Columbia HCA and the Medicare fraud

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Executive Summary Company Columbia/HCA Healthcare Corporation Company Founders Richard Scott and Richard Rainwater Business The company was a for-profit organization and the largest hospital alliance in the world. Business Start- up costs Scott and Rainwater each put up $125,000 and financed the purchase with $65 million from Citicorp. The Market The company’s marketing plan cost was an ambitious $100 million per fiscal year or more. The advertising campaigns were aggressive and saw no boundaries attacking the competition. The Competition Columbia/HCA competed with small or large hospitals, community based not-for-profit hospitals, clinics and health care centers. Product/Services They provided highly overpriced health care and serviced anyone, anybody or anything that could result in a profit. Competitive Advantage Being larger than life and charging so much higher above the competition. Risk/Opportunity What risk? We are invincible! The company’s motto was, “The opportunity to rip you off is now”. The Company’s Downfall Thinking they could steal from the government and the taxpayer but could never be caught. The Punishment One- Becoming the largest healthcare fraud case in the United States history and Two- An investigation that settled at a net record of $1.7 billion dollars. Columbia/HCA Healthcare Corporation: The Beginning The Healthcare Company started in 1987; Richard Scott teamed up with Richard Rainwater to form the Columbia Healthcare Corporation. At the time, the 34-year-old Scott was a graduate of both the University of Missouri and Southern Methodist University Law School; Rainwater was a Fort Worth financier, a self-made billionaire. In September 1993, Columbia merged with Galen Health Care, which had earlier been spun off from Humana. It now owned 99 hospitals in the USA and internationally. It

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