Health South: the Scrushy Way Introduction

Paper- Health South: The Scrushy way

Introduction

Richard Scrushy, Chief Executive Officer of HealthSouth transformed the Health care community by creating the nation’s largest outpatient and rehabilitation center and revered at one point as the “King of HealthCare." However, his Cooperate governance and hiring practices along his disregards of his social responsibility to his invertors and stockholder proved to be a lethal combination that not even the king of health care could recover from.

Health South CEO

Richard Scrushy, Chief Executive Officer of HealthSouth, one of the largest privately held health care companies in the United States, boasting revenue of more than $4.3 billion per year while treating upwards of 100,000 patients a day; was born August 1952 in Selma, Alabama. Richard Scrushy grew up attending church and worked several jobs as a teenager. He graduated from Jefferson State Community College and became a Registered Respiratory Therapist after studying at the University of Alabama at Birmingham. In 1984, Scrushy realized his dream of creating a comprehensive outpatient rehabilitation facility by founding Amcare in Little Rock, Arkansas. Amcare soon changed its name to Health South, and the highly successful company began public trading in 1986.

Scrushy was considered as an “executive who ruled by top-down fare, threatened, critics with reprisals and paid his loyal subordinates well”(Jennings, 2012, p. 184) and played an influential role in the decision-making process of the broad members and Chief Financial Officers (CFO). Recorded conversation from one of the chief financial officer illustrates how Scrushy exerts influence on the type of financial information presented to the stockholders and the general public. “They need to do what you need to do; they need to get those numbers where we want them to be. You’re my guy. You’ve got the technology and the know-how”(Jennings, 2012, p. 184). This type of behavior is unusual for CEOs, as...