Richard Lynn Scott
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Richard Lynn Scott (born 1952 in Illinois) is a billionaire entrepreneur. An attorney by trade, he founded Columbia Hospital Corporation in 1987, with his life savings of $125,000. Columbia merged with the Hospital Corporation of America in 1994 to become Columbia/HCA, the largest private operator of health care facilities in the world. When Scott left Columbia/HCA in 1997, the company's market capitalization was in excess of $35 billion and healthcare inflation had been reduced to almost zero.
Scott has started, invested in and purchased companies primarily involved in healthcare. However, he also has investments in manufacturing and technology. His most recent healthcare investments are Solantic, an operator of urgent care centers staffed by board certified physicians, Alijor.com, an internet site that connects patients and healthcare providers, and Pharmaca, a chain of pharmacies that integrates western and eastern medicines.
Scott also owns Continental Structural Plastics, North America's largest industrial composites molder.Scott has a website, richardlscottinvestments.com. Scott rarely gives speeches or interviews.
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[edit] Biography
Richard Scott was born in Kansas City, Mo., where his father was a truck driver and his mother worked, among other jobs, as a clerk at J.C. Penny. His first job was selling TV Guides door to door at age eight. He had a newspaper route and worked as a fry cook and as a stocker/cashier at a local grocery store chain. He is an Eagle Scout and was a warrier in the Boy Scouts Council of Kansas City, Missouri Indian tribe called "The Tribe of Mic-O-Say". After high school and one year of community college, he enlisted in the United States Navy. He served on the USS Glover as a radarman. While in college, while working full-time at a local grocery store, he made his first foray into business buying and reviving two Kansas City doughnut shops. After graduating high school in 1970, then attending the University of Missouri, he earned a law degree from Southern Methodist University. Scott married his high school sweetheart. They remain married today and live in Naples, Florida.
Scott went on to practice law in Dallas, TX, where he specialized in healthcare mergers and acquisitions. He was a partner at Johnson & Swanson, then the largest law firm in Dallas. He primarily represented companies in the healthcare, oil and gas and communication industries. One of his major clients was Tom Hicks of Hicks, Muse fame.
Scott was a partner of George Bush in the President's ownership of The Texas Rangers.
Scott was recognized by Time Magazine as one of America's 25 most influential people. In 1995, he was named CEO of the Year by Financial World magazine and also was cited as one of the Top 25 Performers of 1995 by U.S. News and World Report magazine.
Scott was a Vice Chairman of The Business Council.
Scott has be honored numerous occasions for his focus on reducing healthcare costs and improving patient outcomes.
[edit] Columbia Hospital Corporation
In the Spring of 1987, Scott raised over $6 billion while he was a partner practicing law and made an offer to purchase HCA . After that offer went nowhere, Scott started Columbia with his entire life savings of $125,000. Scott started Columbia on October 19, 1987, the day the stock market dropped almost 22%. He had never operated a hospital or other medical facility although he had represented hospitals and hospital chains as a lawyer. In 1988, Columbia bought two hospitals in El Paso for $60 million. In 1992, Columbia purchased Basic American Medical, which had eight hospitals primarily in Southwest Florida. In 1993, Columbia purchased Galen Healthcare, a spin-off of Humana. At the time, Galen had approximately 90 hospitals. In 1994, Columbia purchased HCA, Inc., which had approximately 100 hospitals. In 1995, Columbia purchased Healthtrust, which had approximately 80 hospitals, primarily in rural communities.
When he left Columbia in 1997 at the age of 44, Columbia had become the world's largest healthcare company with more than 340 hospitals, 130 surgery centers, and 550 home health locations in 38 states and two foreign countries. With annual revenues in excess of $23 billion, the company employed more than 285,000 individuals making it the 7th largest U.S. employer and the 12th largest employer worldwide. Based on market capitalization, Columbia ranked in the top 50 companies in America and top 100 worldwide.
In 1997, while Columbia owned less than seven percent of the nation's hospitals, 28 of the Mercer/HCIA Top 100 Hospitals in the United States were Columbia facilities. Today, no HCA hospitals are listed in the Top 100 Hospitals survey. Under Scott's leadership, 36% of Columbia hospitals attained "Accreditation with Commendation", in contrast to 8.5% of hospitals nationwide.View Study Highlights
In 1998, when Columbia purchased its first hospital in El Paso, healthcare inflation was over 18% per year. By 1997, healthcare inflation was almost zero. Scott was known for focusing on ways to improve outcomes and reduce costs. He reduced supply costs significantly in the industry. In the ten years he operated Columbia, supply costs went down from over 24% per year at Columbia hospitals to less than 14% per year.
Columbia was instrumental in reducing mortality risks after cardiovascular surgery. Columbia operated almost 100 open heart programs nationwide. By ranking all of these programs for mortality, Columbia caused the industry to begin focusing on death rates after bypass surgery.
Columbia had a "best demonstrated practices" group that constantly worked on ways to share best practices to reduces costs and improve outcomes.
By purchasing not-for-profit hospitals, Columbia was instrumental in funding over $2 billion in foundations that today focus on ways to improve healthcare in America.
In 1997, Columbia was recognized by Business Week as one of the 50 Best Performing Companies of the S&P 500.
Columbia became a publicly traded company in May 1998. From 1988 hrough 1996, Columbia;s stock price out performed the Dow each and every year.
In 1998, Columbia was investigated in an alleged scheme by low-ranking executives at HCA Hospitals to cheat Medicare: it was alleged that certain hospital executives would submit an inflated cost report, file a more conservative version, and pocket the difference in reimbursed income.
By October, 1998 the US government had officially joined the case as prosecutors. Four low-level employees were indicted on criminal fraud charges in January 1999 as a result of a Medicare filing for a hospital acquired by Columbia from Basic American Medical, and in July 1999 a judge handed down two convictions, one acquittal, and a mixed verdict. The two convictions were overturned on appeal.
Scott was never accused of any wrongdoing.
Scott's senior management team have stayed active in the hospital industry. David Vandewater, Columbia's COO, is Chairman and Chief Executive Officer of Ardent Healthcare, Nashville, Tennessee. David Colby, Columbia's CFO, is CFO of Anthem, Indianapolis. Denny Shelton, Columbia Group President, is Chairman and Chief Executive Officer of Triad Hospitals, Dallas, Texas. David White, Columbia Group President, is Chairman and Chief Executive Officer of Iasis Healthcare, Nashville, Tennessee. Ken Donahey, Columbia Controller, is Chairman and Chief Executive Officer of Lifepoint Healthcare, Nashville, Tennessee. Dan Moen, Columbia Group President, is Senior Vice President of Triad.
[edit] Venture Capitalist
Scott quickly moved on, launching Richard L. Scott Investments the same month he left Columbia. Richard L Scott Investments, based in Naples, Florida, has stakes in companies in manufacturing, healthcare and technology.
In late 1997, Scott purchased a controlling interest in America's Health Network for approximately $22 million. In June 1998, America's Health Network showed the first live birth on the internet. In 1999, America's Health Network entered into a joint venture with Fox Entertainment. The name of the channel was changed to The Health Network. The Health Network was eventually sold to Discovery Health for $275 million.
Between 1998 and 2001, Scott purchased 50% of CyberGuard Corporation for approximately $10 million. In 2006, CyberGuard was sold to Secure Computing for over $300 million.
In November 2003, Scott purchased an interest in Pharmaca Intergrative Pharmacies, based on Boulder, Colorado.
In February 2005, Scott purchased Continental Structural Plastics, Inc. in Detroit, Michigan. In July 2006, Continental Structural Plastics purchased Budd Plastics from ThysseenKrupp, making Continental Structural Plastics the worlds` largest industrial composites molder in North America.
In November 2005, Scott launced Alijor.com with his daughter, Allison Scott. Alijor.com connects patients and healthcare providers.
In March 2006, Scott purchased a significant interest in quepasa.com, the largest Latin networking website in the world.
In September 2006, Scott filed with the SEC to indicate a 6.7% ownership stake in Envoy Communications (Nasdaq:ECGI); an October 2006 filing then indicated he had increased his stake to 8.5% since his September filing.
Scott and his partner, Larry Schmittou, one of baseball's legendary minor league owners, own a chain of family fun centers in Kentucky and Tennessee.
[edit] Solantic
In 2001, Scott started Solantic, LLC, which operates urgent care centers in Florida. These centers provide (a) urgent care primarily for patients with no insurance, paitents who cannot get in to see their physician or patients who do not want to use an emergency room, (b) care for workers who have been injured, (c) physicals, immuninzations and flu shots. Solantic has expanded into Wal-Mart Super Centers in Florida.
[edit] Philanthropist
Scott has been involved in a variety of charitable activities. He was on the National Board of the United Way from 1997 to 2003. Scott worked with World Vision to create a primary health care system in a poor area of Kenya. Since 1993, Scott has provided college scholarships to high school graduates of the high school he and his wife attended. Scott provides a scholarship to one low-income student each year at SMU Law School.
