Richard L. Scott: Post Columbia/HCA

May 12, 2009 10:59 am ET

In addition to his adventures in health care reform and Medicare fraud, Richard L. Scott has a varied professional resume.

Banc One Board Of Directors, 1994-1997

Scott Elected To Banc One Board Of Directors In October 1994.  The Columbus Dispatch reported: "Richard L. Scott, president and chief executive officer of Columbia/HCA Healthcare Corp., has been elected a director of Banc One Corp. Scott, 41, founded Fort Worth, Texas-based Columbia Healthcare Corp. in 1987, after having specialized in health-care mergers and acquisitions at his Texas-based law firm. It later merged with Healthcare Corp. of America.  Columbia recently announced plans to merge with HealthTrust Inc. Healthcare. The newly combined companies will operate 311 hospitals with 60,000 beds and 125 outpatient centers." [Columbia Dispatch, 10/19/94]

Scott Served On Banc One's Personnel And Compensation Committee.  According to the Banc One Proxy Statement to Shareholders filed for March 6 - April 16, 1996, "BANC ONE has three standing committees of the Board of Directors.  The Personnel and Compensation Committee, which currently consists of John R. Hall (committee chairman), E. Gordon Gee, Richard L. Scott, Thekla R. Shackelford and Alex Shumate, held four meetings during 1995. In addition to reporting to the Board on the selection of BANC ONE's principal officers...and the fixing of their salaries, this Committee determines the amount of bonus paid to principal officers of BANC ONE and its affiliates, approves the salaries and bonus received by the principal officers of BANC ONE affiliates, administers certain BANC ONE employee benefit plans and serves as the Board of Directors' nominating committee..." [Banc One Proxy Statement, 3/6-4/16/96]

Scott Approved More Than $9 Million In Salaries And Bonuses For Five Employees Over Two Years.  As a member of the "Personnel and Compensation Committee," Richard L. Scott approved the following salaries and bonuses for Banc One's CEO and "the four other most highly compensated executive officers" for FYs ending December 31, 1994, and 1995:

Name

Position

Year

Salary

Bonus

John B. McCoy

Chairman & CEO,

Banc One

1995

$995,000

$1,124,400

John B. McCoy

Chairman & CEO,

Banc One

1994

$995,000

$510,000

Richard J. Lehmann

President,

Banc One

1995

$578,254

$556,600

Richard J. Lehmann

Chairman,

Banc One Arizona Corp.

1994

$457,000

$234,200

Thomas E. Hoaglin

Chairman,

Banc One Ohio Corp.

1995

$441,000

$235,000

Thomas E. Hoaglin

Chairman,

Banc One Ohio Corp.

1994

$424,500

$231,300

Joseph D. Barnette, Jr.

Chairman,

Banc One Indiana Corp.

1995

$430,500

$250,000

Joseph D. Barnette, Jr.

Chairman,

Banc One Indiana Corp.

1994

$414,500

$209,800

Ronald G. Steinhart

Chairman,

Banc One Texas Corp.

1995

$395,000

$240,000

Ronald G. Steinhart

Chairman,

Banc One Texas Corp.

1994

$382,500

$0

[Banc One Proxy Statement, 3/6-4/16/96]

Scott Left Banc One's Board Of Directors In 1997.  The Columbus Dispatch reported that following the FBI probe into Ohio hospitals, "the top officer of Columbia/HCA has decided to leave the board of directors of Banc One Corp. Richard L. Scott, chairman and chief executive of Columbia/HCA, decided not to seek re-election to Banc One's board, on which he has served since 1994." [Columbus Dispatch, 4/1/97]

America's Health Network (AHN), 1997-2001

America's Health Network Provided "All-Original Health And Medial Programming."  The Nashville Business Journal reported: "AHN was launched in March 1996 and provides 24-hour, all-original health and medical programming daily. The network is based in Universal Studios Florida in Orlando and reaches 9 million households in all 50 states through cable television and satellite distributors. According to Media Metrix, AHN.COM is the 26th fastest growing site on the Internet." [Nashville Business Journal, 2/12/99]

Former Columbia/HCA Executives Invested In AHN.  The Nashville Business Journal reported: "Among AHN investors are Richard L. Scott, a founder and former chairman and chief executive officer of Columbia Healthcare Corp., and David T. Vandewater, Columbia's former chief operating officer." [Nashville Business Journal, 2/12/99]

Under Scott's Leadership, Columbia/HCA Made Moves To Purchase America's Health Network.  According to Business Wire: "Columbia/HCA Healthcare Corporation...and America's Health Network today announced the signing of a letter of intent in which Columbia would acquire majority interest in AHN from its parent company A.H. Belo Corporation. Terms of the transaction were not disclosed." [Business Wire, 5/14/97, via FreeLibrary.com]

  • Scott: Purchasing AHN Will Complement Columbia/HCA's "Existing Consumer Health Information Initiatives." Business Wire reported: "'Columbia's acquisition of majority interest in AHN provides another opportunity which will allow us to continue our efforts to build a pathway for individuals to improve their personal health,' said Richard L. Scott, Chairman and Chief Executive Officer of Columbia. 'This complements our existing consumer health information initiatives, which include our award-winning site on the World Wide Web, with more than 4.5 million hits in the first quarter of this year..." [Business Wire, 5/14/97, via FreeLibrary.com]

Columbia/HCA Deal Collapsed, Resulting In Layoffs Of 80% Of AHN's Workforce.  According to the New York Times: "The A. H. Belo Corporation said yesterday that it had sold its 65 percent stake in America's Health Network after a deal with the Columbia/ HCA Healthcare Corporation collapsed. Belo sold the stake to its unnamed partners in the medical cable television network. The terms of the deal were not disclosed. America's Health, which reaches more than six million households in the country, last week laid off 161 of its 200 employees after the Columbia deal collapsed." [New York Times, 8/5/97]

Scott Rescued AHN "When The Money Dried Up."  The St. Petersburg Times reported that: "When the money dried up about a year ago and AHN was limping along with a skeleton crew, [AHN] found a big backer who had plenty of money and experience in health care: Rick Scott." [St. Petersburg Times, 11/3/98]

Scott And Another Columbia/HCA Executive Purchased 75% Of AHN.  According to the St. Petersburg Times: "Booted out of the business of providing health care, [Rick] Scott and Columbia's former president, David Vandewater, bought a 75 percent stake in a business dedicated to providing health information...Scott's fingerprints are all over AHN's Web site, which is run by Columbia's former Web guru, J. Tod Fetherling." [St. Petersburg Times, 11/3/98]

Starting In 1998, AHN Broadcast Several Medical Procedures On Its Website.  The Tennessean reported: "America's Health Network is a 3-year-old cable TV network co-owned by Rick Scott and David Vandewater, former top Columbia/HCA executives. AHN.COM officials say the Web site is based in Nashville because its top executives, including Fetherling, live in the area and because Nashville 'is a hub for health and medical management firms.' Since last summer, the Web site has broadcast a live birth, open-heart surgery and several other operations, including a brain surgery performed last month at Centennial Medical Center in Nashville." [The Tennessean, 2/23/99]

Scott Held Interest In AHN Through Its Sale To The Discovery Channel In 2001.  According to the Richard L. Scott Investments website, America's Health Network was a "Prior Investment" of the company and is "[b]ased at Universal Studios in Orlando, Florida, America's Health Network was a cable health television and Internet company  in which Richard L. Scott Investments, LLC acquired a majority interest in 1998.  Originally launched in 1996, America's Health Network was the first television source for around-the-clock health and medical information.  News Corp's Fox Broadcasting Company acquired a 50% interest in America's Health Network in 1999, at which time the network was renamed The Health Network. The Health Network was subsequently sold to Discovery Communications Inc. in September 2001 and became part of the Discovery Health Channel." [RichardLScottInvestments.com, accessed 4/28/09]

After Scott Joined AHN Leadership, Other Partners Filed Lawsuit Against Columbia/HCA

AHN Limited Partners Filed Suit Against The Majority Partners' Former Employer. According to The Tennessean: "On Friday investors in a limited partnership with the former America's Health Network an Orlando, Fla.-based cable property now known as The Health Network filed suit against HCA in Davidson County Chancery Court. The suit claims that HCA aborted a promised deal to invest in the then fledgling network on the same day in 1997 that Scott, at the time HCA's embattled chairman and chief executive officer, was shown the door. The lawsuit seeks unspecified financial compensation for losses investors say they have suffered as a result of the deal's demise. The suing investors include: Jeffrey Maddox and Webster Golinkin, two of America's Health Network's co-founders..." [The Tennessean, 8/2/00]

  • Lawsuit Pitted AHN Partners Against Each Other - With Scott "At The Center Of The Controversy." The Tennessean reported: "At the center of the controversy is Scott, who resigned in July 1997 amid a growing federal fraud investigation into HCA improprieties involving Medicare and other federal health programs. Scott, along with David Vandewater, is now one of the principal investors in AHN Ltd. Partners, a limited partnership that owns half of The Health Network. The suing investors are also part of AHN Ltd. Partners." [The Tennessean, 8/2/00]

Scott's Columbia/HCA Struck A "Non-Binding Agreement" To Purchase "Controlling Interest" Of AHN.  The Tennessean reported: "According to the complaint, on May 7, 1997, at the direction of Scott then-Columbia/HCA entered into a 'non-binding agreement in principle' to acquire a controlling interest of AHN from a subsidiary of A.H. Belo, a media company whose holdings also include The Dallas Morning News. Founded in 1995, AHN was initially funded with $65 million in venture capital from private investors. By early 1997, however, the company was apparently in need of additional funds to continue operations." [The Tennessean, 8/2/00]

Columbia/HCA "Backed Out" Of Nearly $40 Million Purchase Of AHN.  According to The Tennessean: "HCA was to give Belo [which held a controlling interest] a $34.7 million promissory note and $4.7 million in cash. The company also contemplated giving AHN an additional $25 million in cash. Rather than closing the deal as expected, however, AHN's limited investors say HCA backed out of the sale on July 23, 1997. On that morning, HCA announced Scott's immediate departure and the naming of Dr. Thomas Frist Jr. as the company's new chairman and CEO. Because HCA backed out of the deal, the investors contend they have suffered 'substantial damages and loss.'" [The Tennessean, 8/2/00]

Plaintiff Investors Said Columbia/HCA Back Out "Forced Them To Seek Financial Help" From Scott.  The Tennessean reported: "Specifically, the investors say HCA's decision compelled AHN, at the time strapped for cash, to furlough 161 of its 200 employees. The investors also say they were forced give up equity to a lender that offered it a bridge loan to remain afloat. Moreover, the investors contend their financial plight subsequently forced them to seek financial help in the form of an equity investment from Scott. In return, however, the investors say they 'had to give Scott' a 75% ownership interest in the venture." [The Tennessean, 8/2/00]

Scott "Failed To Pursue Litigation" In Lawsuit Due To "Conflict Of Interest" Between AHN And Columbia/HCA.  According to The Tennessean: "Despite their involvement with AHN Ltd. Partners, neither Scott nor Vandewater, former Columbia/HCA president and chief operating officer, are parties to the suit. In its complaint, the suing investors say Scott has failed to pursue litigation because of a 'conflict of interest' stemming from his ties to AHN and role in HCA's original decision to buy a controlling stake in AHN." [The Tennessean, 8/2/00]

After Forced Exit, Scott Brought Along Two Columbia/HCA Executives To AHN

Vice President Of AHN Marketing Had Been A Columbia/HCA Executive.  According to the St. Petersburg Times, "Karen Bowling, a former Columbia executive...is vice president of marketing at AHN." [St. Petersburg Times, 11/3/98]

Scott's AHN Partner, Vandewater, Also Ousted From Columbia/HCA Amid Fraud Investigation.  The St. Petersburg Times reported: "Richard Scott, ousted as Columbia/HCA Healthcare Corp.'s chief executive in July, received a severance package totaling nearly $10-million, company  filings show. Former chief operating officer David Vandewater, meanwhile, will get more than $6-million. Both resigned from the beleaguered health care company under pressure from Columbia's board...And Scott and Vandewater lead an equity group that this week said it would invest in  America's Health Network, an Orlando-based company." [St. Petersburg Times, 11/14/97]

Richard L. Scott Investments, LLC, 1997-Present

Scott "Launched Richard L. Scott Investments The Same Month He Left HCA."  According to Modern Healthcare, Richard L. Scott "launched Richard L. Scott Investments the same month he left HCA, according to his biography as a director of Cyberguard Corp., a technology firm. Scott Investments, based in Stamford, Conn., has stakes in companies in manufacturing, catalog retail and healthcare, including Pharmaca Integrative Pharmacy, a retail pharmacy chain where Scott is also a director." [Modern Healthcare, 7/11/05]

Richard L. Scott Investments, LLC Holds Interests In A Variety Of Companies.  According to the website, Richard L. Scott Investments, LLC is invested in the following companies:

  • Continental Structural Plastics, Inc. - "supplier of engineered thermoplastic and thermoset compression-molded, structural components"
  • Drives - "designers and manufacturers of...heavy duty drive chain-based products and assemblies for industrial and agricultural applications; and ii) precision engineered augers"
  • Engineered Data Products Holdings, Inc. - "designer and manufacturer of computer-related support equipment"
  • Colorflex - "provider of on-demand labeling and filing systems technology"
  • Tri-Optic - "research and develop the newest technology for media bar code label printing"
  • Airco Industries, Inc. - "manufactures...integrally-lighted displays and control panels for military and commercial airborne and ground communications and navigation systems"
  • L.E.Technologies, LLC - "manufactures steel frames and related components"
  • Solantic, LLC - "operates walk-in, retail-based clinics staffed by board certified physicians"
  • Pharmaca Integrative Pharmacy, Inc. - "operates unique pharmacies that combine prescription drug and over-the-counter products with natural, complementary and personal body care products"
  • Alijor - "founded with the purpose of making it easy for patients in need of medical services to find a healthcare provider"
  • Novasan, LLC - "provides high quality nutritional supplements under the Viosan brand name"
  • America's Health Network - "a cable health television and Internet company in which Richard L. Scott Investments, LLC acquired a majority interest in 1998"
  • EnvestnetPMC - "delivers separately managed accounts, mutual funds and alternative investments to independent financial advisors through its sub-managers"
  • Strike & Spare Family Fun Centers - "one of the top ten largest operators of bowling-based family entertainment centers in the United States"
  • Digirad Corporation - "develops, manufactures and markets solid-state, digital gamma cameras to hospitals, imaging centers and physician offices"
  • Emida Technologies - "transactional network which enables electronic prepaid service distribution, money transfer and stored value card processing targeting the Global Hispanic market"

[RichardLScottInvestments.com, accessed 4/14/09, emphasis added]

Solantic, 2001-Present

Solantic Was Founded In 2001.  Business Wire reported: "Jacksonville, Fl.-based Solantic was founded in 2001 by Richard Scott, founder and former Chairman and CEO of Columbia/HCA, and Karen Bowling, a 25-year veteran of the health care industry, with the goal of providing physician-staffed, patient-centric, convenient walk-in urgent health care. Solantic's centers offer patients a broad range of health care services spanning urgent care, immunizations, screenings and physicals." [Business Wire, 7/30/07]

  • Bowling Has Worked With Scott At Both Columbia/HCA And AHN. According to the St. Petersburg Times, "Karen Bowling, a former Columbia executive...is vice president of marketing at AHN." [St. Petersburg Times, 11/3/98]

Solantic Business Model Based Upon Home Depot, McDonald's, And Wal-Mart.  The Florida Times-Union reported that Solantic President and CEO  Karen Bowling "and her business partner Rick Scott, now Solantic's chairman, pored over books about successful companies such as Home Depot, McDonald's and Wal-Mart...The company was established on June 6, 2001, with Scott, the company's largest investor, contributing an undisclosed amount of money. The first four clinics opened simultaneously six months later. In total, there have been about 300,000 patient visits since the 2002 opening." [Florida Times-Union, 6/21/06]

"Scott Always Wanted To Bring A Friendly, Open, Retail Style To His Hospital Emergency Rooms."  According to CNN Money, "Solantic, an incipient Starbucks of emergency rooms, [is] a string of 23 urgent-care facilities that proudly posts its prices, boasts of chirpy service, and is popular with insurance companies because visits are cheaper than the ER. Customers are offered a menu that includes an $89 visit, a $50 basic checkup, and a $30 flu shot. Scott always wanted to bring a friendly, open, retail style to his hospital emergency rooms. Now he's doing it on his own." [Money.CNN.com, 4/9/09]

 Scott Is "A Retail Nut - Not A Health-Care Wonk."  In her CNN Money piece on Richard Scott, Nina Easton wrote: "We are standing in the produce section of a Wal-Mart [during a visit to a Solantic Clinic] because Rick Scott can't help himself - he's drawn to the retail beauty of the place. 'It's such an attractive presentation,' Scott says in awe of the colorful tumble of grapefruit and apples and celery. The first thing to understand about Scott is that he's a retail nut - not a health-care wonk." [Money.CNN.com, 4/9/09]

Scott "Wanted To Create A Clinic Business" During His Time Running Hospitals.  According to the New York Times, Richard L. Scott said of Solantic: "'I always wanted to create a clinic business when I was in the hospital business.'" [New York Times, 5/14/06]

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