on. He is the former CEO of Columbia, which became Columbia/HCA Healthcare Corp. An article in the Business Journal of Jacksonville narrated his rise and fall.
After working on health-care mergers and acquisitions as an attorney, Scott began Columbia in 1988 by buying two hospitals in El Paso, Texas. In less than a decade, the company grew so large that it had 285,000 employees working in 343 hospitals and more than 700 surgery centers and home health-care offices.

‘In a field supposedly fueled by humanitarian desires to heal, objectives devoted to financial gain are rarely applauded’ the trade publication Medical Laboratory Observer reported in 1997. ‘His aggressive management style, high growth targets and quest for market share made enemies.’

The accusations against Columbia that would eventually lead to Scott's ouster were detailed in numerous New York Times stories, starting in 1996, that scrutinized the company's business and Medicare billing practices.

In the spring of 1997, as federal agents began conducting document raids on several Columbia facilities, Scott did not admit any wrongdoing. 'Mr. Scott's grudging responses apparently contributed to his downfall,' noted a story that ran five days after Scott and Chief Operating Officer David Vandewater resigned.

Scott left with a $10 million severance package and 10 million shares of stock, most of which were from his initial investment before the company was taken public. At the time, those shares would have been valued at more than $300 million.

In 2001, HCA reached a plea agreement with the government that avoided criminal charges against the company and included $95 million in fines. Four mid-level executives were brought to trial but two were acquitted and two more had guilty verdicts overturned.

Scott said prosecutors never attempted to question him.

Civil suits have cost HCA more than $1.7 billion, said attorney Peter Chatfield, a partner with Phillips and Cohen in Washington, D.C., who spent seven years working on a Columbia-HCA civil case brought by two whistleblowers.
Although Scott was never the subject of a law-suit, and never convicted of a crime, clearly major things went wrong at Columbia/HCA on his watch. Yet he left with a golden parachute, and now is a leader in the latest health care trend, in-store clinic chains.

There is a striking contrast between the ethical standards to which nurses and physicians, including those working in in-store clinics, are held, and those to which the managers and executives of health care organizations are held. For the latter, the standard appears to be anything goes, as long as it does not result in serious jail time.

Maybe, given the mess that the leadership of large health care organizations has made of health care, we ought to rethink who should lead such organizations, and to what standards they ought to be held.

Thanks to the Health Care Blog for the tip!

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