Rick Scott's skills building Columbia/HCA into a healthcare juggernaut in the 1990s will be put to good use in his new job as the new Republican governor of Florida, says a good friend who has known him for 36 years.
"Rick thinks big and isn’t afraid to go for it," says Joseph H. Yastrow, an employment attorney in Chicago who met Mr. Scott when they were both in law school. They have kept in touch with ever since, even vacationing together with their wives.
Mr. Scott may be a billionaire now, but he comes from humble origins. "He has lived the American dream," Mr. Yastrow says. The son of a truck driver and JC Penney clerk who grew up in public housing, Mr. Scott served in the Navy, got himself through college and law school and landed a job at a prestigious Dallas law firm where he cut his teeth on healthcare mergers and acquisitions.
Building a healthcare empire from
While processing other peoples' M&As, Mr. Scott thought to himself, "You know what? I can do this," Mr. Yastrow recalls. At age 35, he took out a second mortgage on his home and he and a partner bought two hospitals in El Paso, Texas, the beginning of Columbia Hospital Corp.
"No one is as hard-working and tenacious as he is," Mr. Yastrow says of his friend. "He never complains about anything. He's in the moment. He enjoys what he is doing."
As a new hospital CEO, Mr. Scott focused on efficiency and patient-centered care. "He was very familiar with how hospitals were run and not run," Mr. Yastrow says. "It was the late 1980s. Many of them were not run like a business. He brought the basic principles of business management and cost control into that arena."
In one of his hospital innovations, Mr. Scott created a "best demonstrated practices" group that worked on ways to reduce costs, improve outcomes and benefit patients, according to Mr. Scott's campaign website. In his 10 years at the helm of Columbia, he brought down supply costs from more than 16.8 percent of revenue per year to less than 13.5 percent per year, the website stated.
In 1993, he bought Galen Healthcare, which was spun off by Humana, and a year later he bought HCA, which then had about 100 hospitals. Mr. Yastrow visited him just prior to those deals. "We went running one morning and he told me, 'I'm either going to be a billionaire or I am going to go bankrupt,' " he recalls. "He couldn't discuss what the deal was at the time, but I knew it was big."
Mr. Scott left Columbia/HCA in 1997, while federal investigators were in the middle of a seven-year probe that eventually led to $1.7 billion in fines paid by the company. Charges against Columbia/HCA included paying illegal kickbacks to physicians. Mr. Scott said he was not aware fraud was taking place and noted that he was never questioned about the allegations.
"An army of federal investigators spent seven years examining every aspect of this case," Mr. Scott stated in a release during his campaign. "If they found any merit in these allegations . . . they would have certainly charged me, or at the very least questioned me – neither of which ever happened.''
George Pillari, founder and CEO of HCIA, who analyzed the efficiency of Columbia-HCA hospitals, was asked about Mr. Scott’s ethics and honesty. "That’s never questioned," Mr. Pillari said.
Life after Columbia/HCA
When Mr. Scott left Columbia/HCA he was age 44 and had created the world’s largest healthcare company with more than 340 hospitals, 135 surgery centers and 550 home health locations in 37 states and two foreign countries.
Still restless, he was involved in numerous business ventures in the next 10 years, several of which were in healthcare. He purchased America's Health Network and later sold it to Discovery Health. He helped fund Alijor, a website with healthcare pricing comparisons that was later sold to HealthGrades. And he co-founded Solantic, a chain of urgent care centers than is now in 27 locations in the Southeast.
Solantic was the first urgent care center to post all prices up front, according to the campaign website. Mr. Scott had become a strong believer in transparent pricing and a free healthcare market. "He wanted to leave healthcare in the hands of individual patients," Mr. Yastrow recalls. "He believed that the best way to lower costs would be through a free market system."
Entry into politics
When the healthcare reform bill was proposed in 2009, Mr. Scott reacted viscerally against its proposal for a public option. "That's what got him going," Mr. Yastrow recalls. Mr. Scott formed Conservatives for Patient Rights, which was a leader in the successful campaign to remove the public option from the reform bill.
This effort gave Mr. Scott a taste of politics and led to his successful run for the Florida governorship. "Why would a very accomplished, wealthy person want to do this?" Mr. Yastrow asks. "He has more money than he could ever spend, even if he tried."
Answering his own question, Mr. Yastrow says: "He wanted to keep the American dream alive for future generations." Mr. Scott managed to remain optimistic in the face of the worst economic downturn since the Depression because he could look back at his own ascent from poverty. Even in law school, the future healthcare titan and his wife Ann "had no money at all," Mr. Yastrow says. He recalls Ms. Scott calling him up one day and asking him to join the young couple in judging a baby contest. "They were doing it to get $50 and a free lunch," Mr. Yastrow says.
In the Republican primary, Mr. Scott ran against Florida Attorney General Bill McCollum, who was eager to show this own healthcare credentials. During the campaign, Mr. McCollum filed a lawsuit against the reform law that was eventually joined by 25 states and led to the recent decision by a federal judge in Florida to overturn the entire reform law. Mr. Scott is a strong supporter of the lawsuit, which is expected to be decided by the Supreme Court.
Mr. Scott won the primary by four percentage points and then won the hotly contested general election by 1.29 percent over Democrat Alex Sink, another veteran politician who was chief financial officer of Florida.
With the recession and the backlash against Democrats, "it was the ideal time for somebody to be coming in as the outsider," Mr. Yastrow says. Many other self-financed political outsiders, however, did not succeed in 2010. Jeff Greene, a billionaire from Palm Beach, lost the Democratic primary for U.S. senator in Florida. Republicans Meg Whitman and Carly Fiorina lost their bids in California and Republican Linda McMahon lost in Connecticut.
Why was Mr. Scott successful? "He's the guy you want working for you because he's tireless," Mr. Yastrow says. "If he tells you he is going to do something, he will do it or he will die trying."
"Rick thinks big and isn’t afraid to go for it," says Joseph H. Yastrow, an employment attorney in Chicago who met Mr. Scott when they were both in law school. They have kept in touch with ever since, even vacationing together with their wives.
Mr. Scott may be a billionaire now, but he comes from humble origins. "He has lived the American dream," Mr. Yastrow says. The son of a truck driver and JC Penney clerk who grew up in public housing, Mr. Scott served in the Navy, got himself through college and law school and landed a job at a prestigious Dallas law firm where he cut his teeth on healthcare mergers and acquisitions.
Building a healthcare empire from
While processing other peoples' M&As, Mr. Scott thought to himself, "You know what? I can do this," Mr. Yastrow recalls. At age 35, he took out a second mortgage on his home and he and a partner bought two hospitals in El Paso, Texas, the beginning of Columbia Hospital Corp.
"No one is as hard-working and tenacious as he is," Mr. Yastrow says of his friend. "He never complains about anything. He's in the moment. He enjoys what he is doing."
As a new hospital CEO, Mr. Scott focused on efficiency and patient-centered care. "He was very familiar with how hospitals were run and not run," Mr. Yastrow says. "It was the late 1980s. Many of them were not run like a business. He brought the basic principles of business management and cost control into that arena."
In one of his hospital innovations, Mr. Scott created a "best demonstrated practices" group that worked on ways to reduce costs, improve outcomes and benefit patients, according to Mr. Scott's campaign website. In his 10 years at the helm of Columbia, he brought down supply costs from more than 16.8 percent of revenue per year to less than 13.5 percent per year, the website stated.
In 1993, he bought Galen Healthcare, which was spun off by Humana, and a year later he bought HCA, which then had about 100 hospitals. Mr. Yastrow visited him just prior to those deals. "We went running one morning and he told me, 'I'm either going to be a billionaire or I am going to go bankrupt,' " he recalls. "He couldn't discuss what the deal was at the time, but I knew it was big."
Mr. Scott left Columbia/HCA in 1997, while federal investigators were in the middle of a seven-year probe that eventually led to $1.7 billion in fines paid by the company. Charges against Columbia/HCA included paying illegal kickbacks to physicians. Mr. Scott said he was not aware fraud was taking place and noted that he was never questioned about the allegations.
"An army of federal investigators spent seven years examining every aspect of this case," Mr. Scott stated in a release during his campaign. "If they found any merit in these allegations . . . they would have certainly charged me, or at the very least questioned me – neither of which ever happened.''
George Pillari, founder and CEO of HCIA, who analyzed the efficiency of Columbia-HCA hospitals, was asked about Mr. Scott’s ethics and honesty. "That’s never questioned," Mr. Pillari said.
Life after Columbia/HCA
When Mr. Scott left Columbia/HCA he was age 44 and had created the world’s largest healthcare company with more than 340 hospitals, 135 surgery centers and 550 home health locations in 37 states and two foreign countries.
Still restless, he was involved in numerous business ventures in the next 10 years, several of which were in healthcare. He purchased America's Health Network and later sold it to Discovery Health. He helped fund Alijor, a website with healthcare pricing comparisons that was later sold to HealthGrades. And he co-founded Solantic, a chain of urgent care centers than is now in 27 locations in the Southeast.
Solantic was the first urgent care center to post all prices up front, according to the campaign website. Mr. Scott had become a strong believer in transparent pricing and a free healthcare market. "He wanted to leave healthcare in the hands of individual patients," Mr. Yastrow recalls. "He believed that the best way to lower costs would be through a free market system."
Entry into politics
When the healthcare reform bill was proposed in 2009, Mr. Scott reacted viscerally against its proposal for a public option. "That's what got him going," Mr. Yastrow recalls. Mr. Scott formed Conservatives for Patient Rights, which was a leader in the successful campaign to remove the public option from the reform bill.
This effort gave Mr. Scott a taste of politics and led to his successful run for the Florida governorship. "Why would a very accomplished, wealthy person want to do this?" Mr. Yastrow asks. "He has more money than he could ever spend, even if he tried."
Answering his own question, Mr. Yastrow says: "He wanted to keep the American dream alive for future generations." Mr. Scott managed to remain optimistic in the face of the worst economic downturn since the Depression because he could look back at his own ascent from poverty. Even in law school, the future healthcare titan and his wife Ann "had no money at all," Mr. Yastrow says. He recalls Ms. Scott calling him up one day and asking him to join the young couple in judging a baby contest. "They were doing it to get $50 and a free lunch," Mr. Yastrow says.
In the Republican primary, Mr. Scott ran against Florida Attorney General Bill McCollum, who was eager to show this own healthcare credentials. During the campaign, Mr. McCollum filed a lawsuit against the reform law that was eventually joined by 25 states and led to the recent decision by a federal judge in Florida to overturn the entire reform law. Mr. Scott is a strong supporter of the lawsuit, which is expected to be decided by the Supreme Court.
Mr. Scott won the primary by four percentage points and then won the hotly contested general election by 1.29 percent over Democrat Alex Sink, another veteran politician who was chief financial officer of Florida.
With the recession and the backlash against Democrats, "it was the ideal time for somebody to be coming in as the outsider," Mr. Yastrow says. Many other self-financed political outsiders, however, did not succeed in 2010. Jeff Greene, a billionaire from Palm Beach, lost the Democratic primary for U.S. senator in Florida. Republicans Meg Whitman and Carly Fiorina lost their bids in California and Republican Linda McMahon lost in Connecticut.
Why was Mr. Scott successful? "He's the guy you want working for you because he's tireless," Mr. Yastrow says. "If he tells you he is going to do something, he will do it or he will die trying."