Health South: The Scrushy way

Health South: The Scrushy way

Introduction

This paper is mainly related to the theme “crime does not pay”. However, this is contradictory in situations when someone has the capabilities to lead a multi-billion dollar corporation and has the power to bring changes in the lives of thousands of people. This is the situation when crime actually pays. This paper is mainly related to the case study of success story of Richar M. Scrushy involving the components of dishonesty and unethical practices. Thus, this paper is mainly the analysis of different unethical practices, its impact on shareholders and outcomes of fairness and punishments.

Impact on Stakeholders

In the case of Scrushy, there are different stakeholders who have been impacted by acts of dishonesty. These stakeholders are mainly the Richard Scrushy, U.S. Government, the management team of Richard Scrushy, the patients of HealthSouth, the board of directors and the employees. The section below shows the contributions and ramifications of these health acts.

Richard Scrushy

In this case Richard Scrushy has been defined s a self-made man who had been expelled from his schools. Thus, after that he has completed his GED and achieved a degree in respiratory therapy from the University of Albama at Birmingham (UAB). Scrushy worked to build the HelathSouth by making an investment of million dollars. In this healthcare centre he has provided almost 2000 facilities (Beasley, 1999). Almost 120,000 patients have been treated in the HealthSouth on daily basis which have provided revenue of $106 million. HealthSouth was suffering from different financial dishonesties and ethical problems related to financial operations these days. As a result of improper attention of financial matters, the company has also fired an internal auditor in the year of 1989. The Medicare has also accused HealthSouth for padding bills which have been charged against Medicare for the different facilities including in-patient and out-patient rehabilitation. Thus, as a result the Medicare has also brought changes in its structure in order t bring reductions in exploitation and payments which have brought adverse effect on HealthSouth. Apart from the accusations of Medicare, there were also different lawsuits which have been charged against HealthSouth by Blue Cross Blue Shield of Alabama. They have claimed that HealthSouth has done improper billing of Medicare for therapies which have been conducted by unlicensed aides, students, athletic trainers and interns (Enrione, 2006). As a result of these accusations, Scrushy has been charged by U.S. Securities and Exchange Commission for false reporting of at least $2.7 billion. For being the CEO and Chairman of the Board for HealthSouth, Richard Scrushy was held liable for all the falsifications of financials. Thus, the deeper investigations of financial matters of the company have also identified different other signs of corruptions. The main reasons behind such ethical poverty of Scrushy were the way he treated people. The attitude of management was very careless for the internal controls and the life style of Scrushy was also very lavish (Friedman, 1970).

This corruption has really affected Richard Scrushy ...