Two years ago Richard Scrushy of Alabama was ordered by a judge to pay $2.87 billion to HealthSouth, the company he founded in 1984 — and then plundered, destroying the value of the company’s stock and reducing the life savings of many HealthSouth employees to ashes.
Scrushy, who grew up poor and became one of the nation’s highest paid executives, was flamboyant. He lived in a 16,000-square-foot home with a helipad in the yard. He had 19 cars, art work by Picasso and Renoir and a $5 million lake home in addition to his Birmingham mansion.
He was back in the news this week because officials trying to collect still more to satisfy the huge judgment against him held a yard sale at the home place.
Scrushy and HealthSouth also are worthy of attention because this past week was the first anniversary of the health care reform bill that has caused President Barack Obama such political grief.
HealthSouth provides — the company is still in business, still making money — rehabilitative services to inpatients. As such, HealthSouth tapped into the huge flow of money that streams from Medicare, Medicaid and the thousands of health insurance companies across the land.
The fact that the company generated a flow of profits rich enough to provide lavish benefits to its executives — Scrushy wasn’t the only one who took exorbitant pay and perks from it — is one reason why health care in the United States costs about twice as much for each American as any other rich nation pays to provide for its citizens.
But only one.
Health insurance companies are among the most profitable corporations in the country. Many, many health company executives take more than $1 million a year in pay and benefits. It is primarily because of the cost of health insurance that 30 cents out of every health care dollar is spent on “administration.” Another cost driver is prescription drugs. Drug prices are substantially higher in the U.S. than they are in other countries, primarily because other countries use government clout to hammer prices down.
These are among the factors that convinced the experts who put the health care reform plan together that a public option plan should be provided to put pricing pressure on the for-profit companies. That option was defeated by health industry lobbyists and by members of Congress who were philosophically opposed to having government compete with private industry.
As a consequence, health care costs in this much-favored land of ours continue to rise at a rate higher than inflation and the various players in the health care industry live well, indeed. These are the results of decisions our society has deliberately made.
— Emerson Lynn, jr.
