By Matt Walsh – Editor
Gulf Coast Business Review
When Lindy Richardson Street interviewed in 1993 with then-Columbia Healthcare Co. CEO Rick Scott to be the company’s director of marketing and communications, she was still shaking off the effects of a distressing professional experience. To her disbelief, the federal government had indicted one of her associates at another company.
The ordeal — intensive investigations and depositions and public fallout — was draining. Street was not part of the alleged conspiracy, but its effects consumed her for months. She never wanted to confront a similar experience again.
So when Street started her interview with Scott, she told him: “I have to tell you, if you ever ask, hint at it or suggest to me, or if it smells or feels like it’s illegal or immoral, I won’t do it, and furthermore I will tell people you did.”
“I never had to remind him of that conversation,” she says today. Street worked side by side with Scott from 1993 until he resigned from Columbia-HCA in 1997.
From the moment Rick Scott declared his candidacy last spring for Florida’s governorship and challenged fellow Republican frontrunner Bill McCollum, Florida’s mainstream media and Scott’s opponents, including Democrat Alex Sink, have strafed voters with relentless attacks on Scott’s character.
Their claim is tightly told with a fact: The company he founded and built into the leading health-care company in the nation over a 10-year period paid $1.7 billion in criminal and civil fines to the federal government for alleged Medicare fraud.
Media reports routinely say Scott’s Columbia-HCA Corp. “systematically” defrauded the federal government — never citing evidence that it was proven Scott or his fellow senior managers condoned or even hinted at perpetrating the alleged fraud, never citing evidence of malice and premeditation by Scott. In last week’s gubernatorial debate, Democratic candidate Sink simply repeated the mantra: “I can’t think of anything more frightening,” she said. “He led a company with the most massive Medicare fraud, cheating seniors and taxpayers … The people of Florida cannot trust you at all.”
To be expected, the state’s biggest newspapers dug into the scandal. They reported, although downplayed, that Scott was never charged with any crimes nor investigated. The Miami Herald said “federal investigators found that Scott took part in business practices … that were later found to be illegal” — citing no evidence of Scott’s personal involvement nor noting that these “practices” were widely accepted in the industry until federal regulators changed the rules.
As newspapers often do, The Miami Herald, unable to convict Scott in print, resorted to a standard journalistic practice — raise doubt in readers’ minds about Scott’s character and attribute this opinion to “experts.” Wrote the Herald last June:
“Whether or not Scott was aware of his company’s questionable conduct, the breadth of the problems raises questions about Scott’s leadership, management experts say.”
But if you talk to the people who worked at Scott’s side during his tenure as Columbia-HCA’s CEO, former Columbia-HCA board members, as well as outsiders whose companies did business with Scott or sat on opposite sides of a negotiating table with Scott, the picture of Rick Scott is far different from the one Scott’s political opponents and mainstream media have depicted.
• Stephen Braun, Columbia-HCA’s general counsel who has known and worked with Scott for nearly three decades: “He’s as honest as a Boy Scout.”
• Former Columbia-HCA board member Dr. Magdalena Averhoff of Miami: “Honorable, straightforward, sincere. Rick revolutionized medicine. He was a visionary.”
• Josh Nemzoff, owner of Nemzoff & Co. LLC., who sat across from Scott on eight sales of hospital companies to Columbia-HCA and has never been paid a dime by Scott or Columbia-HCA: “I would never use the term arrogant to describe Rick.”
Asked how Scott was different from other hospital CEOs back in the late 1980s and early 1990s, Nemzoff says: “Very simple. He’s smarter than all of them.”
• George Pillari, founder and CEO of HCIA Inc., an independent company that analyzed the efficiency of Columbia-HCA hospitals, and who worked with Scott. Asked about Scott’s ethics and honesty, Pillari says: “That’s never questioned.”
To be sure, there are at least two sides to a story. In this report, you will see a picture of Scott you likely haven’t seen. And you will see there is more context behind the alleged Medicare fraud than has been reported during this election cycle and more to the resignation of Scott from Columbia-HCA than the alleged fraud.
The Rainwater connection
To paint the picture, start with Richard Rainwater.
A Texan and Stanford MBA, Rainwater became one of America’s most prominent investment managers when he guided the wealth of the Fort Worth, Texas, Bass family into a $5 billion fortune.
In the mid-1980s, Rainwater sat on the board of Hospital Corporation of America (HCA) and was a friend of then-HCA CEO Dr. Tommy Frist.
Scott, at the time, was an ambitious corporate mergers and acquisition lawyer in his early 30s at a Dallas law firm. In 1987, having worked in health-care mergers a few years, Scott demonstrated his taste for big, bold moves when he approached Dr. Frist out of the blue with an offer to purchase HCA for $6 billion with financing from Citicorp. Frist laughed Scott away.
A few months later, Rainwater called Scott and asked Scott if he wanted to start a health-care company. Rainwater, who chose his partners carefully, liked what he knew about Scott. They had a deal.
Scott invested his and his wife’s life savings of $125,000, Rainwater invested the same amount, making them co-equals in what Scott named Columbia Healthcare Inc.
Scott and Rainwater’s plan was to build a national hospital company by acquiring two to four hospitals a year and hoping to apply the same business principles of other industries to hospitals — constantly measuring results to reduce costs and improve customer satisfaction and outcomes. Their method would be a business model that was in vogue and gaining popularity: joint ventures with physicians. Indeed, in his legal practice, Scott had become familiar with and executed a few of these deals with hospitals and surgery centers.
Scott sent out 4,000 letters to hospital administrators and owners, seeking sellers and joint ventures. His first lead came when an executive of Scott’s biggest legal client told him about a group of physicians in El Paso who were unhappy with the owners of two El Paso hospitals.
In July 1988, Scott’s Columbia Healthcare made its first acquisition — a $61 million purchase of two El Paso hospitals, with seller financing and loans from Citicorp. (A fact worth noting in this deal is that the seller of the El Paso hospitals was Nashville-based HealthTrust Inc., which was a spin-off company of HCA. In other words, the roots of Columbia-HCA were circular. As one former Columbia-HCA executive, who would not speak for attribution, said: “The policies we used went back to HCA.”)
Shortly after the purchase, Columbia teamed up with the physicians in a joint venture to buy the hospitals from Columbia and share ownership. The physicians eventually would own 40% of the partnership, and this became the model Columbia used elsewhere in its first few years.
With El Paso as the nucleus of his new company, 34-year-old Scott recruited management help. Two key hires early on were David Vandewater, then 36, a young but experienced hospital executive with Dallas-based Republic Health Corp.; and David Colby, then 33, a brilliant financial architect who would become Scott’s lead financial man structuring complex acquisitions. Vandewater, as president and chief operating officer, did exactly that — focused on operations. Colby was treasurer and chief financial officer.
They continued to move quickly in El Paso, expanding Columbia to become an almost-full-service health-care provider with its two acute-care hospitals; a psychiatric hospital; rehabilitation center; imaging center and other offerings. At the same time, Scott focused on other acquisitions opportunities. That was his specialty; he was regarded as a remarkable “deal guy.”
Says Nemzoff, the hospital mergers-and-acquisitions specialist: “What surprised me about him was his grasp of the business and financial details. I always made a point that I would never agree to a point when Rick and his CFO, David Colby, were both in the room. I would always tell them I wanted to think about it, and then come back later with an answer. Scott and Colby were smart, formidable negotiators. For a lawyer, he understood the legal and the business side.”
The culture inside Columbia
While they built El Paso, Scott in 1988 and 1990 picked up the pace for growth. The acquisition of two to four hospitals a year mushroomed to more. Scott moved into Florida, negotiating joint ventures with physicians in Miami for the purchases of Victoria Hospital, Coral Reef Hospital and Kendall Regional Medical Center. He also expanded the company into Corpus Christi, Texas.
By the end of 1990, Columbia owned about a dozen hospitals in joint ventures with physicians. By the end of 1992, the company had doubled to 24 hospitals, thanks to a $185 million purchase of Indianapolis-based Basic American Medical. Columbia Healthcare suddenly had more than $1 billion in assets; more than $800 million in annual revenues; and $136 million in earnings before interest, depreciation and taxes, a remarkable 17% margin.
Then came the deal that vaulted Scott and Columbia as a fast-rising and powerful national player. In 1993, Scott had talks with Carl Pollard, then chairman of Louisville-based Galen Health Care, a spin-off from Humana Inc. that owned 74 hospitals. Scott and Pollard and another Galen board member, Bill Young, hit it off, and at one point Scott and Columbia General Counsel Steve Braun thought it looked as though Galen would gobble up the much smaller Columbia.
Pollard surprised them. He sold Galen to Columbia. That boosted Columbia’s revenues to more than $5 billion a year and nearly 100 hospitals.
The pace kept Columbia’s senior executives almost breathless.
Vandewater told a Forbes reporter years ago his daily routine entailed waking at 4:30 a.m., jogging three miles and getting to the office by 6 a.m. Street, the senior vice president of marketing and communications, rose at 4 a.m. on Mondays to make her hour-long, 6 a.m. Monday meeting with Scott. At 7 a.m. each Monday, about a dozen senior managers met for the executive management committee meeting.
He was notorious for cutting articles out of papers, circling important paragraphs and sending them to his executives. His memory was extraordinary. When Street would go down her agenda, Scott would bring up issues and details many had forgotten.
When Scott saw that an increasing number of his hospitals’ patients and employees spoke Spanish, he had senior officers coming into the office on Saturday mornings to learn Spanish.
Scott was indeed the pacesetter. He had a seemingly inexhaustible well of energy, intensity and focus. Anyone who worked closely with him remarks about these three characteristics.
“He got more out of 24 hours in a day than anyone,” Street says. “I never understood how he did his time management.” She says the culture at Columbia was “entrepreneurial, very empowering. You didn’t feel micromanaged. The culture was inclusive. He had little tolerance for intolerant people.”
There was no executive dining room, no preferred parking places for executives, no teak-wood, richly paneled offices for corporate executives. Scott went through the lunch line and ate in the corporate cafeteria just like everyone else.
Scott also had what was known as “no-jerk” rule in Columbia’s corporate hiring. Before being hired as corporate counsel in 1991, Braun remembers having to interview with every vice president in the company to make sure he passed the “no-jerk” test. Street says that whenever Scott had a critical word for someone, the worst he would say was, “He’s not a nice person.” He didn’t curse.
Another Scott trait: He was remarkably even-tempered. Says Pillari, now a health-care restructuring adviser in San Francisco with Alvarez & Marsal: “Rick was never irrational, always level headed, always positive. Says Street: “One time I asked him if he ever lost his temper, and he said, ‘What benefit does that do me or anyone around me?’”
Seeing and communicating with Columbia-HCA’s physician partners and employees was important to Scott. He sent weekly e-mails to the company’s 285,000 staffers, and answered their e-mails as well. Pillari saw him as a motivator and inspiring to his associates. Adds Street: “Rick brings out the best in people if you see what he’s trying to do. He made me see more resources and talents in myself than anyone, including my mom.”
But Scott expected a lot. “People at Columbia believed they were on the cutting edge,” says Pillari. “They were using modern management techniques — things that are all common today — that weren’t being used then in the hospital industry … for example, bulk buying of goods and services.”
Foremost in that regard was Scott’s near-obsession with measuring everything. Pillari: “Rick held people accountable and he did it with data.” His top executives even performed “360” formal evaluations that measured the performance of their CEO.
Scott and Vandewater were often criticized for establishing report cards for Columbia-HCA’s 343 hospitals and their administrators, covering everything from patient satisfaction to patient outcomes to admission growth. The two of them read every report card each month and forwarded their comments to the hospital administrators. If a hospital’s quality, financial or operating metrics veered out of the norm, senior executives would pay a visit to figure out how to correct the problem.
The tough standards and expectations brought results. In 1996, the peak of Scott’s tenure at Columbia-HCA, with less than 10% of the hospitals in the nation owned by Columbia-HCA, 26% of the hospitals ranked in the Top 100 hospitals were Columbia-HCA hospitals, regarded as unheard-of in the industry. (Since then, the highest percentage of Top 100 hospitals for HCA has been 14% in 2000; it was 0% in 2003 and 2004). In a 1995 Gallup Organization poll of patient satisfaction, 94% of Columbia patients rated their care as satisfactory to very satisfactory, compared to 88% nationally.
“They were high-performing with good outcomes,” Pillari says. “He was ahead of his time using performance measurements. Now it’s done everywhere.” Even the federal government has adopted many of the measurement standards.
Patient satisfaction and quality of delivery of health care — those were the chief goals for Scott. He wanted American consumers when they needed to a hospital to think of a Columbia-HCA hospital first. Quality was the mantra. “If the employees heard it once, they heard it a million times,” Street says.
Blinded by the cause?
With the Galen acquisition, Scott was just gaining momentum.
One month after the Columbia-Galen deal closed, in October 1993, Scott and Columbia surprised the national hospital industry with the announcement Columbia was acquiring HCA, regarded as the nation’s leading for-profit hospital company. Purchase price: $7.6 billion.
Rainwater, Scott’s partner, had continued to urge Frist to team up with Scott. And with the new emphasis by insurers and the federal government to squeeze costs out of the health-care system with lower and tighter reimbursements, Frist saw that Scott’s Columbia Healthcare Corp. was at the forefront of operating hospitals efficiently. Frist explained his rationale for selling to Scott to Forbes: “At this stage in my career, I don’t have the energy to take it to the next level.”
The merger brought together HCA’s 96 hospitals and Columbia’s 94. In six years, Scott had taken his newly formed company from zero to $11 billion in annual revenues and 190 hospitals.
Scott wasn’t finished. Seven months later, in October 1994, the new Columbia-HCA announced it was acquiring yet another marquee for-profit hospital company, HealthTrust Inc. Also a Nashville-based company, HealthTrust was a spin-off of 117 hospitals from HCA in a 1987 leveraged buyout. But now it was back in the fold, this time under Scott’s direction.
When hospital M&A expert Nemzoff puts Scott’s trifecta acquisitions of Galen, HCA and HealthTrust into perspective, he says, “If Rick had bought just one of those, it would have been remarkable. But he bought all three.”
Scott was indeed revolutionizing the health-care industry. His speed, methods and operating practices constituted what every staid industry hates: disruptive innovation.
And when you’re the leading disrupter, you become a bull’s eye.
While Scott continued to grow Columbia-HCA with more acquisitions even after the Big Three, and while his executive team rushed to integrate all of the new players and cultures into the Columbia way, Scott encountered four challenges that eventually would seal the fate of what you could call him — a committed revolutionary who was almost blinded by his noble cause. A slain captain who led the charge.
The cause: to shift an inefficient, slovenly health-care industry to a capitalistic system, lowering the cost and improving the quality at the same time for American consumers.
The obstacles were huge:
• The not-for-profit hospital industry that vociferously resisted Scott’s cause.
• The rise of HillaryCare.
• The introduction by the Clinton administration of “Operation Restore Trust.”
• And a skeptical board of directors of old-line health-care executives.
As Columbia-HCA grew, Scott and Vandewater realized that scale was the key to success. The more they could drive volume to their facilities, the more they could lower the cost of operating. It’s the Wal-Mart effect. And it was working.
But the strategy was infuriating Columbia-HCA’s not-for-profit competitors. For one, Scott and his team didn’t help their cause when they referred to not-for-profit hospitals as non-taxpaying hospitals. Taking the non-profits’ patients made Columbia-HCA even more despised. Scott made their lives miserable. Organized groups of not-for-profit advocates campaigned in Washington, D.C., with placards that read “ABC” — Anybody But Columbia.
Nemzoff likens the situation to two Catholic parishes: “The pastors are fine when it’s the two of them. But when a third church opens, the other two pastors all of a sudden say, ‘Hey, wait a minute. You’re going to steal my parishioners.’
“Rick rocked the entire industry,” Nemzoff says.
In September 1993, First Lady Hillary Clinton unveiled her big plans to create a universal health care system. Scott became one of the most outspoken critics — if not the most outspoken critic in the hospital industry. And then in May 1995, President Clinton unveiled “Operation Restore Trust.” This became a major thrust of the Department of Justice and the Department of Health and Human Services. They intended aggressive pursuit of Medicare and Medicaid fraud and had assigned teams of investigators to scour the country with handsome bounties to whistleblowers.
In March 1997, federal investigators swooped into El Paso and retrieved documents and computers in search of Medicare violations, some stemming from the allegation of doctors receiving kickbacks for referring Medicare patients to the Columbia-HCA hospitals. Five months later, the feds raided again. This time a force of 500 agents in seven states swarmed into Columbia-HCA facilities looking for records showing Medicare overbilling.
Immediately in the wake of both raids, Scott and his senior executives assembled their teams to counsel the executives whose facilities were raided. Corporate counsel Braun says the raids in both instances “came out of left field.”
Several former senior executives told the Business Review that in all of the Monday executive committee meetings at Columbia-HCA the subjects of Medicare overbilling or Medicare cost reports were never on the senior-management agenda. Former Columbia-HCA board member Dr. Magdalena Averhoff confirmed likewise. In her five years on the Columbia and later Columbia-HCA board during Scott’s tenure, never was Medicare or Medicare overbilling a topic of a board meeting, to her recollection.
Braun says once a year he compiled a Top 10 list of litigation/legal issues for the board. Taxes were always at the top, Braun says, and Medicare cost reporting was on the list but it was never an urgent item — until the raids.
Common industry practices
Did Rick Scott and his employees intentionally and systematically defraud the federal government?
These are facts: The company — after Scott resigned — eventually pleaded guilty to 14 felonies and paid fines of $1.7 billion.
But those facts need context.
Start with this: The overbilling practices for which Columbia-HCA was fined were common, accepted and consistent practices in the hospital industry prior to the Columbia-HCA raids. One illustration of that is the list on page 16 of hospitals and pharmaceutical companies that also paid Medicare-overbilling fraud fines. They include some of the most prestigious education institutions in the nation.
“What we were doing everyone else was doing,” says Braun.
Enu Mainigi, a corporate defense lawyer hired by Scott after he resigned to monitor the Medicare investigations, likened the government’s Operation Restore Trust to the IRS changing tax rules in the middle of the game. “The Department of Justice took regulations that were never subject to question and said, ‘We’re now going to look at them in a different way,’” Mainigi says. “They did this with the hospitals, the medical-device industry and now big pharma.”
Another comparison: Healthcare consultants and lawyers will tell you Medicare rules were constantly changing and were as complicated, gray and fuzzy as the IRS tax codes. Says M&A specialist Nemzoff: “Look on Google at how many people are Medicare cost-report consultants (Answer: 284,000 hits). Why are there so many. It’s so complicated. If you look at the Big Four accounting firms, they have thousands of people providing that advice.”
And it’s not as if Columbia-HCA or any of the companies that have been fined went about skirting Medicare laws with reckless disregard. National Medical Enterprises, now Tenet, was often cited as being the most aggressive interpreting “outlier” charges — that is, requesting higher reimbursements for complicated cases that didn’t fall into the government’s prescribed list of acceptable procedures and charges.
But virtually every health-care company obtained inside and outside legal counsel on what was permissible. And typically, the lawyers who dispensed advice relied on what previously had been accepted practices in the industry.
When Columbia purchased its hospitals, it too relied on outside auditors from the Big Four accounting firms to evaluate the hospitals’ Medicare books and practices. Braun says in none of those deals did auditors flag any Medicare issues. “I’ve never even seen a cost report,” Braun says.
What most news reports have ignored about the alleged Medicare fraud have been the ample news reports between 1987 and final settlement in 2003 that the Medicare practices in question did not start with Columbia. They were inherited in Columbia’s acquisitions. They existed before Scott purchased HCA and HealthTrust.
Several recent news reports made an issue of whistleblowers noting that some Columbia-HCA hospitals kept two sets of books on Medicare billing. To that, Holman Jenkins, a columnist for the Wall Street Journal, wrote in May 2000:
“Never mind that keeping such reserve books is perfectly kosher and arguably obligatory under accounting rules. An affidavit by the Justice Department noted that the practice didn’t even exist at Columbia before 1994 and was imported wholesale when Columbia acquired Hospital Corp. of America.”
Besides, HCA was known to have the guru and one of the most knowledgeable and respected experts in the country on the subject of Medicare cost reports, Helen Cummings. “We had a lot of comfort and confidence in Helen,” Braun says. Conservative in nature and personality, she was regarded as a model of propriety.
Finally, several people interviewed said it’s practically implausible to think that Scott, Vandewater and other senior executives were at the heart of perpetrating a systematic fleecing of Medicare. For one, Medicare patients were Columbia’s largest source of patient revenue, and hospital administrators knew there always existed the threat that if you irritated the federal government too much, it could pull your company’s license to treat Medicare patients. No hospital executive in his right mind would purposely order his employees to risk losing their company’s biggest customer.
One former Columbia-HCA senior officer told the Business Review: “How would we do it? There were 340 hospitals. How do you change somebody’s behavior in 340 hospitals to do something illegal? Do you know how long it takes to get things changed in a hospital?”
On that point, three sources interviewed told of Scott’s attempt to save the company $16 million by changing the company’s employee soda dispensers from Coca-Cola to Pepsi. He couldn’t make it happen. The resistance from employees was too much. Regional presidents and hospital administrators called headquarters and complained: “I thought you said I was running my own show.”
Imagine, then, ordering employees to systematically defraud the federal government.
“The government took all of the documents and e-mails,” said Scott lawyer Mainigi at an interview recently in Fort Lauderdale. “If any of those e-mails tied Rick to fraud, we wouldn’t be sitting here today. If there was something he had done wrong, they would have taken action because he was so outspoken against Clinton health care. The idea this lawyer (Scott) would not have taken immediate action if he knew about it is ridiculous.”
Why Scott resigned
It wasn’t the alleged Medicare fraud or the raids. But they became the tipping point. They provided the final impetus for a Tommy Frist faction of the Columbia-HCA board to oust Scott as chairman and CEO of the company Scott built.
BusinessWeek and The Wall Street Journal each chronicled in the fall of 1997 the split that grew between Scott and Frist, regarded as the father of the for-profit hospital industry and Columbia-HCA’s largest shareholder in the Scott era. Frist declined to be interviewed for this story. But those interviewed by the Business Review unanimously acknowledged Scott’s resignation had more to do with cultural and management differences between Scott and Frist than anything else.
“They are both brilliant,” says former board member Dr. Averhoff. “But they have diametrically opposed personalities.”
“Rick always had an agenda to follow and was all business,” she says. Everything is researched and looked at 10 different ways. And then he would explain the rationale for how he arrived at his decisions. Tommy was more suave and catering to the board. Tommy’s style was business, but a little bit more down-home, very affable.”
As it turned out Scott was brilliant in just about everything as a CEO except nurturing and cultivating his directors. One example: Scott held executive retreats for senior managers to shape and discuss strategy. There were no retreats with board members.
Scott was close to and had regular interaction with Columbia’s board, in particular with board members Pollard and Young, when the company was based in Louisville after the Galen acquisition. When the company moved to Nashville, similar contact with the board ended.
Frist originally embraced Scott after the Columbia-HCA merger. His office was a short distance from Scott’s. He attended the 7 a.m. Monday meetings. But as Scott continued the company’s aggressive expansion and acquisition pace, Frist grew increasingly uncomfortable. He told The Wall Street Journal he opposed joint ventures with physicians even though they were legal and that he argued against buying home-health care companies, which became a target in the Medicare investigations.
Yet Scott pressed on. In early 1997, Frist discontinued his attendance at the Monday meetings. The tension and discomfort surrounding the Frist-Scott relationship was becoming palpable. Frist particularly objected to a national branding campaign that Scott favored.
Averhoff said board members were becoming concerned about the company’s fast growth. “I thought it was too much,” she says. “People were being moved from one position to the next. There was a bit of instability. I thought it was moving too fast. Almost all of the board felt that way. But it was not expressed to the point of insistence to slow down because the company was doing great.”
And then the Medicare raids occurred. After the second raids in July 1997, the 10-member board met for an emergency meeting. Going into what would become a marathon session, Frist had at least five board members on his side.
Scott, Vandewater and Braun informed the board of the steps they were taking to deal with the federal investigations. They argued in favor of fighting the regulators because they believed the company did no wrong and the government would have to show and prove intent to defraud. They believed they had a winning case.
After listening, the board asked Scott and Vandewater to leave. With Frist sitting as vice chairman, he argued that fighting the Department of Justice could put the company and stockholders at risk. He noted the government has all the time in the world; the deepest pockets in the world; and could yank the company’s licenses to treat Medicare patients, a potential financial disaster. Furthermore, he suggested, it would be in the best interest of the company and shareholders to ask for Scott and Vandewater’s resignations.
One board member loudly protested the resignations, saying it had not been proven Scott and Vandewater did anything wrong. Indeed, none of the board members believed Scott or Vandewater was dishonest or perpetrated a fraud.
But when the proposed resignations were brought to a vote, Scott and Vandewater were out. Frist had done his own cultivating of board members.
Frist got his company back. And he immediately began to throttle down and stop Columbia-HCA’s national and world expansion. He dropped Columbia from the corporate name.
It took three years and then three more years before HCA and the government reached its settlements — $840 million in fines in 2000 and $631 million in 2003.
Asked if those amounts were justified, Averhoff says: “The outcome was not right.” The settlements, she said, reminded her of a scene from a movie — “when the attorney says to his client, ‘You have to plead. Things look bad for you.’ There comes a time when you just want it over. You have to make a decision.
“Life,” she says, “is not always fair.”
But it helps to have context.
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