Scrushy Owes $2.88 Billion for Damages

As reported by the Wall Street Journal, here is another reminder about just how bad the leadership of health care can be,

Richard Scrushy was hit with a staggering $2.88 billion civil judgment in a suit brought by HealthSouth Corp. shareholders, one of the largest findings ever from the era of massive corporate scandals.

The plaintiffs said that the former chairman and chief executive helped artificially inflate HealthSouth's earnings for at least six years through an accounting scam uncovered in 2003.

Lawyers said Thursday's judgment appears to be the largest financial penalty ever levied against a single executive.

Mr. Scrushy was once the poster child of highflying CEOs. He was paid salary and perks of as much as $40 million a year, performed at company events in his country band and traveled on one of a fleet of corporate jets.

Mr. Scrushy hosted parties on the Chez Soiree, his 92-foot yacht, and arranged to pay for breast augmentation for a member of a company-sponsored singing group.

Judge Horn said Mr. Scrushy either knew or should have known about the fraud, giving no credence to Mr. Scrushy's repeated insistence that subordinates perpetrated the scheme without his knowledge.

Note that Scrushy had is already a convicted felon, "as he is two years into a seven-year sentence in federal prison on the bribery conviction." He has gone from being a "poster-child" for the high-flying health care corporate CEO to being a poster-child for liars and criminals fraudulently leading health care organizations.

So I get to say it again: instead of focusing on the reform of health care finance, we should be focused on the reform of health care leadership. We have set up a system that rewards imperial health care CEOs with the the lavish life-style and power that used to be reserved for the aristocracy. We have attracted health care leaders who value their own wealth and power ahead of patients' welfare and safety. To improve health care, we need responsible, ethical, honest stewardship of health care organizations. If we do not improve health care's leadership, it will not matter whether we finance it via private insurance, public options, or single-payers.